Western Cape Second Adjustments Appropriation Bill: Economic Development & Tourism

Meeting report

The Chairperson welcomed the Committee and delegation to the meeting. The rules of engagement were explained, after which Members were introduced.

Mr David Maynier, MEC: Finance and Economic Opportunities, in his opening statement, said that Members of the Committee would know that the second adjustment budget had seen a reduction of approximately R4.9 million in the current financial year and as such, the overall budget went from R547.5 million to R542.5 million. A highlight for the Department was the R12 million additional allocation it received for the Covid-19 Relief Fund to support small businesses who had obviously been hit.

Western Cape Government: Economic Development and Tourism 2nd Adjustment Estimate 2020 Presentation

Mr Solly Fourie, Head of Department: Western Cape Department of Economic Development and Tourism, stated, in his introductory remarks, that the Department had a difficult year as a result of the Covid-19 pandemic and its impact on the economy.

Key Adjustments:

First Adjustment Appropriation

• R547.540 million

Funds Surrendered

• R11.172 million realignment of Compensation of Employees
• R8.800 million realignment of Municipal Energy Resilience Project funding to 2021/22 financial year

Funds Received

•  R1.022 million received from MERSeta for Skills Development
• R12.00 million allocated from Provincial Revenue Fund for the WC Business Relief
• R1.500 million received from Vote 1: DotP for WC Safety Plan
• R 500 000 received from Vote 4: DoCS for WC Safety Plan

Second Adjustment Appropriation

• R542.590 million
• R4.950 million decrease in budget

Discussion

Mr A van der Westhuizen (DA) said there seemed to be a small amount of R1.6 million for higher education institutions and wished to know what the intention was for that as it seemed to be a new initiative which came through with the adjustment. Secondly, he sought to know the approach taken towards staff costs and staff vacancies as in the past it was often used as a tool to effect savings.

Mr L Mvimbi (ANC) wanted to know why there were two different amounts for the support to SMMEs and why they had been separated – R39 million and R14 million. Lastly, regarding the compensation of employees’ issue, he sought details as to the positions which could not be filled by the Department.  With reference to page 325, he requested more information regarding any additional posts which would be needed, especially in the office of the HOD, and why they had not been budgeted for on the main projections.

The Chairperson stated that on pages 337 to 345, there was a long list of businesses and wanted to know if those were the businesses which were getting assistance from the Covid-19 Business Relief Fund from the Western Cape. The Tourism Product Development of the Western Cape would be giving financial assistance for tourism relief specifically, as indicated on page 330 that R426 000 would be set aside for that. Clarity was sought on whether in the current and in the next budget the list of receiving beneficiaries would be similar and how many businesses would be supported from that fund.

Referring to page 331, the Chairperson congratulated the Department for setting aside money for the Energy Development Programme, as well as the Work Placement Supply Programme which amounted to R100 000 for the first and R4.2 million for the second, elaborating further that it was important to ensure that people were sufficiently trained and skilled for the jobs of the future.

Lastly, with reference to the R600 000 on page 328 which had been set aside for the Halaal Value Chain and Class Development Programme which intended to grow businesses within the Agri-processing sector, she sought more information with regards to that.

MEC Maynier agreed that economic recovery must be prioritised and would have preferred to not be in a position where budget cuts have to be absorbed. Further details surrounding the R12 million, which was allocated to the Covid-19 Relief Fund and the Department, would be provided in due time.

Mr Fourie responded that the money which had been allocated for the Higher Education Institution Fund had been appropriated in the first appropriation. In the first appropriation, the Department sought to fill posts, however, due to Covid-19 many of those posts could not be filled. The Department took a different view on how it allocated priority posts. While there was a realignment with regards to money, it had been set aside for SEOs.

He clarified that the SMME amounts were different as a result of the different project classifications and how different values were assigned to different projects. The Western Cape Business Relief Fund amounted to a rounded up R39 million, whilst the R14 million was a carry-over from the previous financial year and would be used to support businesses in various aspects and not only with regard to Covid-19 relief.

Ms Mymoena Abrahams, Chief Financial Officer, Western Cape Department of Economic Development and Tourism, responded that the R4.9 million was the net amount received. The Tourism Relief and the Product Development Fund could be found on page 38 of the Appropriation Bill along with the full list of the captured R5 million for that area. Two nonprofit institutions had been supported as a result of that.

Mr Rashid Toefy, Deputy Director-General: Economic Operations, Western Cape Department of Economic Opportunities and Tourism, responded that last year, the Department realised there was a huge market and potential for the Halaal industry which had not fully been tapped into. The Department responded in supporting various businesses, however, at the initial stages, focused primarily on allowing authorities to reach international standards. Thereafter, they focused on supporting various businesses in the Agri-processing space to prepare themselves for compliance with those international authority standards which would allow them to become export-ready.

Consideration and deliberation on Vote 12

Mr D Mitchell (DA) supported the budget vote.

Mr Van der Westhuizen seconded the motion to support the vote.

Mr Mvimbi explained that whilst he was grateful for the way in which questions were answered, he believed that the budget could have done a lot more in terms of addressing economic challenges which arose as a result of Covid-19. On behalf of the African National Congress (ANC), he exercised his righ,t in terms of Standing Rule 90, to not support the Vote.

The Chairperson read out the Draft Committee Report as follows:

“Report of the Standing Committee on Finance, Economic Opportunities and Tourism on Vote 12: Economic Development and Tourism, in the Schedule to the Western Cape Second Adjustments Appropriation Bill [B7 – 2020], dated 27 November 2020.

The Standing Committee on Finance, Economic Opportunities and Tourism reports that it has concluded its deliberations on Vote 12: Economic Development and Tourism, in the Schedule to the Western Cape Second Adjustments Appropriation Bill [B7 -2020], referred to the Committee in terms of Standing Rule 188, supports the Vote referred to it.

Minority View

In terms of standing Rule 90, the African National Congress expressed its minority view to not support the vote.”

The Vote and Committee report was adopted with the minority view noted.

The meeting was adjourned.