Hansard: Debate on Vote 36: Trade and Industry (OAC)

House: National Assembly

Date of Meeting: 17 May 2012

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Minutes

UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 584

Friday, 18 may 2012

Proceedings of extended public committee - old assembly chamber _________________________

Members of the Extended Public Committee met in the Chamber of the Old Assembly at 10:07.

House Chairperson Ms F Hajaig, as Chairperson, took the Chair and requested members to observe a moment of silence for prayers or meditation.

FIRST ORDER: APPROPRIATION BILL

UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 584

START OF DAY

Appropriation bill

Debate on Vote No 36 – Trade and Industry:

The MINISTER OF TRADE AND INDUSTRY: Chairperson, Ministers, Deputy Ministers, hon members, officials from the Department of Trade and Industry, the Council of Trade and Industry Institutions, leaders of organised business and labour, distinguished guests – and I know from last night's meeting that if I don't say good morning to the Techno Girls I will be in serious trouble - ladies and gentlemen, more than a century ago, in an era when there was less of a consciousness of gender equity issues, Karl Marx famously wrote: "Men make their own history but not in the circumstances of their own choosing".

This administration took office in the midst of the most severe global economic crisis since the 1930s and just as the South African economy plunged into recession, declining by 1,3% in 2009 and losing close to a million jobs. Nearly 200 000 of jobs lost were in the already-fragile manufacturing sector. This represented job losses of 220% in a sector that accounted for about 14% of GDP

Given this bleak backdrop, we had no choice but to act decisively by intervening as assertively as possible in the economy to protect our people's livelihoods and their already imperilled dignity. This commitment to saving jobs required us to sharpen our interventions to support industrialisation, reform certain regulations to improve the business operating environment and drive diversification of export markets for South African products.

The DTI's primary purpose in supporting this government's overall strategy is to create decent employment through inclusive economic growth. This commits us to contributing to the New Growth Path's target of creating 5 million decent jobs by 2020, while simultaneously raising the growth rate and reducing inequality.

The particular focus of the work of the DTI within this broad objective is to support manufacturing, which is one of the pillars of the New Growth Path – one of the job drivers. We have now reached midterm, which is a good time for us to reflect on our progress.

In February 2010, the DTI published the Industrial Policy Action Plan 2. While this built on the National Industrial Policy Framework and the Industrial Policy Action Plan introduced in 2007, Ipap 2 sought to bring about a significant shift in the scale of our industrial policy, which we judged was necessary under the circumstances to put our economy on a more labour-absorbing growth path. Ipap 2 recognised and argued that this would require bringing about structural changes to our economy.

In particular, it required putting the needs of productive activities at the fore in order to bring about a major shift from the consumption-driven and import-intensive growth path we had been on in the years before the great recession of 2008-9. It also requires recognising that manufacturing, the productive activity that adds value to the endowments of nature, is critical to advancing from developing to developed and from poor to rich. It is also the only path followed by any country anywhere at any time in economic history that successfully made the transition.

Over the past three years, we have made a number of significant breakthroughs, which I am glad to bring to the attention of the House: Firstly, we stabilised the clothing, textile, leather and footwear industries. Secondly, we strengthened the performance of the automotive industry. Thirdly, we helped prompt an increase in employment in the business process services sector. Fourthly, we assertively adjusted public procurement so that it can act as a vehicle to promote local production.

We all know of the challenges that have confronted the clothing, textile, leather and footwear industries over many years. It had been apparent for some time that the incentive introduced in the 1990s - the duty credit certificate scheme - was not working and was having the perverse effect of stimulating greater import competition. Accordingly, we energetically engaged our counterparts in the Southern African Customs Union to end the duty credit certificate scheme and replaced it with a production-based incentive in 2009. This new scheme, the Clothing and Textile Competitiveness Improvement Programme, supports investments that raise competitiveness. Even though it has been in force for only a couple of years, this scheme has already resulted in greater job stability and even some employment growth among those companies accessing the programme.

Under this new programme, disbursements totalling R112 million have been approved, R14,4 million of which was disbursed to 106 companies. This, combined with the R310 million disbursed under the production incentive scheme, has supported 48 384 direct and indirect jobs.

A major breakthrough was the agreement reached with one of the major retailers in the industry, Foschini, to procure garments from South African SMMEs. This is precisely the sort of commitment to our local economy that we need from South African companies, particularly from retailers.

In spite of coinciding with the global economic crisis, the Clothing and Textile Competitiveness Improvement Programme has not only stalled employment losses but led to a modest increase in employment in 2011. Under the circumstances, this is a remarkable achievement.

In the case of the automotive sector, the transition from the Motor Industry Development Programme to the Automotive Production and Development Programme by 2013 has largely been completed. This has helped to build confidence in South Africa's capabilities and given policies certainty, even in the midst of global stagnation. We fast-tracked one of the key investment measures of the APDP and this facilitated investment commitments worth over R15 billion from both assemblers and local component manufacturers.

I am pleased to see, as was reported yesterday, that more than 500 jobs were added in the sector in the last quarter that has just finished.

The investments made involved major international companies like Ford, Volkswagen, BMW and Mercedes-Benz. This has been accompanied by large increases in the number of vehicles assembled locally and by the production of component parts in South Africa. For example, the production line for the Volkswagen Polo with the local content increased from around 30% to over 70%.

Turning to the third main area of progress, significant advances have been made in the business process services sectors, with a number of foreign operators making the decision to locate themselves in South Africa over the last year, creating over 1 000 new jobs.

A further set of approved projects will create approximately 11 000 jobs over the next three years: 3 400 young trainees were trained under the Monyetla 2 programme. The first Amazon customer service centre in Africa was established in Cape Town to service global English-speaking and German-speaking clients. This was supported by the change we made in the incentive programme - from the incentive programme based on capital expenditure to the one based on operation expenditure. This shows that where there is a will, there is a way and that we can compete in the global economy.

However, as the President has repeatedly emphasised, there is a number of related challenges. We need to increase the basic skills of our people. This will continue to be critical in the medium-term for future prosperity.

Another major achievement has been the conclusion of interdepartmental work to reform the Preferential Procurement Policy Framework Act regulations. This work was completed at the end of last year and it enabled the DTI to designate industries for public procurement by all public entities, including the state-owned enterprises. According to the specific case in each instance, designated products and sectors will have to be procured by all procurement officers from South African manufactures.

The first wave of designations included buses, railway rolling stock, power pylons, canned vegetables, clothing textiles, and leather and footwear. Last month we followed these with the "oral solid dose" designation in the health sector. Already, a progressive approach to procurement and supplier development has shown positive results in that sector, in the awarding of 72% of a R4,2 billion antiretroviral tender to SA manufacturers, without additional costs to the state and in compliance with broad-based black economic empowerment considerations. The reference-price system that we intend to build into the "oral solid dose" designation is intended to ensure that this tender will have a similar outcome. I am pleased to see that the announcement we made in this regard resulted in a number of companies indicating their intention to invest in other sectors.

Funding for these sorts of strategic interventions is important. Accordingly, it is pleasing to announce that the Industrial Development Corporation, under the guidance of the Ministry of Economic Development, has made available an additional R102 billion for supporting industrial policy and the New Growth Path, including R10 billion set aside at prime less 3% over five years. We said in Ipap that scaling up the operations of development finance institutions was fundamental to providing and securing a solid financial basis for industrial investment.

Not only must our economy protect jobs and grow to create new jobs but it must do so in a sustainable and responsible manner, recognising the new opportunities that exist in the renewable-energy sector and other green subsectors. The work we have been doing, in co-operation with our partners in other departments in government, on beefing up standards has assisted the growth of a range of new sectors, particularly related to green industries and industrial energy efficiency.

It used to be said by progressive leaders that they were too red to be green. Now, we recognise that we are too red not to be green. Sustainable development is about people as well as the planet. And sustainability is becoming more and more significant in competitiveness.

In the same vein, inward investment in greenfield manufacturing plants by multinationals, such as Unilever, Proctor and Gamble, Kimberly Clark, Nestlé, FAW Motors, Kiran Global Silica and LG, among others, contribute to our vision of inclusive growth and a sustainable future. The Unilever plant stands out as an environmentally sustainable plant and will become the design standard for all future Unilever plants globally. This reflects the type of quality investment and company that South Africa is able to attract to service the South African market and the whole African continent.

As we look ahead, we must recognise how much and how fast the world's economy is changing. Much of the EU, a major market for South African value-added products, looks set to be trapped in economic recession for some time to come. South Africa and Africa are well positioned, however, with Africa poised to become the next growth story after Asia. These circumstances require that we act smartly to mitigate the risks while positioning ourselves for the medium-term benefits that will arise as Africa begins to assume its rightful position in the world economy as a manufacturer of products. In particular, we need to act to ensure that the global economic slowdown does not have a disproportional impact on jobs in manufacturing, as it did during the first wave of the great recession in 2009.

In his state of the nation address, President Zuma signalled the strategic leadership role that will be played by the Presidential Infrastructure Co-ordination Commission, which has already done a considerable amount of work towards producing a comprehensive and coherent 20-year infrastructure development plan capable of both providing a countercyclical response to the world's economic travails and at the same time laying the foundation for economic development, including a major new wave of industrialisation.

Our role as the dti will be to align industrial policy with this national strategy and to ensure that our industries are well placed to capture a significant share of the market for inputs the infrastructure programme will create and that we indeed capture a larger share than we did in earlier ways of infrastructure development.

Lessons of the clothing and textile production incentive, among others, have taught us that the way forward for manufacturing is to invest and continue in raising competitiveness, not to hang around and wait in the vain hope that the global environment will improve. It is for that reason that the 12i tax incentive scheme has now been supplemented by the announcement in the budget of the Manufacturing Competitiveness Enhancement Programme, which will be deployed towards assisting companies to raise their competitiveness, particularly those in relatively labour-intensive and value-adding manufacturing sectors.

The R5,75 billion that has been budgeted for the MTEF will go a long way towards supporting companies to make critical investment decisions. We had the pleasure of launching the MCEP earlier this week and provided significant details about how the scheme will operate. Applications can start coming in from now onwards and the programme will begin to operate next month.

Trade and competition policies are now strategically more aligned with industrial policy objectives. Tariff setting is taking place on a significantly more sophisticated and strategic basis, informed by sectoral analysis and priorities and the evolution of industrial policy. We are now working smarter and harder on campaigns to tackle customs fraud, illegal imports and to combat the entry of products that do not meet minimum mandatory standards. All of this work needs to be scaled up, but we have taken some important steps forwards in this regard. All these breakthroughs are a clear demonstration of what targeted industrial support and state-led intervention can achieve. This is the modern developmental state in action.

While we must inevitably pay close attention to the global economy and its shifting sands, we recognise the importance of small and medium-sized business to an inclusive economy at home. To improve entrepreneurial capacity, we have begun scaling up small business incubation programmes through the work of the Small Enterprise Development Agency and the enterprise development division within the DTI.

We are convinced that incubation programmes are of particular value and we are seeking to expand and build a number of programmes, including through partnerships, around the private sector. This is crucial to advancement.

To fast-track timely payment to SMMEs, National Treasury issued practice notes to all national and provincial departments, including the SOEs, requiring 30-day payment to SMMEs. Seda also established a call centre to facilitate this process. I am pleased to say that 25 000 calls have been received since the centre was established and it has managed to facilitate payment of over R280 million.

Internal capacity to focus specifically on informal, township and peri-urban enterprises is being strengthened, while work on developing the informal sector, including through the provision of microfinance, will begin soon.

The review of the Broad-Based Black Economic Empowerment Act has been completed and a new Bill has been gazetted for public comment. Work is also proceeding on amending regulations and codes. As a whole, this intervention seeks to strengthen enterprise development through the impact of BEE, in addition to addressing unintended consequences, such as fronting.

Co-operatives remain an important, if undervalued part of our economy and of an inclusive growth strategy. The Co-operatives Amendment Bill has been submitted for certification and is due to be tabled in Parliament very shortly. In the meantime, 220 small-scale co-operatives have been established and 115 have been provided with market-access opportunities in both local and international markets during the past year.

In an effort to increase market access for co-operatives through the Brics mechanism, South Africa and China agreed to enter into business contracts on a "co-operatives to co-operatives" footing on the following commodities: maize, wine and aquaculture.

While developed countries remain important markets and sources of investment and technology for South Africa, our exports to these economies remain well below the peak achieved in 2008, just prior to the global economic crisis. By contrast, the continued and rapid rates of growth in trade and investment with emerging developing economies continue to characterise our trade relations. For example, our trade with the Brics countries grew by 29%. As demand and growth in the North is likely to remain constrained in the foreseeable future, South Africa's prospects for economic growth and development through trade will increasingly depend on diversifying and strengthening economic links with dynamic economies in the South and also through promoting integration in Africa.

While we acknowledge that Africa has emerged as the most important market for South Africa's manufactured exports and that Africa is well poised to become the next global economic growth pole, its full potential will remain unfulfilled unless the continent as a whole industrialises. [Time expired.] [Applause.]

Ms J L FUBBS

UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 585

THE MINISTER OF TRADE AND INDUSTRY

Ms J L FUBBS: Good morning, hon Chairperson, hon members, colleagues and compatriots. This is a people's budget for productive investment. It is a budget for an employment-enabling environment through accelerated industrialisation, driven by manufacturing and a regionally integrated continent that mutually benefits all Africans. That is why the ANC supports this budget. [Applause.]

The multiparty Portfolio Committee on Trade and Industry, that hard-working engine of Parliament ... [Laughter.] ... unanimously supported the report on Budget Vote 36. Let us not forget this when we hear ideological salvoes being fired in this House. [Laughter.]

The world has seen, in a short space of time, a shift in global economic forces away from the traditional powers to the East and the South. [Interjections.] Yes, you can hear me. I have a rally voice. [Interjections.] Acknowledging the importance of trade that underpins this economic thrust, the DTI has reiterated that South Africa will retain its traditional economic ties and partners, in particular the European Union, while building new partnerships with the countries of the South and strengthening its expanding footprint in Africa. The portfolio committee agrees that this configuration of the DTI's operational mandate is certainly pointed in the right direction.

We have seen so many achievements in the DTI, but I will be the first to say - acknowledging the DA's comments in the committee - that yes, many challenges remain. This is the case in any country in the world. Many speakers on the ANC side will deal at length with trade, regulatory issues, SMMEs, gambling and the likes, so I am here just to give an overarching view of what has been done. [Applause.]

There are a few things I thought I should say at the outset. I should mention the challenges first. The National Lotteries Board had the grace to send me an enormous bouquet of flowers when I was in hospital. [Laughter.] That did not alter my opinion that the National Lotteries Board, a critical instrument in sharing the wealth in this country, should identify gaps where this is needed. As a committee we called for this and for the amendment of this legislation to ensure that the distribution agencies knew what the motives should be. We need to ensure that this does not rest on what I call an entente cordiale ... [Laughter.] ... but rather rested on legislation. We may in future get a chairperson who couldn't care at all about the vulnerable communities and then there would be no more entente cordiale. So, we are calling for legislation.

Now, I know the DA often brings in all kinds of things, including slippers, but mine is just a comment: I do not often read and trust all that I see in the media. But having checked on the facts, I must say that it's quite clear that there has been a shift and recognition of the fact that the NLB needs to engage with those organisations in the community that are undertaking valuable work.

To this end, according to the Zululand Observer of 16 May 2012 – in KwaZulu-Natal, hon Oriani-Ambrosini ... [Laughter.] ... - the Uthungulu Community Foundation, a very deserving local nonprofit organisation, met with the NLB. The CEO, Chris Mkhize, stated how much he appreciated the positivity of the whole engagement, because both sides recognised the challenges and how important it was for the NLB to get down on the ground. We owe this to the pleadings - the Minister is no lawyer - of the Minister in this regard. [Laughter.] I might add we owe it to the pleadings of the portfolio committee as well, because we are saying that the NLB is not like any other gambling organisation. This is a process that has adopted a maximisation approach to the regulation of the National Lottery. That is where the revenue is.

The idea, then, is that we do not impose restrictions because we would like to get as much money as possible freely from South Africans so that it can be directed to the right people. [Interjections.] It certainly is. May I tell you that I was shocked to learn that Hilton College was one of the beneficiaries. We put a stop to that immediately. [Applause.]

I realise I have hardly any time left - I don't know how this time works - but there are a range of incentive programmes. [Interjections.]

The TEMPORARY CHAIRPERSON (Mr G T Snell): Order, hon members! [Interjections.]

Ms J L FUBBS: Now listen here, I may have broken a few ribs but I assure you my voice is not broken. [Laughter.] And I have to go through here - quite endlessly ... [Interjections.]

An HON MEMBER: Fade at the end of your speech, not now.

Ms J L FUBBS: I beg your pardon. [Laughter.] I would like to mention some of the issues. [Interjections.]

The TEMPORARY CHAIRPERSON (Mr G T Snell): Members, you can heckle, but do not shout at each other, please. [Interjections.]

An HON MEMBER: But she is shouting. [Interjections.]

The TEMPORARY CHAIRPERSON (Mr G T Snell): She has the floor. [Interjections.]

Ms J L FUBBS: Well, I must say that I find it truly objectionable that members think they need to raise their voices. Again, I say that the DA raised some of these issues, but only after the ANC had raised them. [Laughter.] [Interjections.]

An HON MEMBER: Nonsense!

Ms J L FUBBS: When the Companies and Intellectual Property Registration Office was here, you had one of your film-star people come here and do so much on Cipro. Then he was deployed - I expect it is because his star shone too brightly. [Laughter.] The reality is that we recognised this ages ago, and so did the Minister. He said, look, we have to do something radical. We must get rid of all of this. What did he do? Very much like the Augean stables issue, he brought in a huge hosepipe, if you like, and cleaned the rubbish out.

So, now we have Companies and Intellectual Property Commission, or Cipco – and let me tell you that this has been described as "an international plus". There are things in that piece of legislation that Europe is now following. Who would have thought that Europe would be learning from us? [Applause.] But they are, and you all know it. [Applause.] That has been great progress but, of course, every time the DA gets a real understanding of these issues, their party redeploys them, because they think they have been co-opted by the ANC. [Laughter.] I don't know - I have never seen so much in the way of musical chairs in my life. [Laughter.]

As a last point, there are many areas that we need to look at. Many members in this House will often say: "Oh, look, we need to pursue the United States' approach to do this and that" or "We need to be more robust, more sound, more accountable." Then, the moment you mention state intervention, it is "Oh, state intervention!" - never mind the fact that Europe and the US have nationalised most of their banks. One thing they all realised, and this is the Minister's mantra - I got quite sick of it myself, but it's quite important ... [Laughter.] ... - there is absolutely no doubt that no country in the world has ever achieved economic growth and development and become economically independent, with an understanding of interdependence, unless they have industrialised. That is recognised in the US, Cuba, China and Germany. [Interjections.] I want to tell you that the Germans are looking at us and at our model because they see that our model is a people's participatory Parliament. [Applause.]

An HON MEMBER: They look at our model because they want to laugh.

Ms J L FUBBS: I want to share with you one thing, and that is ... [Interjections.]

An HON MEMBER: I am confused! [Interjections.]

Ms J L FUBBS: Yes, you would be. We all are - you know economists! [Interjections.] In a developmental country, you need to understand that people come first. I want to say this: If you are planning for a year, sow maize. If you are planning for 10 years, plant trees. If you are planning for a lifetime, educate and train your adolescents in strategic skills and empower them. [Interjections.] [Applause.] Viva! Aluta continua!

Mr S B FARROW

UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 586

Ms J L FUBBS

Dr W G JAMES: Hon Chairperson, the Portfolio Committee on Trade and Industry is probably the best committee I have ever served on. Part of the reason is that we have a chairperson who is engaged, charismatic, at times eccentric and, most of all, utterly entertaining. [Laughter.] [Applause.]

If I may begin by saying that in India, 75% of urban dwellers - that is 400 million people - will be middle class by 2025. By 2030, Indonesia will have the fourth-largest middle class in the world, consuming R20 trillion in goods and services. In China, 150 million Chinese now earn an income of R80 000 or more per year. These countries have been growing at 8% a year and they are vivid illustrations of how growth creates hope, prosperity and progress.

AN HON MEMBER: [Inaudible.]

Dr W G JAMES: Hardly in China, ma'am ... Together with Africa, where GDP will reach R21 trillion by 2020, these examples are of a vast and growing market, which, if successfully harnessed, can fuel our own growth at similarly high levels.

It is of the greatest, most fundamental importance to understand that substantially greater trade creates more jobs at home and, therefore, reduces poverty. Shifting trade by growing new markets without abandoning existing markets takes considerable skill and sophistication.

Old established markets, of which the European Union is the largest, account for 45,9% of our exports. However, other than India and China, none of the main developing economies, including Malaysia, Brazil, Turkey and Indonesia, feature in the top 10 nations with whom we trade. It is clear from these figures that the DTI has a formidable assignment to grow our trade in nontraditional markets. The question is whether the leadership is up to the task.

I will return to this subject, but first I want to say that the DTI also has the equally formidable assignment of maintaining our presence in established markets, in what is today a brutal trading world. I am greatly concerned about how the export promotion unit of the DTI is failing our fruit export sector, for example. Support for the Berlin and Asia pavilions has dried up. I have been told, and I am quoting, that "the DTI has lost a serious amount of capacity and knowledge with the departure of key personnel in their Trade and Investment SA/Export Marketing and Investment Assistance section" and that "the replacements are not up to the task of serving the industries to the level required".

In fact, communication has broken down. Towards the end of last year, two members of middle management at the export promotion unit stopped answering their e-mails and phone calls, failed to meet agreed-to deadlines and had a completely disinterested and even hostile attitude.

In response to a parliamentary question, the DTI provided a weak response by blaming exporters for not meeting new criteria. An urgent meeting should be called with all export councils to sort out what are, in fact, communication problems befitting a spaza shop and not a state department.

On the trade side, Minister Davies is certainly not lacking for trying. He is an energetic Minister. He plays a proactive role in leading trade missions and negotiations. He identifies barriers to trade and works very hard, relentlessly, at breaking them down. He is one of the best Ministers in this government. [Applause.] However, a formidable task requires formidable effort. Trade is not shifting away from our traditional markets. Reliance on Organisation for Economic Co-operation and Development, or OECD, countries as export destinations has increased. Yes, exports to China and India have increased, but Malaysia, Brazil, Turkey and Indonesia do not feature as yet. We understand that it takes time. Our natural market, Africa, does not feature yet. Colleagues, the National Development Plan remarks:

Despite the existence of several free-trade areas, customs unions and common markets, the level of intra-African trade remains among the lowest in the world. Only about 10% of African trade is within the continent, compared to about 40% with North America and about 60% with Western Europe.

The colonial pattern of trade has stubbornly endured. It is only now that some African countries have started to reverse decades of neglect in infrastructure - thanks, in fact, to China. Minister Davies must therefore develop a plan to ramp up and diversify trade. A review of the trade missions the DTI plans between June 2012 and March 2013 shows that he has, in fact, begun to identify key markets in South East Asia, especially China, Vietnam, Thailand and Singapore, as well as India, Turkey, Russia, the Middle East and South America. Equally, eight missions to African countries are forthcoming. However, trade missions are key and they have to be strategic - which they indeed are - but that alone is also not enough.

In our estimation, Minister Davies has to tackle two further tasks that will have major budget implications for the future. The first is to educate and train existing and aspiring diplomatic staff to learn the art of economic diplomacy. The model for this art, I believe, is Indian high commissioners, who sell their companies to outsiders at every turn. The second thing is to add capacity to existing trade missions and to establish new ones in export markets with growth potential. Let me suggest a few: Macau and Shenzhen in China; Bangalore and Hyderabad in India; Rio de Janeiro in Brazil; Istanbul in Turkey; Sydney in Australia; Surabaya in Indonesia; and Guadalajara in Mexico. The investments - they are expensive - should yield handsome returns in increased trade in the future.

The Southern African Customs Union and the Southern African Development Community have made halting moves in liberalising aspects of trade. Progress has been slow, especially when it comes to Sacu, and there have been reversals. We are encouraged by the work of the Tripartite Free Trade Area initiative, an assembly of 26 countries that are currently part of the Common Market for Eastern and Southern Africa, or Comesa, the East African Community and SADC. It follows an ambitious free-trade policy agenda. We are supportive of an agreement that includes proposals for a large-scale redesign of customs co-operation, the simplification and harmonisation of trade documentation, as well as procedures and transit trade and facilities.

The fact is that moving goods across most, if not all, our borders in Africa is very slow and very expensive. Cargo trucks into Zimbabwe can be delayed for up to 10 days at the border post. A staggering number of forms have to be completed and filed, underpaid officials seek bribes and many borders simply shut down overnight. There is hope to be drawn from some very innovative reform projects in East Africa. The border between Uganda and Rwanda now never closes down. Mauritius, Kenya and Botswana are ahead of us in terms of using e-government for cross-border transactions. In our 8% growth project, we recommended that South Africa models customs clearance procedures on Mauritius's electronic data interchange system. We can learn a great deal from Mauritius.

Allow me to share some information with you. On average, it takes 30 days to export a container from South Africa, through our seven ports, but 13 days out of Mauritius. It takes eight documents in South Africa but it takes five documents in Mauritius. It costs R12 248 to export a container from South Africa but it costs half as much - R5 896 - from Mauritius.

Our processes and pricing simply make us uncompetitive. Furthermore, the decline of our rail network means that, increasingly, goods have to be transported by road. Figures released by the National Agricultural Marketing Council show that roads transport accounts for 65% of all logistics costs, which is three times the figure in China. Rising fuel prices and new toll roads - new toll roads, colleagues - add additional costs, ultimately undermining our competitiveness, and then Transnet looms large as the dolorous dinosaur of our nation.

I conclude with a few words about industrial policy. Let me say, Chairperson Fubbs, that the DA has no difficulty with the concept. The question is: How much, how far and in which sectors? There are some excellent incentive projects under way, sponsored by the DTI. For example, the Western Cape government has, with the DTI's assistance, developed a plan to service the oil and gas exploration industry, principally out of Saldanha Bay, tapping into a production and maintenance market worth R12,24 billion.

There is the ongoing manufacturing of high-speed coast-guard boats to deal with smuggling, poaching and maritime piracy up and down both of our coastlines - again, in collaboration with the DTI. There are opportunities, furthermore, for old competences to be revived, such as our military technology and the building of rail rolling stock. There are opportunities for new competences to be developed, such as biotechnology applications in the manufacturing of vaccines and pharmaceutical products to deal with the bugs that attack plants, animals and human beings. The DTI, I believe, should join the Department of Science and Technology and consider putting some real money into the scandalously underfunded Agricultural Research Council and the Medical Research Council for this very purpose. [Applause.]

Ms B D FERGUSON

UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 587

Dr W G JAMES

Ms B D FERGUSON: Chairperson, hon Minister, Deputy Minister, members and guests, in the absence of my hon colleague Graham McIntosh, I am honoured to participate in this Budget Vote debate. Given the current status of the world economy, the Department of Trade and Industry, via its programmes, plays an extremely important role as an agent of economic change. This requires innovative new support strategies for enterprises and new business development initiatives.

From a women's empowerment perspective, it is encouraging to see the finalisation of the National Strategic Framework and Women Economic Empowerment as part of its policy thrust and development trajectory. Cope will monitor the support given to the 60 new projects by the Isivande Women's Fund. Our economy is continually shedding jobs and Cope, taking cognisance of the unacceptable levels of unemployed youth, endorses the initiative to develop a specific youth enterprise development programme.

One area of particular concern is the small, medium and microenterprise sector. Despite numerous policy reviews and the amalgamation of various entities to serve the sector, the survival rates of small business are declining. We feel that the amount of R190 million is insufficient to address the huge challenges faced by the sector. Another contentious issue is the burden of codified compliance that the Companies Act places on smaller SMMEs. There needs to be some leeway to exempt these companies from the myriad reporting obligations and the setting up of committees, as stipulated in the amended legislation.

To ensure more efficient implementation of its mandate, the operational systems of the National Consumer Commission need to be put in place. The NCC plays an important role as the champion of consumer interests and gives effect to the Consumer Protection Act. It needs to function optimally. Furthermore, questions around chief executive officer suitability need to be addressed urgently. We believe that under the previous chief executive officer, Gabriel Davel, the performance of the National Credit Regulator had been exemplary. However, recent media reports of the loss of experienced personnel are a cause for concern.

Hon Minister, we need to extract maximum leverage from our Brics membership in terms of increasing the multilateral trade among the member countries. Business expansion into the African continent should be a priority focus and development of incentives and support to encourage outward trade missions is imperative. Hence, the Africa economic development programme should have its budget increased. Given the economic meltdown in the eurozone, the need to continue the search for new markets is important. With our increased investment in Mozambique, Angola and our links with Brazil, I would like to suggest that we forge closer relationships with the community of Portuguese-language countries.

The Industrial Policy Action Plan remains a key driver of policy in terms of priority sector support but requires regular feedback, in terms of sector development plans and performance.

The department must be congratulated on changing the preferential procurement legislation to guarantee that more local content is procured in terms of goods and services. However, this needs to be closely monitored to ensure that it is adhered to throughout the state sector. With regard to the company registrations, we hope that all the problems experienced by the Companies and Intellectual Property Registration Office at the time have been resolved. Also, we need to reduce the registration period for new companies to expedite potential foreign investment into our country.

Cope welcomes the interventions put in place by the Department of Trade and Industry to address the negative consequences of the global financial crisis. However, despite intervention in the clothing sector, jobs are still continually being shed. With regards to the behaviour of businesses, both locally and abroad, Cope supports the development of a code of conduct for business.

In conclusion, the programme priorities and budgets attached reflect the objectives of what the department wants to achieve. I want to congratulate the director-general, Mr Lionel October, and his team for bringing fresh impetus to the Ministry through his innovative and strategic leadership. [Applause.]

Mr M G ORIANI-AMBROSINI


UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 587

Ms B D FERGUSON

Mr M G ORIANI-AMBROSINI: Chairperson, allow me to speak to the Minister through you, on the premise that I do not speak on behalf of the rich. I am not one of them, we don't receive any money from them in our party, and I do not think we have any of them in our party, contrary to the DA and the ANC alike. [Interjections.]

I have a great deal of admiration for the Minister. We have a great deal of respect for his team. The Minister, who undoubtedly has his heart in the right place, has managed to assemble around himself a very competent, dedicated team of functionaries, which is unusual within our government structure. Yet we cannot support the course of action taken by his department. In that respect, I wish to take this from where Dr James left off. Indeed, the main thrust of this department at this juncture of history is industrial policy. We don't have a problem with the notion of industrial policy, or with pursuing one aggressively. We do have a problem with the direction in which it is taking us.

Unfortunately, this department is structurally now what it used to be during apartheid. Instead of being a Department of Trade and Industry, it is a department of social welfare for traders and industrialists. That is a cost borne by those whom I do represent – the poor and the middle class to which the poor aspires. We ought to aspire for the middle class to grow at the same rate as the example given to us earlier by Dr James. The fact is that we are preventing the process of economic growth from taking place. It is extraordinarily painful for me to have to point out that on this present course of action, the Department of Trade and Industry is becoming inimical to the long-term cause of economic growth in our country, while pursing very meritorious social programmes. The cost of the social programmes is going to kill our long-term opportunities for growth.

Minister, you mentioned and quoted Karl Marx, and I dare think that perhaps, as a Marxist, you may read history through economics. As an Hegelian, I tend to read economics through history. I have stood here, since the first time three years ago, when we began this dialogue, pointing out that this crisis is historical, will not go away and will reshape the entire world order until the resources and the industrial capacity around the world is going to be moved in a manner in which we have never seen before. You, Minister, and Minister Gordhan have been clinging to what has been talked about or referred to as signs of recovery here and signs of recovery there. Three years later, we are going deeper and deeper into an economic crisis, with the likelihood of it becoming much worse before it gets better and engulfing Europe in the months to come. Against this, we do not have a plan to create industries that will be viable in the long term after all the dust will have settled; after all the distractions have been terminated.

We state that we are promoting government-funded growth - which is not sustainable. It is what happened to Greece. Greece was doing very well. It had a great rate of economic growth until government could no longer sustain the very type of subsidies, the very types of tariff barriers and the very type of preferential procurement policies that your government, Minister, is now implementing. When it pulled the plug, the entire economy collapsed and went from great economic growth into accelerated recession. This compounded the fiscal problems of the country, because the tax base had shrunk. It got itself into a domino-effect situation of negative consequences out of which it cannot emerge. A similar situation is happening in Italy. There are times when one needs to have the courage to do the painful thing now in order to take long-term gains.

I know that it is anathema for many people here to refer to Margaret Thatcher, but a little pinch of Thatcherism - which is what took the United Kingdom out of the greatest economic crisis it ever experienced - is something that we should look at, rather than transforming the entire department into something that extends the welfare state to the industrialists and trade unionists. This is a time for courage. We are taking the safe route, not out of a recession but possibly into a much deeper recession.

I see my time has expired, Mr Chair. Thank you for the extra seconds. I really urge you, Minister, to have a more constructive dialogue with this voice of opposition, which is not necessarily a voice that wants to oppose you. I sent you some correspondence, which has not been answered. I hope it will be. [Time expired.]

Mr X MABASA


UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 588

Mr M G ORIANI-AMBROSINI

Xitsonga:

Nkul X MABASA: Muchaviseki Mutshamaxitulu, muhlonipheki Holobye, Davies, muhlonipheki Xandla xa Holobye, Manana Thabethe, mfumo wa xidemokirasi wa Afrika-Dzonga wu teke sisiteme leyi a wu fanele wu yi hundzuluxa eka nkarhi wo karhi. Eka endlelo ro hundzuluxa wu tekile magoza wu hundza ndzilekano wa xihlawuhlawu xa xikoloni.

Ku sukela loko ku tumbuluxiwile mfumo wa xidemokirasi hi 1994 ku fika loko ku simekiwile sisiteme ya ikhonomi ya nkarhi wo leha leyi nga kula ku sukela hi nkarhi wa Nyimpi ya Vumbirhi ya Misava ni ku hungutiwa ka mpfumaleko wa mitirho, kuna ku antswa eka vutomi bya vanhu.

Hambiswiritano, mitlhontlho minharhu ku nga ku pfumaleka ka mitirho, vusweti na ku nga ringani swi tshama swi ri karhi swi susumeta hambiloko ku humelela ku ri kona.

Holobye wa mina, ndzi sungula hi ku ku tsutsundzuxa hi ku vula leswaku vanhu lava hi va vonaka va susumeta swigolonyana va rhwale tipulasitiki na mabodlhela va swi yisa eka mbuyeleriso wa switirhisiwa, ndzi kombela leswaku va kondleteriwa va endla mabindzu ya hlengelo. Mabindzu lawa ya hlengelo ya nga heleli eka vona ntsena. Va fanele ku dyondzisiwa na ku leteriwa hi ndlela ya xiyimo xa le henhla leswaku ku nyikiwa ka vona matimba swi hetelela swi ri mitirho.

Va nga heleli eka ku susumeta swigolonyana ntsena kambe va fanele va hetelela hi ku va vatirhi vo hetiseka vo hundzuluxa mabodlhela na tipulasitiki tolote eka ikhonomi leyi hetisekeke leswaku va nga tirhisiwi hi ndlela yo biha hilaha ku nga heriki.

Xihoxo xin'we lexi hi nga xi endlaka i ku tshikela hinkwaswo emavokweni ya makete. Makete wu na makwanga, a wu xurhi. Lexi I xitsundzuxo lexi ndzi lavaka ku xi nyika na vanhu va DA. Eka vachaviseki va mina va DA, Mzwakhe Mbuli u vurile a ku:

Isizulu:

"Ukulimala kwengqondo wukulimala komuntu, ukulimala komuntu wukulimala kwengqondo"

Xitsonga:

Mi ndzi yingisela kahle leswaku hikokwalaho ka yini ndzi vula leswi. Ku macha i swilo swa kahle kambe hi fanele ku tiva leswaku hi machela yini. A hi macheleni leswaku Nawu wa Misava wa 1913 wu tlhelerisiwa endzhaku. Hambiswiritano, ANC a yi vuli leswaku Nawu wa Misava wa 1913 wu endla leswaku valungu va nga vi na xa nchumu. ANC yi vula leswaku valungu a va swi kumi loko hi hala tlhelo Wantima, Muindiya na Mukhaladi na vona va kuma masimu leswaku va rima. Loko mo machela sweswo hina na Nhlangano wa Vatirhi wa Afrika-Dzonga , Cosatu, hi ta hi macha na n'wina.

Va DA, machelani leswaku vatirhi va nkarhinyana va endliwa vatirhi va nkarhi hinkwawo. Loko mi endla tano hi ta macha na n'wina. Ndzi ta mi kombisa leswaku leswi swi hlangana kwihi. loko u tshika makete wu tirhisa vanhu hi ndlela yo biha, hi loko u lava leswaku vanhu hinkwavo va hetelela va fola layini eka sisitimi ya swa mali ya mpfuno.

English:

That's where the connection comes. You must make sure that workers are able to look after themselves when they go on pension. [Interjections.] I hope you are not taking my time. If the system is – as the market would wish - that all workers are casual and paid very little, the consequence would be the creation of a very poor nation. [Interjections.] Everybody will be so poor that they will all turn to the grant system. That is not what Minister Davies is standing for. [Interjections.] Just a second! [Interjections.] Minister Davies is standing for the government which President Zuma, in his 2012 state of the nation address, described as follows:

As a developmental state located at the centre of a mixed economy, we see our role as being to lead and guide the economy and to intervene in the interest of the poor, given the history ...

... the apartheid history ...

... of this country.

By the way, this separateness was not started by the National Party. It was started by the predecessors of the DA. The National Party merely perfected it. [Interjections.]

Some of the challenges faced by many black-owned small enterprises in participating in the mainstream economy are that they have limited access to competitive markets, most of them lack the management skills to operate growing enterprises and most of their products cannot meet the required quality standards - thanks to apartheid.

Let me proceed and say ... {Interjections] No, let me go again, for you. I think you have not heard enough. [Laughter.] One of the instruments the DTI applies is the Black Business Supplier Development programme, which was originally introduced in 2002, under the auspices of the World Bank. The DTI later relaunched the programme with the aim of reaching more entrepreneurs, broadening the activities eligible for assistance and increasing the level of funding support in order to achieve a greater impact on targeted enterprises.

Amendments to the current Black Business Supplier Development programme are primarily aimed at assisting black-owned SMMEs to acquire productivity-enhancing technology. The revised guidelines further seek to enhance assistance to targeted enterprises and in so doing enabled them to access opportunities created by the broad-based black economic empowerment policies of this ANC government and supply goods and services to the corporate sector, parastatals and government.

Another DTI instrument is the empowerment and enterprise development division, which provides strategic direction in the development of policies and strategies and seeks ... [Time expired.]

The ANC supports this Budget Vote.

The TEMPORARY CHAIRPERSON (M G T Snell): Thank you, hon member. I now call on the hon Minister of Trade and Industry. [Interjections.] Oh, my humblest apologies, I meant the Deputy Minister.

The DEPUTY MINISTER OF TRADE AND INDUSTRY (Ms E Thabete)


UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Takes: 589 & 590

Mr X MABASA

The DEPUTY MINISTER OF TRADE AND INDUSTRY (Ms E Thabethe): Chairperson, thank you for the promotion, but I am still deputising Dr Rob Davies, who is sitting next to me. [Interjections.] Hon Chair, Minister Davies, other Ministers present, Deputy Ministers, members of the NA, MECs - if they are here, heads of departments, officials from the Department of Trade and Industry, Council of Trade and Industry institutions, Techno Girls in the gallery, leaders of organised business and labour, the leadership of the South African Women Entrepreneurs Network, including the Western Cape province, Technology for Women in Business, Techno Girls adjudicators, distinguished guests, ladies and gentlemen, good morning. The economic success and sustenance of many economies is anchored by the increased participation of small, medium and micro enterprises in the mainstream economy. SMMEs are principal driving forces of economic growth and development. As the ANC-led government, we are resolute in increasing the uptake of SMMEs, as their dynamism and ability to innovate will assist us in creating much-needed jobs in our economy. They are critical in generating employment and they also help diversify economic activity and make a significant contribution to export and trade.

We need to recognise that this Budget Vote is taking place just after our mid term. Therefore, we are able to talk about the systemic challenges that we inherited as a legacy of our past – in particular the apartheid-space economy. We also have some successes, which we are going to talk about later on. However, the legacy continues to manifest itself as many SMMEs are not connected to the mainstream economy. This remains a challenge to government's efforts of creating interconnectedness in business activities that will usher in the creation of value-chains across sectors.

As the DTI, we are trying to create a value-chain across sectors to connect SMMEs and big corporations in the production of a plethora of goods and services. This is the revolution that the department is leading and we are conscious of the fact that our SMMEs are a vehicle of ensuring economic inclusivity and increased participation by South Africans in the mainstream economy. Yes, of course, hon James, small business has been taken up as one of those drivers by many successful countries that we mentioned, like India and China. I am not sure whether they went through an apartheid era, which I think your party was part of at some time. [Interjections.]

Hon Ferguson, to improve our entrepreneurial capacity, the DTI has begun scaling-up small business incubation, as the Minister has already indicated. I would like to add by saying that by the end of 2011, we managed to produce a lot of them. In this regard, we are proud to announce our partnership with SmartXchange in Durban, KwaZulu-Natal. In our midst, in the gallery, we have a young entrepreneur, Mr Zibuko Mchunu, whose company is incubated in SmartXchange. Mr Mchunu is a pioneering and successful young information and communications technology entrepreneur and a role model for our youth. We should talk about the good things we do and not only about the challenges. [Applause.] He is sitting up there in the gallery. We don't make up stories; we are talking about the things we do under the leadership of this Minister, and we will continue doing so.

Our partnership with agencies such as National Youth Development Agency seeks to ensure that we stimulate the entrepreneurial shift in our youth. Ms Ferguson, we agree with your points, but try to do research and get the latest information. Don't talk about the old points. The department is doing exactly that. That is why we partnered with the Nyda, in particular the Gauteng Chapter, with its visionary chairperson, Simon Molefe, as well as the Eastern Cape, with its activist chairperson, Mr Ayanda Matiti. We have done a lot of youth-focused "Taking DTI to the People" work with them. We intend to strengthen that and make sure that we can invest in our youth. We believe the youth can come up with creative and innovative ways to create business. They must be job creators and not job seekers. As I have already indicated, Mr Mchunu, who is in the gallery today, is one of those. [Applause.]

With Nyda Gauteng, we will soon be launching a substantial number of youth-owned co-operatives, so watch this space. These co-ops will be rolled out across Gauteng and other provinces. To spice it up further, on Monday 14 May 2012, through the National Empowerment Fund, one of our agencies, ably led by Philisiwe Buthelezi, has entered into a partnership with UK Trade and Investment for the benefit of our SMMEs. Talk about those good things, Mr James. Don't ignore them.

We want to get our SMMEs ready to export and make sure that they can access markets through Trade and Investment SA. Our young and dynamic deputy director-general,Pumla Ncapayi, is heading this division. Yes, some officials might resign when they find greener pastures. That is fine. However, regarding complaints, I think those can be challenged on the basis of what the Minister is going to say. She is doing a good job. She is running this division and she is making sure that she sees our department making it through. We are looking at the national export strategy and other investment strategies. We have taken a lot of our investment and trade initiatives under her leadership – under the very same Trade and Investment SA - to make sure that we can enter these markets.

In our attempt to expose SMMEs to international market, we have participated in a number of international trade fairs, including - listen, Mr James – the India International Trade Fair in November. Our participation was organised by Trade and Investment SA. We won a gold award for the best overall foreign stall. How can you say that Tisa is not working when it's part of export promotion? That's part of export promotion.

Secondly, in January this year we participated in a handicrafts exhibition in Cameroon, where one of our exhibitors, Mr Robert Tshimungwa, won a gold award for best exhibitor. This was organised by Tisa. [Applause.]

Thirdly, three weeks ago we were part of the Zimbabwe International Trade Fair, ZITF, organised by Tisa, in Bulawayo, Zimbabwe. We won another gold award for the best overall foreign stand. [Interjections.] I didn't miss your point; I listened to you very carefully. I am saying yes, if you have genuine points, raise them. However, regarding export promotion by Tisa: yes, I know there are some staff members who are not answering calls and things like that, but it is not the entire division that's not working well. We need to make sure that we talk about it when the division is doing well. We could not have won these awards if Tisa was not working. Okay, maybe we have challenges, but it's through this that we are able to do what we must do. Listen again. It must be noted that our participation in these international trade fairs creates business opportunities for South African businesses.

As a result of our participation in the ZITF, Unika Plastic Moulders, a South African company, has secured a deal to supply their products to 133 shops in Bulawayo, Zimbabwe. That will mean job creation and that is what we do to ensure that we have access to markets.

To buttress our intention of making strategic interventions in women's economic empowerment, the DTI has been utilising vehicles such as Isivande Women's Fund, SA Women's Entrepreneurs, Bavumile and Technology for Women in Business. Overall, we are saying that we need to deal with our strategy for women's economic empowerment and make sure that we can strengthen this.

We need to recognise female pioneers in technology. Last year's winner was DrMoretlo Molefi, a young woman who runs a telemedicine unit. Through these units, doctors are able to work in rural areas and make sure that people do not have to walk long distances to clinics but can be treated where they are. This is a breakthrough for our country and an innovation that we should talk about. [Applause.] Those are the things being done by this department, under the leadership of Dr Rob Davies.

We are also nurturing our young women. That is why we have girls in the gallery today. We want to make sure that we nurture them while they are in grades 10, 11 and 12, so that they can become the businesswomen of tomorrow. This will help the nation ensure that ultimately we build a viable and value-added industry but also add value to our locally produced "home brand" goods. We need to make sure that we create the required jobs, let alone transforming our economic structure away from its extractive nature.

We have in our midst the Techno Girls from Sefoloko High School in Ramokgopa village, a deep rural area of Limpopo. These are our future business leaders, future chief executive officers and future entrepreneurs who will create jobs and make sure that we go forward. [Applause.] Thank you, Minister, for your leadership and for ensuring that we can nurture them.

Hon Ferguson, it should be noted that work on the review of existing SMME programmes, policies and institutions – initiated as a result of the presidential directive – has been completed and the final report will soon be presented to the economic sectors and employment cluster. We are taking into account what you said, but we are working on it and making sure that we are able to address the issue.

Showing its resoluteness, the DTI has beefed up its capacity to specifically focus on the informal sector, townships and peri-urban enterprises, to make sure that we try to formalise our people.

The UN declared this year the International Year of Co-operatives, and we should celebrate that. We will be doing that in the Northern Cape during the first week of July. It must also be noted that South Africa's significance in the co-operative movement will be highlighted through the hosting of the International Co-operatives Body in June 2012, here in Cape Town, South Africa. This is the first time that we are hosting an event of such magnitude. It shows that the Minister is running the department well and that we are now being recognised in the international space. Thanks to co-operative bodies like the South African National Apex Co-operative, Sanaco, and other federations that are working with us, we can see the difference and that co-operatives can be a vehicle.

Member Mabasa, I agree with you with regard to co-operatives. That is why we are talking about the amendment to the Co-operatives Act, where we will get a tribunal and a training academy – because we realise that there are challenges – in order to train the co-operatives to work, as well as to make sure that they are able to create the jobs that they want. They are successful in other countries because of the systems such as the value chain, and we hope that we will be able to do that.

In order to improve the networking opportunities for SMMEs and enhance market opportunities, as well as exchange information, the International Small Business Conference will be hosted in Sandton, South Africa, from 15 to 18 September 2012, with delegates from the continent and other parts of the world expected to attend. This is another breakthrough and a notable activity to take place in South Africa, because of the good policies that we drive to ensure that we link up with other countries in our space.

Our development as a country remains locked in decentralised economic activity with serious spatial challenges, which have disarticulated the logic of shared economic activity and benefits. This is why we need to make technology investments now, and what better way to do that than to recognise women who are already at the forefront of innovative technology leadership. Of course, in empowering women, you empower the nation. Women are nurturing in nature, but I'm sure there are men, like the Minister and others, who are very progressive and gender sensitive and support activities initiated by women. Keep up the good work, Minister. [Applause.]

We believe that our current programmes and different incentives are redirected to support the small business sector and we make sure that we have integrated systems so that we are able to work with our sister state-owned entities and thereby ensure that we can make a difference. I believe that, with what we have, we are geared up to face the challenges and ensure that we can have a better DTI family, thanks to the leadership of the director-general and the deputy director-generals, who are here. Most of them are hard-working. They come to the committee and spend many days in discussion with us. Keep up the good work. It is within this good family that we will be able to take our work forward. Again, we thank the leadership of Dr Rob Davies, who makes sure that we can have a better department that contributes to a better global space. [Applause.]

The TEMPORARY CHAIRPERSON (Mr G T Snell): Thank you, hon Deputy Minister. I now call on hon Gcwabaza. [Interjections.] The hon Alberts has been removed from my list, hon members. [Interjections.] Pardon? Hon Alberts, do you want to speak? [Interjections.]

Adv A D ALBERTS: Yes, please.

The TEMPORARY CHAIRPERSON (Mr G T Snell): With pleasure. I'm sorry, but you had been scratched off my list. [Interjections.]

Adv A D ALBERTS


UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 590

The DEPUTY MINISTER OF TRADE AND INDUSTRY

Adv A D ALBERTS: No, Chair, that was a mistake. I hope you can give me an extra minute. I need some more time to sweet-talk the Minister into taking a different policy position on some aspects.

I would like to echo the hon James's sentiments about our Minister. He is one of the better Ministers in Cabinet and he does a lot of hard work. So, too, does our chair, who makes us work hard and is always entertaining. Mr Mabasa, I think your take on history is quite correct.

While interventionist policies to kick-start economic development in crucial industrial areas are important, the most important policy position should be one of light-touch regulation that focuses on socioeconomic and not racial equity, as well as the creation of an enabling environment for business to thrive.

Afrikaans:

U departement slaag wel op 'n wyse daarin om sosioekonomiese geregtigheid te verseker, by wyse van die Verbruikerskommissie. Ons het egter ernstige kommer oor die verhouding tussen uself, die direkteur-generaal en die kommissaris. Die kommissaris blyk 'n doelgerigte kampvegter vir verbruikersregte te wees. Die vraag wat ons wil vra is of die Minister die kommissaris 'n geleentheid gaan gee om weer aansoek te doen vir haar werk. Gaan sy in so 'n geval objektief beoordeel word? Die antwoorde hierop is van die grootste belang vir die verbruikers, wat 'n effektiewe en dinamiese Verbruikerskommissie, wat hul regte aggressief beskerm, wil sien.

English:

While the new Companies Act has done a lot to ensure access to easier business and the Companies and Intellectual Property Commission has managed to diminish the backlog in company registrations – and that deserves acknowledgement – there is a sense that business is just not getting out of its starting blocks.

It is a fact that most jobs are created within the small business segment. The National Development Plan states that 90% of jobs to be created in order to reduce unemployment to 6% by 2030 will come from the small business sector. This means that the DTI will have to stop focusing only on large so-called developmental projects, but gear the Industrial Development Corporation to seriously look at small business development as well.

What we need to unleash the creative and economic power of small business in this country is to carve out a completely libertarian space within the economic environment. This means that small business must be exempted from regulation like affirmative action and black economic empowerment taxes, with the introduction of legislation to enforce punctual payment by large businesses and government to protect the cash flow of small business. It should also ensure that banks make lending to small business easier, as opposed to dishing out unsecured credit. This should be part of the banking sector scorecard, but should not be based on race.

Lastly, entrepreneurship must be made a compulsory subject in schools and not be left for MBA programmes only. This recipe is what Clem Sunter refers to as the "alternative national democratic revolution", and it will work if implemented. It did so in China and India, among others.

Afrikaans:

Verder moet ons aan die Minister noem dat ons diep terleurgesteld is oor die uitsluiting van wit vroue en wit gestremde mense uit die aangewese groep in die voorgestelde nuwe Wet op Swart Bemagtiging. Terwyl daar gedurig deur die regering gepraat word oor die skep van 'n inklusiewe ekonomie, word die arbeidsmark en besigheidswêreld al hoe meer gepolariseer op rassegrondslag. Wit mense word al hoe meer gerelegeer tot ekonomiese ghettos.

English:

We have said time and again that there are many white people out there who want to start small businesses that can create employment and help develop disadvantaged persons, but they are systematically sidelined. Therefore, when it comes to small business, show us what true inclusivity means by releasing them from the regulatory strictures based on race, so that they, as true citizens, can also participate in the economy, create jobs and ensure that you have a future tax base. It will be a win-win situation for everyone.

Mr N E GCWABAZA


UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 591

Adv A D ALBERTS

IsiZulu:

Mnu N E GCWABAZA: Sihlalo, Mhlonishwa Ngqongqoshe Rob Davies, Mhlonishwa Sekela Ngqongqoshe, mama Elizabeth Thabethe, maLungu ePhalamende ahloniphekile kufanele ngisho nje zisasuka ukuthi uhulumeni we-ANC, oholwa uMongameli u-Jacob Zuma, uNxamalala, usukhiphe imali eningi ebizwa ngemihlomulo eyimihuheko, kule minyaka emibili nengxenye uphethe ukuze kuxhaswe izimboni zikwazi ukuthuthukisa nomnotho kuqashwe futhi nabasebenzi abaningi abahleli kumanje bengaqashwe ndawo.

Ngokwenza lokhu, uhulumeni we-ANC uhlose ukuthi kuncishiswe igebe phakathi kwezicebi nabantulayo; kuncishiswe ububha kanye nokuntuleka komsebenzi. Kodwa ingxenye yale mali eningi ekhishiwe ebizwa ngemihlomulo eyimihuheko, engingayibala ngezigaba zayo, ihambisana futhi nemali yokuthi kusizakale ukuthi kuqashwe intsha yakithi okumanje ihleli emakhaya, yona ebizwa ngemali yokubonelela intsha. Angiqinisekise le Ndlu-ke ukuthi uhulumeni we-ANC awusoze nakanye ugqugquzele abaqashi ukuthi basebenzise imali yokuxhasa intsha ukuze ixhaphaze intsha yakithi entula umsebenzi.

Yingakho-nje lolu daba luphambi kwe-Nedlac ukuze kuxoxiswane ngalo phakathi kwezinyunyana zabasebenzi, uhulumeni, abaqashi kanye nezinhlangano zomphakathi ukuze kufinyelelwe esixazululweni sokuthi le mali ingasetshenziswa kanjani ngaphandle kokuvula ithuba lokuthi kuxhashazwe intsha ngokuthi iqashwe bese iholelwa imali encane. Sinesiqiniseko sokuthi lezi zingxoxo ze-Nedlac, zizophumelela futhi kuzofinyelelwa esisombululweni.

Ngikhuluma ngalokhu, ngoba lesi sabiwomali esikhuluma ngaso namuhla, sifaka nale mihlomulo eyimihuheko esikhuluma ngayo ngoba yilo Mnyango wezoHwebo neziMboni onikezwe umsebenzi wokuthi ukhiphe le mihlomulo eyimihuheko esikhuluma ngayo namhlanje. I-DA-ke ikhethe ukuthi ibhikishe, ibhikishele i-Cosatu.

English:

There are two things the DA could have done. Firstly, they could have waited for the Nedlac process to come to a conclusion because ... [Interjections.]

The TEMPORARY CHAIRPERSON (Mr J D Thibedi): Order, hon members!

Mr N E GCWABAZA: ... the Nedlac negotiations are going to succeed and a compromise position is going to be found. [Interjections.] The second possibility for the DA could have been to send a small delegation to Cosatu to find out from Cosatu ... [Interjections.]

The TEMPORARY CHAIRPERSON (Mr J D Thibedi): Order, hon members! Order!

Mr N E GCWABAZA: ... what could be an amicable compromise to this issue. [Interjections.]

The TEMPORARY CHAIRPERSON (Mr J D Thibedi): Hon members, we can not hear the speaker! Please restrain yourselves.

Mr N E GCWABAZA: But what does the DA do? They go on a march to Cosatu ... [Interjections.] ... in the spirit of political adventurism, with the aim of setting black youth against black youth and exploiting their vulnerability ... [Interjections.] [Applause.] ... in black-on-black violence similar to what was engineered by the former apartheid government in the mid 1980s and early 1990s. [Interjections.] Well, let me tell you ... [Interjections.] ... when members of the DA retired to their plush suburban homes in Cape Town in Johannesburg ... [Interjections.] ... the black youth, whom they had manipulated and used, went back to their poverty in their townships in Soweto. [Applause.] Now the DA has set black neighbour against black neighbour, in Soweto and elsewhere in the country.

The TEMPORARY CHAIRPERSON (Mr J D Thibedi): Hon member, please take your seat. Hon members please, let us give the speaker the opportunity to be heard. Let us give the speaker the opportunity to be heard. There is a point of order, Mr Gcwabaza, take your seat.

Mr A WATSON: Hon Chair, the member is totally misleading the House with lies. That is tantamount to hate speech and racism.

IsiZulu:

Mnu N E GCWABAZA: Uhulumeni we-ANC ... [Ubuwelewele.] ... i-ANC iyayisisekela lesi sabiwomali esindlalwe ngaphambi kwaleli Phalamende namuhla.

English:

The TEMPORARY CHAIRPERSON (Mr J D Thibedi): Hon members, please, let me just make this point. Take your seat, hon member. Take your seat. If an hon member is making a point referring to a political party, it cannot be unparliamentary or out of order. If a member makes a point referring to another member of this House, then it becomes an issue that we can engage in, in terms of whether it is in order or not in order. So, I want to appeal to all of you in the Chamber to please give a speaker the opportunity to raise his or her point of view. We may not necessarily agree, but it is important to listen. I am interested in listening to everyone who speaks in this House. Thank you, hon members. Proceed, hon member. [Interjections.]

Mr N E GCWABAZA: The budget presented before this House today, which aims to address, among other things, the triple challenge of poverty, unemployment and inequality, is being supported by the ANC. [Applause.] I want to look at three issues, namely gambling, lotteries and credit extensions, in the context of the Industrial Policy Action Plan.

The National Lotteries Board has experienced delays in processing the applications and disbursement of grants to deserving nongovernmental organisations and community-based organisations. That includes sports, arts and culture bodies. However, we are encouraged because the Lotteries Amendment Bill is coming to this Parliament in the course of this year to address these and many other challenges.

We also need to draw the attention of this House to the challenge that has been faced by the distributing agencies that have not been accountable for the grants that they have been disbursing.

To contribute to the eradication of poverty, unemployment and inequality, the National Lotteries Board must reach out to the NGOs and CBOs in the rural communities. In addition, it must ensure that the funds it disburses are used to bring a better life to the intended communities. It is also proposed that some of the lotteries funds be dedicated to the five priorities of government, especially education, health and rural development, to replace the discontinued Reconstruction and Development programme allocation.

On gambling, we note that gambling is a concurrent competency, whose activities are regulated by the DTI, through the National Gambling Board and the provincial gambling regulatory authorities.

The TEMPORARY CHAIRPESON (Mr J D Thibedi): Hon member, I am afraid your time has expired. [Interjections.] [Applause.]

Mr G S SELAU


UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 592

Mr N E GCWABAZA

Mr G SELAU: Hon Chair, hon Minister, Deputy Minister, colleagues, distinguished guests, South Africans, South Africa has a future to expect. It is expectant of a future - I am trying to make the right choice of words. I wanted to use the word "pregnant", but I needed to consult first on whether it would not be problematic to do so. [Laughter.] In order to arrive at this expectation, which is called a sustainable future, there are particular soldiers that we need to field to fight this battle. One is sustainable economic development, two is sustainable trade and industry, and three is sustainable environmental development. These three will guide us towards achieving a sustainable future.

As you all know, last year South Africa hosted the 17th Conference of the Parties. In preparation for that, South Africa had certain positions. The first position was that the conference should come up with a convention outlining the targets for Annex 1 parties and actions for non-Annex 1 parties, legally binding support for developing countries and a legal framework for adaptation. That was what the convention should have.

The second position was that there should be an amendment to the Kyoto Protocol to include the second commitment period. In other words, the Kyoto Protocol should be extended. Our third position in preparation for that conference was that time and space needed to be given to developing countries to transition to low-carbon economies and to adapt to unavoidable impacts. That was South Africa's position.

After that conference, firstly, the second commitment period of Kyoto Protocol was secured as the only international and legally binding mechanism we have to cut greenhouse gas emissions. Secondly, a political agreement to work towards a legally binding global climate regime was achieved - this was also in acknowledgement of the shifts in the global economy. Thirdly, an agreement was reached on the implementation of the Green Climate Fund, on condition that it is under the guidance of and accountable to the Conference of the Parties.

Of importance to us is that, beyond that conference, economic development and processes towards greening the economy continue in different countries in different ways. Our context is South Africa as it relates to Africa, South to South, as well as South to North economic relations, including Brics, of course. However, we need to pause for now and look at South Africa in terms of the economy or trade and industry internally, and that takes us to the Industrial Policy Framework Plan.

Ipap is aimed at creating jobs, growing the economy and greening industry, among others. In this plan, there are 14 key areas or pillars, if you like, including manufacturing, industrial financing, leveraging, procurement, developmental trade, competition policy - I can go on and on. I hope all of these have been read and understood by the hon Ambrosini as positive steps in the right direction.

We would want to go a little deeper into Ipap to look at some of the key areas, such as the development of Special Economic Zones. What are these? That is the first question. We said the SEZs are geographically designated areas of a country, set aside for specifically targeted economic activities, which are supported through special arrangements and systems that are often different from those that apply in the rest of the country. I think that is clearly understood.

Furthermore, an SEZ is an economic development tool to promote rapid economic growth by using incentive packages to attract the targets for investment and technology. These zones act as a magnet for investment in desirable activities, in specially designated areas, by providing quality infrastructure, contemplated by attractive incentive packages, business support services, cluster development and minimal red tape.

I want to conclude by saying that the biggest question, which becomes our homework from here, is what role are we – and by this I mean the entire nation – playing in ensuring that the successful implementation of Ipap is realised and achieved. The ANC supports Budget Vote 36 - Trade and Industry.

Mr G G HILL-LEWIS


UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 593

Mr G S SELAU

Mr G G HILL-LEWIS: Chairperson, I must just respond to some of the points that have been made here today, before I get to my prepared speech. The hon Mabasa made a speech today that opposed a policy of his own government. [Interjections.] The youth wage subsidy is a policy announced by President Zuma in 2009. I am not sure if Cosatu has deployed the hon Mabasa to come and oppose the ANC in Parliament. If so, hon Mabasa, please come and join us. Don't oppose the ANC from your own benches. [Interjections.]

It is very clear that hon Gcwabaza was deployed here today to try and invent every line possible to excuse and muddy the simple truth because every South African now knows, after what happened in Braamfontein on Tuesday, that Cosatu stands opposed to the interests of the unemployed and my party is standing up for the unemployed. [Applause.] That is very uncomfortable for the ANC and very uncomfortable for the hon Gcwabaza, but now South Africa knows it is true. [Interjections.]

I want to thank the Minister for being one of the most available members of this government. As many have said, he is a really good Minister. His hands-on style is evident in the department. [Interjections.] His department has an enormous mandate. It plays a crucial role in unlocking economic development, driving growth and opening up markets. It is right that the Minister focuses on these priorities, as he did in his speech today. But he must not do so to the detriment of the smaller, but equally important parts of his job. While they are not as grand, expensive or international in nature, the Minister must not neglect important issues in the entities which fall within the department's mandate. If he does so, the result is that often the department's more noteworthy achievements on the trade and industrial development front are overshadowed by other embarrassing and entirely avoidable issues.

Some of those have been mentioned: The seemingly insurmountable backlogs at the Companies and Intellectual Property Commission, the uncomfortable admissions about the failures of the National Industrial Participation Programme, the embarrassment that is the National Lotteries Board and the latest high-profile fight that the Minister has had with the National Consumer Commissioner have all consumed the Minister's and the public's attention. I only have time to deal with the National Lotteries Board and the National Consumer Commission.

The National Lotteries Board deserves the censure of this House for its absolute failure to run a transparent and efficient distribution system which enjoys the confidence of the public. Lately, while several NGOs face the imminent possibility of closing down and stopping their services to the community, the National Lotteries Board has said that they will "go to the ground", hon Fubbs, for further input on how they should spend the billions of rands available to them that they are just sitting on.

Of course it is laudable that they should go to the ground and seek input, but they should not do so while NGOs like the Saartjie Baartman Centre in Manenberg, just down the road, are facing imminent closure because they can't get their act together. This is a waste of critical time - time that many NGOs simply don't have.

We are pleased with the latest information that a Lotto reform Bill is going before Cabinet next week, apparently, after which it will be released for public comment. This is urgent and we will hold you to it, Minister.

Last year the Minister announced the creation of the National Consumer Commission and the appointment of its first commissioner, with much fanfare. But it has been all downhill from there. The relationship is now so bad that the two parties are openly briefing against each other in public. The present war of words between Consumer Commissioner Mamodupi Mohlala and the DTI benefits no one. In fact, it is ordinary consumers who stand to lose the most from a National Consumer Commission whose attention is completely diverted from its core and crucial job and is instead defending itself against the attacks of the DTI.

One cannot escape the impression that the DTI has set up Commissioner Mohlala to fail from the very beginning. They reluctantly appointed her to the top job as the head of a crucial new entity, but then clipped her wings by allocating the NCC a budget woefully inadequate for the size and scope of its mandate.

The Minister has said repeatedly, in committee meetings and to the press, that he does not control how much his entities are allocated by Treasury. But this is only half true. The department makes representations to Treasury based on what they think the entities need. If Minister Davies had really wanted the NCC to succeed, he could have put up more of a fight for the money. He could have won that fight. The fact is, he did not.

Instead, the department has allocated R75 million in this budget to communications and Rl50 million for travel and accommodation, while the NCC, a crucial consumer protection agency, has had to take on big business and government alike, and defend all consumers against shoddy goods and service, with just R30 million. He then says the Auditor-General raised serious concerns about the NCC and that this explained the inadequate allocation. However, the final Auditor-General's dashboard report, released last month, shows vast improvement in internal controls.

The Minister has said his department did not lose the employment contract of the commissioner and that they have followed it to the letter, but e-mails from the Minister's own office say it has lost the contract. Why, if the commissioner's appointment is confirmed by the portfolio committee, of which hon Fubbs is the chair, has our portfolio committee never been briefed on the steadily escalating crisis between the commissioner, the director-general and the Minister? All these questions still need to be answered and one cannot help but feel that the Minister has not quite fully taken South Africa and this Parliament into his confidence on these matters.

I, for one, hope that we can resolve these matters soon so that the Minister and his Deputies, who are, sadly, as absent as he is present, can focus on the major priorities of this important department.

Mr B A RADEBE


UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 594

Mr G G HILL-LEWIS

Mr B A RADEBE: Hon Chairperson, Ministers and Deputy Ministers present, and hon members of this august House, next week, on Friday, 25 May 2012, Africa marks the 49th anniversary of the formation of the Organisation of African Unity. This organisation was formed by 30 leaders of the then 32 independent African states. Its historic mission was to ensure that Africa is free from colonialism. One of the founding leaders of the OAU, former President Kwame Nkrumah, said in 1961:

Divided we are weak; united, Africa could become one of the greatest forces for good in the world.

As we participate in this 2012 Budget Vote debate of Trade and Industry, those wise words of President Kwame Nkrumah are still as relevant today as they were 51 years ago. This "great force" that Africa could become could have been obtained from the vast mineral and natural resources of Africa. President Kwame Nkrumah was one of the pioneers of rapid industrial development, propagating that the resources of Africa must be beneficiated before they are sold on the world markets. Hence, he agitated that Ghana should have produced its own chocolate instead of selling its cocoa - industrialisation in action.

I am glad to report that the DTI, through its Industrial Policy Action Plan, is doing precisely what President Nkrumah said in the 1960s. Ipap has identified 21 sectors where government focuses its financial resources so that it can stimulate the production of value-added goods. This programme on its own has an investment of about R102 billion over the next five years, through the Industrial Development Corporation.

What is important is that the industrial policy now informs the trade policy. The implication for this is that the tariffs policy will always be informed by industrialisation instead of a narrow view of protecting the local market. For example, when an imported product is deemed necessary for industrial production, it will not draw the trade tariffs it would normally have done in the past. Instead, those imported products will be taken as if they were produced locally so that they can stimulate value-adding.

The important programme of regional integration has received priority from this ANC-led government. That is why, last year, President Zuma hosted the summit for the launch of the Tripartite Free Trade Area agreement. This free trade agreement will cover 26 African countries, with a total population of 527 million people and a gross domestic product of US$624 billion. This big market will be strengthened by the free flow of goods and business people, infrastructure development, for example the North-South rail corridor championed by President Zuma, and the harmonisation of industrial development policy within the participating countries.

The success of the tripartite agreement will depend on the harmonisation of regulations between individual countries, for example customs, the standard of products sold between countries and the alignment of the information technology systems at the border gates so that they can facilitate the free flow of products. So, if something has entered Zimbabwe, there is no need to undergo the same process when it enters Uganda or Zambia.

This will demand that the standards authorities, like the SA Bureau of Standards, the National Regulator for Compulsory Specifications and the SA National Accreditation System are well equipped to execute their mandates. It is pleasing to note that the budgets of Sanas, NRCS and SABS have been increased by 47%, 110% and 48% respectively. It shows that this government puts its money where its mouth is.

This will ensure that the goods that are exported and imported by the country are of a high quality. This is more important, considering that the global economic environment is on the decline. The expertise of these standards authorities must be shared with the countries that are in the free trade area agreement.

The portfolio committee has identified the proliferation of counterfeit goods as a serious problem in our country. During the previous year, 112 raids were conducted in 42 clothing industries in three provinces, which resulted in 260 tons of goods being confiscated. So, it means that the very clothing and textile industry we are busy protecting is being undermined if this bad habit is not nipped in the bud.

Over a period of three years, 2 tons of computer hard drives worth R1 billion were confiscated. So what does that mean? This demands that Sars and its counterparts must upscale and improve their efficiencies on the borders, because this will undermine the manufacturers in the individual countries.

The increased trade within the Southern African Development Community, SADC, and the Tripartite Free Trade Area is not undermined by tariffs, since only three countries have not complied with the zero-rating of the tariffs. It is the rules of origin and nonaligned infrastructure and nonaligned regulatory framework. These challenges are reflected in the fact that intra-Africa trade is less than 10% of the total trade of the African countries. This means that what President Kwame Nrumah was afraid of in the 1960s still exists: the colonial powers still have an economic hold on African countries. That is why we call on the department, through its International Trade and Economic Development programme, to intensify its efforts in promoting trade and development within the African continent.

Since world economic growth is led by the emerging economies, the ANC-led government must be congratulated for its sterling performance in the world forums like the World Trade Organisation. The Ministry and the department must be congratulated for sticking to their guns in ensuring that the Doha Development Round is being pursued by the emerging economies in the WTO.

The portfolio committee will give the Ministry all support in fighting pluralitarism of the developed countries in the WTO. We hope that with Russia participating in the WTO, the balance of forces will shift in favour of the emerging economies. [Applause.]

The portfolio committee also appreciates the South Africa-Cuba assistance agreement, which was signed this year and will be ratified by Parliament next week. This agreement is unique because 90% of the R350 million assistance to Cuba will benefit South African companies, but at the same time they will be helping the Cuban people. As a former president of the country, isithwalandwe [much-lauded] uTata Nelson Mandela, once said:

The morality of the South African people demands that we don't abandon our friends in their hour of need.

The Cuban people demand support from South Africa. They did not create the hurricanes. That is why, as a country, we must support them and take our cue from the stalwart uTata Mandela. We know that the Cuban people are our friends. They helped to liberate the African continent from the colonial powers. I know other people would never forgive them for doing that. The Cubans continued to help our emerging democracy by having educational and cultural exchanges with us. [Interjections.] As the ANC made the clarion call to create a better South Africa, a better Africa and a better world, the Ministry has led from the front in concluding this wonderful agreement. That is why it is highly appreciated, Comrade Rob Davies.

The portfolio committee has called for the intensification of the opening of new trade missions in the emerging economies, since these economies will be the economic growth points of the world. The portfolio committee appreciates the budgetary increment in the Trade and Investment South Africa programme by 3,6%. The portfolio committee also appreciates the support the department is giving our exporters, especially in enabling them to take their products to the various international pavilions.

We know that in October there will be a pavilion in Shanghai and Beijing. That information is all over the newspapers. So, the department is communicating properly. That is why those people who say the department communicates like a spaza shop are living in their own cuckoo world. At the same time, I know that we have political differences. That is why we have different political parties, but there are certain issues that have been raised in this debate that cannot go unchallenged.

The first one I will address is the hon Oriani-Ambrosini. The hon Oriani-Ambrosini raised a critical issue, saying that the department is in the business of social welfare for industrialists. Hon member, there is no social welfare. There is no country in the world that has industrialised without the support of government. I can give an example here: the armaments industry of America. That industry would not be where it is today if it were not through the support of the different administrations, whether Republican or Democratic. They were all in support. That is why they are so powerful to this day. So, if you want our country to matter in the international world, we have to support our industrialists.

An HON MEMBER: Yes!

Mr B A RADEBE: We must create incentives so that they expand and go to international markets. So, the argument that says this is a social welfare state is wrong. However, I know which interests you are wishing for. You know that if our industrial capacity collapses, your friends will benefit abroad. [Interjections.]

The other issue, which was raised by the hon Alberts, can also not go unchallenged. The President of the Republic raised the issue of the triple challenge of unemployment, poverty and inequality. That triple challenge affect a certain racial group more than any other people.

An HON MEMBER: Yes!

Mr B A RADEBE: More than any other people, that group was the one that was marginalised since the formalisation of the Union Government in 1910. The other groups were supported. That is why we had the Land Bank, which was able to extend cheap loans to the farmers there. So why, then, when it is the turn of all the people, must we turn our backs on them?

What is critical here, hon Alberts, is that the minorities had an 84-year head start, from 1910 to 1994. We have a lot of ground to cover for the other people who were marginalised. [Interjections.] What is very important, hon Alberts, is that one of the ANC's eminent leaders said, as far back as 1913, that we must banish the demon of racism and tribalism. That is why the policies of the ANC, even at the height of apartheid, expressed that South Africa belonged to all who lived in it, although they were oppressed. So, we are going to embrace you as we move forward. The ANC supports this Budget Vote. [Time expired.]

THE MINISTER OF TRADE AND INDUSTRY

UNREVISED HANSARD

EPC – OLD ASSEMBLY CHAMBER

Friday, 18 May 2012 Take: 595

Mr B A RADEBE

The MINISTER OF TRADE AND INDUSTRY: Chair, I thank hon members for the mostly thoughtful and constructive comments made in this debate. I want to start off with some responses to what the hon Wilmot James said, because, actually, when I was cut off, I was going to address the very subject of trade diversification.

Let me say to him that I think we need to develop a broad, national consensus about the imperatives to strengthen our trade relations where we can with our established trading partners, while recognising there is not going to be much growth in those relations in future years. This we must do while building new, dynamic trade and investment relations with the new, emerging economies in the world. I would suggest that, at some stage, perhaps the chair of the portfolio committee could think about having an engagement on a number of these matters.

Let me say right at the beginning that I would concur with the Deputy Minister that we have an energetic, dynamic, hardworking and capable Deputy Director-General of Trade and Investment South Africa, or Tisa, in Pumla Ncapayi. However, if there are cases where there are officials in Tisa or any other part of the DTI who are not answering requests, or if there are areas that members have identified where we need to strengthen capacity, in the framework of our approach of continuous improvement, we will engage on those matters.

However, I do think that the issues of trade diversification and trade promotion raise some very, very complicated questions. They raise some questions about what government does and what business does and how we interact and relate one to another. Very often what happens is that government is able to take advantage of political relations which we enjoy with many of the most dynamic economies but then the real trick and the real challenge is to turn that into real commercial opportunities. I am very open to trying to have a discussion. I have invited comments from business. How do we make the activities that we engage in much more effective and much more robust?

Let me just say that we are, of course, very fortunate that we applied for and became a member of the Brics bloc. We came in at a time when we were able to contribute towards the shaping of the intra-Brics co-operation programme. I think that has been something very, very valuable to us. Among other things, we are hoping that we can launch the Brics-led Development Bank, when we host Brics next year.

Some of the areas that we are trying to diversify with, in addition to Brics, include Indonesia. I think we have established a very strong rapport with the Indonesian Minister of Trade, Gita Wirjawan, and it is my intentions to go to Indonesia in the course of this year. We are also looking at countries in the Gulf - that is a very important part of our work as well.

We are also working with the Department of International Relations and Co-operation and we are trying to share resources. An example of this was that the former Chief Director of Investment Promotion was appointed as the Ambassador, under the auspices of the Department of International Relations and Co-operation, to Saudi Arabia.

On the questions of African integration, cross-border problems and so on, let me say that we have recognised them. They have been identified. For example, I was at the World Economic Forum on Africa in Addis Ababa last week and the same issues cropped up again. We raised these in the framework of the trade facilitation discussions in the Southern African Development Community. We have also supported the idea that the World Trade Organisation will engage on issues of trade facilitation and binding rules on trade facilitation. This is subject to the recognition of the fact that in many cases, improvements in trade facilitation do also have resource implications. So, we want to follow that approach, and that is embedded into our approach to regional integration.

When we talk about the Tripartite Free Trade Agreement, or the Continental Free Trade Agreement, which is now under discussion in the African Union, we have recognised the fact that there is too little intra-African trade already. A lot of that has nothing to do with tariffs as such. In fact, the biggest barriers, even within SADC, are no longer tariffs, because we have removed tariffs on a very large part of the trade. There are other regulations, if they are regulatory matters. Often, however, there are inadequate infrastructure and underdeveloped production structures as well. If you are a producer and exporter of cotton, if you like – I was going to say copper – you do not have a huge amount to trade with the producer and exporter of platinum. That is the reality.

So, what we have insisted on and what we have put in the Tripartite Free Trade Agreement is that the approach has to be one of development integration, where we work simultaneously on infrastructure development, cross-border infrastructure and also where we work on issues of co-operating on the promotion of industrial development. That is the common endeavour we have on the African continent. So we, as South Africa, are building integration, and the African continent is going to be part of our own efforts to promote exports of industrial products from South Africa. I think we also have to realise that we are part of a common endeavour and we have got to support industrial development elsewhere.

On the question that was raised about the oil and gas and the boat-building sector¸ let me just stay that we elevated that into Ipap – not this version, but the previous one - precisely because we saw that there were important gains to be made from this and that national government could actually facilitate the process. In addition to that, we have also seen the possibility of oil and gas servicing taking place on the east coast of the country as a result of gas finds on the east coast of the African continent.

It is not correct to say that Transnet is a dinosaur. I think it is a question of transport and port authorities not seeing this kind of business activity as their core business. My experience is not limited to South Africa. In the best cases, port authorities realised that this kind of activity could create significant and substantial numbers of jobs. It is exactly for that reason that we, as a department, have intervened. I had a very good conversation with the CEO of Transnet, who, I think, understands absolutely the importance and significance of that. So, we are quite optimistic that we can move further forward. By the way, we were given credit in the NCOP debate yesterday for the work the department has done to try and reinstate the Universal African Lines investment in Saldanha Bay.

Again, I would be very happy to have a longer engagement with the hon Oriani-Ambrosini, but I think that we are, respectfully, going to have to disagree. You suggested that we needed a pinch of Thatcherism. [Interjections.] Now, as I understand Thatcherism, it was a degree of growth accompanied by de-industrialisation. However, what happened there was that they said it did not matter if they did not have any industries as long as they had other activities in place, and those other activities were ... well, we now know what they were. They were derivative trading and all sorts of other financial services of a rather unsustainable type.

If we look at the United Kingdom today, the Conservative government of the UK, the heirs of Thatcher, are actually now trying to recover industry, because I think they probably realise that they made a mistake in the past. What we need to do is learn from successful peer countries. What have other emerging economies done? What have the Brazils, Indias and Chinas of this world done? I am afraid to say they did not follow policies with a pinch of Thatcherism! [Laughter.] I think we would be happy to come back and discuss that further.

I take the points made by the hon Mabasa on co-operatives. I also take the points made by the hon Gcwabaza on gambling and I thank the portfolio committee and him, personally, for the work he did on the Gambling Review Commission Report.

Regarding the points raised by the hon Hill-Lewis, I want to say that the judgment in the Labour Court on the case taken up by the Consumer Commissioner has only just been handed down, as we have been sitting here. I have not had the opportunity to study its implications, but I do want to say, absolutely upfront, that we never tried to set up the National Consumer Commissioner to fail. I have never had any personal agenda with the NCC. I want to say that we want the NCC. I am not going to comment on all the issues, because we need to look at the judgment along with these issues to see where we go from here.

Allow me, however, to say that we want an NCC that is active, engaged and pursuing the interests of consumers in this country. We want an NCC that can present well-considered interventions and judgments that are sustainable in law in this country. We want an NCC that is able to create an environment in terms of its relationships with its employees that encourages those employees to contribute what they can. We want an NCC that is working according to its mandate but also in a collegial way, as an institution of the Council of Trade and Industry Institutions. We want an NCC that is using its resources in such a way that it creates a basis for us to be able to go to National Treasury and ask for more funding. All of that is our objective. I think perhaps we need to find another opportunity and certainly, when I have looked at the judgment, we will see where we go from there.

Finally, let me just say to the hon Ferguson - I forgot to comment on her point – yes, we are very happy to be building relations with Lusophone countries. As a matter of fact, having lived in Mozambique for 11 years, falo português [I speak Portuguese]. It is actually a great asset to me in my interactions with my counterparts in Angola, Mozambique and Brazil, among other places. We are working with those countries, not because they are Lusophone countries as such but because they are important economies in their own right.

Thank you very much, everybody. We look forward to further engagements with the portfolio committee, and I thank everyone for the support given to this Budget Vote. [Applause.]

Debate concluded.

The Committee rose at 12:23.


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