Committee Report on Economic Budget Vote

Economic Development

12 April 2016
Chairperson: Ms E Coleman (ANC)
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Meeting Summary

The Chairperson, after consulting Members, decided that the meeting adjourn for an hour as the ruling party members needed to go into caucus around the report before presenting it to the meeting. The meeting adjourned and convened two hours later.

The Chairperson took Members through the report page by page. Members made minor amendments, including re-wording and typographical errors. Not many major changes made to the report.

The Chairperson noted with great interest the unnecessary repletion of words, and appealed to the members to summarise and re-word where they saw fit.

The report was adopted with amendments.

Meeting report

Opening remarks
The Chairperson, after consulting Members, decided that the meeting adjourn for an hour as the ruling party members needed to go into caucus around the report before presenting it to the meeting. The meeting adjourned and convened two hours later.

Report of the Portfolio Committee on Economic Development on Budget Vote 25: Economic Development and the Annual Performance Plan of the Department of Economic Development for the 2016/2017
The Chairperson tabled the report for consideration. Members were taken through the document page by page and invited to make comments where necessary.

The Chairperson made a correction on the date of the document, which was 2016/2017, and pointed out that it was rather 2016/2019.

Under introduction, last paragraph on page one line three; the sentence read: “It has the responsibility to coordinate the formulation of cross sector policy programmes that will seek to improve the social capital of marginalised groups.”

Ms D Rantho (ANC) enquired if government had the responsibility to coordinate rather than create. Upon discussion by Members it was decided that the word “coordinate” made sense in that regard.

Mr P Atkinson (DA) made a minor correction on the Strategic Objective 6.

The Chairperson suggested that the figures in the report be left as they were; her staff would deal with them.

Under Programme 1: Administration point (iv). The sentence read: “Recurrent issues relating to space constraints in the entities, particularly the Competition Commission, Competition Tribunal and ITAC”

Mr Atkinson made a minor correction and reworded “recurrent issues” to “issues relating to”.

Under Programme 1: Administration point (i) the sentence read: “The Department’s ability to source the requisite skills to fulfil its mandate”

Mr S Tleane (ANC) enquired whether it was the department’s ability or better yet inability to source the requisite skills to fulfil its mandate.

Mr M Mbatha (EFF) responded that ability would be a suitable word in this regard, as inability would put the government in a bad light.

Under Recommendations point (xi), there was a discussion around the word “intensify” or “Fast track”. The sentence read: “Intensify work on the expansion of industrial funding to support the development of entrepreneurship, township and rural economy, SMMEs, Cooperatives and black industrialists. It is important that the impact of the funding strategies is felt especially in these sectors.”

Mr Mbatha recommended the use of the word “Fast track” rather than “Intensify” He pointed out that on black industrialists, what he saw was the definition and nothing further was reported on the programme of action.

The Chairperson responded that government had given that role to the Industrial Development Corporation (IDC) and they were the ones to come up with the programme where black industrialists were concerned.

Mr Tleane made a minor change on the word black industrialists to Black Industrialists.

The Chairperson clarified the term “Black Industrialist” referred to 100% pure, black enterprise and there was no mix of other races and no fronting.

Mr Mbatha was concerned that the majority of black players in Mining was hanging in the air, and that could possibly be caused by lack of finance and lack of direction.

The Chairperson concurred with his statement, it was the reason why the status quo was changing now, and that the empowerment part of it was coming through and the shareholder capacity would not be neutralised.

It was noted that an error was made, under Significant Subsidiaries bullet three, Scaw had to be removed and replaced with Foskor. The sentence read: “Foskor was established by the IDC in 1951 to produce phosphates for the country’s agricultural sector. IDC owns 59 percent of Scaw. The company is reportedly experiencing operational challenges which will negatively affect the company’s 2015/16 performance despite the benefit of a weakening Rand in recent months.”

Mr P Atkinson made a correction that Scaw be replaced with Foskor.

Mr Tleane suggested that this point be merged with point two.

Under Significant Subsidiaries bullet four, Members were not happy with the use of the word “reportedly expected” and tried to find a suitable word for it. The sentence read: “The National Empowerment Fund (NEF), is reportedly expected to be a subsidiary of the Industrial Development Corporation (IDC). The NEF reportedly stated that it would require a cash injection of at least R500m from the corporation if it is to implement its 2016/17 strategy”.

Mr Tleane suggested that the use of the word “reportedly expected” be omitted as it raised uncertainty.

Mr Atkinson recommended that the word “reportedly expected” be substituted with the word “likely”.

Mr Mbatha pointed out that the National Empowerment Fund was not a new organisation, it was more than ten years old, therefore its value should be added so that it did not sound new, as it was a continuing value adding organisation.

The Chairperson added that in the Key Financial Implications, the figures had not yet been audited, and therefore focus should rather be on 2016.

Under Recommendations point (i); a Member noted with concern that the sentence did not make sense. The sentence read: “The Corporation’s investment strategy puts more emphasis on local procurement of renewable energy and automotive materials, among others, so that the MTSF target of 75 per cent local procurement be reached by 2019”.

Mr Mbatha proposed that this point be connected to other sentences, as it did not make sense.

It was suggested that Observations point (i) be moved. The sentence read: “Progress made on issues of localisation – the lack of skills, willingness and readiness of industries”

Mr I Pikinini, (ANC) suggested that this point be moved to Recommendations.

The Chairperson then tabled the matter to the meeting as to whether it did qualify under Recommendations.

Mr Tleane, made a minor change on point number two of Observations, to remove the second “and”.

Ms Rantho, added that the Observations and Recommendations be re-worded to afford the general public to be able to understand what every point meant.

Under Recommendations point (i); it was corrected that Ministers did not appoint Tribunal members, but rather recommended for the President to appoint. The sentence read: “The appointments of Tribunal members by the Minister, scheduled for the end of May, are finalised”

Dr J Cardo requested that the point be changed as the Minister did not appoint Tribunal members, but rather recommended for the President’s authorisation.

Under Committee Observations point (ii); The organisational structure; Mr Atkinson questioned whether such a structure existed or perhaps needed improvement.

A Committee staff member responded that the Recommendations spoke to Observations and he had elaborated more on Recommendations rather than Observations.

Under Recommendations point (i); “A briefing to Parliament on the PPS and challenges confronting the scrap metal sector takes place before the end of the first quarter of 2016/17. The post of Deputy Chief Commissioner is filled without further delay and the Department reports to the Committee on progress in the third (parliamentary) term;”

Dr Cardo recommended that this sentence be subdivided into two rather than one.

Under Recommendations point (iv); it was pointed out that the sentence did not make sense. The sentence read: “The Commission implements in full the recommendations of the study commissioned by the Department”.

The Chairperson requested that this point be omitted, as it did not make sense.

The Members agreed on the removal of both points numbers (iv) and (v); “The Commission continues to play the lead role in the Southern Africa Customs Union, especially in assisting with clarifying the different tariff regimes between countries”

The Chairperson requested that the meeting adjourn to allow the staff to make corrections on the document, and to come back for adoption.

Dr Cardo suggested that the report be emailed to Members rather, as the Members’ minds were not as fresh at the moment.

The Chairperson release the staff to allow them time to work on the report, and further stressed the importance of passing the amendments before adjourning the meeting for the day.

Mr Mbatha requested that the staff highlight the amendments in red so that it was clear for Members to see.

The Chairperson moved for adoption of the report with Amendments.

The report was unanimously adopted.

The Chairperson thanked the meeting for the manner in which they handled the report.

The meeting adjourned.


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