Impact of SONA on Tourism sector; Term 1 Programme

Meeting report

Briefing on the implications of the State of the Nation Address (SONA) 2020 for tourism
Dr Sibusiso Khuzwayo, Committee Content Advisor, assisted by Ms Sisanda Loni, Committee Researcher, briefed the Committee on the implications of the SONA 2020 for tourism.

Dr Khuzwayo provided the Committee with a snapshot of tourism performance. Unemployment in SA currently sat at 29%. In 2019 President Cyril Ramaphosa had announced a target of having 21m arrivals by 2030. To achieve this target SA needed to have a 6% compound growth per annum. The current tourism performance did not reflect a growth trajectory to meet the 2030 target. The latest statistics released by Statistics SA (StatsSA) for November 2019 showed a 2.3% decline in arrivals. This translated to a loss of about 615 000 arrivals in 2019 which was an R5bn loss in tourist spend for SA.

The Committee was provided with insight into how issues spoken to by President Ramaphosa in the SONA tied in with tourism. On inclusive tourism growth, President Ramaphosa spoke about the launch of the Tourism Equity Fund. There was however already a Tourism Transformation Fund in place. Members were urged to ask the NDT to explain what the difference between the Tourism Equity Fund and the Tourism Transformation Fund were. Both Funds were aimed at addressing transformation in the sector. SONA also indicated that government was cognisant of the implications that tourist safety and security had on the bigger picture of economic growth and job creation. In August 2019, the Committee had convened a consultative workshop with relevant parliamentary committees on tourist safety and it was starting to bear results. The Committee was urged to convene more joint meetings of this nature with relevant counterparts. President Ramaphosa had also spoken about linking the district development model to tourism development. The NDT needed to outline how tourism would be integrated into the district development model. Perhaps the master plans of the NDT could be integrated into the model.

The President also highlighted the importance of building social compacts through partnership and cooperation. To this end it was important for the Committee to understand how investment decisions were made in the tourism sector. The Committee needed to have a closer working relationship with the Tourism Business Council of SA (TBCSA). The NDT too had to formalise partnerships with other government departments. SONA also touched on the importance of leveraging on social capital. South African Tourism should use outstanding citizens like Mr Siya Kolisi, the Springbok rugby captain, in boosting destination marketing. The SONA made mention of an economic recovery plan.

National Treasury had developed a paper entitled ‘Economic Transformation, Inclusive Growth and Competitiveness’. The economic blueprint policy paper did focus on interventions for the tourism sector one of which was for SA’s visa regulations to be amended to ensure a better balance between security concerns and the growing tourism sector. The observation made was that the proposal focussed more on tourism agencies which dealt with marketing and neglected tourism development. The Committee’s focus for the 6th parliament was on the development of villages, townships and small dorpies. The tourism budget should therefore focus on these niche tourism opportunities to bring about transformation. The Committee was urged to engage with the Ministers of Finance and Tourism on the National Treasury proposals contained in the economic recovery discussion paper.

President Ramaphosa stated that the proposed state bank was at an advanced stage of development. Tourism entrepreneurs faced many challenges ie lack of capital, lack of access to markets and inadequate government support. The suggestion was made that the proposed state bank should be given a tourism development mandate as tourism was a priority sector. Unstable state enterprises like Eskom and the South African Airways (SAA) was spoken about in the SONA and like many sectors tourism was adversely affected. Load shedding affected tourism establishments and attractions whilst the cancellation of international and domestic routes by SAA tarnished SA’s image and may cause a decline in international tourist arrivals. From the Committee’s side engagement with the Minister of Tourism should take place over possible partnerships between SA Tourism and SAA to increase numbers on international routes. SONA mentioned the Presidential Youth Employment Intervention and women participation. For the benefit of the Committee, the NDT should outline how it would align its women and youth programmes with for arguments sake the Presidential Youth Employment Intervention. In the SONA it was acknowledged that the digital economy would increasingly become a driver of growth and a creator of employment. Tourism bookings were becoming more automated and digitalised. The NDT and SA Tourism should indicate how they have embraced the Fourth Industrial Revolution in all aspects of tourism. Members were informed that climate change was institutionalised in the Office of the President. Climate change had a broad impact on tourism. It posed a threat to the tourism industry’s sustainability. The NDT and SA Tourism needed to indicate to the Committee how ready and equipped government and the local tourism industry were in tackling this challenge. Other issues which the Committee needed to consider was how ready SA was for the Corona virus. 

First Term Committee Programme (28 January 2020 – 20 March 2020)
Mr Jerry Boltina, Committee Secretary, presented the Draft Committee Programme to the Committee.

Discussion
The Chairperson asked that members express their views on both the briefing and on the First Term Draft Committee Programme.

Mr T Khalipha (ANC) stated that having joined the meeting at a late stage he did not have anything to say about the briefing other than expressing appreciation for it. He did however support the First Term Draft Committee Programme.

Ms M Gomba (ANC) appreciated the briefing by the Committee Content Adviser and the Committee Researcher. It would better equip members in their interactions with the National Department of Tourism (NDT).

Mr E Myeni (ANC) asked whether the Tourism Equity Fund and the Tourism Transformation Fund both spoke to villages, townships and small dorpies. He asked when the Committee would be privy to the master plans of the NDT so that members could make input.

Mr P Moteka (EFF) also expressed appreciation for the hard work that had gone into the briefing. He was aware that on most of the issues members would have to have a dialogue with the Minister of Tourism. Why the introduction of a Tourism Equity Fund when there was already a Tourism Transformation Fund? This spoke volumes about the lack of communication between the Minister of Tourism and President Cyril Ramaphosa.

He stated that black women had less than 10% ownership of businesses. For blacks the figure was less than 48%. He stressed the need for something drastic to happen. The Committee had in its six months of existence set the tone that the focus of tourism needed to be on villages, townships and small dorpies. If there had been communication between the Minister and the President then the issue of villages, townships and small dorpies would have been highlighted in the SONA 2020. The facts were that the SONA 2020 had been silent on it. Perhaps villages, townships and small dorpies could be provided for in district models. He asked Committee Support Staff to check whether the South African Commercial, Catering and Allied Workers Union (SACCAWU) were the only union relevant to the tourism sector. There could be other unions active in the sector as well.  He was pleased with the First Term Draft Committee Programme.

Mr M de Freitas (DA) also expressed appreciation for the briefing and said that it was best if the NDT responded to the issues raised in the briefing. A meeting should be scheduled for this to happen.

Mr H Gumbi (DA) emphasised that the biggest threat to tourism was the collapse of South Africa as a state and the collapse of its economy. There were problems everywhere. Crime was out of control and load shedding was a daily occurrence. Service delivery of basic services was also lacking. All these issues had a huge impact on tourism. The Committee needed to have focus to have some progress which in turn could enforce certain outcomes. For one, grading should be made free of charge and this should be impressed upon the Tourism Grading Council of SA (TGCSA). How could this be done? He said that cross political support was what was needed. He added that the Committee in doing oversight visits should choose areas where there were multiple facets of state failure.

Mr G Krumbock (DA) said that the concerning thing about the briefing was that it highlighted the fact that not everything was in the control of tourism. Failures on service delivery and high crime were beyond the control of tourism. The issue was about what the Committee, the NDT and entities could do about getting tourist numbers to where it ought to be. He referred to figures released by StatsSA for November 2019 which spoke about a 2.3% decline in arrivals (Slide 4). This translated to a loss of about 615 000 arrivals in 2019. This loss of tourists apparently translated to an R5bn losses in tourist spend in SA. He asked how the R5bn figure had been calculated. For many years, the Committee had insisted that a figure be calculated on what the optimum marketing spend for SA overseas should be. A study had been commissioned. A pilot study had been done in the Nordic region but to date the Committee had heard nothing else over the matter. He conceded that even if a figure was given to the Committee it did not necessarily mean that National Treasury would be forthcoming with the funds. He felt that the Committee should be updated on what was happening over the matter. The use of technology ie Trip Advisor had taken off immensely. People read reviews posted on TripAdvisor and made their bookings accordingly. He had observed that the establishments that had received good reviews were all clean. He pointed out that in Rwanda every citizen was given the responsibility of keeping the country clean. SA needed to have an inter-ministerial committee of sorts to deal with the issue. There needed to be pride in keeping SA clean. It was something over which there could be control. A clean country certainly was something tourists would appreciate. It was one of the easier obstacles that could be overcome.

Mr Z Peter (ANC) was in favour of the First Term Draft Committee Programme and was in favour of it being adopted. He welcomed the briefing and disagreed with Mr Moteka’s take on things. He felt that President Ramaphosa had said a great deal in his SONA. On energy President Ramaphosa had spoken to the Eskom issue. Yes, load shedding had a negative impact on the economy and also affected tourism. There was also the issue of rationalising state owned entities. It remained to be seen whether it would have a positive or negative impact on tourism. The issue of crime and the South African Police Services (SAPS) increasing their visibility was mentioned. The Committee itself had spoken about crime and safety issues. There was also the fight against corruption which was prevalent. It was something that the Committee could not turn a blind eye to. President Ramaphosa had also stated that 44 000 hectares of state land would be released. What impact would it have on tourism? He remarked that the Committee should not be too hard on itself. Parliament had just started a new term. The Committee was putting systems into place. Things would be different. The Committee had achieved a great deal in the last six months under the leadership of the Chairperson. Tourism did not have the luxury of time. Everything happened quickly. For instance, the comments by the former Deputy President FW De Klerk about Apartheid not being a crime against humanity did not help things. Even though he had retracted his remarks the day before, the damage was perhaps already done. He felt that the Committee needed to be hands on on the Strategic Plan of the NDT. The Chairperson needed to set the tone on the direction that the Committee needed to take. He also felt that people needed to know what the Committee was doing. Perhaps the Committee could develop a template to populate the achievements of the Committee over the last six months.

Mr Moteka said that he had not said a great deal as much of what needed to be said had to be directed towards the Minister of Tourism. He felt that mediocrity should not be applauded. The loss of R5bn in the tourism sector was a crisis. Load shedding by Eskom too was a crisis as it affected the economy. Perhaps President Ramaphosa had said a great deal but it amounted to nothing when it came to uplifting the poor. The Committee felt strongly about the issue of villages, townships and small dorpies but the SONA had been silent on it.

Mr Khalipha agreed that the Committee had hit the road running six months ago but there were already programmes running when the Committee had come in. It was best for the Committee to wait on the Budget Speech of the Minister to check on whether issues that were important to the Committee were covered. Tourism issues would be covered in the Budget Speech of the Minister. The President was informed by the programmes of the ruling party. He asked that members refrain from politicking. The new term should not be started on the wrong foot. Constructive criticism was acceptable. He did not take too kindly to the statements made by Mr Moteka. Criticisms could be made after the Budget Speech of the Minister. If villages, townships and small dorpies were not mentioned then the Committee could criticize. There were 28 departments in all. Should the President be expected to cover all issues?

Dr Khuzwayo responded that most of the issues were to be directed towards the NDT, the Ministry and stakeholders. As such he would not deal with questions that arose. He would perhaps speak to what the Committee could do. He did feel that there was a need to intensify joint committee meetings. Committee support staff would look at ways of bettering linkages.

The Chairperson interjected and stated that there were 19 departments that were relevant to tourism on which better linkages were needed.

Dr Khuzwayo said that in order for more joint committee meetings to take place there was an institutional process that had to be adhered to. There should however be joint committee meetings at least once a term. It was something that had to be institutionalised. On planning, he stated that the NDT would on 11 March 2020 table its Five Year Strategic Plan. If there were issues that members had raised and it was not reflected in the Strategic Plan, then members could approach the Minister. The Minister could issue an addendum to the Strategic Plan to cover those issues that had been left out. He urged the Committee to wait for the process to unfold. He was aware that there were priority issues for the Committee but there needed to be an overall alignment. On the figures that had been spoken to, he suggested that experts be called in to unpack them. It would shed light on what the figures should be. The Financial and Fiscal Commission (FFC) could be requested to speak to the adequacy of the tourism budget. In the Fourth Parliament, the FFC had stated that the budget of tourism was inadequate to cover its mandate. The outcome of the Strategic Plan lead up to the Budget Report. He added that the FFC analysis could be part of the Budget Report. A meeting with the FFC could be scheduled in the Second Term Programme.

Mr Boltina stated that the grading issue seemed to always come up and never got resolved. On resolving the matter, he said that the Committee needed to find out when tourism legislation was coming to Parliament. It was important for the NDT to table the legislation or else the Committee could not do much.

The Chairperson highlighted issues that the Committee needed to look into or discuss. These included having quarterly meetings of Legislative Tourism Oversight Forum (LETOFO), the deployment of members during oversight, using technology to do oversight, collaboration with universities and Technical and Vocational Education Training (TVET) Colleges and having joint committee meetings with the 19 identified government departments. There would be bilaterals with chairpersons of those committees with whom joint meetings would be had. He continued that the Committee needed to set up a Whatsapp group for better communication amongst the Committee, that a meeting with the Zion Christian Church (ZCC) be scheduled and that committee visits would be undertaken to Orania and to wine farms in the Western Cape and Northern Cape. Additionally, the Tourism Bill needed to be tabled and on issues raised around the SONA 2020 the Committee would await the Minister’s Budget Speech and the Strategic Plan of the NDT. In addition, a letter would be written to the Minister about poverty being concentrated in villages, townships and small dorpies and given that the President could not raise the issue in the SONA it was of great importance that it be covered in the Minister’s Budget Speech.

Mr Moteka fully supported writing the letter to the Minister around covering villages, townships and small dorpies in the Budget Speech.

The Chairperson highlighted that in debates, Members could also raise the issue of poverty. The newly implemented practice of tracking Committee resolutions had been presented to the presidium of parliament. It was now perhaps on the books to adopt the Committee’s model for the entire parliament. An automated system for decisions taken in the House and in committees was needed. The TGCSA would be informed around decisions that the Committee had taken around grading. He explained that equity was shareholding. The Executive wished to set aside funds for entrepreneurs to buy equity in big companies. This was being done to bring about transformation. He had met with the Minister just prior to the meeting and had discussed overlapping mandates as well as work with other government departments. Issues around safety and transport had also been discussed. On keeping SA clean, the Minister needed to have meetings with her counterparts in Cooperative Governance and Traditional Affairs (COGTA) and Environmental Affairs. He informed the Committee that the FFC in the variables that they used in doing calculations did not wish to move away from using population data with respect to provinces. StatsSA on the other hand, had data which placed emphasis on poverty which was prevalent in certain provinces. He had suggested to the FFC to place more weight on poverty than on population numbers. The FFC did not wish to make the change. He remarked that one should be willing to rattle the system. The same formula could not be used over and over again. Consensus was needed on the formula to be used. He added that the Chief Executive Officer of SA Tourism had been reinstated.

The meeting was adjourned.