Trade and Industry Budgetary Review and Recommendation Report: party submissions

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Trade, Industry and Competition

16 October 2019
Chairperson: Mr D Nkosi (ANC)
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Meeting Summary

ANC, ACDP, EFF and FF+ Submissions (not for the public)

The Committee discussed party submissions on the draft Budget Review and Recommendation report. Submissions were made by the ACDP, EFF and FF+. The ACDP’s submission addressed broadening beneficiation, skills training and anti-dumping measures – these proposals were adopted by the Committee. More controversially, it proposed the scrapping of B-BBEE: discussion centred on this point, with the DA and ACDP proposing its replacement and scrapping respectively. The ANC and EFF opposed this. This provision was rejected. The EFF’s note on energy-intensive industries was accepted, while the FF+ concerns over the “sugar tax” were considered but not adopted.

The Committee agreed to meet the following day to adopt the report.

Meeting report

The Chairperson welcomed the members.

Apologies were read out.

The Chairperson indicated that the documents circulated included party inputs and a “clean” version of the BRR Report. The unedited draft before the Committee was the latest version of the BRR Report. He suggested an explanation from party members of their parties’ submissions.

Ms T Mantashe (ANC) reminded the Committee to adopt the agenda. Ms R Moatshe (ANC) moved to adopt, and it was seconded by Ms N Motaung (ANC).

Mr Andre Hermans, Committee Secretary, explained that the ACDP, EFF and FF+ had revised their submissions. The Committee had to go through each of the parties’ submissions and agree or disagree for inclusion in the final BRR Report. The Democratic Alliance was satisfied with the report as it was.

ACDP submission

Mr W Thring (ACDP) presented the African Christian Democratic Party’s input. The first clause of the submission spoke to the narrowness of beneficiation in South Africa, whereas there was a potential to expand this beyond the platinum and iron sectors. This clause proposed the Department look at broadening beneficiation. It also proposed a monitoring system for the growth brought by beneficiation.

The second clause spoke to establishing a partnership with the Departments of Basic and Higher Education. The ACDP proposed achieving synergy with the skills training of unemployed people.

The third clause proposed the scrapping of racial classifications. The fourth clause expanded on this, proposing that B-BBEE had failed in reducing unemployment and inequality, and that it thus should be scrapped.

The fifth clause spoke to supporting measures to protect the South African poultry industry from dumping.

Mr M Cuthbert (DA) noted his agreement with the ACDP’s submission, particularly clauses 3 and 4. South Africa had the highest Gini coefficient in the world, and BEE had been used for clientelistic reasons. He proposed BEE should be scrapped and replaced with a system that targeted inequality in a more nuanced manner. He proposed that, while the vast majority of poor people in South Africa were black, the affirmative action system could be more comprehensive and use different criteria.
Ms Mantashe had no issues with clauses 1, 2 and 5. However, she had issues with clauses 3 and 4. South Africa had to reach a state where it could “compare apples with apples”. Since the enactment of BEE there had been change in the economic status of some black people, but it was not at the desired level yet. She appealed to the Members who spoke before her that it was not yet time to advance the ideas they had. She proposed that the racial classifications were part of a kind of positive discrimination, and that therefore the ANC would never accept the scrapping of B-BBEE.

Mr Cuthbert replied that, looking at the expansion of the black middle class, particularly under former President Thabo Mbeki, much of this expansion was due to the neoliberal GEAR policy and did not focus on labour absorptive growth. He thus proposed that BBBEE did not actually meet its objective.

Mr Thring advanced that the best way to bring people out of poverty was to free them. He did not want to receive a position because of the colour of his skin, he wanted to earn it. He stated that black people were hardworking, competent and intelligent, and they did not need affirmative action to help them earn positions. Psychological studies had shown that affirmative action policies in the United States were psychologically harmful. He did, however, understand the position of the ANC.

Ms Y Yako (EFF) observed that companies realigning their policies to fit in to affirmative action policies were only doing this to keep contracts. She submitted that even affirmative action appointees were underpaid and underexposed based on the colour of their skin. The history of discrimination would not wash away in the coming decades. Discrimination had to be addressed by policy. The EFF’s position was that corruption had infiltrated the BEE policies. Rooting out loopholes in these policies allowing the rich to get richer was essential.

Ms J Hermans (ANC) seconded Ms Mantashe. The ANC did not support clauses 3 & 4 of the ACDP’s submission. As long as South Africa remained one of the most unequal societies in the world, B-BBEE would be a necessary policy. She proposed that, as long as South African poverty had a black face, particularly a black woman’s face, and there was not equal pay for equal work, the ANC would support B-BBEE.

The Chairperson reverted to the ACDP, asking Mr Thring to move the 3 clauses agreed on.

Mr Thring moved that clauses 1, 2 and 5 be adopted by the Committee. Ms Mantashe seconded this.

EFF Submission

Ms Yako proposed the EFF’s submission was more of a note that energy-intensive industries that did not want to pay normal tariffs and thus strangled municipalities extended beyond just the steel industry.

Ms Hermans suggested that the Committee add Ms Yako’s note.

Ms Yako moved for adoption, this was seconded by Ms Hermans.

FF+ Submission

The Committee Secretary clarified that the FF+ submission mirrored a pre-existing clause in the draft BRR on the effect of the Health Promotion Levy on the sugar industry.

Ms Hermans was of the view that the Committee would be putting the cart before the horse in including the FF+’s clause. She proposed that other measures to assist the sugar industry should be considered before the scrapping of the Health Promotion Levy. The ANC did thus not support this submission.

The Chairperson noted that this issue would not be missed given its inclusion in the 2019 Budget Vote. He proposed that Mr Mulder would be informed of this development given his absence.

ANC Submission

Ms Mantashe moved the submission.

Mr Thring seconded the submission, noting that it largely covered the material covered by the Committee in the preceding weeks.

Consideration of the BRR Report

The Committee Secretary committed to consolidating submissions in the report and circulating the amended document the next day. The Committee would then meet to vote on the report at 13:00 that day.

The Chairperson thanked the Committee Secretary, hoping that the final report should be circulated sooner rather than later.

Mr Cuthbert notified the Committee that the DA would be sending an alternate member in his and Mr Macpherson’s the following day and that they should be notified of the details of the meeting.

Mr S Mbuyane (ANC) asked if he could engage directly with the Secretariat on the report.

The Chairperson agreed that the member was entitled to make submissions directly to the Secretariat.

The meeting was adjourned.



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