Tourism Budget: Committee Report


09 July 2019
Chairperson: Mr S Mahumapelo (ANC)
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Meeting Summary

The Draft Committee Report on Budget Vote 33: Tourism was placed before the Committee for consideration.

Committee observations and recommendations to the National Department of Tourism (NDT) and to South African Tourism (SAT) as captured by Committee Staff were presented to Members. Members were encouraged to make changes or additions to the Draft Report where they deemed it necessary. Members reworded parts of the Draft Report where needed. The Chairperson wished for it to be captured in the Draft Report that there was a general degradation of places of historical interest like ex-President Nelson Mandela’s capture site at Howick Falls. He also felt that SAT needed to assist emerging enterprises to qualify to be graded. Villages, townships and dorpies needed attention when it came to tourism. Case in point was that in the area around the Kruger National Park there were at least fifty villages that had to be taken on board. Tourism benefits were not filtering down to them.

Members appreciated the hard work that Committee Staff had put in on compiling the Draft Report.

The Draft Report was adopted as amended.

Meeting report

The Chairperson was pleased that the Draft Report had been circulated to Members beforehand. In so doing it would fast track proceedings as they were already familiar with the Draft Report’s contents. He asked the Committee Content Adviser, Dr Sibusiso Khuzwayo, to present the Draft Report to the Committee and to zoom directly into the observations and recommendations of the Committee.

Consideration of Committee Draft Report on Budget Vote 33: Tourism
Dr Khuzwayo stated that the Draft Report covered what was discussed in the 2019/20 Annual Performance Plans (APPs) of the National Department of Tourism (NDT) and South African Tourism (SAT) inclusive of associated budgets. He said that if there was anything that Members wished to add to the Draft Report they should feel free to raise the matter and it could be incorporated into the Draft Report. He proceeded to speak to the observations of the Committee firstly in regards to the NDT and thereafter to those pertaining to SAT. It was followed by the recommendations that members had come up with to the NDT and to SAT given observations made.

Observations of the Committee with regard to the NDT
- Regarding the budget the Committee observed that 53% of the NDT’s budget went towards SAT for   marketing purposes. This did not leave much over for the NDT to fulfil its mandate and the Committee felt that the Tourism Vote remained underfunded by National Treasury.
- On the legislative front, the Committee observed that the Minister of Tourism had published the Tourism Amendment Bill for public comment. The Committee would prioritise the processing of the Bill once it was formally tabled in Parliament by the Minister.
- The Committee noted that the tourism industry currently contributed 720 000 direct jobs and 1.5m indirect jobs in SA which was 9.2% of total employment.
- The Committee was concerned that tourism growth in SA was still skewed with Johannesburg, Durban and Cape Town benefitting the most. It would seem that tourism development and marketing focussed more on urban areas at the expense of small towns and dorpies.

Observations of the Committee with regard to the SAT
- On international arrivals, the Committee observed that 65% was from Southern African Development Community (SADC) countries whilst only the remaining 35% were from SA’s core markets. This being said it had to be kept in mind that it was the core markets which drove much of the tourism spend in SA. The Committee was however concerned that international tourist arrivals to SA had declined by 0.6% when comparing figures of 2018/19 to that of 2017.
- The Committee noted challenges relating to the processing of visas which included in-country limited capacity, delays and red tape. This was concerning as visa challenges had caused declines in key source markets of China, India, Nigeria, Ghana, Ethiopia and New Zealand.
- The Committee was concerned that the land expropriation debate in SA was wrongly portrayed on several social media platforms in the USA and Australia. This had created negative publicity for SA.
Recommendations of the Committee with regard to the NDT
- The Committee recommended that the NDT and SAT adopt judicious methods of budgeting and spend limited resources by applying effective, efficient and economic budgeting principles that would allow the achievement of more outcomes with limited budget.
- The Minister of Tourism needed to argue the case for tourism in government and influence all colleagues in the Economic Cluster as well as other relevant government departments. Government departments should make provision for tourism enabling programmes and projects in their APPs to facilitate tourism growth.
- Members felt that the NDT and SAT needed to develop a strong philosophy and adopt bias towards rural and township/Ekasi tourism when developing the 2019-2024 Medium Term Expenditure Framework for the 6th Administration.

Recommendations of the Committee with regard to the SAT
- There needed to be continuous engagement with the Minister of Home Affairs to introduce a fully-fledged E-Visa and a visa on arrival regime in SA to facilitate tourist movement.
- SAT should work closely with the Department of International Relations and Cooperation and with Brand SA in involving its embassies in mitigating the impact of negative perceptions about SA abroad.
- SAT had to adopt a mind shift and fresh strategies to leverage on the weaknesses of SA’s currency through implementing targeted marketing campaigns in core markets such as China and India given that these countries were the ones driving tourist spend even though they only constituted a quarter of international arrival arrivals. 
- The Committee recommended that SAT revise its policy on grading and also ensure that the benefits of grading were tangible to graded establishments so as to encourage more establishments to enrol and remain within the grading scheme.

The Chairperson asked that it be captured in the Draft Report that there was a general degradation of places of historical interest like former President Nelson Mandela’s capture site at Howick Falls. Attention should be given to places that had been neglected in the past.

Mr M de Freitas (DA) congratulated the Committee Staff on a job well done with the Draft Report.

Mr K Sithole (IFP), on the Committee recommendation to South African Tourism (SAT) to finalise the case against its suspended Chief Executive Officer (CEO) and to expedite the filling of positions of Chief Marketing Officer (CMO) and Chief Financial Officer (CFO) (page 31, paragraph 9.16), asked that timeframes be added to the recommendation. 

Mr Z Peter (ANC), on the Committee recommendation to SAT (page 31, paragraph 9.11), suggested that the wording “well packaged messages about crime” be reworded to “well balanced packaged messages about crime”.

Ms S Xego (ANC) stated that she was in support of the Draft Report.

Ms M Gomba (ANC) agreed with Ms Xego and said that the Draft Report was a true reflection of the previous meeting of the Committee.

Ms L Makhubele-Mashele (ANC) too congratulated Committee Staff on a job well done on the Draft Report. Under Committee observations pertaining to the National Department of Tourism (NDT), she referred to the statement that SAT would receive R4bn from the NDT which accounted for 52.4% of its Medium Term Expenditure Framework (MTEF) Budget (page 23, bullet point 2). Given that the Committee was looking at the 2019/20 NDT Budget she felt it highly unlikely that 52.4% of the 2019/20 budget would be R4bn. She asked for clarity.

Dr Khuzwayo explained that the R4bn was a cumulative figure for the MTEF. One had to take into consideration estimated national expenditure. The appropriation to SAT was R4bn which was roughly 53% of the NDT’s MTEF budget which ran until 2021.

Ms Makhubele-Mashele said that the explanation was exactly the point that she was making. The Committee was looking at the 2019/20 financial year. So it was not possible for SAT to have received R4bn for the financial year 2019/20. The amount that SAT was getting for 2019/20 should be captured in the paragraph. 

The Chairperson addressing Dr Khuzwayo suggested that the phrase “projected to be” be used or that it could state that SAT’s budget was “approximately” 53%. He said that an addition should be made to the paragraph stipulating what the amount appropriated to SAT for 2019/20 was.

Ms Makhubele-Mashele agreed and said that the amount of R4bn was for the outer years.

The Chairperson, on recommendations regarding the NDT (page 30) referred to paragraph 9.4, asked that the words “awareness and encouragement “be added before the word “programme” in the paragraph. He also suggested that in paragraph 9.5 that “collaboration amongst departments” be captured somehow. On the Committee recommendation to SAT about revising the policy of grading (page 31, paragraph 9.15), he proposed that something should be added along the lines of “SAT need to assist emerging enterprises to qualify to be graded”. Emerging enterprises had to be assisted by SAT to reach the level for grading. He felt that villages/townships and even small dorpies must get attention regarding tourism. He conceded that perhaps they were covered under rural development but said that something more explicit was needed. He pointed out that for instance around the Kruger National Park there was at least 50 villages that should be take on board. He too congratulated Committee Staff on an excellent qualitative Draft Report. He placed the Draft Report before the Committee for adoption.

The Draft Report was adopted as amended.
The meeting was adjourned.


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