In a virtual meeting, the Committee met to consider its Report on the adjustment budget for vote 38: Department of Tourism.
The Committee’s Content Adviser presented only the ‘Observations’ and ‘Recommendations’ of the Report, drawing on the most important points. The main highlight was the discussion on medical tourism, which many Members considered to be an important part of tourism, which should be given particular attention during the Covid-19 pandemic. However, a concern was raised that the introduction of the National Health Insurance scheme might change the medical tourism scenario in the future.
The slow pace of transformation in the sector was raised, and a Member suggested that the government should create a conducive environment for tourism to grow. Tourism recovery was another point of concern, as the Report indicated that businesses would operate just to break even post-Covid, and a more positive outlook was needed.
The Minister’s statement that businesses that did not comply with broad-based black economic empowerment (BBBEE) sector codes and did not contribute to the Unemployment Insurance Fund (UIF) would not qualify for support from the TRF and UIF benefits for their employees, led to disagreement in the Committee along political lines. The DA said that although this was government policy, it wanted to record that it did not agree with it. The Chairperson said the meeting’s purpose was to consider the Committee Report on the Department’s revised budget allocation, not to discuss parties’ policies.
The Report was adopted by the majority of the Members, with the DA and EFF withholding their support.
Opening remarks by the Chairperson
The Chairperson said the meeting would cover two items – consideration of the Report on the revised budget of the Department of Tourism (DOT), and the minutes. The Report had been circulated to all Members, so the Content Advisor was not expected to go into depth with it, and should rather draw attention to the salient points, particularly ensuring that the recommendations were a true reflection of what had been discussed and agreed to by the Committee.
Report of the Portfolio Committee on Tourism on Adjusted Budget Vote 38: Tourism
Mr K Sithole (IFP) made a proposal that Dr Sibusiso Khuzwayo, Content Advisor, should begin with the observations and then go on to the recommendations in the Report.
The Chairperson said the reason Mr Sithole was making the proposal was because the Members had gone through the Report already.
Observations and Findings:
Dr Khuzwayo said that from the discussions that the Committee had had with the National Department of Tourism (NDT) and South African Tourism (SAT), the impact on the initial allocation of R2.48 billion for Vote 38 had been a downward revision of 40.3%, which was a cut of R1 billion. This had serious implications for the targets initially set by the NDT for the 2020/21 financial year. Programmes mainly affected were the tourism grading support, the market access programme, and the cancellation of certain meetings and events. There was also a huge impact on the transformation agenda that the Committee was driving.
As a result of the removal and cancellation of these programmes, the budget needed repurposing for future plans. The Department and SAT had told the Committee that it was looking mainly at the internal programmes that would capacitate them to be able to fulfil their mandate when the tourism sector eventually reopened. The NDT was implementing a project called Enterprise Project Management, where it focused on internal controls; transformation of the sector; creating market access for new entrants to the sector and packaging new attractions and experiences that would ensure that by the time the sector reopened, at least the country was repurposed for domestic tourism.
The next observation was the disbursement of the Tourism Relief Fund (TRF), where initially there was R200 million that had been capitalised. The Department had been requested to implement this fund, because initially it was meant to support 4 000 entities, which capped the support at R50 000 per entity. The Committee had been impressed that out of the 7 293 applications received, 3 861 applications had been approved.
Another observation in the Report was the focus on domestic tourism, where the NDT and SAT was currently engaging the provincial destination management organisations through the chief marketing officers’ forum, to discuss how to drive both domestic and international tourism. Enhanced communication was another observation that should be improved on.
The Committee had been pleased to hear that the NDT had launched the crowd survey through the #ShareSouthAfrica platform to source ideas at a local level, and that it was getting positive results.
The next observation was the significance of adhering to legislation by the tourism sector, where the Committee had noted that there were concerns from some industry stakeholders about the broad-based black economic empowerment (BBBEE) requirements for them to access government relief assistance. The Minister had stated that businesses that did not comply with BBBEE sector codes and did not contribute to the Unemployment Insurance Fund (UIF) would not qualify for support from the TRF and UIF benefits for their employees.
The eighth observation was the obstacle to transformation, which was one of its key priority areas. However, the budget cuts had had a huge impact on the Committee’s efforts to expedite transformation. Departmental programmes such as the Tourism Incentive Fund and Working for Tourism were at the centre for driving transformation. Tourism recovery was another observation, where the Committee had noted that SAT was currently finalising the national tourism recovery strategy. It had also observed that even when the recovery set in, the tourism sector would not return to pre-COVID conditions, as many jobs would have been lost due to the pandemic.
Governance and organisational stability were the next points, and the Committee had been pleased that both the Department and SAT could operate effectively with their current vacancies. It had also welcomed the new appointments, and believed these individuals would steer the Board towards a developmental and transformational trajectory.
Medical tourism was a proposal made by the Committee, in which South African Tourism should consider promoting the country as a preferred destination for both during and post COVID-19. However, the Committee was aware of the regulations set by the National Coronavirus Command Council (NCCC), and that the World Health Organisation (WHO) was advising against such activities. The marketing work should aim to put the country on the map for medical tourism to attract medical tourists when international tourism reopened.
Lastly, Dr Khuzwayo referred to the impact of the revised budget on the recommendations made during the Budget Votes. The revised budget would not have an impact on the revised 2020/21 Annual Performance Plan (APP) tabled by the Minister of Tourism. The Minister had already considered the budget cuts by the National Treasury, and the revised APP was already in line with the Special Adjustment Budget.
The Committee encouraged the NDT and SAT to carefully implement the risk adjusted strategy in relation to tourism, consider the following recommendations and report back to the Committee before the end of the 2020/21 financial year. The Committee recommended that the Minister of Tourism:
- Engages the National Treasury on the importance to fund tourism to revive this economic sector as it contributed massively to the gross domestic product (GDP) of South Africa.
- There should be intense discussion with the National Treasury (NT) to continue funding the tourism mandate. The Minister should engage with the NT to recapture the Tourism Relief Fund with immediate effect. The continued closure of the sector meant that there were businesses in distress that needed to be assisted.
- The Temporary Employment Relief Scheme (TERS) was outside of the Department, but it was where companies could claim. There was a need to ensure that the UIF benefit was still available so that companies did not retrench.
- The needed to be improvement in communication and public education about BBBEE imperatives for transformation, how tourism businesses could comply with this national democratic process for redress, and people had to be kept abreast of what was happening in the sector.
- The issue of intergovernmental collaboration had never been more important than now. There was a budget, even at the provincial and local government level, that would be made available for tourism development and marketing.
- The call was for a whole government approach, to ensure that other government departments fulfilled their tourism support roles, and were made aware of the importance of supporting the tourism sector.
- The NDT and SAT should ensure the development of the case for tourism by presenting a funding proposal to the NT that would ensure that all votes would be zero-rated. Each sector would have to make a case for them to be funded. It was important that before the end of the financial year, the Committee knew the plans that had been submitted to the National Treasury.
- There must be guarantees that the zero-rated budget reprioritised departmental programmes that would ensure the recovery, and inclusive and sustainable tourism growth of the sector.
- The zero-rated budget proposal should feature the transformation agenda of the tourism sector of South Africa, as it was one of the important elements of oversight that the Committee was looking at in this term.
- It must prepare the country for the reopening of the tourism sector in the post-COVID era. SAT was working closely with the Tourism Business Council of South Africa (TBCSA) to ensure that the country was ready. Tourism was a level one or two activity so until then, the sector would not be opened fully.
- Domestic tourism products should be adapted, particularly those that were meant for the international market, to ensure they were suitable for the domestic tourism market.
- Instruction Note 5 of 2020 had been issued by the National Treasury to all the departments to ensure that it was given leeway in terms of their procurement processes in the fight against COVID-19.
- Improve the communication strategy to enhance predictability and transparency for both the Department and SAT by establishing a weekly stakeholder feedback session. The Committee would await the interpretation by the Minister and SAT to see how it would create this platform.
- Packaging and marketing the country through SAT as a preferred destination for Medical Tourism.
Dr Khuzwayo said any additional input would have to be incorporated in the Report by the end of the day, because tomorrow was the last day to report to Parliament in terms of the Budget Reports.
Mr Sithole said the Report was spot on as Members had received it earlier. One point that he wanted to add was the timeframe of 60 days after the Report was tabled to Parliament, so that the Department could monitor and evaluate the progress.
Mr G Krumbock (DA) said he would pass and wait for the second round to ask questions.
The Chairperson said that there would not be a second round.
Ms M Gomba (ANC) said that she was very impressed with the Report, particularly the reference to medical tourism, as she believed it was one of the most important parts of tourism that the Committee needed to attend to, especially during the current situation of COVID-19.
Mr M De Freitas (DA) referred to the ‘Obstacle to Transformation’ in the Report, and suggested that it should be included that government should create a conducive environment for tourism to transform and grow. Under the heading ‘Tourism recovery’, the Report stated that even when the recovery sets in, the sector would not return to pre-COVID conditions, but initially businesses would operate just to break even. He did not understand where this came from, as it was not in the discussions and the information that he had read did not indicate this. He was nervous about ‘businesses operating to break even,’ because there was no data to support this. Under the heading, ‘The significance of adhering to legislation by the trade’, it was stated that BBBEE was a policy through which the South African government intended to facilitate redress and ensure that the country was transformed for the benefit of all its citizens. He said that if this was on behalf of the Committee, then he was happy for the Report to say that some Members of the Committee agreed with this policy, but DA Members did not.
The Chairperson said that the position had always been that post-COVID, some businesses would perish, some would survive, some would grow, and some would struggle to operate. He added that the Members were here as a Committee, and not as different political organisations.
Dr Khuzwayo responded that businesses would initially operate just to keep afloat, but it would take more than just mentioning all the possible scenarios. From a risk perspective, the investment portfolios of those businesses were doing fine. He would respond to Mr De Freitas not agreeing with the BBBEE policy when he concluded.
A Committee Member said that the Report covered the views of the Committee and was reflective of the discussions they had had. She gave credit to those who had prepared the Report. She agreed with the point made by Mr De Freitas on stressing the importance of transformation and for the government to create a conducive environment for tourism to grow. However, she was not happy with his points regarding BBBEE, because it was an existing policy of government that had been adopted, and it could not be changed. Normally in a Committee Report, Members talked as a Committee and not as political parties.
Ms L Makhubela-Mashele (ANC) had an issue with two points in the Report. The Department was working on a risk adjusted strategy, and putting in timeframes such as six months was problematic. She suggested that the Department should rather state that it must report in the financial year, and state how they were working around the adjustment budget and the risk adjusted strategies to recover the tourism sector. Her second issue was about the BBBEE sector codes and government policy. She thought it would be incorrect to entertain that any political party did not support BBBEE in the Report. It was within their right and it could be raised on other platforms, but the Committee would continue with the Report as captured, because it was government policy.
Mr H April (ANC) thought that the Report adequately covered the views of the Committee, and he concurred with the sentiments made. He also wanted to agree with some Members who believed that the Report was one of Parliament and was not necessarily a Report of any political party, and therefore they should resist going down the route of saying what the parties’ policies were with regard to BBBEE.
Mr Krumbock asked if he could speak, and the Chairperson said that he had forfeited the opportunity earlier.
Mr Krumbock responded that he was waiting to hear what the input would be, and as a third Member on the Committee, he believed this to be correct. He was not the shadow Minister or shadow Deputy Minister, so he was trying to be respectful.
The Chairperson said that he would give Mr Krumbock an opportunity to speak, but he was supposed to know how the Committee operated, as there was no second round.
Mr Krumbock said he appreciated the Chairperson giving him an opportunity to speak. It was just that he preferred that the number one and two of his party spoke before him, because it was not appropriate otherwise. The Committee had taken a different view on the point raised by Mr De Freitas, but he did not think there needed to be a dispute. The BBBEE policies had been passed by Parliament with the majority and it therefore was a government policy. Although the BBBEE policy had parliamentary majority, it did not mean that the Members of the DA necessarily shared the same views. He believed that he, Mr De Freitas, and Mr Gumbi were allowed to pose alternatives and contest elections on the basis that they had a different view on certain issues, and allow individuals to support it or not. They were not North Korea -- they were allowed to have an opinion. He thought it would be untruthful and wrong to say that every person on the Committee agreed with this policy, as it was not the case. He agreed that Members should act as a Committee and, where possible, should strive to reach consensus. However, there would be occasions where all Members could not agree and that should be acceptable, because that it was what having a multi-party democracy meant. He suggested that there should be a change of wording in the Report that would accommodate every Member, including those that had taken an opposing view. By phrasing it differently, it could encapsulate the views of every Member in the Committee.
Regarding the actual presentation, Mr Krumbock had asked himself what the long-term future of medical tourism would be, because it was an important part of the tourism spend in the country. With the National Health Insurance scheme, it was unlikely that there would be the same number of tourists visiting the country to enter private medical institutions and spend money. He wondered if the Report should be amended to flag this as something that might not be as profitable in the scenario where the health institutions would change in the future.
Lastly, he believed that the Committee should all agree that it would like to see a tourism industry that was providing more employment, more tax revenue for the fiscus, and enabling a far greater pace of transformation to take place. If people were doing well, it would attract other people as an industry that they would like to get into, but if they were all breaking even there was not much attraction for people to leave their careers and go into an industry that was merely ‘breaking even.’ If the Report reflected a more positive and forward-looking view of the Committee, it could use the word ‘thriving’ instead of ‘breaking even,’ which would create a more positive outlook.
Mr Sithole was confused, because every party had their views on BBBEE policy. It was none of their business what the DA’s views on the BBBEE policy were, and whether they complied, but as a Committee they should agree to follow the policy of government. On behalf of the IFP, he supported the Report with the amendments to the recommendations.
Mr H Gumbi (DA) said that Mr Krumbock had made some constructive remarks on how the Committee could go forward, and did not think that there should be a major dispute about this.
Mr De Freitas said that Mr Krumbock had covered the part about BBBEE, but he did have other suggestions for amendments which he asked to be considered.
A Committee Member said that Members should not to be partisan in the Committee meetings. At this stage, the Committee was confirming what happened in the meetings that had previously been held, and Members were meant to just correct, rephrase, and improve on the Report, and not add new points.
Mr P Moteka (EFF) said there was no debate about BBBEE -- it was the way to go.
Ms Makhubela-Mashele said she was in support of BBBEE as a government policy, and it was very unfortunate that Mr Krumbock would want to take them back and come to the Committee of Tourism to dispute a government policy that did not even belong in the tourism sector, except for the BBBEE sector codes. From what she gathered from Mr De Freitas, he did not have a problem with other Members and the Report agreeing with BBBEE, but as a political party they did not subscribe to this policy, which was fine. She suggested that moving forward, the Committee should not allow a Member who forfeited his/her turn to speak to summarise all the points given by speakers -- only the Chairperson should be allowed to do so and give input. It was incorrect that Mr Krumbock had decided to speak on every input given by Members of the Committee, which suggesting that he had a superiority complex.
Mr Krumbock interrupted that if people were going to make comments suggesting that other people were racist, then there would be a problem. He suggested the Chairperson should get the Committee under control.
Ms Makhubela-Mashele interjected that she did not call anyone racist.
The Chairperson responded that he had been told that Mr Krumbock was one of the most experienced and long-term serving Members of the Committee, and that experience should reflect on how he handled issues in the Committee. If he wanted to speak, he should raise his hand and the Chairperson would allow him the opportunity.
The Chairperson said that democracy had its comforts and discomforts, and one should live with this reality. Before the meeting closed, every Member would always have an opportunity to speak on any matter. However, today the Committee was dealing with a Report which was the outcome of an interaction between the Committee, the Department of Tourism and South African Tourism, as a consequence of the review of the budget imposed on the Department and the rest of the public by COVID-19. The Committee was not here to review or analyse policy, but simply looking to see if the Report reflected the discussions that ensued between the Committee, the NDT, and the entity.
Secondly, he did not think that Mr Krumbock could compare the situation of the Committee to North Korea or Kim Jong-Un’s approach to dealing with issues – he did not think that it came close to that. South Africa’s democracy was one of the most advanced democracies in the world, and it had been an unfortunate expression on Mr Krumbock’s side. The matter that took place involving BBBEE was actually a law, and if Members had problems with the law, they should amend the law, but it could not be done by the Committee of Tourism discussing the implications of the budget as a result of COVID-19. If Mr Krumbock would like to change the BBBEE law, Parliament had procedures on how this could be done.
The Chairperson appreciated that the Committee Report reflected the interactions between the Department SA Tourism. As for the proposal it makes that future medical tourism may be affected by the National Health Insurance scheme, the Department would have to review the situation when it reached that state, because any proposal that the Committee made were being made under conditions that could change any time.
On the adjustments made, he was sure that they would respond accordingly. He agreed with the Members that the Committee should avoid speaking as a political party, as it was in a meeting that represented Parliament. If Members were going to speak on behalf of their political parties, there would be chaos in the meetings. If the Chairperson was to behave wearing the cap of the ANC, his conduct would be different and would not resemble the conduct of an honourable Member.
The Chairperson asked if there were Members who were for the adoption of the Report.
Mr Sithole moved the adoption of the Report with amendments.
Ms Gomba seconded the adoption of the Report.
He asked if there were any objections to the Report with amendments.
Mr De Freitas and other members of the DA objected to the Report.
Mr Moteka had also objected to the Report.
The Chairperson noted the objections that were expressed by Members of the Portfolio Committee of Tourism. The majority of Members adopted the Report with amendments. The Report was now adopted.
Ms Gomba moved the adoption of the minutes.
Mr Sithole seconded the adoption.
There was no objection for the adoption of the minutes, and they were adopted as a true reflection of the discussion that was held.
The Chairperson thanked the administration for the manner in which it had assisted in crafting the Report.
As a Committee, with the Republic of South Africa, it offered its condolences to the Mandela family on the passing of Zindzi Mandela, and to the rest of the families in South Africa who have lost loved ones. He wanted to remind Members that it was Mandela month, and they should try to contribute to the wellbeing of others.
The meeting was adjourned.
No related documents
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.