Hansard: Debate on Vote No 36 – Trade and Industry
House: National Assembly
Date of Meeting: 15 May 2013
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Minutes
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 53
WEDNESDAY, 15 MAY 2013
PROCEEDINGS OF EXTENDED PUBLIC COMMITTEE – OLD ASSEMBLY CHAMBER
____________
Members of the Extended Public Committee met in the Old Assembly Chamber at 14:02.
House Chairperson Mr C T Frolick, as Chairperson, took the Chair.
The MINISTER OF TRADE AND INDUSTRY
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 53
START OF DAY
APPROPRIATION BILL
Debate on Vote No 36 – Trade and Industry:
The MINISTER OF TRADE AND INDUSTRY: Hon Chairperson, members of the portfolio committee, Members of Parliament, Ministers, Deputy Ministers, director-general, officials of the Department of Trade and Industry, DTI, and officials from the Council of Trade and Industry Institutions, COTII, leaders of business and labour, distinguished guests, and ladies and gentlemen, it is common knowledge that the term of this administration has coincided with the most severe global economic crisis since the 1930s. When we took office in 2009, the South African economy moved into recession, which cost us close to a million jobs. Sir, 200 000 of these, or 20%, were in manufacturing, a sector which contributes only 14% to the GDP, meaning that the impact of the recession was disproportionately severe in manufacturing.
This reality, highlighted by the global economic crisis, put into sharp relief the necessity to redouble our efforts to transform a number of long-standing structural imbalances and weaknesses in our economy, in order to place it on a new sustainable and productive sector-led growth path.
Guided by the resolutions adopted at the ANC's 52nd National Conference in Polokwane and the manifesto on which we were elected in 2009, this administration tabled the New Growth Path, within which the Industrial Policy Action Plan, Ipap, was identified as the manufacturing job driver. Ipap has become the centrepiece of the Department of Trade and Industry's work, with all our actions being coordinated with or aligned to it.
Over the course of this administration we have institutionalised the tabling at the start of each financial year of a new iteration of Ipap, covering action plans over that financial year and two outer years. Ipap has moved far beyond vision statements or diagnostics. Its main feature is the identification of action plans with defined frameworks and identified responsibilities for implementation by various entities. Key action plans have been developed after consultation with industry players.
Last month we released the 5th iteration of Ipap, covering this government's last full financial year in office. Accordingly we highlighted a number of key lessons we have drawn from our efforts over the past five years, as well as identified the broad direction we believe a higher impact industrial policy would need to traverse in the future.
One of our major conclusions is that where government has acted purposefully to implement programmes developed in consultation with industry players, businesses and labour, concrete positive results have been achieved. Among our most significant achievements has been the finalisation of the transition from the Motor Industry Development Programme, MIDP, to the Automotive Production and Development Programme, APDP, which now includes the heavy, medium and commercial vehicle segments of the automotive sector, as well as a programme under discussion and in development for electric vehicles.
Providing incentives to promote competitiveness and localisation in this important sector of the South African economy has contributed to production volumes' increasing to 539 424 units, with exports reaching 277 893 units in 2012. Furthermore, this change in focus in incentive, to support and encourage deepened local component manufacturing, has resulted in 128 projects supporting or sustaining 57 197 jobs.
As a sign of confidence in the steps we have taken and in the future of this sector in South Africa, private investments of nearly R16 billion have been secured. These have included both new investors and new lines of operation by existing investors. Among the new investors in the sector we have welcomed the First Automobile Works of China which is constructing a truck plant in Coega and the Beijing Automotive Works which is building a taxi assembly line and distribution centre. Examples of existing investors' expanding their operations include Toyota's Africa taxi, Quantum Ses'fikile, assembly line in Durban. We've also seen important new investments by long established regional equipment manufacturers such as Mercedes Benz, BMW, Ford and General Motors.
The clothing, textiles, leather and footwear industry experienced a remarkable turnaround, directly attributable to a radical change in our incentive programme, which occurred when we introduced the Clothing and Textiles Competitiveness Programme, CTCP. Sir, 12 205 new permanent jobs have been created in companies benefiting from this programme. A pleasing new development has been that local retailers have committed themselves to local procurement in support of manufacturing companies. Over 469 companies were assisted under the CTCP, with R1,5 billion's worth of applications approved. Approximately 49 000 existing jobs are being retained through the support of the CTCP.
The roll-out of the Renewable Energy Independent Power Producer Procurement Programme has underpinned significant investments in renewable energy. Significant investments in wind tower manufacturing and solar power plants have been made, including by DCD, which invested R300 million, Mainstream Renewable Power, R4,6 billion and SunEdison, R2,6 billion.
Chairperson, in 2009 we said that the threat of de-industrialisation loomed large and we had to confront this danger with interventions to promote industrialisation in a systematic and sustainable manner. We also said that the infrastructure roll-out, which is our main countercyclical response, must be a tool of industrial development.
Accordingly, we have sought to strengthen our procurement system to support increasing local industrial production. In this regard we can point to the designation of sectors for local procurement under the Preferential Procurement Policy Framework Act as introducing a sea change in industrial development in South Africa. The first wave of designations has already seen significant new investments in sectors such as transport and capital equipment, and companies are actively "tooling up" to ensure that they are positioned to take up the opportunities which arise from the infrastructure programme.
Sectors already designated include railway rolling stock; power pylons; bus bodies; textiles, clothing, leather and footwear, particularly workwear; canned vegetables; furniture; certain pharmaceuticals, particularly oral solid dosages; and set-top boxes.
Furthermore, localisation is now fully entrenched in a number of key procurement programmes, such as renewable energy generation and fleet procurement processes of state-owned companies.
Moving ahead, work has already begun on assessments of sectors and products for designation, including valves; manual and pneumatic actuators; power and telecommunication cables; and components of solar water heaters.
In addition to the strategic use of localisation in government procurement, the Department of Trade and Industry has also used a variety of incentives to support and encourage investment in manufacturing and value-added services.
A case in point is the Manufacturing Competitiveness Enhancement Programme, MCEP. Grants to 214 enterprises have been approved, at a value of R1,35 billion. Sir, 41 626 jobs are expected to be retained as a result, with a total investment outcome of R5,37 billion. I am pleased to report that MCEP is currently operating on an average two-month turnaround time. Considering the large numbers of applications and the amounts of funding involved, this is an excellent rate and the feedback I am receiving from a range of firms is very positive indeed.
Through the 12i Tax Incentive we have supported 26 projects involving investments valued at R32,6 billion and creating or sustaining 3 326 jobs over the last four years.
Additionally, we can report that the European Outsourcing Association awarded South Africa its prestigious Offshoring Destination of the Year Award a few weeks ago. Over the past three years, we have seen investments in business process services with a value of R1,3 billion, supporting 4 500 new jobs.
At the beginning of this administration we identified the film industry as having significant potential. Our efforts to work with the industry to unlock this potential have resulted in an impressive roster of locally shot blockbuster films. There are a number of things outside there that show you some of the ones that have been shot in South Africa. I recently had the opportunity to see some of the rough cuts of the film Mandela: Long Walk to Freedom, which is a film that we have been supporting. I can report that we as the Department of Trade and Industry can be proud to have been associated with supporting what I have no doubt will be one of the most important films ever produced in South Africa. [Applause.]
Chairperson, I believe that our record speaks to what can be achieved from industrial policy, and it also shows that we have laid a basis for strengthening our efforts to reindustrialise our economy in the future. As the current iteration of Ipap argues, industrial development in the future will need to be built on six pillars. These are, firstly, the beneficiation of mineral products, and this is something that is fundamental to our future progress; secondly, regional economic development and industrial integration; thirdly, the steady roll-out of the infrastructure development programme; fourthly, the development of new export markets; fifthly, local procurement and supplier development; and lastly, partnerships with Brics countries.
We believe that what we need in the future is a higher impact industrial policy and not a lighter touch programme, as has been called for by some of our critics.
South African history does not, however, allow us to grow the economy, and to industrialise and develop, without addressing the legacy of disadvantage, discrimination and underdevelopment which was left to us by apartheid. But while one element of economic transformation and broadening participation is about redressing the injustices of apartheid, it is also important to recognise that there are sound socioeconomic reasons for aspiring to a more inclusive economic model.
The Department of Trade and Industry considers entrepreneurship, co-operatives and SMME development as not only central to addressing injustices of the past, but also key to our efforts to ensure a more vibrant and effective productive economy. In other words, by broadening economic participation to include participants who were excluded in the past, we develop a stronger entrepreneurial base for the future.
It is for that reason that all of our SMME support programmes were reviewed in 2009 to identify ways to improve outputs and impacts. One outcome of this exercise was that we decided to prioritise incubation programmes based on evidence both in South Africa and elsewhere. The programmes, which seek actively to support productive small, medium and micro enterprises, SMMEs, in their start-up phase and to mentor them as they develop, dramatically improve survival chances for this sector. In line with this new priority and to leverage private investment, the Department of Trade and Industry introduced the Incubation Support Programme in September 2012, with the aim of contributing to the establishment of 250 incubators by 2015-16.
To date 13 projects have been approved under the scheme, with a total project value of R373 million, in sectors such as renewable energy, information and communication technology, agroprocessing, chemicals, mining, and clothing and textiles. Currently, the Small Enterprise Development Agency Technology Programme has 42 incubation centres in all nine provinces, in sectors such as biotechnology, mining, agroprocessing, construction, jewellery, automotive, metals and renewable energy. To date, 376 new enterprises have been created as a result of these efforts. Then, 2 247 SMMEs were supported, 28% of which are owned by women, and 2 161 jobs were created as a result. We will in future also encourage universities and science councils to host incubators. These incubators will be used to develop hi-tech and high-growth sectors.
Since 2009 we have made steady but important progress in ensuring that the co-operatives sector receives the attention that the potential of this sector deserves. We have reviewed the Co-operatives Act, and yesterday the National Council of Provinces approved the new amendment Bill which, when it is signed into law, will allow us to establish a Co-operatives Development Agency to provide more focused development support for co-operatives, and will also allow the establishment of the Co-operatives Tribunal. [Applause.] Another feature of the Bill is that it will recognise an apex body to represent the interests of co-operatives, both in South Africa and in international contexts.
Hon members will be well aware of the efforts the Department of Trade and Industry has made over time to increase the participation of black people in the economy. In line with the changing landscape, new black economic empowerment legislation and a proposed new amendment to the Codes of Good Practice were introduced in 2012. The BEE Bill, which is before the portfolio committee, seeks to confront fronting. It will establish a BEE commission to deal with complex fronting, and thus enhance compliance with the legislation.
The Codes of Good Practice have been revised to incentivise stronger performance in enterprise development and supplier development. These will be the key features of broad-based black economic empowerment. The shift to enterprise development and supplier development is intended to support stronger symbiotic relationships between black-owned enterprises and large companies in key value-chains in the economy. We hope that it will help to ensure that big business plays a role in developing viable suppliers that will be able to take on opportunities in both domestic and international markets.
The Department of Trade and Industry views women's empowerment as one of its priorities, and we are in the process of developing a National Strategic Framework on Women's Economic Empowerment. This aspect of our work has been led by our champion Deputy Minister, Elizabeth Thabethe, and she will develop this point in her input a bit later on.
In 2009 we said that industrial policy requires a supportive regulatory environment to foster more competitive and dynamic industries and businesses, and to prevent harmful market domination and abuse, and the exploitation of consumers. Consequently, business regulation and the protection of vulnerable consumers has over the last four years been another focus of attention.
A key outcome has been the establishment of the Companies and Intellectual Property Commission, CIPC. We took the decision, which I now think has been vindicated, to go ahead with the roll-out of the new Companies Act, despite reservations in some quarters. The new Companies Act gives South Africa a forward-looking regulatory framework that provides for simple, easy company registration. It gives us enhanced governance and clarity on disclosure standards for business, and it provides measures to assist companies facing economic difficulties.
The innovative business rescue provisions have already shown their mettle as a tool to save otherwise viable enterprises that are facing cash flow problems from the previously inevitable fate of liquidation. Sir, 945 companies, including close corporations, have been assisted through this scheme, and 6 624 jobs have been saved as a result.
We have also introduced other important legislative changes. They include the Intellectual Property Laws Amendment Bill to protect indigenous knowledge.
They also include key reforms to the operation of the National Lottery. We have responded to the criticisms and suggestions which were made in wide consultation, and Cabinet recently approved the new Lotteries Policy Framework and Lotteries Amendment Bill which is now out for public consultation. In addition, we have introduced regulations and a directive to improve the accessibility of lottery funds by needy communities and causes, to improve governance structures on lottery matters, and to ensure optimal distribution of lottery funds for development purposes.
The Consumer Protection Act was finalised and implemented during this administration. I am pleased to report that despite some initial teething problems there is now overwhelming support for the work of the National Consumer Commission, especially in poorer communities, which is where the worst abuses of consumer rights have been uncovered.
As we look beyond South Africa and our immediate challenges, we must not lose sight of the changing global economy. This administration foresaw the importance of broadening development integration in Africa, as well as the importance of the emerging new global powerhouses, such as China, India and Brazil.
Negotiations for a Tripartite Free Trade Agreement, TFTA, between the Southern African Development Community, SADC, the East African Community, EAC, and the Common Market for Eastern and Southern Africa, Comesa, are progressing and on track. But we have said that our efforts in this regard must be complemented by the promotion of both infrastructure development and cooperation, in order to transform productive sectors and industrialise our continent.
I am pleased to say the themes that we have been championing from the start of this administration are now finding an important echo on the African continent, as was evidenced, for example, by the discussions that took place last week during the World Economic Forum here in Cape Town.
Infrastructure development has focused on the North-South Corridor, with significant progress in upgrading road links. Projects have been identified for rail, border post and port developments.
The TFTA will combine the markets of 26 countries, with a population of nearly 600 million people and a combined GDP of US$1 trillion. In summary, this is a key initiative that will provide market scale that could launch a sizeable part of the continent onto a new trajectory of industrial development. The TFTA was also envisaged as part of a bigger project, a continentwide Free Trade Agreement, FTA, which will create a market with a combined GDP of US$2,6 trillion.
Chairperson, the election of Roberto Azevedo of Brazil as the next Director-General of the World Trade Organisation, WTO, creates an important new opportunity to advance a multilateral trade agenda informed by the mandate agreed to at the 2001 Doha Ministerial Conference to place the needs and interests of developing countries at the heart of the work programme of the WTO. We know Mr Azevedo well and actively supported his candidature, particularly after the elimination of the African Union-endorsed candidate in the first round. We congratulate Mr Azevedo and look forward to building a strong working partnership with him in advancing the WTO's work,
South Africa's participation in the Brics group is a significant component of our diversification strategy, as it provides important opportunities to build South Africa's domestic manufacturing base, enhance value-added exports, promote technology sharing, support small business development, and expand trade and investment opportunities.
It is for that reason that a key priority for us is to develop a work programme that will promote more value-added exports among the Brics members. We are pleased to announce that Brics trade ministers, at their meeting in eThekwini in March, accepted a proposal from us that we would coordinate a study to identify the way forward in the promotion of value-added trade.
In the coming year we will focus on strengthening South Africa's relations with Brics, as well as with other fast-growing emerging economies. In addition to that, the national export plan which we adopted recently will shift to the implementation phase as we seek to develop a new layer of emerging exporters to lead South Africa's export diversification.
In conclusion, are all these efforts bearing fruit or are the pessimists right? Let me just say that in one week last month I participated in three key investment announcements – by Procter and Gamble in Gauteng, Johnson Controls in East London, and Tellumat in Atlantis. The investment announcements by these three companies in one week alone amounted to R2,4 billion. In fact, over the period from 2010-11 the Department of Trade and Industry has facilitated investments with a total value of R125,5 billion. At the end of the 2012-13 financial year in March, the department had an investment pipeline with a value of R53,5 billion, with the potential to create 20 000 jobs.
However, of greater significance than the value of these investments is the strong vote of confidence in the South African economy that the companies in these value-added sectors have provided. These are not investments that were made on the spur of the moment; the companies involved have rigorously assessed the South African market, considered the potential risks, and compared South Africa to other potential investment destinations. After considering all of these factors, these companies and many more like them have chosen to invest, step up their role in South Africa, and create jobs in the productive economy of this country. These investors know that we have challenges, but they are not put off by our challenges. They recognise that Africa is the next growth frontier, and that South Africa, as the most industrialised country on the African continent, is of key strategic importance.
They have accepted the necessity for broad-based black economic empowerment, they have accepted that they need to be active in addressing the skills challenges in their own enterprises, as well as in the country as a whole, and they have not been put off by our industrialisation or localisation programmes. In fact, many of them have embraced these challenges and our initiatives as necessary developments that will lead to a stronger economy.
In closing, I do not believe that we could have made these advances without the support of people in the Department of Trade and Industry – its family and its institutions. I am proud of what we have achieved with the staff, which has a much more diverse profile than the Department of Trade and Industry had in 1994. This new profile, much more reflective of the demographics of South Africa, is emerging as a source of strength that will lead us into the future.
I want to thank, for the support I've received, my colleagues the Deputy Ministers; the director-general; the deputy directors-general; the heads of the different Council of Trade and Industry Institutions; my colleagues the ministerial colleagues in the cluster; and everybody who has worked in our office.
I commend the Vote of the Department of Trade and Industry to this Parliament. Thank you.
Ms J L FUBBS
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 54
THE MINISTER OF TRADE AND INDUSTRY
Ms J L FUBBS: Hon Chairperson, hon members, colleagues, compatriots, and ladies and gentlemen, the Department of Trade and Industry budget is driven by its commitment to employment through an enabling environment, an environment underpinned by strategic trade and an expanding footprint in Africa.
Fighting against the headwinds of a continuing European economic crisis, the DTI's budget of R9,6 billion is geared to driving industrialisation and broadening economic participation underpinned by trade. These objectives are supported by technical infrastructure, such as standards and quality assurance, which our fellow African states are commending, as we are also transferring some of our skills, and sharing experience with them.
This budget is built upon a strategic plan of realistic output-based action, and is closely aligned with the ANC-led government's vision. Consequently, Budget Vote 36 – Trade and Industry is expected to achieve its outcome of restructuring the economy and creating this enabling environment specifically for the private sector to create employment. [Interjections.]
Now, yes, this is a realistic, robust and results-based budget. It is a budget for a developmental state, a state that through a series of interventions, such as incentives, infrastructure building, strategic tariff adjustments, beneficiation and strategic skilling, is turning South Africa into the economic engine of Africa.
Through its flagship mandate in the Industrial Policy Action Plan, which has been covered by our Whip, hon Radebe, we have this aligned to the National Development Plan, NDP – it is not out of sync – and its primary pillar is the New Growth Path. The DTI, in this budget with all the financial constraints that it faces, has brought about allocated efficiency and established an expenditure platform for an equitable service delivery budget.
I am sure you can see from the committee's report that this budget reflects its commitment to industrialisation. Sir, 75% of this budget is earmarked for industrialisation. Industrial Development: Incentive Administration gets 58%. Industrial Development: Policy Development gets 17%. Broadening Participation, which the hon Mabasa will spell out to us all, and which includes SMMEs and regional development, gets 10%. Trade does require more funding, and Trade and Investment South Africa, and International Trade and Economic Development get 5%. Also you, the people of South Africa, the consumers, have not been forgotten – you are fully funded in this budget, and we have also recommended a review upwards. Now, the integrated budget ensures that technical infrastructure no longer lies below the radar screen.
As I said earlier on, we have not gone through the economic crisis, which was introduced, of course, by America and Europe. We are still there, but we are working very hard on this.
How do we support industry? How do we work in partnership with the private sector without allowing them, as they so often do, to try a move between the cracks? Well, I will tell you how. What we have done is to look at incentives backed by serious conditionalities in this regard.
For example, the grant disbursement incentive is not just a freebie. It is given only on the completion of each activity, such as plant and equipment, or upgraded or new production lines. The Manufacturing Competitiveness Enhancement Programme, MCEP, which was newly launched last year, 2012, is also making a significant contribution in this regard. Of course, as we are aware, in the motor industry the Automotive Investment Scheme, AIS, continues to be a robust contributor to our GDP.
With all of this we should not forget that these funds don't lie in a bank vault of the Department of Trade and Industry. They are handed out strategically with conditionalities, 92% making up the transfers.
Regarding the clothing and textiles production incentive, you will recall that in 2009 the clothing and textile industry was in total collapse, and that was right here in the Western Cape. I am not too sure what people were doing down here! [Laughter.] The fact that we are not a federal state is why we, from our other provinces, from this pool of funds, ... [Interjections] ... were able to actually ask: What we can do to help because, after all, we are all South Africans? That is the main thing here. [Applause.] What did we do with this incentive that is administered by the Independent Development Corporation, IDC, which falls under the mandate of Minister Patel? I saw him somewhere, and I see the Deputy Minister here. There is R758 million just for clothing and textiles.
There is a contribution to research, for the National Metrology Institute because, of course, we know how important that is. The hon Gcwabaza will tell us all about technical infrastructure. Then there is the National Cleaner Production Centre, NCPC, administered by the Council for Scientific and Industrial Research, CSIR, because we are well aware that research and development is a Cinderella area and we are resuscitating her from the fire. There is also the SA National Accreditation System, which hon Gcwabaza again will speak to, and this is absolutely no fairy tale if you have been to CSIR, which I doubt.
We welcome the DTI's marketing its programmes, incentives and support. Where? They are not simply in Gauteng, but in the rural areas, and not using people like me, but using the Congress of Traditional Leaders of South Africa, Contralesa. They are in partnership with Contralesa, a recognition of the significant role that our traditional institutions play.
Concrete support for the youth feeds into the Youth Enterprise Development Strategy. Then there are women. Of course, Minister Davies is now ensuring that the face of our boards reflects a softer outlook. You will see the female component highly reflected there. Women are recognised as a critical resource agent. They can transform boards and inject fresh thinking into value-added production, ranging from agro-industries and manufacturing to arts, crafts and research. We heard the Minister talking about films just now, and our support for that. The Technology and Human Resources for Industry Programme, Thrip, complements the department's commitment to human capital.
Let us turn to trade. All of us heard the Minister of Finance saying what the impact has been of the decline in American and European demand, not just for South African goods, but for goods across the world, and that in South Africa's case this has linked with the imbalance between exports at 1,1% and imports at 7,6%. This imbalance has had a negative impact on the current account of the balance of payments. All that is is that the current account is on one side of this huge balance sheet. That's what it means.
What is it that needs to be done? We can no longer pursue a consumer-driven economy. We are, as this ANC government has been saying for some time now, committed to a productive economy, because it is only through a productive economy that we will redress the current account. [Interjections.]
An HON MEMBER: Show us in electricity prices, Joan!
Ms J L FUBBS: Yes, I am coming to administered prices, and I want to tell you that this committee – driven by the ANC, of course, may I add – actually looked at administered prices. [Interjections.]
However, I will say this of my colleagues in the DA, Cope and the rest, that they were very, very collegial – very, very collegial. We worked together – of course, after persuasion! We worked together to ensure that we got to the root of what was causing this increase in regard to sending some of our goods outside the country.
I know Minister Gordhan will agree with me that port charges played a significant role, and we were able to persuade the CEO in this regard. By the way, we don't like your model, which has actually put the highest prices for transport from the ports onto manufactured goods – beneficiated items! That is not ANC policy! He fully agreed and has committed himself to significant reductions in port charges. The point here is that the committee brought together the stakeholders, helped them see sense and reason, and they agreed. And this, I can tell you, is a total victory!
Mr Chairperson, because of the oversight work in our committee we have cut that price. There are a few more things we are going to be cutting because, after all, Eskom has also realised the need to balance these issues to ensure ... [Interjections.] No, no! It didn't take them as long as the previous government before 1994! [Applause.]
We wish to congratulate ... [Interjections.] No, let us congratulate them. Let us also be aware of where many of us are. For example, I don't know where Tim Harris is today. Maybe he is in the Other Place ... [Interjections.] Hon Tim Harris! Indeed, he is an honourable man. The hon Tim Harris was in the committee at the time when we went to the World Trade Organisation, WTO, and he knows how we all felt about, should I call it, the "skewed sight" that they had on the developing world.
We are very happy to congratulate the new Director-General of the WTO, Mr Roberto Azevedo. Of course, I don't say his name as well as the Minister, who has a knowledge of Portuguese. He is currently with the Permanent Mission of Brazil to the WTO. We look forward to a deepening appreciation of the development objectives of the WTO, and how they pan out in Doha, which we believe may be getting a fresh life.
I believe he will bring an informed understanding of the role of emerging economies, developing countries, and countries classified as "MIC". That is not a "Mickey Mouse" statement! That is "middle-income countries" – that is what it stands for. An example is South Africa, for the following reason. When you look at the total GDP of South Africa, you think, "Wow! We can't help South Africa!" But, as a matter of fact, the gap between the haves and the have-nots is the second biggest internationally, and that is a direct result of the legacy of apartheid. [Applause.] Now, in regard to the imbalances, the imbalances ... [Interjections.] We have tackled that. [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members! Order! [Interjections.] Hon member!
Ms J L FUBBS: Let me say one thing. You know, I welcome your opportunity to exercise your lungs, but do so outside!
One of the other measures pursued by the DTI which has born fruit is the strategic setting of tariffs, and I must say all members of the committee agreed on this. Let's not have just one way of setting our tariffs.
How did we correct the high cost of domestic steel? We were all together on that – how did we address it? Well, when we hit a brick wall with ArcelorMittal, which believes in parity pricing, we said that there were many ways to tango, and that what we were going to do was we were going to lower the tariffs on steel, and we secured a lower price for steel.
But we didn't just say, "Lets lower tariffs across the board." We would have collapsed other industries, in particular the clothing and textiles industry, which we had to protect during its rebuilding campaign. So, we increased the price of tariffs there.
Of course, there are other issues we have to worry about and one is, we are aware that some of our raw minerals – and I know the hon Radebe will tackle this in detail – are being shipped out, even to friends, before being beneficiated. That we are going to address, and I know he will speak on that in depth.
Let me say this, hon Chairperson, that we are aware of the catalytic role industrialisation plays, backed by strategic, export-driven trade, how it plays out and how it engages with our developmental economy. But the ... [Interjections.] [Time expired.] The ANC supports this Budget Vote. [Applause.]
Dr W G JAMES
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 55
Ms J L FUBBS
Dr W G JAMES: Chairperson, hon members, and ladies and gentlemen, the year ahead is the final one for Ministers in President Jacob Zuma's administration, as it is for those of us giving the annual Budget ripostes. It is a year that will define the legacy of the executive, with Minister Robert Davies under scrutiny today, as it defines my contribution as a representative of the official opposition in Parliament. It is a year that defines two decades of the ANC government since uhuru in 1994, as it does the political character of the opposition as a whole. [Interjections.]
Where to begin? In 1994 we inherited a bankrupt fiscus, a sputtering economy, a nation damaged by apartheid, and a people traumatised by the violence of the transition. A group of leaders, among whom were Tito Mboweni, Derek Keys, Trevor Manuel, Minister Robert Davies and others, came together at Mont Fleur in 1992 and emerged with four scenarios represented by iconic "birds".
At that time the ostrich represented the white government, which kept its head in the sand to avoid a negotiated settlement with the black majority. Then there was the lame duck, which anticipated a prolonged transition under a weak government because it sought to satisfy everyone and satisfied no one. There was also Icarus, which represented a constitutionally promiscuous government, which came to power on a wave of populist support, embarking on an unsustainable public spending programme and crashing the economy. Finally, there was the flamingo which, in flight mode, made hope and history rhyme, uniting the country in a successful transition, with all citizens rising slowly and together.
Pippa Green tells the story of Trevor Manuel, Derek Keys, Alec Erwin, Maria Ramos, André Roux, Iraj Abedian and others, in reforming what was an economy in a pathological state of decline at the time. This economic leadership laid responsible foundations for recovery; defined a stable route out of debt; and kept us out of the exacting hands of the World Bank and the International Monetary Fund.
Under apartheid, Trade and Industry was about protecting vested interests. Under Trevor Manuel ...
HON MEMBERS: The hon Manuel!
Dr W G JAMES: The hon Manuel. Under the hon Manuel it became, at least initially, the vanguard of economic freedom, trade and tourism. What we saw was the falling of protectionism, export subsidies coming down, barriers to small business being identified, and anticompetitive ideas being mooted. The flamingo, the iconic bird, started to rise, but not in formation, and, as time went by, and unsolved challenge followed unsolved challenge, the poor bird began to falter.
Firstly, mesmerised by beneficiation, we did not do more of what we were already doing at the time, such as taking more from the earth and shaking more trees for low-hanging fruit.
Secondly, we failed to turn the HIV/Aids crisis into an opportunity to develop our health biotechnology industry, and furthermore to transform our arms and steel industries into complexes for serving in peacetime.
Thirdly, what started as a people-centred Reconstruction and Development Programme, RDP, descended, by way of the arms deal and the opening round of black economic empowerment, into a cycle of history characterised by elite self-enrichment on the back of corruption, tender fraud and consumption-led debt. [Interjections.]
The result, colleagues, was the crowding out of caring for the poor, the jobless and the unhoused, which is why former President Nelson Mandela pleaded at the time for an "RDP of the soul". It is in this spirit that the DA today identifies five issues requiring resolution, so as to up our game and free the energy latent in our economy.
First, empower our citizens with quality education! Only by having skills and knowledge can citizens master the environment, push new ideas, get a job, start a business and refuse to put up with incompetence, inferior service, and big brothers who think they know everything, presume what is good for us, and have the nerve to act on our behalf without being asked.
Second, remove all barriers to starting and running a small business! The Business Day's Peter Bruce once said that South Africa was not a nation of shopkeepers. He was wrong. Scratch below the surface, look behind the formal sector, and go on a ride with the SA Revenue Service, Sars, in search of greater revenue lines, and you will find a nation teaming with small businessmen and women, desperate to come up for air, under the weight of overregulation by this government.
Third, investors furthermore need policy certainty! Under the ANC the direction of national policy changes, depending on the machinations of different factions within that party and its alliance partners. The absence of policy certainty and stability plague the ANC-led national government, as it struggles to reach consensus around the National Development Plan, especially difficult being the discord with some key trade union partners.
Fourth, South Africa needs to be proactive about identifying potential investors and trading partners, and to actively lobby them to invest in our country! In order to do this, we will need a coherent and focused strategy; properly trained diplomats who can promote South Africa as a reform-minded and business-friendly destination; and a redesigned, modern, combined foreign affairs and trade footprint located where it matters.
By the way, on the question of trade, I recommend that you all read Tony Leon's book, The Accidental Ambassador, to understand what needs to be done in the area of trade and diplomacy reform. Leon would know. He and his talented embassy staff almost doubled our exports to Argentina in one year, reaching a record of R1,3 billion by 2011. [Applause.]
Fifth, the government needs to create the right business environment for business to flourish! This is so that both domestic and international players receive good returns on their investments. This requires that tax rates be competitive relative to other developing countries, and that South Africa's physical infrastructure be upgraded and expanded to meet the needs of a vibrant and growing economy.
The Western Cape government is single-mindedly committed to maintaining our infrastructure; providing excellent service delivery; and providing a public transport network to connect every citizen to opportunities to work and to run a business. [Applause.]
My friends, our trading position today has never been so bad. Please listen up! Between 1994 and the year 2000 our trade balance rose from a positive R18 billion to R48 billion - the highest ever. By 2012 our trade balance was in deficit by R78 billion, worsening since. Our trade account over the last 18 years is a function of the state of our mining industry, which is today in a crisis that this government seems singularly incapable of resolving.
We have not, as a country, developed diversified export lines, and we have remained reliant on imports for a range of consumer products. Our deficit has been financed by foreign capital that has, in turn, aggravated dividend and interest deficits. The reliance on foreign capital makes us extremely vulnerable. It raises the spectre of Icarus, where an unfocused and paralysed government, which tries to satisfy everyone and as a consequence satisfies no one, breaks the economy in the process.
What we need to do is to trade ourselves out of trouble, but the Department of Trade and Industry is not enough of a trade Ministry. The department spends 5,3%, which is R508 million – the second lowest item in its Budget for 2013-14 – on advancing trade objectives. It should spend significantly more on aggressively championing our products and companies, and many of our world-class CEOs in the markets that matter the most. My friends, you can find the same advice in the National Development Plan.
Minister Davies is more of an industry Minister. His department spends 72% of its Budget, which is R6,9 billion, on promoting industrial development. Minister, spending money on infrastructure; economic development zones; incubators for small business development; incentive programmes for niche areas like agroprocessing and ship building; and providing some measure of relief in hard times to troubled sectors like textiles, albeit temporarily and without destroying low-wage jobs as a consequence, make sense and they are worthy of support. I want you to know that.
We are not opposed to the Ipap, Minister, only to projects that do not meet John Maynard Keynes's wise injunction that, and I quote:
The important thing for Government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all.
Accordingly, we see no compelling reason why we must nurse so many projects that are part of the automobile sector. What the car companies require is to trade freely in the Southern African Development Community.
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, your time has expired.
Dr W G JAMES: Thank you very much. [Applause.] Chairperson, I was going to present ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, your time has expired. [Interjections.] Order, hon members!
Mr G B D MCINTOSH
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 56
Dr W G JAMES
The HOUSE CHAIRPERSON (Mr C T Frolick): The next speaker is the hon McIntosh.
Mr G B D MCINTOSH: Thank you, Mr Chairman.
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon McIntosh, make use of the podium in front of us.
Mr G B D MCINTOSH: No, I do not want to use the podium, Sir. I can keep my eye on the Minister and on you ... [Interjections.] [Laughter.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, you must use the podium!
Mr G B D MCINTOSH: Mr Chairman, that is not a Rule.
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, if you do not want to follow the protocol that has been followed, then you will forfeit your speaking time. You will use the podium.
Mr G B D MCINTOSH: Mr Chairman, I will take that up with the ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member! For the last time, you must use the podium! [Laughter.] [Applause.]
Mr G B D MCINTOSH: Mr Chairman, I want to object to your ruling and I will take it up in the correct areas.
The HOUSE CHAIRPERSON (Mr C T Frolick): You are welcome, hon member.
Mr G B D MCINTOSH: And I can speak this way on the podium. [Laughter.] [Applause.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member! Hon member! [Applause.] Order, hon members! [Applause.] Order, hon members!
Mr G B D MCINTOSH: Mr Chairman, ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Order! Order!
Mr G B D MCINTOSH: Mr Chairman, this is a good department and a diverse department ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, will you take your seat? [Interjections.] [Laughter.] Hon member, you are refusing to follow and you are deliberately ignoring the instructions from the Chair. [Interjections.] Can I ask the service officers to remove this member from the Chamber please? [Interjections.]
Mr G B D MCINTOSH: Mr Chairman, on what basis? I am speaking from the podium. It is an abuse of power by you. I am speaking from the podium! [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member! Hon member!
Mr G B D MCINTOSH: I am listening, Sir.
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, you are now deliberately not following the order. The debate has gone well – we made a request that members and even the Minister make use of the podium, and that has been done. But you have deliberately come here after three times – you ignored what the Chair was saying – and you have started engaging in certain unparliamentary activities, jumping onto the benches like a small child! [Interjections.] That is not allowed in the House!
Mr G B D MCINTOSH: Mr Chairman, can I address you on this matter?
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member! Hon member! Where are Cope's Whips?
Mr G B D MCINTOSH: Mr Chairman, let me address you on a point of order.
The HOUSE CHAIRPERSON (Mr C T Frolick): I am not allowing you to address me.
Mr G B D MCINTOSH: I want to speak to you on a point of order! That is my right. [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order! May I request, hon member, that you either continue as the other members have continued, or you forfeit your speaking time and you leave the Chamber. [Interjections.]
Mr G B D MCINTOSH: Mr Chairman, ...
The HOUSE CHAIRPERSON (Mr C T Frolick): I am not taking any explanations from you! I am not going to ...
Mr G B D MCINTOSH: This is a good department ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Order! Order!
Mr G B D MCINTOSH: It is a diverse department ... [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members! [Interjections.]
Mr G B D MCINTOSH: ... and it is absolutely vital to the South African economy.
The CHIEF WHIP OF THE OPPOSITION: Hon Chair, may I address you? [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon Watson, I have made a ruling in this regard. The hon member is now following procedure. Will you take your seat, please?
The CHIEF WHIP OF THE OPPOSITION: May I ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Will you take your seat please?
The CHIEF WHIP OF THE OPPOSITION: ... address you on a point of order, Chair?
The HOUSE CHAIRPERSON (Mr C T Frolick): No, hon member.
The CHIEF WHIP OF THE OPPOSITION: Are you refusing me a point of order? [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, take your seat. We want to get the debate under way.
The CHIEF WHIP OF THE OPPOSITION: I am just asking you: Are you refusing me a point of order?
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, we have resolved this issue with the member.
The CHIEF WHIP OF THE OPPOSITION: You do not know what I want to say.
The HOUSE CHAIRPERSON (Mr C T Frolick): There is no need for further points of order on this matter.
The CHIEF WHIP OF THE OPPOSITION: You do not know what I want to say!
The HOUSE CHAIRPERSON (Mr C T Frolick): There is no need. I have made a ruling, hon Watson.
The CHIEF WHIP OF THE OPPOSITION: But you have not heard me, Sir.
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon Watson, will you take your seat please? [Interjections.] Continue, hon member.
Mr G B D MCINTOSH: Thank you. To run a globally competitive economy and walk tall in a hard, unsentimental world ... [Interjections.] ... where national self-interest rules, ... [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members! [Interjections.]
Mr G B D MCINTOSH: [Inaudible.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Continue, hon member.
Mr G B D MCINTOSH: To run such an economy we need a department with strong institutional memory, with highly skilled, dedicated, patriotic personnel, regardless of colour or gender, and with at least some staff with language skills linked to our biggest trading partners. Board meetings at the Standard Bank now have simultaneous interpretation of Mandarin and English. How many DTI staff can speak Chinese, or indeed any other languages?
Generally the department is well run and, if there are weaknesses, the DG and his senior staff are doing their best to correct them.
As the hon Fubbs reminded us, private investment is the handmaiden of this department – capital! We need money – foreign direct investment and local investment. That is how we will grow our industries and our industrialisation.
However, did hon members notice that the hon Minister did not speak about the National Development Plan? He spoke about the New Growth Path. [Interjections.] Nothing about that!
We notice, too, that the Minister should act strongly against people like Patrick Craven. What business has Patrick Craven to comment on Ipap and to use that political swearword "neoliberal"? The Minister should firmly repudiate those communists who are trying to cripple the NDP. If he did that, his pipeline of investment would grow exponentially, because people who are investing with capital want to see that. However, the Minister said there was an "echo" on African investment at the World Economic Forum this last week.
Let me quote to you what the richest man in Africa had to say at that forum and in an interview with Business Day. Listen to this:
In Nigeria, we had these laws demanding that any (foreign) investor had to have a Nigerian partner. But that just dried up the capital flows.
Are you listening, Mr Minister? [Laughter.] What did Mr Dangote go on to say? He said:
Now, anyone can do business with anyone in Nigeria.
[Interjections.] He has about R6 billion in investments in South Africa. He went on to say – and this is not an umlungu [white person] speaking; this is a black Nigerian:
... South Africa's BEE laws and policies would have to be reviewed in order to attract more investment from Africa to South Africa ...
He went on to say:
... (South Africa's) BEE rules and regulations benefited only 5%-10% of the population.
The Minister is pushing through a BEE Bill, and I have written about it on www.politicsweb.co.za. This Bill comes 20 years after freedom, and is highly problematical. It complicates and holds back investment. It denies the vision of Nelson Mandela, the hon Trevor Manuel and Mr Cyril Ramaphosa, and reaffirms the stream of race victimology and greed that Malema and Manyi embody.
South Africa is actually doing very well. There are a lot of people in this country who are always thinking, "Siyahlupheka! Siyahlupheka!" ["We are poor! We are poor!] I want to tell you, South Africa is doing very well. The black middle class has more than doubled in the last eight years. It has grown to 4,2 million people. Motor car ownership by the black middle class has increased from 750 000 to 1,9 million. That is a huge achievement.
Minister Patel and our President point out that the South African economy has grown by 83% in the last 20 years, but we are only going to grow it if we attract private capital. The Nigerians understand that.
But what does the hon Fubbs say? Listen to her comments. She says, well, we have got to bring in private investment, but we must control these blighters because they creep through the cracks in the wall! [Laughter.] Not only that, but when Walmart comes, what does one get? A genuine attitude by the government of being anti. They are not welcomed with open arms. No, no, no! They support the Competition Tribunal.
This is the same attitude our Minister of International Relations and Co-operation has. Her department is called Dirco – which sounds like an engineering company! [Laughter.] The Minister of International Relations and Co-operation speaks of when the British cut our aid. That is actually a source of pride to me as a South African, because it is telling me what the British are saying, that they have made an assessment, and the South Africans are doing so well they do not need aid! But what does our Minister do? She throws a fit! I would be proud of that fact. It also shows you that the rest of the world sees that we are doing well.
Our problem is the left. It is the communist trade unions and wildcat strikes that are damaging our country, and the Minister must understand that. He must not pussyfoot around them; he must make a strong statement objecting to that attitude! Then we will have capital pouring into South Africa, as it is into Nigeria. [Interjections.] [Applause.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order! Order, hon members!
Mr J H STEENHUISEN: Mr Chairperson, ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Please take your seat in the meantime, hon member. Hon members, we will take up the matter of the conduct of the hon member Mr McIntosh ...
HON MEMBERS: Yes!
The HOUSE CHAIRPERSON (Mr C T Frolick): ... and we will discuss it with the relevant Chief Whip from Cope outside this forum. We will now continue with the debate. Did you have a point of order, hon member?
Mr J H STEENHUISEN: Chairperson, I would like to seek clarity from you. In every other debate that has taken place, including the one in this Chamber yesterday, members have been given the option at the beginning to speak from the podium or to speak from the benches. I seek clarity, therefore, on behalf of our members, for future reference. Are you making a ruling today that this is how it shall be henceforth, or will this be only when you are in the Chair, Chairperson? [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, I am the Chairperson of this session ...
HON MEMBERS: Yes!
The HOUSE CHAIRPERSON (Mr C T Frolick): I am the Chairperson of this session, and that is why I requested the hon member to use the podium, like I requested the hon Minister to do so. [Applause.] I repeat, like I requested the hon Minister to do so. I am not going to ...
Mr J H STEENHUISEN: Mr Chairperson, ... [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): [Interjections.] Order, hon member! Order! Order!
As I have indicated, I will enter into a discussion with the Speaker and the Chief Whip of Cope on the matter of the hon member who was just at the podium, and then we will deal with the matter from there.
As the Chairperson of this session, I am requesting hon members to make use of the podium. In the past hon members have complained that neither the Old Assembly Chamber nor Committee Room E249 is properly equipped to conduct Budget Vote debates. That is why podiums were put in there. So, if the podium is there and I am in the Chair, then I am going to request members to make use of the podium.
Mr I O DAVIDSON: Mr Chairman, on a point of order: ...
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, what is your point of order now?
Mr I O DAVIDSON: Sir, my point of order is this: I just want to endorse the comments of my colleague. You have the right to request, but you do not have the right to make Rules. The Rules are made in the Chief Whips' Forum and in the Parliamentary Oversight Authority. Only they have the right to make Rules. [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, thank you for your point of order. Will you take your seat please? The Chief Whips' Forum is a consultative body. It does not make Rules for Parliament.
Mr N E GCWABAZA
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 57
The HOUSE CHAIRPERSON (Mr C T Frolick)
Mr N E GCWABAZA: Hon Chairperson, hon Minister of Trade and Industry, Dr Rob Davies, hon Deputy Ministers and hon members, the ANC supports Budget Vote 36, the budget for Trade and Industry. In supporting this budget, let me attend to some of the entities over which the portfolio committee has oversight.
The National Credit Regulator is an instrument that contributes to addressing the socioeconomic challenges related to the low wages in the workplace which no longer match the living standards of the majority of South Africans and, as a result, force them to the lending institutions. Challenges have emerged with regard to unsecured and reckless lending by financial institutions, which is also characterised largely by lending for consumption rather than for productive and job creating economic activities. There are problems in debt counselling and court processes as well.
The ANC looks forward to a comprehensive amendment of the National Credit Act and the National Credit Policy, which amendments the DTI plans to introduce in Parliament in July.
Let me turn to technical infrastructure institutions and start with the National Metrology Institute of South Africa, NMISA. The selection of the technical infrastructure institutions, all of them, was linked to their strategic importance in supporting the manufacturing sector and exports, and protecting consumers from unsafe and poor quality products and services. These institutions ensure the maintenance of quality standards, compulsory specifications, accredited testing and measurement units. These are primary scientific standards of physical quantities for South Africa, which are equivalent to other national and global measurements.
NMISA provides the international link to traceability for all measurements and also provides reference analysis in the case of measurement disputes. Furthermore, it develops and maintains primary methods for chemical analysis to certify reference materials for South Africa and the SADC region.
South Africa needs sound and effective measurement systems to be able to compete in a globalised economy which emphasises free trade. Scientific development and applied research necessitates modern measurement systems and techniques. As the provider of internationally equivalent measurements and standards, NMISA therefore plays a critical role in underpinning South Africa's industrial and trade competitiveness through developing and maintaining vital elements of the national technical infrastructure. Thus NMISA supports the Industrial Policy Action Plan by ensuring that South Africa's manufactured goods are acceptable and competitive in international markets.
In the 2013-14 financial year NMISA will be focusing on measurement standards for sectors that are prioritised in Ipap, such as the green and energy sectors, metal fabrication, capital and transport equipment, automotive components, agroprocessing, plastics, pharmaceuticals and chemicals. It will also be upgrading the optical frequency national measurement standards for the Square Kilometre Array, SKA.
The National Regulator for Compulsory Specifications, NRCS, regulates the development of and adherence to compulsory minimum product specifications. It ensures that business manufactures, sells imports, and exports goods and services which comply with compulsory specifications in order to guarantee the health and safety of consumers and the protection of the environment, and to make our goods and services competitive in terms of costs, quality and quantity in the global markets.
For the financial years 2013-14 to 2017-18 the NRCS is planning to focus on enforcing technical regulations, with the emphasis on locking out goods that do not comply with compulsory specifications. Also, it seeks to address failures of the market, where businesses may produce, import and sell goods and services that are harmful to consumers and threaten the environment, and may fall short of promised quality, quantity and safety in line with trade metrology.
However, the NRCS acknowledges that it has to strike a balance between the burden of overregulation and the benefits of pragmatic focused regulation.
The NRCS also regulates other products covered by memoranda of understanding with other national departments, namely, the Departments of Transport, of Health, of Labour, of Environmental Affairs and of Agriculture, Forestry and Fisheries.
As far as legislation of the NRCS is concerned, the Minister of Trade and Industry, the hon Dr Rob Davies, has amended, with effect from 1 July 2013, schedule 2 of the Regulations Relating to the Payment of Levy and Fees with regard to Compulsory Specifications. These amendments cancel the existing tariffs for the automotive, chemical, mechanical and materials, electrical, and food and associated industries, and substitute these with new tariffs.
The NRCS is currently strengthening and enforcing existing and new mandatory standards for the manufacturing sector of our economy as identified in Ipap. These are: energy and water-efficient building regulations; water-efficient requirements for plumbing components; safety and environmental requirements for electrical products in fixed installations; compulsory requirements for processed meat; compulsory requirements for live aquaculture; and safety and environmental requirements for electric vehicles.
The NCRS participates in international forums and regional committees on technical infrastructure, and serves as the coordinator and the secretariat for the three SADC committees.
I now turn to the South African National Accreditation System, Sanas, which is a national accreditation body aimed at providing an effective accreditation system. It is internationally recognised and provides a good laboratory compliance and monitoring system. It underpins South Africa's industrialisation, trade and economic development through credible accreditation and improving operational delivery of services.
In its strategic objectives for 2013-14 Sanas includes: excellence in operational delivery of services; providing accreditation support for industrial development and the protection of the health and safety of the public and the environment; promoting accredited results among global partners and advancing South Africa's trade and economic development; and supporting regional integration as part of the objectives of Ipap and the trade policy.
Sanas is the founding signatory of the Multilateral Recognition Agreement of both the International Laboratory Accreditation Co-operation and the International Accreditation Forum. At a regional level, it holds the position of regional coordinator of and is host to the SADC Accreditation Secretariat. It also undertakes the transfer of skills to the SADC Accreditation Service, and was recently elected to host the secretariat of the newly established African Accreditation Co-operation in support of African technical infrastructure under the African Union.
The SA Bureau of Standards develops, promotes and maintains South African national standards. It keeps South Africa's database of more than 6 500 national standards, as well as developing new standards, and revising and amending, or withdrawing existing ones.
The HOUSE CHAIRPERSON (Mrs F Hajaig): Hon member, your time has expired.
Mr N E GCWABAZA: In conclusion, clearly, South Africa's technical infrastructure institutions are well placed to promote and support regional and continental ...
The HOUSE CHAIRPERSON (Mrs F Hajaig): The hon member's time has expired.
Mr N E GCWABAZA: ... industrialisation, trade and infrastructure development in the context of the SADC-EAC-Comesa tripartite alliance. Thank you.
The DEPUTY MINISTER OF TRADE AND INDUSTRY
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 58
Mr N E GCWABAZA
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Mrs T V Tobias): Hon Chair, ... [Interjections.] ... the hon member is trying to save face by claiming that I look smart! [Laughter.] Good afternoon, hon Chairperson, hon members, and ladies and gentleman. Before I begin with my speech, I need to indicate upfront that if the creative industry needs people to act, they can get many from the National Assembly. Today I saw a lot of actors in this House. [Laughter.] They demonstrated their ability to participate in the creative sector, and I think they are in the wrong place! [Interjections.]
Once again the time has arrived where we need to give a detailed account of what programmes we have implemented with the budget appropriated in the last financial year, namely the 2012-13 budget, and also to request approval of the budget for 2013-14 from this august House. We need to reflect on the programmes implemented, based on policy positions approved by this collective. We will also reflect frankly and honestly on the realities that any government is faced with when implementing a mandate given to it by the electorate, operating within a complex environment of scarce resources.
In government the fiscus is based on tax revenue. In the South African context there is a situation where half of the labour force are not actively participating in the economic mainstream, due to factors that we all know and have regurgitated since the inception of the democratic dispensation.
For any economy to grow, we need unity of purpose. If the private sector and the government look at each other with a suspicious eye, we run the risk of unneeded disparities in policy formulation and policy implementation. I repeat, if the private sector and the government look at each other with a suspicious eye, we run the risk of unneeded disparities in policy implementation and policy formulation. [Interjections.] We need to harmonise the relationship between the private sector and the state through continuous engagement and consensus-seeking.
The target of five million jobs can only be achieved through consistent and vibrant economic growth. There was a question regarding whether we need a consumption-driven or a production-driven economy. That is the debate that ensued this morning. This question, in the context of the South African economy, is neither here nor there, as we are dealing with an economy that until now has left the majority of its citizens out of participating in the mainstream. That is a fact, hon members.
In the past our economy left the majority out of the economic mainstream and therefore we as politicians ... [Interjections.] Hon member, I'm going to beg for your indulgence. [Interjections.] We as politicians need to avoid gambling with such a sensitive matter and become patriotic in changing the lives of South African citizens. This does not mean that leaders and government officials should take advantage of the vulnerability of our society and become involved in corrupt activities.
We also need a balance between consumption and production because, for any economy to grow, we need both a competitive and a productive economy. Therefore, as the state we will continue to humbly call for a partnership between the public and private sectors in addressing these complexities.
We further promise, as always, to provide tax incentives, which we have always provided, as a reward. We will also reward compliance. Therefore, there will always be incentives when companies comply with regulations.
The debate on wage subsidies has become egg on the face of some, and seems to have divided our society. In my considered opinion, any idea that seeks a solution to our unequal past should be embraced as far as it works. However, it should be evaluated, and abandoned if it does not work. Criticism should be positive ... [Interjections.] ... and an alternative solution should be provided.
I am also wary of international ratings that presuppose that all countries move on an equal footing. How can developed countries be measured with the same yardstick that is used to measure developing countries? How can the economic growth of developing countries be equated with that of developed countries? This is not just an exercise and it is actually insanity and hypocrisy.
However, that does not mean that the bar must be lowered. In fact, it must propel us to perform even better. Indeed, South Africa has outdone itself; hence we gained membership of Brics. This was not because we were equal to the Brics countries in regard to monetary value and otherwise; it was the political and socioeconomic factors that put South Africa on the map.
To elaborate on my point, it was reported that the International Monetary Fund, IMF, had slashed South Africa's economic growth focus for next year from 4,1% to 3,3%. This was done against the backdrop of what the Minister of Finance indicated in his Budget speech, putting next year's projection at 2,7%. Where did the IMF get the 3,3%? Our projection for 2015 is 3,8% and not 3,7%. Let people stop counting chickens before they hatch! [Interjections.]
Come 2015 we will report on the real growth, as we do every financial year. Of course, government did project its growth to be 5% in its last projections, but these were challenges that were experienced by our economy. [Interjections.] No, let me give you examples. I am going to be specific – I don't deal in drama but with facts!
The first one is that the energy prices went up. [Interjections.] There were global risks – we know that there was a financial crisis. There was a decline in global demand, and that is a fact. [Interjections.] That is a fact. There was a decline in global demand. [Interjections.] Domestic consumer demand also declined. We experienced volatile capital inflows and commodity prices, the volatility of the rand, the rising of food prices and the rising of inflation. I can go on.
This eventually led to growth being below the 3,8% projection, ladies and gentlemen. I think we agree on that. We also agree that there was a challenge of structural problems in the country, and I have already provided the example of the labour force.
During the Budget speech the Minister of Finance indicated that the 2013 Budget was being presented during challenging times. He elaborated on this by saying that the South African economy was continuing to grow at a slower rate, and government had to take measures to reduce spending. Last year, during the Budget debate in the NCOP, I made a remark that the global economy was facing uncertainties, but countries were still expected to build vibrant economies.
We meet here today in the National Assembly, and we need to answer difficult questions about how we are going to create employment, especially for the youth, 80 days after the Minister of Finance tabled the Estimates of National Expenditure. This is based on his assertion that the global economy was painting a bleak picture.
We need to strike a balance in juxtaposing global economic discourse and South African policy challenges. He further challenged us to balance economic recovery and economic consolidation, and our being an economic power and having social solidarity. Given the above, he also provided hope by indicating that the South African economy was expected to grow from 2,5% to 2,7% in the current financial year, and it is expected to grow, as I said earlier on, to 3,8% by the year 2015.
The million dollar question that remains is how we achieve these economic projections, given the challenges experienced in the past? The answer lies in our performance. As long as there are low productivity levels, uncompetitive behaviour, little innovation and lack of investment in local content, they will not be achieved. To the hon member from Cope, it is not about foreign direct investment – if there is no local content, investment is equally useless. Notwithstanding global challenges, this growth won't be realised ... [Time expired.] [Applause.]
Adv A D ALBERTS
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 59
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Mrs T V Tobias)
Adv A D ALBERTS: Chairperson, it is a pleasure to serve on this committee. The fact that many decisions are made by consensus is testimony to the pragmatic mindset of the committee members under the very able and, dare I say, entertaining leadership of its chair, Ms Fubbs. It is quite appropriate to thank her for always listening to my comments and advice and acting thereon.
Afrikaans:
Minister, soos u weet, is u departement die enjinkamer van die land se ekonomie. Die hardnekkige probleem wat ons in die gesig staar, is die feit dat werkloosheid nie verminder nie. 'n Mens kry die indruk dat min van die planne wat gemaak word 'n substantiewe, positiewe effek het. Dit is vir ons kommerwekkend, en daarom wil die VF Plus 'n paar voorstelle maak.
English:
Many of the structural problems in the economy have been created by government. This department has been a prolific creator of legislation, whether new or amending, that imposes layers of bureaucratic burden on businesses. One pending piece of legislation, the Licensing of Businesses Bill, is so far-reaching that it will kill off the informal sector if implemented unchanged. We need less red tape so that society, especially the poor, can spontaneously create businesses for themselves as opportunities arise.
Afrikaans:
Die industrialiseringsplan lyk belowend, maar die sukses daarvan is onderhewig aan die sukses van 'n effektiewe vervaardigingsektor. Die feit is dat die gebrek aan effektiwiteit baie te doen het met ons streng arbeidswetgewing. Dit word bewys deur die rand se wisselkoers. Sodra dit laag is, kan ons meeding met ander lande. Sodra dit styg, bestaan geen meer aansporing wat ons produkte mededingend maak nie. Die wisselkoers en hoë arbeidskoste word dan saam 'n struikelblok tot effektiewe internasionale mededinging. Daarom moet die Minister met sy kollega by Arbeid gesels oor hoe om die probleem die hoof te bied. Selfs die Minister van Finansies deel hierdie siening.
English:
The economy will also grow when it is truly inclusive. Therefore, the implications of the Broad-Based Black Economic Empowerment Amendment Bill, whereby white women and people with disabilities will be excluded from being taken into account for BEE scoring, are extremely worrisome. This sends a negative message to people who can contribute to building the economy that they are not welcome here.
The Minister has also inherited restrictive regulations that prohibit the establishment of certain industries and, if they should be amended, they could create many jobs. I have now for almost a year tried to obtain an audience with the Minister regarding this, but to no avail. I know the Minister is busy, but surely a Member of Parliament must be able to see the Minister on such an important matter as job creation.
Afrikaans:
Laastens wil ons 'n pleidooi lewer dat die Minister opnuut kyk hoe SunSpace as 'n hoëvlak tegnologie-werkgewer geakkommodeer kan word binne die Industriële Beleidsaksieplan, IBAB, in plaas daarvan dat die maatskappy opgebreek en by Denel geïnkorporeer word. Hierdie maatskappy kan baie nuwe wetenskaplikes en ingenieurs oplei, buitelandse valuta inbring deur satellietverkope en die ekonomiese golf van die ruimte-industrie tot voordeel van die land ry.
English:
We hope the Minister will attend to these matters for the sake of our economy. Thank you, Chair. [Applause.]
Mr Z G WAYILE
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 59
Adv A D ALBERTS
Mr Z G WAYILE: Hon Chairperson, hon Minister, hon Deputy Minister, members of the committee, all those in the gallery, and our social partners, I want to depart from the basis of a scientific analysis. We seek to change the world but we are not working under conditions of our own choosing – we are operating in a very hostile global environment.
I want to also deal with the distortion that is creating the impression that some of the problems that the Minister has been commenting on, and all the challenges that the ANC government is dealing with, are yesterday's problems. I think hon members must bear in mind that in 1884 the Berlin Conference of European powers created scars on our continent. The particular epochs of the 1652 Dutch East India Company, the 1910 Union of South Africa, the Natives Land Act, Act 27 of 1913, and the Bantu education system, all created social and political scars on our people. [Applause.]
The ANC government and our allies on the rest of the continent have the inherent responsibility to heal the scars of centuries that have been created by our colonial masters.
The year 1994 has been characterised by a number of people as a political miracle, which is an insult to the South African people, in particular under the custodianship of the ANC. There was no miracle. People died – they perished – and they went into exile. That is why at times we respond to issues in a very mechanical way. It is because we move on the basis of a wrong assumption.
The ANC adopted the Freedom Charter. Some of the basic tenets of the Freedom Charter are the following:
The national wealth of our country, the heritage ... shall be restored to the people; ...
All other industry and trade shall be controlled to assist the well-being of the people;
We are not part of a technical exercise. The historical mission of the ANC is to ensure that the wellbeing of our people is addressed. I just want to highlight a few issues.
We have to applaud the ANC government for being visionary and for adopting policies. Some of those policies we have managed to navigate in turbulent and challenging times, both here and globally. That must be appreciated. [Applause.]
The Motor Industry Development Programme, MIDP, has been regarded as a major success of South Africa's postapartheid trade and industrial policy. The MIDP was introduced on 1 September 1995 and was scheduled to continue until 2012. It was initiated to assist the motor industry to adjust to the global economy. It was introduced against the backdrop of South Africa's political and economic liberation and other major structural shifts in government policy, in line with the trade regime.
The MIDP was designed to help the industry to adjust and also to increase its competitiveness in the new postapartheid trade policy environment. The programme consisted of various elements, but I will not mention them because of time constraints. The MIDP has resulted over the past 10 years in fostering adjustments that have increased the competitiveness of the industry to the point where some, perhaps many, factories can now become competitive with the continued subsidies. The ultimate goal is to increase the competitiveness of the South African automotive industry through best practice compatible with the World Trade Organisation, WTO.
The Automotive Production and Development Programme, APDP, replaced the MIDP. The APDP aims to stimulate growth in the automotive vehicle production industry to 1,2 million vehicles per annum by 2020, with the associated expansion of the components industry. This means that an opportunity will be afforded for local content to be increased in domestically produced vehicles. I think these are some of the major achievements of the ANC government. The automotive industry is regarded as a strategic sector. It is also deemed the largest – leading – manufacturing sector.
The APDP comprises the following elements: tariffs, local assembly allowance, production incentives, and automotive investment allowance. These are some of the measures that have been instituted by the ANC government to ensure that we navigate the difficulties of the global economy. Furthermore, this is in the context of the acceleration of industrialisation, which is much needed in our country.
Let me touch on another point which is of strategic importance, the process of bringing about the Special Economic Zones Bill. [Time expired.] Thanks very much. The ANC supports the budget.
The HOUSE CHAIRPERSON (Mrs F Hajaig): I would like to remind the House that this was hon Wayile's maiden speech. [Applause.]
Mr S N SWART
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 60
Mr Z G WAYILE
Mr S N SWART: Hon Chairperson, whilst the department's core strategy is the promotion of industrial development, and this the ACDP definitely supports, I wish to focus on the informal sector today.
We all know that the informal sector contributes more than 3 million jobs to the South African economy and this number includes street traders, shoe repairers, hair salons, dressmaking businesses, spaza shops and retailers. There are many others. The majority of street traders in South Africa are women who trade in a range of goods including sweets, Nik Naks, clothing, and fruit and vegetables. Despite its relatively modest appearance, street trading is one of the largest sectors of the informal economy.
It is interesting that the City of Durban has acknowledged this and they estimate that the value of the sale of cooked green mealies on the street is in the region of R1 million per month. This is very significant.
There are a number of bylaws that must be complied with, such as the registration of formal businesses, trading in legal spaces, and complying with tax regulations. The ACDP questions the wisdom of the additional licensing requirement proposed in the Licensing of Businesses Bill. We also question the capacity of municipalities not only to issue these licenses but also to keep a register of every business, including informal street traders, in their jurisdiction. One can rest assured that bribery and corruption would be the order of the day to obtain or renew these licences. This is a serious concern that we need to deliberate upon.
This Bill will empower every police and traffic officer, as well as a host of other municipal officials, to be licence inspectors, with far-reaching powers of search, seizure and issuing of fines. The maximum penalty for operating a business, such as selling mealies on the side of the road, without a valid licence will be 10 years. How are our overstretched criminal courts going to deal with this additional burden? [Time expired.] We believe that this needs to be re-assessed. Thank you.
Mr I S MFUNDISI
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 60
Mr S N SWART
Mr I S MFUNDISI: Chairperson and hon members, if the Auditor-General's report is the yardstick with which we measure the performance of a department, then the Department of Trade and Industry is doing very well.
The preferential trade agreements with other developing countries are a step in the right direction; more so, if we seek to have such agreements with African countries in particular.
Some expert opinions are of the view that the Trade Policy and Strategic Framework does not properly define the exact nature of the South–South co-operation proposed by the policy framework and, as such, South Africa is viewed as not having a strategy for dealing with its trade partners.
Minister, perhaps the time is ripe for the industrial parks in the erstwhile independent and self-governing states to be reopened to ensure access to jobs in the proximity of the people concerned. Rosslyn is a shining example in this regard, and Babelegi in Hammanskraal is another example.
There is a need to evaluate and confront investment and competition policy barriers that South African companies face when attempting to set foot on the rest of the continent. Complex SADC rules must be reviewed so that they cease to be trade barriers, and rather enhance meaningful trade integration in the region. With South Africa's ambition of leaving an investment footprint in Africa, it is in our interest to pursue and facilitate a more fertile ground of engagement in SADC first. The UCDP knows that South Africa, as the biggest economy on the African continent, plays an integral role in the advancement of the continent.
The department has vehemently defended the government's industrial policy, as working well. The question, however, is: How come we continue to have such high unemployment numbers if our industrial policy is doing so well? For years now there has been a talk of how South Africa's manufacturing sector needs to grow the number of jobs, but that has not happened, because decision makers are to some extent working in silos. No amount of state intervention towards creating more manufacturing jobs will work, if the manufacturing companies find, for instance, that our labour laws are unbearable.
And, finally, if South Africa continues to import almost everything from China and elsewhere, then we are not likely to create jobs. However, if imports are reduced, then a more reasonable space to trade is created domestically, and the hope is there that we may be able to create jobs. Thank you.
Mr X MABASA
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 61
Mr I S MFUNDISI
Mr X MABASA: Chairperson, ... [Interjections.] ... this is an SMME shirt! [Applause.]
Xitsonga:
Holobye Davies, vamanana vambirhi lavo saseka va Swandla swa Holobye ,Swirho swa Huvo na vuyeni lebyi nga eka galari, ...
English:
... the basis of South Africa's economic challenge is a structural economic challenge which, if not qualitatively addressed, will exacerbate growing income inequality. This challenge relates to skewed patterns of ownership and production, characterised by inequality, dualism and marginalisation. In addition, the monopolistic domination of the economy is an obstacle to the goals of economic transformation, growth and development.
Hon Wayile has given us a context so that, when we look at the challenges that are faced by South Africans, they are not seen as being seeds planted by the ANC. No, all that the ANC government is doing is uprooting most of the evil things that were planted as long ago as the time of Dr Verwoerd and his colleagues.
The year 2012 was declared the International Year of Co-operatives and the theme was, "Co-operative enterprises build a better world". The theme seeks to capture not only the significant role that co-operatives are playing in the global economy and at local level, but also to articulate the resilience and stability of the co-operative enterprise model. Just to illustrate this, when the whole world was sunk in depression and the other economic forms could not shoulder the world, it was co-operatives that held the economy sky high. [Applause.] All those countries that have co-operatives embedded in them did well under those strenuous conditions.
Let me tell you why co-operatives are important. When we talk about co-operatives, one could think that we are talking simply about developing countries, but we are talking about developed countries as well. For example, France has 21 000 co-operatives which have created one million jobs. In Kenya, 63% of the population derive their livelihoods from co-operatives. Approximately 250 000 Kenyans are employed by and gained their income from co-operatives. By the way, while we were in Kenya cheese, milk and yoghurt were made in our presence – that is the reality. In Columbia the co-operative movement provides 137 888 jobs. In Indonesia it provides 288 586 individuals with jobs. In the USA – it is important that you listen carefully, as this is the USA – 30 000 co-operatives provide more than two million jobs! When we say that we must strengthen co-operatives in South Africa, we are looking at a model that succeeds.
How should SMMEs and co-operatives be treated in order to succeed? It is critical that SMMEs and co-operatives are paid on time after they have rendered services either to government or the private sector. [Interjections.] Government should protect SMMEs and co-operatives from big business, who sometimes run away without paying the subcontracted SMMEs and co-operatives. [Applause.] Working space is often a challenge to SMMEs and co-operatives. Here we call upon municipalities to ensure that they assist them with land and other infrastructural needs.
It is important to note that white people who acquired land through the Land Act of 1913 should not be too greedy and hold onto the land. Greed kills. [Interjections.] White people who acquired land in that manner should make part of it available to the government so that it can be used for co-operatives and SMMEs. [Applause.]
What factors make co-operatives and SMMEs succeed? We have nonfinancial support in the form of the Small Enterprise Development Agency, Seda. We also have financial support in the form of the National Empowerment Fund, NEF, the Industrial Development Corporation, IDC, and the Small Enterprise Finance Agency, Sefa.
The Co-operatives Amendment Bill calls for the establishment of a co-operatives agency, as well as a co-operatives tribunal. The NCOP has already passed the Co-operatives Amendment Bill and very soon we will have the Co-operatives Amendment Act. [Interjections.] I am very good at being rude, but I am controlling myself. Please, don't push me there, because I can easily go there! [Applause.]
The co-operatives development agency will support, promote and assist with the development of co-operatives, provide financial and nonfinancial support to co-operatives, and provide business and support services to co-operatives. The main function of the co-operatives development agency is to intervene when there is conflict amongst co-operatives. There is also financial support. The function of the agency is, inter alia, nonfinancial support services, education, and training.
Let me spell out the fact that co-operatives must not be relegated to being poor little institutions! Co-operatives can be giants! In the countries that I have spoken about, co-operatives build buildings and rent them out. They must be seen as maintaining sustainability. They are growing all the time. That is why, typically, the following should be remembered. The type of activities that are engaged in by co-operatives should not be regarded as "little ones", but ... [Time expired.] The ANC supports this Budget Vote. Thank you. [Applause.]
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Mrs E Thabethe)
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 62
Mr X MABASA
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Mrs E Thabethe): Chairperson, I would like to acknowledge the Minister of Trade and Industry and other Ministers present in the House; the Deputy Ministers that are here; members of the National Assembly; MECs; heads of departments; officials of the Department of Trade and Industry and the Council of Trade and Industry Institutions; members of the South African Women Entrepreneurs Network, Sawen, led by the its president and the CEO; leaders of organised business and labour; distinguished guests; and ladies and gentlemen.
I would like to specifically recognise from the podium the 2012 technogirls that won a competition for best entrepreneurship and technology. Those involved are the youth from Ponelopele Oracle Secondary School in Kaalfontein, Tembisa, Gauteng; Boitumelo Olifant, a technogirl from Tetlanyo Secondary School in the Northern Cape; Nomarika Motaung, my mentee; and Kgotso Mokoele, an incubatee from Seed Container Park, Secopa, manufacturing hub. [Applause.]
We believe that, instead of only talking about red tape, between the Department of Co-operative Governance and Traditional Affairs and the DTI we must put in place a mechanism to deal with this matter. We give support to the SMMEs, and that is why I acknowledge them in the podium – we are not just theorists, but we actually give support.
So, in the gallery we would like to recognise Kgotso Mokoele, who is an incubatee in Soweto and is doing very well. She is a very young, fresh businesswoman who is doing very well. [Applause.] I would also like to recognise Manqoba Katane in the gallery, a young man who is very passionate about small business, is currently working with the incubation centre, Secopa, as a social media guru, and is doing fantastic work. [Applause.] In the gallery is also Sister Jenny. It is because of the support that we give to them that they are in the gallery. These are the people we have supported.
People keep on saying that the Minister is concentrating on only one side. They are very wrong. The Minister of Trade and Industry is the Minister of both Trade and Industry. He is dealing with both, and the President has not made a mistake, because the Minister is doing very well. [Applause.]
Again in the gallery, we have Mama Lolo, a beneficiary of the Tourism Support Programme and former lecturer, who runs a B&B in Diepkloof, Soweto, and who is also supported by the government.
The current administration's central focus has been on the creation of decent jobs, economic transformation and inclusive economic growth. These are some of the key strategic priorities identified in the 2009-14 Medium-Term Strategic Framework, MTSF, which were later turned into government outcomes.
The Department of Trade and Industry, of course, under the leadership of Dr R H Davies as Minister, articulated these priorities in the 2010-13 MTSF. Therefore it is imperative that we reflect on the achievements that have been recorded in these areas. [Interjections.] If you do not have anything to say, just keep quiet and do not come and disturb the people on the podium.
With regard to women and gender empowerment, the National Development Plan identified poverty, underdevelopment and inequality as the major challenges facing our country. We agree that women and the youth have not been fully integrated into our economy as yet. The department understands that economic emancipation should be broadened to include women and the youth, who were excluded from the mainstream economic activities of the country in the past during the apartheid era. We will continue to talk about that, because these are the ills that the ANC government is still trying to deal with after these 20 years of democracy.
It is against this backdrop that the DTI has introduced initiatives that are tailor-made for women, such as the Isivande Women's Fund, for the information of the hon Swart; Bavumile to assist them with technology use; and Technology for Women in Business, TWIB. The Isivande Women's Fund aims to provide women entrepreneurs with affordable financial support. Of course, we take some of the women from the informal sector. The Director-General, Mr Lionel October, is working very hard making sure that we can deal with this matter. We take them out of the informal sector, formalise their businesses, and support them. We need to grow this fund because we have more than 31 projects that we have been supporting. The TWIB deals with technology, growth, development and businesses.
While we recognise the need to afford women opportunities to participate in the economy, we also need to encourage our young girls to pursue technology, mathematics, commerce and science-related careers. It is for this reason that under this Minister we are promoting the Techno Girl programme. This is a vehicle that the department is using to achieve this objective. Today you plant a seed, and tomorrow you get a better harvest because of what you have done. The DTI partnered with the provincial departments of education and of economic development, the Small Enterprise Development Agency and Cell C in delivering this programme. It is a programme that works very well.
In addition the department will table the National Strategic Framework and present it to Cabinet and the portfolio committee, in order to make sure that this strategy assists our women and ensures that we deal with this issue.
I now come to small businesses and co-operatives. It has been proven that under this Minister we are doing very well. Internationally we hosted a very successful small business summit in September last year, together with other African countries, such as Ghana and Zimbabwe. We were able to host this, and the CEO of Seda was elected president, to focus on Africa. She is one of our own. We are very proud and congratulate her, encouraging her to keep up the good work because we are doing the right thing. [Applause.]
The department considers entrepreneurship development as strategic to broadening economic participation, since we understand that the economic development and success of many countries are anchored on increasing the participation of SMMEs in the mainstream economy. We believe that SMMEs form a principal driving force of economic growth and development. In this regard we undertook to accelerate the delivery of the upscaling of the support, particularly for black-owned rural and township SMMEs, as well as co-operative programmes through the Seda network, and what the NEF is doing.
We also congratulate the CEO for doing very well by penetrating into areas that had not been penetrated before. We say she should keep it up. We will then be able to reach our desired goal. Although the IDC is dealing with these matters, we are also trying to make sure that we can deal with all the other challenges that are faced by small business.
The Minister has come with amendments to broad-based black economic empowerment because there were unintended consequences that we had to deal with. To me he has done very well, because these were some of the issues that were hidden, but he was able to deal with them and make sure that we had a committee to discuss them and give us inputs. We will be going ahead with these amendments. Of course, transformation is easier said than done, and I am very disappointed that people who should be supporting this are saying: "No, this is not working." It can work if only all of us work together.
The Codes of Good Practice, with a view to creating an enabling environment, are doing exactly that. We have partnered with Unisa and Wits University to offer a BBBEE Management Development Programme. The programme is aimed at professionalising the BBBEE industry and making sure that we can reach our goal.
In conclusion, I reported our winning last year. This year, led by Minister Rob Davies, Trade and Industry won, for the second time in a row, the gold award for the Best Foreign Stand at the Zimbabwe International Trade Fair. Out of more than 21 countries participating we were able to win that for the second time! [Applause.] What did we win with? Best products and best stand, and that was with those very officials whom you accuse of not being able to speak Mandarin! This is South Africa and we have 11 official languages. I don't think Mandarin is one of the languages we have to promote! [Applause.] We promote our 11 languages and we have done well, together with those officials of the DTI, who make sure that we can participate in those exhibitions.
We also cannot just win for having the best products; we must win for taking the informal sector, formalising their businesses, and training them, so that, together with big business, they are able to go to these missions and represent us.
Minister, there is a good appetite for our products in Africa – the footprint is there. I have just come back from Tunisia and Algeria, after taking delegations from small and big business there. [Applause] They are there and they say we must come back again, because they believe in what you are doing and how you are leading the department. We will be there to support you, to make sure that we make a difference in creating conditions conducive for businesses to do business.
Please, where it is right, you can be an imbongi [praise singer] for us – we are doing very well under the leadership of this Minister. Don't just come to the podium for political point-scoring and tell us about something that you did not thoroughly research and that you cannot even back up.
The ANC will make sure that it leads this country. The ANC will lead this government, and I am sure that next year all of us will be there at the polls. People know exactly what we do, and we don't just talk! That is why some of those people are in the gallery – because we act! Thank you. [Applause.]
Mr G J SELAU
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 63
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Mrs E Thabethe)
Mr G J SELAU: Chairperson, hon Minister, hon Deputy Minister, hon members, distinguished guests, and ladies and gentlemen, I wish to thank the hon Minister for his developmental Budget speech, which was well delivered, and also for the speeches by the Deputy Ministers supporting his speech.
Allow me, hon Chair, to start by saying that the ANC supports Budget Vote 36 of the Department of Trade and Industry for 2013-14. Let me also take this opportunity to congratulate the Department of Trade and Industry for a job well done on one of the department's major programmes, which is the Manufacturing Competitiveness Enhancement Programme. This programme was launched in May 2012. To date a total of 189 enterprises have been approved for grants with a value of R992,2 million, and 33 551 jobs are expected to be retained. We also congratulate the department for other successes mentioned in the Budget speech here today. This is very remarkable.
Hon Chair, with your permission, let me focus in the beginning of my speech on clean energy in our country, South Africa, from a manufacturing perspective. The Industrial Policy Action Plan outlines the fact that, for the purpose of the development of the economy, there is a need for investment in the manufacturing sector to ensure an increase in employment creation. These are value-adding industries, which create the highest opportunities for employment.
The South African government has continuously outlined the need for the country to redirect some of its efforts towards the green economy for purposes of job creation and economic growth. In the process of finding innovative ways to transform the country's manufacturing sector, the green economy offers opportunities to work on strategies aimed at ensuring sustainability and resource efficiency to improve the productivity of the manufacturing sector. The benefit of this will be the creation of jobs and opportunities to diversify export offerings as the demand for green goods increases in developed countries.
In the words of the US President, Barack Obama:
... a green, renewable energy economy isn't some pie-in-the-sky, far-off future, it is now. It is creating jobs, now. It is providing cheap alternatives ..., now. And it can create millions of additional jobs and entire new industries if we act now.
[Applause.]
Industrial Policy Action Plan 2, Ipap 2, calls for the following in order to effectively address the required structural changes from a manufacturing perspective. Firstly, electricity and capital-intensive resource-processing sectors should introduce new cutting-edge alternative technologies and processes to make additional investments in green technologies and sectors. Secondly, the share of value-adding, labour-intensive sectors should be increased and the share of energy-intensive sectors in the GDP should be decreased. Thirdly, accelerated growth that will be sustained in the green and energy-efficient sectors should be promoted.
The success of projects identified by the Industrial Policy Action Plan relies on how well the various departments work together. The Department of Trade and Industry, working together with other departments, specifically the Department of Energy, has embarked on the following programmes to ensure the transformation of the manufacturing sector through green technologies. [Interjections.] Thank you.
Firstly, the DTI is in the process of developing a comprehensive solar and wind sector development strategy. Approved in May 2012 in principle and still to be finalised, the strategy has identified seven key action programmes, namely: market facilitation; local manufacturing and industry upgrading incentives; local content requirements; technical and physical infrastructure; trade and investment support and facilitation; research demonstration; and skills development.
Secondly, the DTI supports the development of energy-efficient products and services in a competitive local manufacturing industry.
Thirdly, as part of the Manufacturing Competitiveness Enhancement Programme, the DTI provides the Green Technology and Resource Efficiency Improvement Incentive. This is an incentive programme to support projects with green technology upgrades and business development activities that will lead to cleaner production and resource efficiency.
Fourthly, the Department of Trade and Industry is also funding an industrial sustainability programme that is managed by the National Cleaner Production Centre of South Africa. The objective of the programme is to strengthen market access of South Africa's industry by developing networks and transferring resource efficiency and cleaner production technologies and services.
Therefore, the department is contributing to the sustainability of industry value chains, and delivering measurable economic, environmental and social impacts. Thank you very much, Chairperson. [Applause.]
Mr G G HILL-LEWIS
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 64
Mr G J SELAU
Mr G G HILL-LEWIS: Chairperson, there was not a single mention – not one mention! – by any ANC or government speaker today of the National Development Plan. [Interjections.] Not once! It is unbelievable how quickly a so-called national plan can be tossed in the bin by the ANC.
Chairperson, the Minister of Trade and Industry has one of the biggest and most important mandates of any Minister in this government. The department is responsible – more so than any other one – for setting South Africa's economy on a path of job-creating growth. It is against this mandate that the Minister must be measured.
From the outside, one would be forgiven for thinking that the Department of Trade and Industry and its Minister were doing everything right – unqualified audits; on time payments; no significant underspending; and a generally available and responsive Minister and director-general. These are all laudable achievements.
However, when we consider the department's progress in the achievement of its core mandate of job-creating growth, the picture is very different. Instead of unlocking new investment, growing trade, positioning South Africa as the biggest exporter to the continent, and driving growth, the Minister seems to be preoccupied with extending the control he personally exerts over our economy. He has amassed vast power to make new rules and issue reams of new secondary legislation.
In his own words, speaking at the release of the latest Industrial Policy Action Plan, the role of the state in the economy is to "steer but not to row". In other words, this is a model of state capitalism in which the state must determine the direction and priorities on behalf of the private sector, which must then just follow instructions. Except that this government cannot steer!
Chairperson, it cannot even read the map! [Interjections.] However, we have a map for how to fix our economy and unlock growth – it is called the National Development Plan! You should read it. If the Minister were making a real effort to implement the sections of the NDP which relate to this department, we might be more complementary, but he is not doing so. In fact, he seems bent on following a policy course directly and deliberately opposed to the NDP.
Let us just consider one small example, that of small, medium and micro businesses. The FinScope Survey details how 90% of new jobs in South Africa are created in SMMEs. That is, jobs are created by entrepreneurs, hon Fubbs, who have a good idea and who take huge risks to turn that idea into something they can sell. Jobs are not created by bureaucrats or by new government commissions or committees.
Given that context, it should alarm us that South Africa is ranked 53rd out of 185 economies in regard to the ease of starting a business. That is ten positions lower than we were ranked last year! The Global Competitiveness Report 2012-13 of the World Economic Forum ranks us 37th out of 38 countries on the burden of government regulation. Most worryingly, Chairperson, entrepreneurial activity in South Africa is half of what it is in our competitor countries.
That is why the National Development Plan repeatedly and correctly emphasises the need for the government to create an environment in which it is easier and cheaper to start and run a small business. It calls for a quick and easy process for starting a new business and transferring property. It envisions a state which cuts unnecessary red tape; streamlines administrative processes; and supports businesses in their investing, growing and hiring more staff. It sees a relationship, not of one party steering and the other rowing, hon Minister, but of the two rowing together in partnership.
In this context, the gazetting of the Licensing of Businesses Bill belies the Minister's stated commitment to implementing the NDP, because the Bill runs counter to everything the NDP calls for. The NDP specifically says that we should be doing everything to simplify the regulatory burden, not add to it. As a first step, it calls for the establishment of a panel to conduct a comprehensive regulatory review for small business to see where we can strip away red tape and simplify processes. Why has the Minister not established such a panel? This is something simple and tangible that he could do now to implement the NDP. He need not wait, and it would really help small businesses, but he has not done it. Why not, I would like to know?
The Bill he has gazetted does not solve any problems. He has never told us why he wants the Bill. He says it is to fight businesses' trading in counterfeit or stolen goods. But, none of these things are solved by this Bill, and other legislation allows the government to police those things already. They just don't do it! In any case, I would like to put this question to the Minister: Does he really believe that a business trading in stolen goods is going to stop doing so because they don't have a licence? Is he really serious about that? [Interjections.] It is excessive, unnecessary regulation that slows down new business formation and hampers entrepreneurs in getting on and creating jobs.
Here is an idea for the Minister. [Interjections.] Not yet – still two minutes. Bring us a small business regulatory reform Bill that unties the regulatory knots that currently hamstring our economy. That is a Bill the DA would support.
Also, make sure other departments pay their suppliers on time. This should be a standing item of yours on the Cabinet agenda, Minister. If it is not, I'm sorry, you are not doing your job. You should be hounding any Minister whose department does not pay its suppliers within 30 days.
Here is something else you could do. Launch a "red tape to red carpet campaign" that allows entrepreneurs to identify the regulations that hold them back, and then commit your government to getting rid of them.
Start a government red tape challenge involving all DTI employees, and encourage them to innovate, thinking of new ways of getting rid of red tape. [Interjections.]
Minister, these are all things the DA is already doing where we govern. [Interjections.] That is why where the DA governs, small businesses are flourishing, investment is flooding in, the economy is growing faster than before, and jobs are being created. [Interjections.] These are productive, self-sustaining, prosperity-generating jobs.
This department ... [Time expired.] Thank you very much. [Applause.]
Mr B A RADEBE
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 65
Mr G G HILL-LEWIS
Mr B A RADEBE: Chairperson, Ministers, Deputy Ministers, members of this august House and the public in the gallery, this debate takes place when we will be celebrating the Golden Jubilee of the Organisation of African Unity, OAU, next week. This organisation was instrumental in mobilising the international forces that waged a continental and global assault on the apartheid regime.
The founding members of the OAU, such as Kwame Nkrumah, believed that the fight against colonialism involved the unification of Africa, politically and economically. In the 1964 summit of the OAU, he said the following, and I quote:
By far the greatest wrong which the departing colonialists inflicted on us, and which we now continue to inflict on ourselves in our present state of disunity, was to leave us divided into economically unviable States which bear no possibility of real development ...
This clarion call of President Kwame Nkrumah was to agitate the African states to make common policies in development, trade and industrialisation.
It is a remarkable achievement that the ANC-led government, which is only 19 years old, is involved in the programmes that promote industrialisation, intra-African trade and continental unity, and Africa-wide developmental institutions. The sterling work of this government is realising the dreams of the founding fathers of the OAU.
The Department of Trade and Industry, through its programme of industrial development, is ensuring that South African companies are able to add value to our resources and try to minimise the export of raw materials. Since the Department of Trade and Industry is the custodian of the Industrial Policy Action Plan of the ANC-led government, what is important is that strides are being made every day in ensuring that agricultural goods and mineral resources have value added before they are exported.
In 2009 the ANC made the clarion call that, "working together we can do more". This is now evidenced by the fact that national and provincial departments, local municipalities, and state-owned enterprises are working together to fight the triple challenge of unemployment, poverty and inequality.
Hon Minister, the Industrial Policy Action Plan is working. In the past development took place only in the big cities. Today I want to focus on the rural areas, because I am a boy from the Free State, which is an agricultural province.
Let me give an example of how the Ipap works in those small towns. In the past few years the maize farmers all over the country have been faced with a surplus of 500 million tons of maize. The co-op, Vrystaat Koöperasie Beperk, in the Free State worked together with the provincial government, the three local municipalities of Phumelela, Nketoana and Mafube, and the IDC to launch a R624 million broiler project known as Grain Field Chickens project. This project was divided into three subprogrammes.
An abattoir was erected in Reitz with the capacity of processing 160 000 chickens a day. This led to the creation of 622 jobs in Reitz. These jobs have been created through Ipap. [Applause.]
In the town of Vrede a chicken feed factory was erected. This chicken feed factory is the place where the excess maize is being beneficiated, after which it is taken to the international market. The value of maize would otherwise have gone down and put its farmers out of work. As we say in the Free State, 'n boer maak 'n plan [where there is a will, there is a way]. We did make a plan. [Inaudible.] We are dealing with that! [Applause.]
What is very important is that the provincial government also came to the party. When the provincial government came to the party, it ensured that all the roads connecting these towns were upgraded so that there could be a free flow of commodities – the chicken feed factory is in Vrede, the hatchery is in Frankfort, and the abattoir is in Reitz. [Applause.] The provincial government committed R300 million to improving the roads. Now, as I speak, these roads are in good condition. That is what we call unity in action. [Interjections.]
What is also very important is that around those towns – that means in the three municipalities – a total of 65 broiler houses were erected. Sir, 65 broiler houses were erected, and these broiler houses are managed mainly by the black farmers – emerging black farmers! It shows that you can have samewerking [co-operation] in the Free State, where the white farmer and the emerging businessman can come together and work and build this country. [Applause.] That is what is happening. These are the results of the Industrial Policy Action Plan.
What is critical here is that the provincial government came to the party. The provincial government provided R10 million for these projects to ensure that the emerging black farmers were able to build their own broiler houses. That is what we call black economic empowerment, BEE. BEE is not a swear word. Hon Hill-Lewis, BEE is not a swear word or horrible! [Laughter.] It is not a swear word.
What is critical here is that we as South Africans have no choice but to work together to build this country. If we don't work together, we will sink together. [Interjections.]
What is very important in the process is that the Industrial Development Corporation, which is a state-owned enterprise, went straight to Reitz and bought R15 million's worth of shares in that abattoir so that the workers there could become owners at the same time. That is what we call unity in action to fight poverty. [Applause.] What is also very important in regard to the capital investment is that the IDC was able to put in R85 million as its own shareholding. [Interjections.]
What is critical here, hon Minister, is that the municipalities also came to the party. They ensured that they made the land available, that water was always available, and that electricity was always supplied timeously so that it was not interrupted. This is because these operations operate 24 hours a day. Those are the results of the Ipap. If the Ipap can work in such small rural towns, what more can we not achieve if we work together as a team?
In the process this project is facing a threat. There are a lot of chickens coming from the European Union and Brazil. I think that this department must do its job to ensure that such emerging enterprises are protected from this type of dumping. I think this department must really work on that. [Applause.]
Hon McIntosh, with regard to the issue of free enterprise, no country is industrialised without the protection of infant industry. You can go to America, England and South Korea, and you will find it's the same story. Infant industries were protected so that they could grow. This is not a new thing.
This project actually proves that the economic policy of the ANC, of creating a developmental state which is based on a mixed economy, was correct. The Polokwane resolutions, which stated that the state had to lead an industrial and developmental trade policy, were correct.
This project also has a sister project in Namibia. This very project is being replicated in other SADC countries, because we have to develop together as a region. As I said, this project also has a sister project in Namibia, where the IDC, which is our very own state-owned enterprise, plus Bank Windhoek and the Development Bank of Namibia, have partnered in a similar project, which is known as Namib Poultry Industries. Firstly, this project sourced R150 million's worth of equipment from South Africa. Secondly, it sourced R20 million's worth of raw materials. Regarding maize from South Africa, 20 tons of maize will, thirdly, be shipped straight to Namibia annually.
It shows that the threat which the economy was facing has been turned into an advantage because of the Industrial Policy Action Plan. This has turned a rural project into a regional one, and this would not have been possible without the co-ordination of policies in the region and Africa as a whole, where the DTI is leading in the alignment of these policies on the continent. The Freedom Charter states that we are striving for a better South Africa, a better Africa and a better world. That is what is happening. [Applause.]
The Economist of 27 April to 3 May 2013 had a very bold front page title: "Generation Jobless". That is The Economist – it is not a South African journal, but an international journal, and it states, "Generation Jobless". The editor of The Economist stated that in the countries that are members of the Organisation for Economic Co-operation and Development, OECD, 26 million youths in the age group, 15 to 24, were unemployed and out of school. In emerging economies like Africa 262 million youths are unemployed and economically inactive. The same report indicates that youth unemployment has increased by 30% worldwide since 2007. This shows that the unemployment problem among the youth is an international phenomenon. [Applause.]
The issue of youth unemployment and poverty was eloquently summarised by the former President of South Africa, Dr Nelson Mandela, when he said, and I quote:
Every country in the world faces challenges. One of our challenges here is to ensure that we deal with poverty, (unemployment and) lack of education.
This is critical. The issue of education was linked to unemployment and poverty. We know very well that the years of Bantu education have caused South Africa to have high structural unemployment. [Interjections.] If we are going to try to solve this, the issue of fighting unemployment has to be better handled. One of our challenges here is to ensure that we deal with poverty, unemployment and lack of education.
The International Labour Organisation study and the OECD report indicated that the youth that have university qualifications in the fields of natural science and technology are less likely to be unemployed.
This issue of fighting unemployment is better handled when the state and the private sector work together to create opportunities for youth entrepreneurs. Working together is manifested in a town known as Sasolburg, where the Metsimaholo Municipality and the Sasol Group are able to work together to create opportunities for young entrepreneurs. What is happening is that the Department of Trade and Industry has provided R26 million in seed funding, and the Sasol Group has come with R80 million, and they have created ChemCity Eco Industrial Park, where young entrepreneurs are being nurtured, so that they can grow. What is very important here is that the municipality has provided the land, the infrastructure, and incentives. This means that up to 2018 there will be preferential rates for those areas, so that more people are able to get work. That is an example of unity in action. [Applause.]
What is very important is that we cannot ignore the issues that have been raised here. On the issue of the National Development Plan, this is the ANC's policy! [Applause.] Why do I say this? Listen carefully. In Polokwane in 2007 the ANC resolved that, and I quote:
(The) state (must create) an institutional centre for government-wide economic planning ... to prepare and implement long and medium term economic and development planning.
That is the resolution of the ANC. What does that mean? It means that the National Planning Commission was a resolution of the ANC. [Applause.] What happened after that was that at the Mangaung conference the work of the National Planning Commission was blessed by the ANC, because in Mangaung the ANC was able to adopt the National Development Plan as its official policy. I repeat, this is official policy of the ANC! [Applause.]
When it comes to implementation ... [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order! [Interjections.] Order! [Interjections.] Order! [Interjections.] Order, hon members! Order! Yes, hon member Hill-Lewis?
Mr G G HILL-LEWIS: Hon Chairperson, I would like to ask if the hon member will take a question.
The HOUSE CHAIRPERSON (Mr C T Frolick): Hon member, are you prepared to take a question? [Interjections.]
Mr B A RADEBE: [Inaudible.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order! [Interjections.] Order, hon members! You may continue, hon member Radebe.
Mr B A RADEBE: What is very important is that with whatever plan we have, we have short-term, medium-term and long-term goals. The Industrial Policy Action Plan is the immediate goal. That is what we are doing now. The New Growth Path is the medium-term goal. We have identified the areas where we are going to grow, and we are implementing this. The National Development Plan is the long-term goal. So hon members must understand these economic basics. [Applause.]
What is very important here is that there are certain things which we cannot run away from. The first is this, and it is very important. [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members!
Mr B A RADEBE: What is very important, hon Hill-Lewis, hon James and hon "Makhathini", ... [Laughter.] ... is that BEE is here to stay. BEE is here to stay! [Interjections.] On those issues raised during the portfolio committee meeting concerning broad-based black economic empowerment, the DA was proposing that the word "black" be removed. [Interjections.] [Time expired.] The ANC supports this Bill. Thank you.
The MINISTER OF TRADE AND INDUSTRY
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Wednesday, 15 May 2013 Take: 66
Mr B A RADEBE
The MINISTER OF TRADE AND INDUSTRY: Hon Chairperson, let me thank the hon members for their contributions. I think that we are actually getting to the point where we are beginning to see what the alternatives and the issues are.
The hon James is getting himself into a terrible knot on industrial policy. It was reported to me that when the latest iteration of Ipap was tabled in the portfolio committee, he described it as world-class. Later they went out and issued a statement saying that it was too diverse, too widespread, and we needed a "lighter touch" industrial policy!
In the portfolio committee I said that when I went out to open the Tellumat factory, the Premier of the Western Cape was there, and she said, "Halala!" [Inaudible.] [Laughter.] The managers of that factory told us that it owed its existence to the 12i tax incentive, the designation of set-top boxes, and the fact that we had also introduced a tariff-rebate scheme for the television sector. [Interjections.] So I said to the hon James, 'Which of those, in the name of "lighter touch", do you want us to remove? Which of those must we remove? Then go and tell that to the workers in Atlantis and see what it means for their jobs.' [Interjections.] We got no answer to that. No answer!
Today the hon James quoted J M Keynes to me, saying that we should have less nursemaiding in the automotive sector. The question still arises: Which part of the Automotive Production And Development Programme must be withdrawn? What will this mean for the competitiveness of the South African programme compared to other destinations? [Interjections.] And what will this mean for jobs and manufacturing capacity in this country? I think the hon James is not going to give us a concrete answer to that either, because I think he knows it's going to be damned embarrassing. [Interjections.] Rather, he tells us that we should have more trade and less industrial policy.
Now I want to trade quotes from Keynes with him. Keynes said, back in the 1930s:
Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.
So, who is the defunct economist? [Laughter.] There were a bunch of economists who in the early 1990s went around and told developing countries that they could assume that global markets were infinitely growing and that export-orientated growth offered opportunities unlimited across the world. Well, I have news for him. There has been a global economic crisis. It's not like that anymore, if it ever was! [Applause.]
We have to have a strategic approach to trade promotion, and we have that. [Interjections.] We have that. We have identified Africa and African integration as our first priority. [Interjections.] We have identified value-added exports in Brics, the Association of Southeast Asian Nations, Asean, and the Gulf, fast-growing emerging economies, and we are also seeking out opportunities in Japan and OECD countries.
Now it's quite true that we could probably improve our work. [Interjections.] However, when I take into account that Trade and Investment South Africa, Tisa, was recently elected as the international vice-president of the international World Association of Investment Promotion Agencies, we can't be doing so badly. [Applause.]
The other issue is that the DA pretends that the issues of small business development are all about removing red tape. Well, we are trying to remove red tape. [Interjections.] I gave some examples, including the Companies Act ... [Interjections.] ... and the new BEE codes.
However, it's not all about that. [Interjections.] There is also a need for active mentoring and support for small businesses as they develop the capacity to become real players. [Interjections.] And do you know what? The current Western Cape government closed down all the Red Door facilities providing those services in this province. [Interjections.] But we have gone out and the Small Enterprise Development Agency has established a Seda outlet ... [Interjections.] ... in every single one of them because we know that if we are going to deliver small business growth, even in this province, we need to have those facilities in place. [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members!
The MINISTER OF TRADE AND INDUSTRY: Lastly, let me say ... [Interjections.] ... in relation to the BEE codes, that I sat with Mr Dangote on a panel debate that was televised, and he did express some concerns about BEE. However, when we explained the direction that we were trying to move in with regard to BEE, using it as a tool to promote entrepreneurship, I think he then had a different view. [Interjections.]
Dr James referred to the flamingo in regard to me, reminding me that I was in that scenario. The flamingo takes off steadily, steadily. [Interjections.] As it gains capacity, it is poised to go much, much higher, and much more solidly. That is what we are doing in the DTI. That's the programme we put before the country and I am happy and proud to be associated with it. Thank you very much. [Applause.]
Debate concluded.
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members! Order! Although the debate is concluded, there is a matter that we need to deal with before this EPC rises. Hon members will recall that we had an unfortunate incident during the course of the debate. The matter has now been discussed with the whippery of Cope and I recognise the hon McIntosh.
Mr G B D MCINTOSH: Must I speak from here or there? [Laughter.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members!
Mr G B D MCINTOSH: I would like to apologise to the hon Chairman for the distress that I caused him in the discussion about speaking from my bench or from the podium. [Applause.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members!
The CHIEF WHIP OF THE OPPOSITION: Hon Chair, may I address you? In view of the goodwill expressed by Mr McIntosh, will you also apologise for not recognising me when I rose on a point of order? [Interjections.]
The HOUSE CHAIRPERSON (Mr C T Frolick): Order, hon members! Hon Chief Whip of the Opposition, you are too big not to be recognised. [Laughter.] That concludes the business of this Extended Public Committee.
The Committee rose at 16:46.
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