Trade, Industry and Competition BRRR: discussion

Meeting report

Opening remarks
The Chairperson greeted Members, noting that that the only item on the agenda was the first consideration of the Budget Review & Recommendations Report (BRRR).

The Secretary stated that he had distributed draft copies to Members the previous day.

Presentation of the Budget Review & Recommendations Report by the Committee Secretariat
The Committee Secretary read through the draft report. Having read the full report, he noted that only the ANC had submitted proposals for the Conclusion and the Recommendations.

Budget Review & Recommendations Reports BRRR

Discussion
The Chairperson requested that the secretariat read the input from the ANC into the Conclusions and Recommendations, point by point, so that the Committee could determine whether there was consensus on each of the points. He called for comments, contributions and amendments, if any.

The Secretary indicated that, in some cases, the secretariat had rewritten points in black but had kept the original in blue ink and had provided an explanation for the proposed change in red ink.

Mr W Thring (ACDP) apologised for not submitting the ACDP comments as requested. He was happy with point 1 which related to the Covid epidemic as long as the additional comments written in red and blue were removed.

Mr Thring addressed point 3 on the support of Broad-based Black Economic Empowerment (BBBEE). The ACDP was not in favour of the BBBEE policy although it understood the need for equity and the need to transform communities. However, after 27 years, most children would have had equal opportunities in terms of education, etc, although the party was not blind to the fact that inequalities remained. The challenge was that BBBEE was a race-based policy and the ACDP could not support a race-based policy as only once SA moved beyond such policies, would the country move forward. Many spoke of SA as a rainbow nation where SA belonged to all who lived in it but only when the country moved away from race-based policies would all South Africans feel included. That was a challenge that the ACDP had with the BBBEE legislation. However, he accepted that if it were law, the law had to be enforced even though he did not support BBBEE policy.

Mr M Cuthbert (DA) shared the concerns of the ACDP. He indicated that the DA believed in an alternative to BBBEE and that was based on socio-economic circumstances. The DA could not agree with point 3 as a concluding point. The DA believed that the current system had only enriched those who were politically connected and those who were able to make use of the various funding channels made available by government, but the ordinary person on the street had not benefitted from the legislation and he could say that without fear of contradiction by virtue of the fact that he had seen, particularly in his constituency, people who were suffering from an unemployment rate in excess of the national average of 40% and who had no opportunity to take advantage of the legislation and to improve their lives. That was obviously because the funding channels were closed off to the broader public. He believed that the Committee needed to reconsider the inclusion of that point in the BRRR.

Mr F Mulder (FF+) supported the statements made by the ACDP and DA. The point was that the BBBEE policy had failed; it did not serve its purpose, and had to be replaced. The FF+ was clear on that matter and he did not need to repeat the points made.

Mr S Mbuyane (ANC) stated that parties had been given ample time to come up with conclusions and recommendations and he was not surprised that the opposition parties could not come up with contributions as they simply opposed everything because they were opposition parties. He made it very clear that BBBEE was the policy of government and, one way or the other, the point must remain that the BBBEE people had to be given teeth to bite. That was not an issue for discussion.

Mr Mbuyane stated that his point was on industrial financing under point 8. The Committee had to determine how to strengthen it because if the process was properly understood, why were companies not able to assist people on the ground, especially youth and women? To the ANC, it was a serious problem. Hence the recommendation that the process of job creation would be improved if it were strengthened at provincial and local government level.

The Chairperson asked if there was agreement on the Conclusions and Recommendations as submitted by the ANC. He asked the Secretary to go through point by point.

Point 1: Covid
The secretariat had proposed a change to the input by the ANC. He proposed that the original wording, currently in blue, be deleted. The wording in red ink was an explanation of why the change was made and would be removed by the secretariat.

Mr Mbuyane agreed with the notes in red script. He cautioned that one should not make the mistake of assuming that the Covid issue was simply a problem for the Department of Health that had to go and vaccinate people: it cut across all departments. It was also an economic issue, which was why it had been raised in relation to trade and industry. If Covid-19 was left to the Department of Health, it would remain an economic challenge but if the country mobilised all its people to come and be vaccinated, that would strengthen the economy. The emphasis should be on that matter.

Mr Thring stated that he was not going to comment if the writing in red was removed, but if that writing were to be retained,  the ACDP could not support that point unless the right of educated citizens to choose and, as per the Bill of Rights section 2(12), the right to psychological and bodily integrity, were included. As that was the position of the ACDP, he could not support the inclusions supported by the ANC.

Ms J Hermans (ANC) supported Mr Mbuyane, agreeing that the wording in blue should be deleted but the wording in red should be retained, including the importance of educating citizens about the need to be vaccinated.

The Chairperson noted that Mr Mbuyane had moved and Ms Hermans seconded.  He called for objections.

Mr Thring objected unless his point were included, i.e. that South Africans had the constitutional right to choose whether or not to have the vaccination.

Mr Mulder stated that the FF+ supported the objection of the ACDP.

Mr Cuthbert stated that the supply of vaccines in SA that had been very slow originally as a result of government’s processes. Currently, there was vaccine hesitancy, and obviously people had the right to choose whether or not they wished to be vaccinated, but he did think a point needed to be made on the vaccine hesitancy and it had to be explained that it was for the greater public good that as many people  as possible were vaccinated because that would allow the country to reach population immunity which would allow  people to get on with their lives sooner rather than later.

The Secretary explained that the situation was that the point would be retained but the question was whether to include an addition as requested by Mr Thring and Mr Mulder. Mr Cuthbert had suggested that the importance of population immunity could be considered. He presented a re-worked version.

Ms Hermans agreed with the re-worked wording on the screen.

Mr Cuthbert was happy to compromise as long as all of the views of Committee Members were included.

Mr Thring was happy with the amendments to the original.

The Chairperson noted that there was agreement on point 1. He assumed parties were comfortable with point 2.

Point 2: Localisation
Mr Cuthbert did not agree with the point as localisation policy and import substitution had had dire economic consequences for countries that had pursued that policy line. While it might produce short term gains, in the long run it made local firms less competitive, dropped the quality of goods and increased the price of goods. It did not fit into the DA policy framework. Organic localisation was fine but he could not support a state-based localisation based on certain items that were being protected from competition. That was diametrically opposed to what he believed.

Mr Thring said that the ACDP was not opposed to localisation but one of the key pillars of industrial policy was beneficiation and he asked that the word “beneficiation” be included in the point as it had been used almost interchangeably with localisation in the industrial policy.

Ms Hermans stated that the ANC would accept such an amendment.

Point 2 was approved with the objection of Mr Cuthbert.

Point 3 - BBBEE
Mr Thring stated that he could not support point 3 in the light of the ACDP’s views on BBBEE.

Mr Mulder supported Mr Thring’s point.

Mr Cuthbert stated that the DA had already raised its concerns about BBBEE.

The point was accepted with the objections noted.

Point 4: Rural development
Mr Cuthbert agreed with the need to support rural communities because small towns and dorpies had been seriously affected and there was a need to focus on developing those towns but he did not believe that the District Development Model (DDM) would achieve those goals. It was not the panacea to the issue because it tried to centralise more power within the state and national government as opposed to devolving power to local authorities, which was a key DA policy of subsidiarity and the point did not fall in line with that. He therefore had to object to the point.

Ms Y Yako (EFF) stated that she did not object to the point but she thought that it was very vague and was simply a political statement with no substance. She did, however, support rural development which was way overdue.

Mr Mulder stated that the FF+ had previously expressed its concerns about DDM to Minister Patel and so supported the concern of the DA, but the FF+ had to go further and say that with the current state of local government in SA, that policy was virtually impossible to carry out. Economic development could not thrive in the rural areas because local government had failed. He could not support point 4.

Mr Thring stated that in line with the ACDP core principles of federalism and subsidiarity, he could not support the point while it included the DDM.

The Chairperson noted the matters raised by the parties.

Point 5 – Sugarcane Value Chain Master Plan
Mr Thring agreed with the Sugar Master Plan.

Ms Yako asked that the promotion of black-owned millers (mills) be included in the point.

The Chairperson asked if she was suggesting an amendment.

Ms Yako suggested that “black-owned millers (mills)” be included in the point as there had been a lot of talk about that point.

The Chairperson asked whether it was an amendment.

Ms Yako suggested that black millers be added to the same group as small-scale sugar growers.

Mr Mbuyane stated that the programme of diversification would lead to the inclusion of other small-scale players, so he would accept it as an example of diversification in the value chain as a small scale farmer could, tomorrow, become a miller.

Ms Hermans stated that the ANC accepted the point about millers but the point about diversification was a different point in the report.

The Secretary confirmed that diversification was included in Point 7.

Ms Yako approved the inclusion of “black-owned mills”.

Mr Mbuyane stated that the diversification could be included in point 7 but should reflect on the sugar diversification process.

The Chairperson asked for clarity with regards to the additions.

Mr Cuthbert did not support the addition of black-owned mills.

Mr Mulder stated that the FF+ also opposed the race-specific promotion of black millers.

Point 6 - regulations for the sugar industry
The Committee agreed.

Point 7- the collaboration with other departments, diversification and climate change.
Mr Mbuyane requested that the words “and beneficiation” be included in point 7.

The addition was supported by Mr Thring.

The Secretary indicated that the secretariat would make the amendment as requested after the meeting.

Point 8 – unemployment.
The secretary noted that the secretariat had amended the ANC input.

Ms Hermans stated that the ANC supported the amended version.

Mr Thring indicated that the ACDP supported point 8.

Point 9 – unstable electricity supply

The secretariat had made amendments.

Ms Hermans, supported by Mr Mbuyane, confirmed that the ANC accepted the adjustments.

Point 10
Agreed.

Point 11- the qualified audits of the National Regulator Component Standards
Ms Yako suggested that the problems with the South African Bureau of Standards (SABS) be included.

The Secretary explained that the report did not contain any reference to the SABS in the body of the report and therefore could be included.

Ms Yako accepted the explanation.

Recommendations
(Point 1)
The secretariat suggested that the point was not actually a recommendation but, in fact ,a concluding remark.

Ms Hermans agreed that it should be a concluding remark.

Mr Mbuyane agreed.

Point 1 – District Development Model and upliftment of rural communities.
The secretariat had made amendments to the point.

Ms Hermans agreed with the way that the point had been captured by the secretariat.

The Secretary stated that the secretariat would make the amendments proposed by Members. The document would then be sent to Members to take to their caucuses the following day. The report would be considered for adoption the day thereafter.

The Chairperson obtained agreement from all parties on the proposed process.

Closing remarks
The Secretary stated that there would be two items on the agenda on Friday. The Committee would consider the list of amendments to the Remitted Bills that had to be sent to the House of Assembly and then the Committee would finalise the BRRR. He had sent all relevant documents to members.

The Chairperson summarised the agenda and concluded the meeting.

The meeting was adjourned.