Department Budget Hearings: discussion

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Trade, Industry and Competition

11 March 2005
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Meeting Summary

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Meeting report

11 March 2005

Chairperson: Mr B Martins (ANC)

Documents handed out:

Draft Committee Report on 2005/6 Budget

The Committee met to discuss their draft report on the 2005/06 Department budget. A number of issues were discussed, including the current system of public submissions; ownership structures within the associate public entities; the future of the National Empowerment Fund; the presence of smaller entities within the Department framework; the role of knowledgeable academics in Committee briefings, and the establishment of an early warning system to address problems in a proactive manner.

The Chairperson informed Members that no public submissions had been received from stakeholders despite various invitations to contribute.

Ms Chen (DA) asked for clarity on the R250 million rebates to the clothing industry through the Deputy Credit Certificate Scheme. She asked whether the incentive would be part of the Department budget.

Professor B Turok (ANC) acknowledged the sound report but questioned the processes involved. Such reports tended to be ‘buried’ and limited action flowed from the statements. He questioned the ability of stakeholders to influence the reporting process; the poor response from solicited stakeholders was a concern. He asked that the word "agreed" in paragraph one be replaced with "accepted" as it appeared to overstate the situation. The report should clearly state that a large amount of funding transfer continued to go to large private sector enterprises as ownership patterns had not changed significantly.

He recommended that the National Empowerment Fund be merged into another similar organisation, such as the Industrial Development Corporation, to avoid duplication and promote cost saving. Presently, the NEF spent R50 million per annum on structural costs. The concept of absorption had been supported by senior officials within the IDC who wanted to discourage ‘empire building’. The continued existence of the NEF should be reconsidered by Members. The report should make some reference to the recent departure of the Director-General.

The Chairperson reminded Members of the upcoming budget debate where specific issues could be discussed in greater detail. The purpose of the present exercise was to gauge Member’s sentiments and opinions on certain key issues at a general level.

Mr S Njikelane (ANC) recommended that the report also include smaller entities within the Department as these tended to be ignored. The NEF should reappear before the Committee to provide motivation and reasons for its continued existence. The NEF’s claim to act as a catalyst for Black Economic Empowerment (BEE) should be interrogated.

Mr L Laubschangne (DA) agreed that the entity could be absorbed elsewhere.

Ms D Ramodibe (ANC) sought clarity on the procedure enacted to obtain public opinion and asked whether this had been adequate.

The Chairperson responded that the Committee Secretary solicit comment from NEDLAC structures and similar avenues. He agreed that innovative approaches could be utilised next year to enhance public input.

Mr Laubschangne stated that advertisements were important but recommended that the Committee identify certain influential stakeholders and approach them directly to provide input.

Professor Turok suggested that the Committee consider approaching high-profile academics at a number of institutions and facilitate the provision of information sessions on industrial policy during the year to expand Member’s understanding. Civil society entities could also be invited to present updates on key BEE legislation. The Committee currently tended to operate in an insular fashion. The Chairperson supported this idea.

Mr Njikelane asserted that specific target groups, such as women and the disabled, should also be incorporated into the hearings process. The researcher should compile a database of relevant entities and construct a network of supportive groups to enhance the process of information-gathering.

Mr J Maake (ANC) noted that the Committee tended to adopt a passive stance and reports highlighted shortcomings after the fact. Problems should be identified more timeously so that corrective measures could be taken. The declared budget of 0.6% for the African Economic Development Agency seemed inadequate considering related entities such as New Economic Partnership for African Development (NEPAD) and the Southern African Development Community (SADC).

Professor Turok responded that the funding had been directed at the NEPAD Secretariat of 30 officials, located at the Development Bank of SA (DBSA), although other African governments also contributed.

Mr Labuschagne (DA) suggested that target groups such as the disabled, be invited to brief the Committee after approximately six months into the financial year to identify problems as they arose.

The Chairperson agreed that the Committee had to reach out to stakeholders and also ensure that Department entities briefed Members on a regular basis. Challenges within ongoing programmes should be identified and appropriate responses devised in a proactive manner.

Mr Njikelane stated that the Committee should adopt an approach based on independent access to informationm, coupled with a proactive response. The creation of a monitoring and evaluation strategy would facilitate the development of an ‘early warning system’ that would enhance national objectives.

Ms Ramodibe also questioned whether the current method used to garner public comment was effective and whether relevant entities had been involved in the process.

The Chairperson stated that the procedure used to acquire public comment would be re-evaluated and innovations introduced. The Department, Committee Secretariat and contact networks of Members would be utilised to improve the provision of vital information. Recommended amendments to the draft report would be undertaken and a final draft circulated to Members shortly. The report would be adopted next week.

The meeting was adjourned.



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