Hansard: EPC: Debate on Budget Vote No 28 - Economic Development
House: National Assembly
Date of Meeting: 22 Jul 2014
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Minutes
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START OF DAY
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 229
TUESDAY, 22 JULY 2014
PROCEEDINGS OF EXTENDED PUBLIC COMMITTEE – NATIONAL ASSEMBLY CHAMBER
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Members of the Extended Public Committee met in the National Assembly Chamber at 10:00.
House Chairperson Mr C T Frolick, as Chairperson, took the Chair and requested members to observe a moment of silence for prayer or meditation.
FIRST ORDER
START OF DAY
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 229
APPROPRIATION BILL
Debate on Budget Vote No 28 - Economic Development:
The MINISTER OF ECONOMIC DEVELOPMENT: Hon Chairperson, hon members and colleagues, MECs, agency heads and invited guests, today's Budget Vote, here at the start of a new administration, provides an opportunity to look forward to the next five years in the context of the mandate of the Department of Economic Development and the National Development Plan as the country's vision for overall economic and social development.
The Department of Economic Development was formed five years ago to facilitate the integration of economic programmes across the state and to promote inclusive growth. It developed the New Growth Path, which sets out 10 job drivers to lift the rate of job growth and now forms part of the economic implementation plan for the NDP.
The Department of Economic Development promotes public and private investment by directly facilitating projects and improving the regulatory and policy environment. The department provides strategic direction to the efforts of the competition authorities to break up cartels and guide competition and merger cases to encourage job creation and development. It supervises the International Trade Administration Commission of SA to ensure that trade policy supports industrialisation and employment.
The department provides technical services to the National Infrastructure Plan and the Presidential Infrastructure Co-ordinating Commission, PICC. It develops its strategic frameworks and unblocks obstacles to infrastructure implementation. It oversees the work of two leading development finance institutions, namely the Industrial Development Corporation, IDC, and the Small Enterprise Finance Agency, Sefa, and ensures increased levels of industrial financing in the economy, including small business funding - and I am pleased that we have with us today Minister Zulu, the new Minister of Small Business Development. The Department of Economic Development led the dialogue with social partners on six major social accords, including on youth employment, the green economy, local procurement and skills development.
I outlined the mandate of the department in order to highlight some successes of the past five years. These show what we can do as a society. These successes stake out the platform that we have laid for radical economic transformation and for the capable and responsive state envisaged in the National Development Plan. Radical economic transformation requires that we do things differently and that we achieve greater outcomes. It means changing the economy to the benefit of ordinary South Africans, stimulating job-rich growth and tackling the systemic features that lock so many people out of productive jobs, entrepreneurship and economic benefits.
To achieve this, we need to focus on six Is. These are infrastructure, industrialisation, investment, innovation, inclusion and integration. These six Is work together to achieve radical economic transformation.
The first I is infrastructure. In the past five years, government lifted investment in public infrastructure from R610 billion to R1,1 trillion. That is the biggest five-year spend in at least the past 50 years, turning vast stretches of the country into construction sites. The new Infrastructure Development Act, which was passed, is there to co-ordinate and drive infrastructure development.
Our initiatives include the largest electricity construction programme in Africa and in our history. In the next five years, we will add 15 000 MW of energy from coal, solar and wind. This is equal to the output of eight new Koeberg nuclear power stations. That is what we are going to be bringing on stream in the next five years. [Applause.] We completed two major new dams and we are building more, ensuring clean water for our homes, factories and farms in the future.
We are building hundreds of schools and expanding university and college infrastructure to improve the lives of our children. We are constructing new rail lines to protect our roads, move goods cheaply and reduce emissions. We are building public transport systems so that workers will have safe, reliable and comfortable commutes to work.
Infrastructure is central to economic transformation. It provides inputs for both existing and emerging enterprises, from the coalfields and power plants of the northern mineral belt to the rural areas of the Eastern Cape. With the localisation drive, it generates markets for manufacturers, deepening industrialisation and supporting good jobs. Finally, it provides employment directly, with 200 000 workers currently employed. The formation of the PICC in 2011 vastly strengthened our build programme.
So, looking forward, in the next five years we will scale up state and private investment in public infrastructure to provide a strong platform for inclusive growth and job creation, with planned spending of at least R1,5 trillion. Job creation will be a priority, at least 250 000 jobs will be sustained in PICC-led construction and operations, with at least 60% of all new workers being young people.
We will issue guidelines under the Infrastructure Development Act to ensure that the build programme drives economic and social transformation, turning infrastructure sites into training spaces and opening the door to real participation by black-owned and women-owned enterprises and co-operatives. We will complete the work of breaking open the construction market and breaking up the cartels and monopolies.
The second I is industrialisation, which goes together with investment and innovation. Employment, growth and investment have fully recovered from the 2008 global downturn. Employment is at 15,1 million, the highest ever. It has risen by 1,4 million workers since the adoption of the New Growth Path in October 2010. In spite of the damaging global recession in 2009, the economy gained 700 000 jobs over the course of the fourth administration.
In the beginning of the year to March 2014, the gross domestic product reached R3,5 trillion. This is an 11% growth in real terms over the period of the last administration. For comparison, by 2013, the UK, Denmark and Holland had not yet reached their 2008 GDP levels. While the GDP recovery is a good story, we need to turn South Africa from a nation of importers into a nation of manufacturers. In the past administration, we adopted a manufacturing-led industrialisation strategy to achieve this aim, based on processing minerals and agricultural resources and making capital goods for infrastructure – and I am pleased that my colleague, Rob Davies, is here today. An effective industrialisation strategy requires more than vision, though. It requires hard, nitty-gritty work to address the many constraints that face innovative projects and investors.
Over the past few years, we worked with foreign and domestic investors to facilitate new investment in, among other things, soya products, television manufacturing and film-making. In Atlantis, a place not very far from where we are meeting today, national government facilitated two new electronic factories and maintained jobs in a number of textile companies.
In 2009, all minibus taxis and metro buses were imported from China and Brazil. My department worked closely with Toyota and Beijing Automotive Works. They set up new South African assembly facilities, which have already produced almost 24 000 taxis locally. National government specified that the metro buses for the bus rapid transit lines must be assembled locally. To date, 400 buses have come off production lines in Cape Town and Germiston. When we see the new buses in the BRT lanes on our roads or the new taxis on our freeways, we can now know that they were assembled by South African workers. [Applause.]
The Industrial Development Corporation has dramatically lifted its funding. Its five-year total funding approvals reached R59 billion, more than twice as high as the previous five years. Last year alone, it disbursed R11,2 billion. Since 2011, IDC funding of R40 billion attracted private sector investment. In fact, the counterpart is accounted for a further R82 billion in cofunding. It shows the central role of the IDC in mobilising private and public investment. It has become the leading source of financing for green energy projects.
The hon members who are fans of the medical drama series Grey's Anatomy will have seen a full-body scanner used in their trauma units to give immediate digital images of injured patients. That scanner is exported from South Africa to medical facilities across the world. [Applause.] It was developed and produced by a company called Lodox, which is financed by the Industrial Development Corporation.
The competition authorities, too, are central to our strategies to promote industrialisation and to combat the pernicious impact of price-fixing and market abuse on industrial development. Recently, the Competition Tribunal issued a ground-breaking judgment that imposed a pricing remedy on Sasol for abuse of market dominance in the polypropylene industry. It is regrettable that Sasol has appealed this decision; a decision that can facilitate local production of plastic products.
Looking forward over the next five years, we will support the President's dialogue with business to build a partnership on inclusive growth and job creation and to unlock productive investment. IDC funding will focus more on industrial diversification, job creation, localisation and mineral and agricultural beneficiation.
The Department of Economic Development will work with metros to create simpler processes for investors and accelerate regulatory approvals. Government will leverage localisation opportunities from infrastructure, including the new train manufacturing programme, which will ultimately supply the entire continent.
We will strengthen the capacity of the competition authorities to impose remedies on dominant players and monopolies, so that we can benefit consumers and industries. Government will take steps to secure more competitively priced steel as an input in infrastructure and industrialisation, a piece of work that we do in partnership with Minister Davies.
I will bring relevant amendments to the Competition Act to Parliament next year to beef up the powers of the competition authorities. Economic regulators, development finance institutions and other state agencies will strengthen co-ordination around industrialisation. The Department of Economic Development will put together a training programme for economic regulators to improve capabilities across the state.
The third I stands for inclusion. Inequality is at the root of many of our social divisions and industrial relations problems, as workers see that the benefits of economic growth are unfairly shared. We must use every economic programme and engagement to build a more inclusive economy. Let me give an example. Last year I met with a foreign investor who wanted to buy Afgri, a large local company active in grain storage, poultry and equipment leasing. Ultimately, following negotiations, we reached an agreement in line with the Competition Act's public interest requirements. The new owners will provide R90 million to support smallholder farmers with training, mentoring and loans, plus give a 40% discount on storage rates to producers of under 10 tons of grain, so that we ensure that competition is used to bring small players into the market and to support our people's entry into the economic mainstream.
It means families struggling to make a living on the land can now enjoy support, mentoring and finance to enter the mainstream economy. Together with the funds set up by settlements with Pioneer Foods and Walmart, this means that large companies will provide R580 million to support smaller producers and local suppliers.
We are now in discussion with the construction industry on a similar restitution package as redress for their collusion and price-fixing. The R1,5 billion in penalties is not the end of the story with the construction industry. The competition authorities acted strongly against cartels and monopolies during the fourth administration, with R5,7 billion - I repeat - R5,7 billion in fines, penalties or mandatory development funds, dealing with construction, cement, the food sector, retail, telecommunications, fertilisers and scrap metal. That represented a growth of almost 900% when compared to the previous period, demonstrating our commitment to shaping a more inclusive economy.
Sefa has vastly expanded its lending to smaller and emerging enterprises. In the past year, it more than doubled its disbursements to R549 million, reaching a reported 46 000 enterprises and individuals. IDC investments created or saved 156 000 jobs in the economy, of which 11 500 were in the informal economy. I would like to point out that IDC lending to black-empowered companies was R25 billion in the past five years.
Our work on infrastructure exemplifies transformation. We are addressing apartheid's infrastructure backlogs in black communities, bringing black entrepreneurs into train refurbishment projects, supporting women entrepreneurs to break into mining and providing work experience to a new generation of young engineers and artisans. These examples show what the state can do.
But the private sector and the trade union movement must step up their contribution to transformation, including through better industrial relations. We must build on the existing social accords to reach wider compacts that address equity, jobs and growth more directly, including dealing with the factors behind workplace conflict.
The success of Scandinavia in the early part of the 20th century, Germany and Japan after the Second World War and much of Asia in the past few decades was founded on measures to promote social and economic equality. Reducing inequality and poverty promotes growth by increasing our people's spending and saving power, improving conditions for productivity and co-operation in our workplaces and cities, deepening our markets and stimulating aggregate demand. Therefore, it is an economic and indeed a commercial necessity to combat inequality and fight poverty, not only a moral and human imperative.
Looking forward over the next five years, the IDC will focus more on job creation, supporting hands-on black industrialists and co-operatives and building a fairer economy. The Department of Economic Development will emphasise youth employment and entrepreneurship. The IDC and Sefa have set aside R2,7 billion for this purpose. We will deepen our work with business and labour on the youth employment and skills development accords. The competition authorities will be asked to focus more on jobs, industrialisation, small business development and economic transformation, not as a by-product but as an explicit objective of competition policy.
Government will vigorously pursue cartels, price-fixing and the abuse of market dominance, including through criminal sanctions - I emphasise that: through criminal sanctions - and will conduct market enquiries to open up business practices to proper scrutiny and appropriate corrective action.
The department and its agencies will work closely with the new Small Business Development Ministry to develop new entrepreneurs, expand township enterprises and strengthen small business. Finally, we will facilitate workplace and national accords to address the root causes of shop-floor conflict and raise living standards and productivity.
The final I stands for integration - integration of the region and the developing world. African regional integration is the best way to widen our markets. A cruel legacy of colonialism is that Africa's infrastructure and industries were shaped mainly to provide raw materials to Europe and the Americas. Over the past 20 years, Africa largely exported raw materials to other continents without changing the underlying structure of trade. We are addressing this challenge through increased trade within the continent, more work on intraregional infrastructure and a sharper focus on industrialisation. Africa has become South Africa's largest market for industrial products.
Our manufactured exports to the rest of Africa rose by about R21 billion, or 16%, in this past year. It now generates about 167 000 jobs in South Africa. We are partnering in infrastructure development on the continent and the IDC and the Development Bank of Southern Africa are expanding their African investment footprint.
Integration also requires that we diversify trade and investment. We are building deeper partnerships with Brazil, Russia, India, China and South Africa, Brics, countries while maintaining strong relationships with the EU and USA. The Brics summit last week made excellent progress in converting a discussion forum into durable economic institutions that benefit citizens. The New Development Bank will mobilise savings that in part can finance substantial investment in African infrastructure and industrialisation. The headquarters for the African region will be here in South Africa.
The new Contingent Reserve Arrangement will provide a pool of roughly R1 trillion to shield Brics economies from speculators and market panic. South Africa will commit roughly R50 billion but will be able to draw up to R100 billion if required. That is how Brics is beginning to add value to our economy.
Looking forward over the next five years, government will finalise the African Free Trade Agreement to create an integrated market of 26 countries with 600 million consumers. We will focus more resources on African infrastructure and industrialisation, like the Grand Inga hydropower project; like the Sasol project in Mozambique; like the North-South corridor. We will deepen efforts in Brics to attract investment and export manufactured goods, and next year we will host a Brics conference on competition policy here in South Africa. Finally, we will work with traditional partners, including through a new Economic Partnership Agreement with the European Union, and through the extension of the Africa Growth and Opportunities Act with the United States.
The budget allocation for this financial year amounts to R696,9 million, of which R243 million is for the IDC's subsidiary Sefa, R206 million is for the competition authorities, R85 million is for trade administration and R163 million is for the department's operations and capital spending.
I now table the Department of Economic Development's budget for consideration by this august House and I thank my colleagues, the portfolio committee, the department and agencies, as well as social partners from the trade union movement and from the business community, for their work over the past five years. Thank you. [Applause.]
Ms E M COLEMAN
THE MINISTER OF ECONOMIC DEVELOPMENT
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 230
The MINISTER OF ECONOMIC DEVELOPMENT
Ms E M COLEMAN: Hon Chairperson, hon Minister and Deputy Minister, other Ministers and Deputy Ministers present, hon members of the Portfolio Committee on Economic Development, other colleagues, dear friends and the media, at the outset let me thank the Department of Economic Development for tabling their revised annual performance plan and other supporting documents within the stipulated timelines. Subsequent to the receipt of the above-mentioned documents, the portfolio committee was able to deliberate and make observations and recommendations where every member of the committee contributed.
However, we would like the House to note the nonsupport of the report by the DA and the EFF. This nonsupport is based on issues that are unrelated to the deliberations and the spirit of the discussions on the report. In the same breath, we would also like the House to note that these two opposition parties participated in and contributed to the page-by-page amendment processing of the report.
The conclusion of the National Development Plan was a major milestone for South Africa. In performing its electoral mandate, particularly in relation to the transformation of the economy, the department is guided by the New Growth Path, the Industrial Policy Action Plan and the Infrastructure Development Act, which takes its cue from the NDP. To those who might still be confused, this means that the NDP is an overarching plan that gives effect to all other socioeconomic activities. It will therefore be naive for anybody to confuse the NDP with any document meant to serve as a tool and/or a mechanism to achieve the NDP goals.
The ANC-led government was voted in on the promise of radical economic change. The Department of Economic Development, the EDD, is one of the departments in the Economic cluster whose core mandate is to ensure the realisation of such a change. Its central role, among others, is the implementation of Outcomes 4 and 6, which address inclusive growth and infrastructure development, as well as aspects of co-ordination. We are convinced that the six strategic thrust areas, as identified by the department, will ensure that its mandate is realised and the core challenges of poverty, unemployment and inequality are mitigated.
The ANC recognises and acknowledges that a thriving economy in a national democratic society requires a state that is able to use its capacities to direct national development through fiscal redistribution, the utilisation of state-owned enterprises and development finance institutions, and effective regulation. It will therefore be important for the EDD to enhance efforts to ensure that the development impact of the development finance institutions is sufficiently broad based and that their investment programmes are well co-ordinated. This will require the IDC, which is the Industrial Development Co-operation, and the Small Enterprise Finance Agency to be well positioned in order to become real engines of socioeconomic development.
We acknowledge – also given that we have already heard from the Minister of the sterling work being done by the two development finance institutions - that the IDC doubled its funding envelope in the past administration and that its annual approval over the past three years increased by about 37%. We have seen their efforts through various funding schemes directed towards the productive sectors, such as the agricultural value chain, manufacturing activities, tourism, the mining value chain and other tradable services, leveraging about 6% of its total investment, where 2% is from the IDC's direct investment - I think the Minister referred to this - in actual rands and cents.
All this happened because we are indeed a country at work and as we work, we relate a story that is good for the country and for the region as a whole.
The IDC has notably continued to finance key strategic projects that have high risks and it accepts that some of the pay-off may take years, even decades. For example, the IDC has been a major supporter of renewable energy generation for the national grid. This is crucial for our future and the future of the entire planet. It is therefore important to know that the financing of some of the projects will require a balance between short-term and long-term returns.
Small business remains an important policy priority for government and the small, medium and micro enterprises have been identified as crucial drivers of job creation. The reason is clear. Small business fosters economic inclusion, contribute to economic growth and create employment, thereby contributing in a significant way to poverty alleviation.
The SMME sector plays a significant role in lifting millions of citizens out of poverty and into the middle-income group. This is what necessitated the establishment of the Small Enterprise Finance Agency, Sefa
Having been guided by the department and the committee, Sefa continued to play a significant role in the development and implementation of strategies and policies in the SMME sector. Last year, as the Minister has already mentioned, over half of Sefa's loans went to women-owned businesses and a quarter went to businesses owned by young people. Guided by government policies and strategies, Sefa will make an important contribution to the key national priorities of economic growth, of which the ultimate aim is to provide decent employment opportunities and to foster national development.
While much has been achieved over the years in the country's small business development arena, some challenges still remain. Key among these continuing difficulties on the part of aspiring and existing business owners is access to appropriate finance to start, grow and expand their business operations. As alluded to by the President in his state of the nation address, access to finance and support for youth enterprises need to be enhanced.
The establishment of the Department of Small Business Development marks an important milestone in government's ongoing efforts to support small business in South Africa. [Applause.] The establishment of this department is welcomed, as it will take the baton and respond to the call for enhancing the support and financing of SMMEs, especially of those aligned with the youth, women, rural communities, the physically challenged and all other disadvantaged groups. The Department of Small Business Development will scale up the efforts and effectiveness of development and finance as we seek a radical change in our economy that empowers our people and builds national prosperity.
The ANC-led government should be applauded for coming up with programmes of economic change that can steadily roll back unemployment, poverty and inequality. The success of some of the well-articulated programmes will require an extraordinary national effort by all of us, including the private sector.
The role of the private sector is critical in the transformation agenda. Some of the good programmes being driven by government and the implementation of identified projects and priority sectors will require the public sector to partner with the private sector to develop, implement and share risks. The identified key job drivers and the infrastructure development programme, which will stir and spur economic growth and is part of government's commitment to secure a better quality of life for all, will require private sector involvement in terms of funding, especially in the development of some of the strategic integrated projects. In this case, it is important to look beyond financing from DFIs alone. There is evidence that where government partners with the private sector to drive infrastructure development, there has been success.
The recent promulgation of the Infrastructure Development Act by the President, which was shaped largely through engagement with the department and the committee, provides an opportunity for the private sector to invest in infrastructure development.
The EDD, through its co-ordination role in the infrastructure programme and the implementation of the strategic integrated projects, Sips, will continue to identify productive sectors that can facilitate sustainable and affordable financing. We would therefore like to invite the private sector to join hands with the government in taking South Africa forward. Under the Act, the EDD is empowered to set even stronger guidelines for local procurement, which indeed will ensure that more of our people, black women in particular, can take advantage of the opportunities arising from our massive build programme.
Before I end, allow me to indicate that through the work of the EDD and in co-ordination with other government departments and entities, South Africa will be a better place to live in and there will be more good stories to tell.
The budget tabled by the EDD will indeed lay the basis for continued growth. As such, it has the full support of the Portfolio Committee on Economic Development and the ANC-led government. We expect the coming administration to be successful in this regard, as was the previous one.
In conclusion, the committee would like to thank the Ministry and the entire collective of the department, led by the director-general, for their continuous efforts to enhance the fight for a national democratic revolution by applying methods of radical transformation.
I would also like to thank the committee members who participated and contributed to the Budget Vote debate, not forgetting our public entities. The ANC supports Budget Vote 28. Thank you. [Applause.]
Mr S J F MARAIS
Ms E M COLEMAN
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 231
Ms E M COLEMAN
Mr S J F MARAIS: Chairperson and Minister, South Africans acknowledge that we are dependent on sustainable and holistic economic development and growth if we want improved economic wealth and sustainable job creation, in line with the objectives and strategies of the National Development Plan.
No real jobs can be created without sustainable economic growth of between 6% and 8% over a sustained period. Our gross domestic product of less than 2% compares poorly with countries in Africa, Malaysia, Korea and our Brics partners.
We have just emerged from one of our worst mining strikes, with devastating consequences for economic growth, job preservation and investor confidence. An estimated 48 000 jobs were lost between 2012 and March 2014 alone. Currently, we are experiencing a devastating metalworkers strike, with slow or no production at five of the seven vehicle manufacturers and disastrous effects on downstream enterprises. Strategic manufacturers have decided either not to expand their planned production capacity, or to move production elsewhere in the world. Permanent job opportunities and economic growth opportunities have been lost. An estimated 188 000 jobs were lost in the manufacturing sector between 2006 and March 2014 alone. Many are being lost now.
Last week, the statistician-general confirmed that the sluggish economic growth is mainly due to the effects of the strikes and low productivity in the mining and manufacturing sectors. The Governor of the Reserve Bank has stated that a 1,7% GDP is now expected, provided that the strikes end, which does not seem likely. The Reserve Bank's increase in the repo rate has resulted in further pressure on economic growth potential.
Afrikaans:
Die landbousektor het die potensiaal om een miljoen werksgeleenthede in 2030 te skep. Die realiteit is dat kommersiële boere van l20 000 tot 36 000 gedaal het, terwyl 400 000 permanente werksgeleenthede verloor is oor die afgelope 20 jaar heen. Volgens statistiek is 73% van eens produktiewe bemagtigde plase nou onproduktief, met geen werk of voedsel wat gelewer word nie.
English:
The Minister must ensure an enabling environment where business can grow the economy and create real jobs. Infrastructure and industrial development can take place and foreign direct investors especially will risk their money only if an enabling, lucrative, safe and predictable environment is available, and if policies and outcomes are secured and predictable.
Afrikaans:
Minister, u begroting is 10% laer as die aangepaste 2013-l4 begroting waarmee ekonomiese groei en werkskepping gestimuleer moet word en waarvan 77% vir oordragte en subsidies is, soos u aangedui het.
Die DA ondersteun die werk van die Mededingingskommissie, Mededingingstribunaal, Internasionale Handelsadministrasiekommissie en die Nywerheidsontwikkelingskorporasie om oop en gelyke geleenthede vir almal te verseker, waardeur besigheid en werksgeleenthede benut kan word op 'n billike en regverdige wyse. Onbehoorlike begrotingsbeperkings op hulle sal dit op risiko plaas.
English:
The IDC has a record of lucrative infrastructure development, finance and investment. Pressure from government in support of the ANC's developmental and New Growth Path goals might impact on its future performance.
One must question money for more dialogue, which is not a directly measurable expense. This sounds like talk shops, while other priorities might be neglected. For the rest of the budget, although lower than the previous year, taxpayers can certainly query the value for their money.
Afrikaans:
Minister, verskille kan gemaak word deur, onder meer, op die volgende job drivers [skeppers van werksgeleenthede] te konsentreer, wat verband hou met julle sogenaamde accords [ooreenkomste]: Eerstens, ontsluit 'n sakeomgewing waar meer en veral nuwe welvaart makliker geskep kan word. Tweedens, verseker die beskikbaarheid van geskikte kennis en vaardighede via die onderwys, opvoeding en besigheidsektore. Derdens, verseker dat stakings nie ekonomiese ontwikkeling en werkskepping verongeluk nie. Sover, Minister, blyk dit dat ons nie suksesvol hiermee is nie.
Vierdens, verseker dat die huidige arbeidsregime omskep word om beide werkgewers en werknemers te ondersteun binne die breër Nasionale Ontwikkelingsplan doelwitte. Vyfdens, ontsluit ekonomiese groei en werkskeppingspotensiaal wat deur die landbou gebied word. Ek noem net twee aspekte: onderbenutte staatsgrond en kommunale grond kan die behoefte na voedselsekuriteit en grond aanspreek; en oorweeg die Wes-Kaap se grondhervormingsmodel, wat gedeelde aandeelhouerskemas tussen plaaswerkers en boere bied en wat in die Wes-Kaap reeds 80% suksesvol is.
Ons neem kennis van die doelwitte van die Presidensiële Kommissie vir Infrastruktuurkoördinering en die aankondiging van Projek Phakisa. Die uitbreiding van planne is goed, maar nie ten koste van die nakoming van basiese verantwoordelikhede en bestaande projekte en strategieë nie. Daar is van die strategiese infrastruktuur programme, Sips, waaroor ernstige kommer bestaan. Ons vertrou dat Projek Phakisa nie net nog 'n Heropbou-en Ontwikkelingsprogram, HOP; Strategie vir Groei, Indiensneming en Herverdeling, Gear; en Versnelde en Gedeelde Groei-inisiatief vir SA, Asgisa, mislukking sal word nie.
The HOUSE CHAIRPERSON (Ms A T Didiza): Hon member, your time has expired.
Mr S J F MARAIS: Chair, you never said that I had two minutes left. [Applause.]
The HOUSE CHAIRPERSON (Ms A T Didiza): Order! Hon member, I never said you had two minutes left because you had only five minutes allocated to you. If members want me to remind them, I will, but some have requested that when they have five minutes allocated to them, they do not want such a reminder because it disturbs them. I am sorry about that and I will do it next time. I am sure some of your members will not be offended. Hon Shivambu, yesterday you asked me not to disturb you. Do you want me to tell you when you have two minutes left?
Mr N F SHIVAMBU: Chair, please do not do so. I will time myself with regard to what I am supposed to do.
The HOUSE CHAIRPERSON (Ms A T Didiza): Okay, thank you, hon member. It is over to you now.
Mr N F SHIVAMBU
THE HOUSE CHAIRPERSON (Ms A T Didiza)
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 231
Mr N F SHIVAMBU: Chair, the EFF does not agree with the Budget Vote as presented by the Minister. Firstly, it is based on the NDP, which is a joint programme of the ANC and the DA. The NDP is not the same as the NGP, which the department spearheaded, and anyone who wants to argue that fact is basically misleading themselves. A better path had been chosen through the NGP. The NDP does not speak to what the Minister has addressed here. For instance, the job drivers that are identified in the NDP are small, medium and micro enterprises, SMMEs, while he is emphasising industrial expansion and infrastructure development. That is not articulated in the NDP.
Secondly, the NDP does not speak about the deconstruction of the minerals-energy complex through industrial diversification and ensuring that South Africa involves itself in many other industrial processes, outside of the minerals-energy complex. That is supposed to be at the centre of industrial expansion in South Africa, because when you speak about development you will necessarily be speaking about industrial expansion. [Interjections.]
The HOUSE CHAIRPERSON (Ms A T Didiza): Order! Hon members, speak softly and allow the speaker to be heard, please.
Mr N F SHIVAMBU: So, that is the basis. The second issue that we do not agree with is this: Yesterday, in finance, we spoke about the poorly conceptualised radical economic transformation phase. It looks as if this is just a slogan in the ANC because different people say different things about what that means. So, we really cannot take that seriously – in terms of its becoming a basis for what happens.
The department is supposed to co-ordinate and align all economic policies, actions and programmes that happen in all departments, but it does not have the space to do so. Firstly, it is not in control of monetary policy. That is controlled by the Reserve Bank. The Minister repeatedly complains about monetary policy that is not aligned to the need for industrial expansion, but he is not in control of that. The Constitution gives that task to a different sphere of influence. Industrial policy is primarily co-ordinated at the Department of Trade and Industry level, which does not account to the Department of Economic Development with regard to what happens there. The Minister is in his space to co-ordinate any industrial expansion that happens there.
Minister, regarding the development finance institutions to which you are supposed to give guidance, the majority of them - if not all are not under your control. Now they see farmers going to hon Minister Zulu, and it will be out of your control. The IDC will continue under your control but the National Empowerment Fund is with the Department of Trade and Industry, while the Development Bank of Southern Africa is elsewhere. The Public Investment Corporation, PIC, which can be used as an important tool for industrial investment and expansion, resides elsewhere. The National Youth Development Agency, Nyda, also resides elsewhere. All of those are not aligned to the need for industrial expansion. Those are some of the key issues that we want to highlight.
Minister, the other issue that you are dealing with in your sphere of influence is the Competition Commission, which traditionally should be residing under the Department of Trade and Industry - where it resided before. The Competition Commission is toothless. Private companies ignore all competition rules that are supposed to guide business in South Africa. We saw what happened in the construction industry. They just paid the money and nothing happened to them. There ought to be mechanisms to criminalise collusion and all these things that happen in industries. Banks are colluding, the construction sector is colluding and the hospital sector is colluding. All these sectors are involved, yet there seems to be nothing wrong with it! They are just issued with a fine, which they pay and which they will recover by simply putting other measures in place to deal with their businesses.
There is a programme called the Recycling and Economic Development Initiative of SA, also known as Redisa. It falls under the Department of Energy. It has the potential to play a significant role in industrial expansion, yet it is not under your co-ordination. It is not doing any work and Energy is not overseeing its work, despite the fact that it collects R2,30 per kg of each and every tyre that is brought into South Africa.
Now, the Department of Communications is going to spearhead the process of digital migration. No fewer than 20 million set-top boxes are supposed to be manufactured, yet still there is no clear industrial plan in terms of what is going to happen. [Interjections.]
So, on that basis, we vote no! We are not sloganeering; we are only giving a proper perspective. [Time expired.]
Mr M HLENGWA
Mr N F SHIVAMBU
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 231
Mr M HLENGWA: Hon Chairperson, let me indicate at the outset that the IFP supports Budget Vote No 28. [Applause.] The Department of Economic Development is charged with the all-important mandate of spearheading job creation. The work of this department therefore is and remains the yardstick measure of the progress we are making, or the lack thereof. At the epicentre of this focus is the NDP, which should be a magnet in attracting and aligning all government plans.
We expect that the Department of Economic Development will also focus on the issue of health care to ensure that we have a healthy workforce capable of uninterrupted productivity. The Department of Economic Development must also ensure that the Department of Labour resolves disputes in order to keep the economy going. Energy supply is also vital and energy must be readily available, so the continued threat of load shedding is of grave concern.
The Department of Economic Development must play an oversight and guidance role over all departments to ensure that they contribute to the creation of a healthy and vibrant economy that is conducive to growth, development and job creation.
Hon Minister, the desperation of unemployed young South Africans is mounting and their patience is dwindling fast. In 2014, 20 years into our freedom and democracy, a crisis is rapidly approaching as unemployment levels continue to rise. We are sitting on a time bomb, which should have exploded already. A 25% unemployment rate is beyond critical, and the efforts seeking to control the situation are clearly not working. Unemployment is the highest it has ever been and is another key challenge to economic growth. This, together with other debilitating social conditions such as HIV and Aids, as well as poverty, needs to be addressed urgently and in a sustainable manner. It is in this vein that we must ensure that the plans and programmes we are debating today ultimately translate into jobs or, at the very least - and I emphasise, at the very least - job opportunities.
The IFP fully supports the development of SMMEs and co-operatives and we welcome the programmes being rolled out by the Small Enterprise Finance Agency and the IDC to ensure that South Africans are enabled to create and build their own sustainable livelihoods through the business and entrepreneurial support they are receiving. This moves South Africa away from dependency and firmly onto the course of sustainability, self-help and self-reliance.
We impress upon the department the importance of ensuring that Sefa reaches all South Africans, especially those in rural areas, who were hardest hit by apartheid. Moreover, the duplication and overlap of roles and functions with regard to co-operatives among the departments of Economic Development, Trade and Industry, and Small Business Development is of serious concern and are a catalyst for confusion. This must be resolved as a matter of urgency.
The issue of jobs remains the most important and most pressing matter and requires bold leadership from the Department of Economic Development. The IFP maintains that government should strive towards the creation of a conducive environment for businesses to operate and create jobs. We are of the view that the political freedom that we have needs to be translated into opportunities and access to economically and socially sustainable livelihoods. We cannot stand by and watch those in power loot the country, while they sing the NDP 2030 economic emancipation lullaby to the poor. We need to translate the NDP into action.
Infrastructure and human development must also be a priority for the Department of Economic Development. It is our expectation that the Department will, to a large extent, ensure that all government departments contribute positively and progressively to the agenda of job creation. The multiple accords signed by government departments nationally and internationally, particularly those that relate to job creation, must be brought to life.
In conclusion, it is our expectation that the Department of Economic Development will work closely with the departments of Basic Education and Higher Education and Training to ensure that our education system is producing a workforce that is compatible with the needs of the job market. Education should be the basis from which we catapult young people into active economic participation through skills development and training. Thank you. [Applause.]
The DEPUTY MINISTER OF ECONOMIC DEVELOPMENT
Mr M HLENGWA
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 232
The DEPUTY MINISTER OF ECONOMIC DEVELOPMENT: Hon Chairperson, hon members of the Extended Portfolio Committee, Members of Parliament and invited guests, thank you for the privilege of delivering my maiden speech to this committee in the debate on Budget Vote 28 - Economic Development. The Minister has already outlined the importance of the co-ordination and integration efforts within government and other state institutions towards economic growth and the creation of decent jobs. The Department of Economic Development, EDD, has been at the centre of the co-ordination of economic development and job creation.
Last Saturday, I witnessed the presidential launch of Operation Phakisa, another collaborative working model that put together stakeholders from the public sector, business, civil society and academic and research institutions into collective thinking sessions for five weeks to crack the implementation of megaprojects. This should be applauded. I had a very exciting experience of this but I heard that the hon member Marais had a gripe with this matter. He said that it was the coming of another version of the Accelerated and Shared Growth Initiative for SA, Asgisa. Of course, I don't expect him to comprehend this because I think if we were to go into the DA's history and its political background, we would find that its political ideology did not agree with working collectively. As such, it cannot follow what we are doing in this regard.
Again, hon member Marais talked about ... [Interjections.]
The HOUSE CHAIRPERSON (Ms A T Didiza): Order! Members, do not interject in such a manner that the speaker cannot be heard!
The DEPUTY MINISTER OF ECONOMIC DEVELOPMENT: ... the National Development Plan, which is supposed to emphasise the target of 6% to 8% growth by 2030. What a selective statistical extraction from the NDP! The NDP talks about a vision till 2030, and it says that from now on we should build up to that. I have never seen a vision that is created in a room on one day and achieves its objectives at that very hour. We are working on that and you must understand that by working collectively, we are moving towards that.
The hon Marais talked about jobs in different phases, but he selectively does not want to talk about the fact that we are emerging out of an economic crisis and that after the implementation of the government's thoughts and the launch of the New Growth Path, we have seen a growing trend in terms of employment since 2011. We think we are going in the right direction and that is what should be applauded.
The Minister has already outlined the successes we have achieved at national level with regard to our integration work. We think that horizontal co-ordination among departments, state organs, the private sector and civil society is achieved at the national level. We think that we have not done well at the vertical level. We will be focusing on that area in the next nine months and over the next five years. We shall be strengthening the oversight role on provincial and local economic development planning and implementation. This should ensure the integrated and seamless implementation of economic development initiatives across the state for better outcomes in job creation and poverty alleviation through improved spatial development. The Ministers and members of executive councils, Minmec, economic development platform will be used as the main intergovernmental co-ordination mechanism for oversight.
The infrastructure co-ordination model in the fourth term of the democratic government serves as a reference, and we have seen its successes. We shall also take this work to provinces as a guide. We shall use the national Infrastructure Development Act and the practical experience from the above to assist provinces to identify similar kinds of specific provincial strategic projects to drive growth and employment, with key areas of focus being economic planning, policy alignment and the integration of the implementation of the NGP job drivers within this sphere. The alignment of provincial and local economic development plans with the NDP, the NGP, the National Infrastructure Plan, the National Industrial Policy Framework and the Industrial Policy Action Plan is critical.
I was very disappointed when I heard hon Shivambu say that there has been so much degeneration. I have always respected him. The people of this country said we should implement the NDP. All debates with regard to weaknesses in that document have been canvassed with our society. Society instructed us to implement the NDP and improve those areas where we think we have to step up. I do not know why the hon member does not comprehend that.
Another issue, which actually disappointed me more, was when the member said we were not in control of the Department of Trade and Industry, the DTI. That is the historically bureaucratic way of implementing projects. We are saying that has changed. Over the past five years it has been proven that when one cuts across bureaucracy and integrates efforts, one actually manages to gain more. [Applause.] In this regard, we are going to assist the provinces to recognise this at the provincial level. We are going to assist them to review their growth and development plans and we hope to improve these plans in at least two provinces within the next five years. We have already commenced with the review of the five-year strategic plans of the departments responsible for economic development and planning in provinces. This process should include the alignment of annual performance plans to ensure that commitments made in the strategic plans are traceable to their day-to-day action plans.
We shall introduce the alignment of planning and implementation processes at the local level as well, using the development of local economic development plans as a platform. Over the next five years, our priority will be the 23 identified struggling district municipalities. The department will therefore be committed to supporting a number of spatial initiatives. These include the revitalisation of distressed mining communities and labour-sending areas.
In the next nine months we will commence with some work in the district municipalities of Bojanala, Pondoland and Westonaria. We shall also pilot the development of spatial economic development plans for rural local economic municipalities as well. uMkhanyakude, Vhembe, Phokwane and Taung local municipalities shall serve as our pilot in the next five years. Vhembe shall focus on supporting the youth skills and youth enterprise development programme, working with the Department of Rural Development and Land Reform. In Thabo Mofutsanyana, we will use the pilot to unblock key challenges faced by co-operatives and small businesses. In Alexandra, Eldorado Park and Westonaria, we will pilot the revitalisation of township economies. The six Is, as identified by the Minister, shall guide our work throughout the process.
In order to promote inclusivity, we will also implement the six accords. In this case, we will identify the skills pipeline for the present and the future, in order to provide qualitative inputs to the skills development forum, led by the Department of Higher Education and Training.
With regard to the green economy, the department will identify potential job opportunities in the entire value chain for youth participation. With regard to innovation, we will take at least two prototypes per sector that has been struggling to enter the market and unblock it.
The plan for this year is ambitious. However, it is packaged in a comprehensive manner – six objectives, 22 key performance indicators and 154 outcomes – with a budget of R696,9 million. We thank the Minister for this simplification. As a newcomer, it has helped me to land softly and to comprehend clearly what the department is all about. Thank you. [Time expired.] [Applause.]
Mr M HLENGWA
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 233
The DEPUTY MINISTER OF ECONOMIC DEVELOPMENT
Mr M HLENGWA: Hon House Chairperson, may I address you on the issue of parliamentary language? I did not want to disrupt the hon Deputy Minister, but while he was delivering his speech there was a number of interjections. Although interjections are allowed, there was a member – I do not know who - who used unparliamentary language. I wish to plead with hon members to refrain from using unparliamentary language such as "shut up" when this debate is even streamed live and watched all over. I think this kind of language is not in keeping with the decorum of the House and it is unparliamentary. Thank you, Chair.
The HOUSE CHAIRPERSON (Ms A T Didiza): Order! I hope all hon members will observe parliamentary language when they are in the House. Also, when members interject, it should be done in such a manner that it becomes a commentary and as a result we cannot hear the speaker at the podium.
I would also wish to advise members that the table in front of me has a stopwatch. Therefore, members must not be irritated when, in their view, the minutes may seem longer. [Laughter.] I just hope that members will appreciate that the Table staff monitors the stopwatch. Thank you, hon members.
Mr N L S KWANKWA
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 233
The HOUSE CHAIRPERSON (Ms A T Didiza)
Mr N L S KWANKWA: Hon House Chairperson, hon Minister, hon Deputy Minister and hon members, the Department of Economic Development plays an important role in our economy by co-ordinating the work of other government departments and public entities in order to ensure job creation and inclusive growth.
However, this is going to be difficult in light of the energy supply problems and crippling industrial action, primarily because the department has an important role to play in creating an environment that is conducive for businesses to flourish. This will make it difficult for them to actually attract foreign direct investment.
However, I wish to focus on the department's small business development strategy, with the Small Enterprise Finance Agency, Sefa, in particular. While Sefa, since its establishment in 2012, provided access to many small and medium enterprises, we need to address the huge discrepancy between the loan approvals and disbursement rates. In addition, according to Sefa's report, last year, out of the 30% target it had set itself for facilities disbursed to youth-owned businesses, only 16,5% was achieved, thus leaving many young people on the periphery of economic activity.
Sefa attributed this to a number of factors, including the failure of its clients to meet set loan conditions. We believe that steps should be taken to reduce the red tape that stifles small businesses and youth entrepreneurship. Such action should also ensure that youth development finance institutions proactively take steps to help small businesses and youth-owned businesses, in particular, to meet the conditions of their finance agreements.
Plans should also be put in place to improve the current picture where the poorest and previously disadvantaged provinces, such as the Eastern Cape, Limpopo, North West and so on, have the lowest share of Sefa loan approvals and disbursement rates.
Roadshows and marketing campaigns in poor provinces should be scaled up to increase awareness of the services of all development finance institutions for no other reason than to ensure that these provinces also derive maximum benefit from these services.
Coming to the important work of the Competition Commission of South Africa, yes, we agree that the commission has done a sterling job in promoting and maintaining competition in South Africa. We have seen the commission impose stiff penalties on companies that engage in anticompetitive practices, the latest one being the stiff penalty imposed on Sasol Chemical Industries Limited.
While these successes are worth celebrating, they are just the tip of the iceberg. Many employees in both the private and the public sector are reluctant to blow the whistle on corruption and perceived wrongdoing in the public and private sector for fear of victimisation. For example, has anyone ever wondered what happened to Mr Ebrahim Ismail Mukadam, who blew the whistle on the bread price-fixing scandal in 2006? There were reports that after the incident the suppliers pulled out all the stops to victimise Mr Ismail Mukadam and that severely affected his business. This does not encourage whistle-blowing.
It is our concerted view that we should consider possible ways to improve current whistle-blower protection mechanisms to ensure that people are encouraged to blow the whistle on corruption and perceived wrongdoing. The UDM supports Budget Vote 28.
Chair, this microphone is too low; it is difficult even to look up. Thank you. [Applause.]
Mr P G ATKINSON
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 233
Mr N L S KWANKWA
Mr P G ATKINSON: House Chairperson, may I ask you to please give me a two-minute warning? Hon Chair, hon Minister, hon Deputy Ministers, hon members of the DA, hon members of all other parties and distinguished guests, it is now a matter of undisputed fact that the world economy suffered a serious setback as a result of the 2008 financial crisis, which originated in the United States of America and Europe. In fact, many of the disappointing economic statistics that have come out of South Africa, such as the falling gross domestic product growth rate and high levels of unemployment, have been ascribed to the effects of this crisis. It was therefore with some interest that I read an article, written in 2013, in an international news magazine called The Spectator, looking at how the world has fared since then:
It may not feel like it, but 2012 has been the greatest year in the history of the world. That sounds like an extravagant claim, but it is borne out by evidence. Never has there been less hunger, less disease or more prosperity. The West remains in the economic doldrums, but most developing countries are charging ahead, and people are being lifted out of poverty at the fastest rate ever recorded ... We are living in a golden age.
Minister, if you want an example of this golden age that we are living in, all you need to do is look at the millennium development goals, which were put in place by the United States in 1990. The idea was to reduce the amount of people living in absolute poverty by half by 2015. Because of the success of many of our peers in creating jobs, places like Brazil, India and China actually reached this goal seven years early, so that by 2008 half the people in the world who were living in absolute poverty were no longer doing so.
The point that needs to be made here is that irrespective of the 2008 financial crisis, which the Deputy Minister refers to as part of our problem, our peers such as Brazil, China, Chile and India are recording levels of GDP growth that have helped to make poverty history through job creation. Much of this can be ascribed to the faster pace of economies where employment practices are much less restrictive than those in South Africa. The World Economic Forum's Global Competitiveness Report has shown a very worrying decline in labour market competitiveness in South Africa between 2009 and 2013. Funnily enough, that is the period that also encompasses the life of this department.
In 2013, in a comparison of 148 countries, South Africa was last - at 148th - in terms of co-operation with regard to labour employee relations, 147th in terms of hiring and firing workers, and 142nd in terms of how pay relates to productivity.
Clearly, if this Fifth Parliament is to make any headway at all in improving the worryingly low levels of job creation, the issues of labour market flexibility need to be addressed. The right balance must be found between addressing the protection of workers' rights and providing a more flexible labour market, which will absorb the unemployed at a far greater rate than it is doing now. The announcement this past week by the governor of the Reserve Bank of a likely fall in GDP growth to 1,7% shows quite how serious this problem is becoming.
The second issue that needs to be addressed to assist in moving us to a more successful economy is the issue of policy certainty. The challenge faced by this government is clearly pointed out in an article by Itumeleng Mahabane in last Friday's Business Day. Mr Mahabane says:
Two months into the fifth democratic administration there is virtually nothing to indicate that we are going to change our moribund economic course. Little suggests that the government will improve its efficiency and increase the rate of investment in social and economic infrastructure, and focus on policies that are adequately stress-tested and aligned to the overriding imperative.
While Ministers swear allegiance to the National Development Plan, there is still too many policy contradictions at the heart of government. In the latest report to the committee on the Budget Vote, the New Growth Path is being represented as the implementation vehicle for the National Development Plan. While there are points of overlap between the two plans, they are conceptually and fundamentally different, with the NGP taking a statist view of the economy while the NDP is more aligned with the involvement of the private sector.
The Rand Merchant Bank economist Rudolf Gouws succinctly captures the discrepancy between the NGP and NDP in a slide that he uses at the beginning of his presentations on the economy. He depicts two large arrows on a road, pointing in opposite directions. It is exactly this kind of policy confusion that frightens off investors and retards economic growth.
South Africa therefore has a choice of remaining in a state of turboparalysis - all motion and no progress - or to make the hard choices that will take us to a more successful economy. Seriousness about improving the economy will be apparent from these two steps: improving labour market flexibility to encourage job creation, as well as an absolute and unambiguous commitment to implementing the NDP; and measuring all future policies and announcements against how they assist to that end.
These two steps would go a long way to restoring investor confidence and would begin to take South Africa to a place where we can make poverty history. Thank you. [Applause.]
Mr M A CELE
Mr P G ATKINSON
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 234
Mr M A CELE: Hon House Chairperson, hon Minister, hon Deputy Minister, hon chairperson of the portfolio committee, hon members, the director-general and all staff members, distinguished guests, comrades and friends, it is an honour to be given the opportunity to debate Budget Vote No 28 of the Department of Economic Development. I wish to congratulate the Minister and the Deputy Minister on their appointment and wish them and the department all success for the future. The ANC supports this Budget Vote.
My input will be on social dialogue and accords. It is for this reason that there is a need to refer to the beacon of the people, the Freedom Charter, as per our late president-general of the ANC, Comrade O R Tambo. The Freedom Charter constitutes one of the most comprehensive acts of social dialogue during which thousands of volunteers from the ANC and progressive organisations crossed the country for months on end, collecting demands. These demands were consolidated in a charter that represents the wishes and desires of the people on the nature and character of the democratic South Africa they envisaged.
We need to remind ourselves of the transformation of 342 years. In the first instance it was colonialism, followed by colonialism of a special type - a process, not an event, to correct all those mistakes. It is a complex process, because we are dealing with the transformation of the state, the national question and the economic legacy that we inherited. It is therefore right and proper to say that the ANC has good stories to tell, if one looks at the 20 years of democracy. Yes, the ANC has indeed done a lot in these 20 years if one looks at the 342 years of colonial and apartheid rule, where the majority of the people were neglected, marginalised, oppressed and exploited.
IsiZulu:
Yinde le ndlela esiyihambayo bantu bakithi, eyadalwa
yingcindezelo nobandlululo. Singadikibali ngoba uhulumeni oholwa
nguKhongolose uzoqinisekisa ukuthi siyangena ntshi kwezezimboni, kwezohwebo nakuyo yonke imikhakha yokuphila kwabantu bakithi. [Ubuwelewele.]
ULUNGA ELINGAZIWA: Bathanda bangathandi.
English:
Mr M A CELE: Yes. The National Development Plan points to the importance of social cohesion in achieving our vision of a prosperous and united South Africa. Social cohesion is both the result of more inclusive growth and a precondition for it.
In this area, the Department of Economic Development has had a path-breaking role in the past five years. It has made top priority of the facilitation of engagements between stakeholders in the economy, from the factory floor to sectoral and cluster structures, to the National Economic Development and Labour Council itself.
This work is based on the recognition that the economy is not primarily about the state. Some 80% of employment and production in South Africa lies in the private sector. Moreover, even where the state is the investor and employer, workers have their own organisations and interests. And, of course, production inevitably takes place in communities, which also has something to say about it.
In short, we can only succeed in building the economy if we build in collaboration with key stakeholders. The role of the state is to create the conditions, as far as possible, for new and productive investment, job creation and inclusive growth. In the course of the past two years, the Department of Economic Development has reached major social accords to achieve this aim. The accords deal with education and skills development, local procurement, the green economy, conditions around mining and, most recently, youth employment. All of these accords address key challenges in our economy and identify important opportunities for growth and development. Reaching them was difficult. Each of the parties had to agree to some short-term sacrifices in order to support longer-term developments.
I would like to focus on the local procurement accord. It is a particularly important contribution to the industrialisation of our economy. The ANC received its mandate from the South African people in the May elections, with the overwhelming support of 62% of the electorate. That support was rooted not only in the ANC's track record but also in its manifesto. The manifesto highlighted industrialisation and infrastructure, with localisation as a pillar of both. We undertook to promote local procurement to increase domestic production and the creation of decent jobs by directing the state progressively to buy at least 75% of its goods and services from South African producers.
Today, the state has embarked on a coherent campaign to increase its local purchases to 75% ... [Interjections.] We have seen major gains in the build programme ... Two minutes, uyangirobha lo muntu [this person is robbing me.] [Laughter.]
In closing, I would like to highlight the bus assembly experience to show what can be done. Marcopolo SA was contracted by the ANC-led government to supply Rea Vaya buses as part of the ANC government infrastructure programme in transport. A good story to tell is that thousands of people are getting jobs out of the government infrastructure programme, which involves the private sector.
Let me share with you a story of an example of localisation in action. Mr Nndanganeni Hendrick Mavhunga from 118 Goba Section, Katlehong Township began working at Marcopolo in October 2013 on a fixed-term contract to build the Rea Vaya buses. This contract was due to end on 13 December 2013 but he was fortunate enough to be offered a second contract to assist with the Tshwane BRT buses until 31 May 2014. He was retrenched from his previous job in early 2013 and had been searching for a new job for about six months. It was difficult to find work and he would go from company to company, asking for work and leaving his CV. In August, he left his CV at Marcopolo. He had experience only as a heavy current electrician and no experience as an auto-electrician, so he was very grateful that Marcopolo was willing to give him an opportunity and train him to do the job. As the end date of his second contract approached, he was very concerned because this would mean he would be unemployed once again. With a wife and five-year-old child who live with him, as well as his aged father and young sister to support ... [Time expired.] [Applause.]
The TEMPORARY HOUSE CHAIRPERSON (Mr B L Mashile): Hon members, I am not able to see the hon M G P Lekota, and we were not advised differently. I will now call the hon K R J Meshoe.
Rev K R J MESHOE
Mr M A CELE
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 234
Rev K R J MESHOE: Chairperson and hon members, the ACDP supports the vision of the Department of Economic Development, which is "to create decent work through meaningful economic transformation and inclusive growth". We also support the vision of eliminating poverty and reducing inequality by 2013 by, among other measures, growing an inclusive economy and promoting leadership and partnerships throughout society, as stated in the National Development Plan.
The focus of my speech will be on creating decent work through meaningful transformation and inclusive growth. To give context to the importance of ensuring that those who had been marginalised in the past benefit from an economy that should be inclusive, I will highlight a concern that was brought to my attention by some local business people in the past year. These entrepreneurs, who have been running spaza shops in black townships for many years, claim that they are losing their shops to foreign business people because of unfair competition. They say that competition is unfair because foreign business people, who are their competitors, seem to be heavily subsidised and bankrolled by either foreign business cartels or by governments of the countries they come from. They further claim that in many townships and villages throughout the country, almost all spaza shops have been taken over by foreign nationals. They say that what upsets them is that local people in townships used to own small businesses during the time of apartheid, but under a democratic government, which should be empowering them, they are losing everything.
These complainants are people who have struggled to create decent work on their own, but now most of them have lost everything because of unfair competition, which, they allege, their government is doing nothing about. What I want to know from the hon Minister is how he plans to draw in these former entrepreneurs in our townships to be part of inclusive growth and an economy that the Department of Economic Development has a vision for. How does he plan to address the unfair competition they are complaining about in order to ensure that the few surviving entrepreneurs do not lose out to these foreigners who are better trained and organised?
I believe that giving this serious matter the urgent attention it deserves will help ease simmering tension among disadvantaged small business owners, many of whom do not have any form of business training or coaching. This might also help prevent further xenophobic attacks from taking place. This past year, I raised the same matter with the hon President and, obviously, it was not attended to - there was no response. That is why I am repeating this request because people are saying that they want answers. How are we going to deal with that issue? [Time expired.] Thank you very much. [Applause.]
Nkul X MABASA
Rev K R J MESHOE
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 235
Xitsonga:
Nkul X MABASA: Mutshamaxitulu, Holobye, Xandla xa Holobye ku katsa na swirho swa Yindlu leyi, ndza mi xeweta.
English:
I dedicate this speech to my late mother, who brought me up under very difficult circumstances as a street hawker. She used to sell ...
Xitsonga:
... mahewu, vuswa, ticondzo na masonja.
English:
That is how she made a living. But I must quickly say...
Xitsonga:
... leswaku masonja yalawo se ma yiviwile hi bindzu lerikulu. A ma ha ri ma vanhu lava nga sungula ku ma dya ni ku ma endla. Hambi ku ri mahewu na wona se ma yivile hi bindzu lerikulu. Mi nge ndzi hatlisa ndzi vula leswaku ndzi tsakela leswaku mi vona matimba ya mabindzu lamatsongo na mabindzu yo hlanganela. Ku na n'wana loyi a vuriwaka Molokomme laha Palemende, u kota ku endla swilo swo saseka ku fana na leswi. Swi langutiseni. [Va phokotela.] eOrlando Empowerment Zone va kota ku endla tiphayiphi leti. Loko Afrika-Dzonga yo xava tiphayiphi eka mabindzu lamatsongo, SMMEs, na mabindzu yo hlanganela...
English:
... South Africa will be empowering those who were excluded from the economy. [Applause.]
Xitsonga:
Bindzu ro hlanganela leritsongo ra vamanana ri le ekundleni tintanghu ta xikolo. [Vaphokotela.] Ku laveka ntsena leswaku vanhu va ka hina va pfuna ku kurisa mabindzu yo hlanganela hi ku xava tintanghu ta xikolo hi xitalo. Loko u pfuna mabindzu yo hlanganela u pfuna vanhu vo tala, ku nga ri munhu un'we. Loko u xava eka mina tanihi Mabasa...
English:
... I will become a millionaire, but the people who work for me will remain very poor. If you buy from co-operatives, those people, yes, they may not become millionaires, but they will become quarter millionaires - all of them. [Applause.]
Xitsonga:
Xana ma yi vona beke leyi? Ndzi kombela ku khomeriwa,ku nga ri yona leyi. Beke leyi yi endliwile eSoweto Empowerment Zone, eka ndzhawu leyi ku endliweke phayiphi liyani ndzi mi kombeke yona. Ndzi kombela swinene leswaku n'wina vamhani mi swi vona leswaku mi ta kota ku titshemba
English:
You are always told that you cannot do this and you cannot do that. You must believe in yourself. [Applause.] Co-operatives are a success. When there was a problem in 2008 - when countries collapsed economically - some of the countries that I will mention here held their own because of active co-operatives. I am speaking of Italy, Canada, Kenya, India, Bangladesh and Spain. What makes these countries succeed is that they have certain characteristics. They all have one of these three: either they have a college of co-operatives, or a university, or study centres, so that every university also has a co-operative unit. [Applause.]
When I came back from Kenya, I came back with a carton of sour milk that had been made by co-operatives. I also came back with cheese made by co-operatives. Just to show how strong they are, they also have a co-operative bank. So, we must not cry about the monopoly in our banks, which we have to run around and chase, while they charge whatever they want because they do not have competition. Imagine if the stokvel people in Soweto came together and said that for three to five years, a part of the money that we bank, we will use... [Interjections.]
THE TEMPORARY HOUSE CHAIRPERSON (Mr B L Mashile): You have two minutes left, hon member.
Mr X MABASA: Chair, you are not kind. [Laughter.] The point that I am making is that Small Business is standing on the shoulders of giant departments. Who are the giant departments? They are the Department of Trade and Industry and Economic Development. Small Business is not going to start things from scratch. It is merely going to extend the building so that it gets higher and higher.
Let me indicate that I wish our President, who was kind enough to come up with this department, may change the name to Small Business and Co-operatives. Co-operatives are not stepchildren in the business arena of South Africa. [Applause.] They are legitimate children.
Small businesses and co-operatives must not remain small forever. Yes, they must start small but we want to see them grow, like a child grows from a certain age until that child becomes a university graduate. Education and training are the things that government must do to support co-operatives. Co-operatives will never succeed without maximum support from the government. But if businesses in the private sector, especially those that are monopolising, want to help, they must also purchase and work with small business and co-operatives.
It is wrong for about four big businesses to continue becoming multibillionaires, not thinking about those who had been formally excluded. Remember, it is apartheid. Dr Verwoerd - I do not know whether he is called a genius - is responsible for the mess in which we find ourselves. Thank you, Comrade Chairperson. [Time expired.] [Applause.]
THE TEMPORARY HOUSE CHAIRPERSON (Mr B L Mashile): Order! Our guests in the gallery, I can feel that the proceedings are enticing, but you are not expected to participate in the proceedings of the House. You are not even allowed to clap hands. Thank you very much. I now call on the hon H C C Krüger. It is his maiden speech.
Mr H C C KRÜGER
Mr X MABASA
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 235
Afrikaans:
Mr H C C KRÜGER: Voorsitter, agb Ministers, agb lede, en dames en here, Suid-Afrika se eerste 20 jaar van demokrasie kan slegs as 'n sukses beskou word indien elke burger polities en ekonomies vry is. Demokrasie moet ook die bevordering van ekonomiese en sosiale vryhede waarborg. Navorsing toon dat die ontwikkeling van kleinsake-ondernemings en koöperasies, soos my kollega nounet gesê het, een van die belangrikste maniere is om hierdie ideaal te verwesenlik.
Die ANC, in hul wysheid, kondig nog 'n nuwe ministerie en departement in hierdie verband aan. Die mandaat van die Minister van Kleinsake-ontwikkeling is baie duidelik, en indien dit geïmplementeer word, sal dit nuwe ondernemings tot gevolg hê en bestaande ondernemings in staat stel om tot hul volle potensiaal te groei. Die DA waarborg egter om 'n leidende rol in die sukses daarvan te speel. Die beskikbaarstelling van genoegsame kapitaal, Minister, sal ook 'n stap in die regte rigting wees.
Die grootste struikelblokke moet egter nie misgekyk word nie. Die nasionale regering – en die Minister – vergeet gerieflikheidshalwe dat eie pogings, harde werk, geleenthede en ondersteuning sukses in die sakewêreld verseker. Daar bestaan geen twyfel dat die land se gebrekkige infrastruktuur, swak onderwysgehalte, arbeidsonrus, bedrog en die slakkegang van die staatsmasjienerie 'n onderneming se vernaamste struikelblokke in die pad na sukses is nie. Dit is daarom nie 'n verrassing dat vyf uit elke sewe nuwe ondernemings nie die mas opkom in Suid Afrika nie.
Hierdie ministerie is net nog 'n toevoeging tot die ANC se oneffektiewe, burokratiese regering, met die potensiaal om tyd en geld te vermors. Om kleinsake-ontwikkeling te versnel, moet ons seker maak dat die Kleinsake-ontwikkelingsagentskap, Seda, die Kleinsake-finansieringsagentskap, Sefa, die Kabinet, en die departemente almal behoorlik funksioneer.
Armoede is 'n knaende inbreukmaking op 'n individu se menseregte en kan daarom nie geduld word in 'n demokratiese samelewing nie. 'n Verantwoordelike regering moet alles in die stryd werp om armoede met mening uit te wis. Op die oog af wil dit voorkom asof die ANC wel sterk in hierdie rigting wil beweeg, met die aankondiging van hierdie nuwe ministerie. Ons almal, agbare Voorsitter, ken die ANC al te goed. Baie van hul handelinge is nie noodwendig met die oog op die bal nie; dalk was hierdie een "payback time." In plaas van 'n strategie wat alle regeringsdepartmente toerus om geleenthede te skep, infrastruktuur te ontwikkel en ondersteuning te bied om doelgerig op besigheidsontwikkeling te fokus, word daar eenvoudig net nog 'n olifant geskep, wat nie noodwendig sal bydra tot die verligting van armoede nie.
Die DA ondersteun kleinsake-ontwikkeling, inklusiewe welvaartskepping en 'n geleentheidsgedrewe samelewing vir almal. Die Wes-Kaap en Kaapstad is sprekende voorbeelde van waar die regte bestanddele bymekaar gevoeg word om geleenthede vir entrepreneurs te skep en waar goeie leierskap die struikelblokke in die pad na sukses minimaliseer. Na 20 jaar maak die ANC nogsteeds staat op 'n groterwordende, oneffektiewe staatsdiens en word die begrip "mag-staat" in plaas van "regstaat" al hoe meer toepaslik. 'n Mens kan net wonder hoeveel Ministers daar in die Sesde Parlement gaan wees – dis natuurlik as die ANC dan die regering is.
Die DA deel die doelwit van werkskepping en besigheidsontwikkeling, maar stem nie saam met die burokratiese strategie wat die ANC nou volg nie. Baie dankie. [Applous.]
English:
Dr D T GEORGE: Hon Chairperson, on a point of order: I did not want to interrupt our member's maiden speech, but while he was talking a member in the opposite benches accused him of lying. So that hon member has broken two rules: Firstly, he has accused our member and impugned the dignity of our member by accusing him of lying, which is unparliamentary. I would like you to rule on that, please. He has also defied a convention of Parliament that when a member is making a maiden speech, that person is not to be interrupted. The speaker was not beig controversial and therefore the member's behaviour was unacceptable. I would like you to rule on that. Thank you, Chair.
THE TEMPORARY HOUSE CHAIRPERSON (Mr B L Mashile): Order, hon members! I need assistance. Can we identify the member who said that the hon member was lying?
Dr D T GEORGE: Yes, I can. It is the member over there. I am pointing right at him and he is smiling at me. That is the member, Chair. Thank you.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order! Which one is it?
Dr D T GEORGE: Chair, perhaps the hon member can stand up and identify himself so that we can have a good look at him. Thank you.
The TEMPORARY HOUSE CHAIRPERSON (Mr B L Mashile): Hon members, is there a member who will take responsibility for having uttered those words? [Interjections.]
Mr B M MKONGI: Chairperson, I want to withdraw my comment.
The TEMPORARY HOUSE CHAIRPERSON (Mr B L Mashile): Order! Thank you very much for making my job easy, hon member. Hon members, I just need to caution members who are making their maiden speech. If you become controversial, you must expect that other members will respond to you. It is definitely so that there was controversial content in the speech just made by the new hon member. I just want to warn those members who are making maiden speeches to assist the House in this regard so that they can proceed without hindrance from the other members.
Order! Hon member, are you rising on a point of order?
Mrs E M COLEMAN: Hon Chairperson, on a point of order: With due respect to the DA, our Deputy Minister also delivered his maiden speech and the member over there kept on interrupting him. I think, in the same spirit, we would like you to also request that member to withdraw because the Deputy Minister was never controversial. He actually interrupted and disturbed the Deputy Minister, but we understood why. Can we get a ruling on that too? I will indicate which member it was. [Interjections.] Yes, the member at the back there.
The TEMPORARY HOUSE CHAIRPERSON (Mr B L Mashile): Hon members, I have tried to make a ruling now. It will be a little difficult for me to go back in the process. I call on hon members that if there is any point of order to be made, please try to make it instantly so that we are able to attend to the matter. But I really do caution that members should respect those who are making their maiden speech by not making interjections, but also that the speaker has a responsibility not to be controversial and attract the interjections. Thank you very much.
Mr S A TLEANE
Mr H C C KRUGER
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 236
Mr S A TLEANE: Hon Chairperson, hon Minister, hon Deputy Minister, hon Minister for Small Business Development, hon members, guests, I observe all protocol and I thank you for the opportunity. Lest we forget, hon Chair, in 1906, iNkosi Bhambatha ka Manciza Zondi defied a decree by the then Natal colonial regime to pay poll tax. He took up arms to fight an oppressive whites-only regime that had already uprooted his people and made economic prosperity an impossibility. Because of the peaceful nature of the African majority, iNkosi Bhambatha and his people did not possess weapons of mass destruction. He therefore succumbed to the power of the gun powder of the colonial authorities.
After his capture, he was ruthlessly decapitated and his head inhumanely paraded around the villages as a ploy to harshly intimidate the people from ever rising against the racist regime. The enemy failed dismally in this regard because today we meet here in the fifth democratic Parliament of the Republic of South Africa, under the watch of His Excellency the hon President Zuma, who was born and bred in the same valleys, plains and mountains where iNkosi Bambatha and iNkosi Sigananda ka Shezi gallantly resisted colonial oppression in the early 1900s. [Applause.]
The Department of Economic Development, ably led by hon Minister Patel, is strategically located at the centre of government, with its tentacles of change and economic empowerment caressing and nudging the various government departments, stakeholders and other agencies to embrace radical economic development in order to secure a future for posterity. One of the key strategic objectives of the Department of Economic Development is the promotion of competition, trade and smart economic regulation.
Ms N M MDAKA: Chair, I rise on a point of order. Those hon members from the DA are making a noise. Can they leave and go and sit over there, please, Chairperson?
The TEMPORARY HOUSE CHAIRPERSON (Mr B L Mashile): Order, hon members. Will you not converse loudly so that we can hear the members who are speaking? Thank you. Continue, hon member.
Mr S A TLEANE: I hope you have saved my minutes, hon Chairperson. One of the key strategic objectives of the Department of Economic Development is the promotion of competition, trade and smart economic regulation. This objective assists in the achievement of enhanced, fair and just competition among business practitioners, also unblocking trade opportunities locally, on the African continent and abroad while vigorously creating conducive conditions for the entry and empowerment of those of our people who were previously excluded from participating in the economy of the country under the old order.
In executing this noble task, the Department of Economic Development uses the Competition Commission of South Africa and the International Trade and Administration Commission, Itac. The Competition Commission was established through the Competition Act and its objective is to promote and maintain competition in order to, among other aims, promote employment and advance the social and economic welfare of South Africans; expand opportunities for South Africans to participate in world markets and recognise the role of foreign competition in the Republic; promote a greater spread of ownership, particularly to increase the ownership stakes of historically disadvantaged persons.
Before the establishment of the Competition Commission, the scourge of price fixing and collusion was rife in the business sphere. As such, smaller companies found it almost impossible to compete against monopolies. It also deprived ordinary South Africans of the opportunity to create wealth and employment for themselves and others. The entry of the commission was therefore geared at enforcing fair competition through the eradication of dominance by cartels, monitoring the creation of unnecessary mergers and acquisitions, as well as promoting voluntary compliance with the Act through nonenforcement activities.
Since 2009, the economic environment has improved notably after the establishment of the Department of Economic Development, which strives for acceleration in job creation and the participation of all South Africans in the economic activities of the country in order to address the triple challenge of poverty, unemployment and inequality.
After conducting a general investigation into the state, nature and form of competition, in what is called a market inquiry, the Competition Commission uncovered cases of improper business conduct by numerous firms that had been referred to the Competition Tribunal for adjudication. Those that chose to co-operate with the commission disclosed their misconduct and were made to pay heavy penalties. These penalties acted as a deterrent to cartels. In the construction industry alone, colluding companies settled on fines of almost R1,5 billion. They had been involved in bid rigging in the run-up to the 2010 Soccer World Cup. Some of the key cases the commission handled include Sasol and Pioneer Foods, which we will discuss briefly.
The case against Sasol clearly demonstrates the quest by the ANC-led government to promote clean and accountable governance, both in the public and private spheres, and to fight corruption and improper conduct. The exorbitant prices had a direct impact on jobs. Sasol was fined a total of R534 million and was warned to stick to the straight and narrow in order to avoid stiffer penalties. Pioneer Foods was fined a total of R855 million and this acted as a deterrent to other companies that wanted to play truant as well.
The levelling of the playing field implies empowering those with limited resources and those who were previously excluded from participating. The Industrial Development Corporation is complementing the good work of the competition authorities by supporting the establishment of new industries.
The International Trade and Administration Commission is an important player alongside the competition authorities. It has, to a large extent, contributed immensely to the development and promotion of trade by local practitioners in the Southern African Development Community region and African continental markets at large. It has achieved this through the support and co-operation of the Southern African Customs Union, which has created a common external tariff and common excise tariff for this common customs area.
Deporting illegal immigrants may be a good tactic to protect our resources. Thank you. [Time expired.] [Applause.]
Ms C MATSIMBI
Mr S A TLEANE
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 237
Ms C MATSIMBI: Hon Chair, hon members, hon Minister, hon Deputy Minister, colleagues and friends, the ANC wishes to welcome the Budget Vote for the Department of Economic Development for the coming financial year.
At the 53rd national conference of the ANC in December 2012, the delegates endorsed the strategic goals of the infrastructure plan, which they regarded as a programme based on Strategic Integrated Projects, SIPs, and which would have a catalytic impact on job creation, unlocking resources, developing the poorest regions of our country, overcoming special inequalities and developing the region. Further, the delegates expressed the view that the infrastructure programme would support the growth of our supply sectors, unlock the key bottlenecks in the economy and underpin the structural transformation that we have seen. Infrastructure spending is the ANC-led government's attempt to influence the economy through government spending.
Supporting this admirable, national and aspirational government will of necessity operate a budget deficit as part of a conscious overall strategy of the fiscal policy. The ANC-led government has adopted the National Development Plan as a blueprint for a future economic and socioeconomic development strategy. The NDP sets the broad direction for the way forward for infrastructure development and its crucial role and alignment within the country's 2030 vision. The plan aims to ensure that all South Africans attain a decent standard of living through the elimination of poverty and reduction of inequality.
The point of departure in the NDP is that, while South Africa has a relatively good national economic infrastructure network, the challenge is to maintain and expand infrastructure in order to address the demands of the growing economy. The New Growth Path sets a goal of 5 million new jobs by 2020. It identifies structural problems in the economy to be overcome and points to opportunities in specific sectors and markets, or jobs drivers. The first jobs driver is infrastructure because it lays the basis for higher growth, inclusivity and job creation.
The economy is already constrained by inadequate investment and the ineffective operation and maintenance of existing infrastructure. Speeding up the delivery of infrastructure and providing for the maintenance thereof is a major part of the government's programme. The objectives are to move faster towards getting rid of social backlogs and to improve and give more access to economic infrastructure.
In February 2012, the President, His Excellency J G Zuma, announced the National Infrastructure Plan in his state of the nation address and said that the implementation of infrastructure needed to be sped up. Based on this work, in April 2012, the 18 Strategic Integrated Projects to support economic development and address service delivery in the poorest provinces were identified and launched. The projects cover a range of economic and social infrastructure across all nine provinces. The identified projects will provide new infrastructure, assist in terms of rehabilitating and upgrading existing infrastructure and also play a critical role in facilitating the regional integration of African co-operation and economic development.
To ensure the effective and successful implementation of the massive infrastructure programme, the government, through the leadership of His Excellency Jacob Zuma, has established the Presidential Infrastructure Co-ordination Commission, which brings together political heads of the three spheres of government for the first time in a joint intergovernmental forum, headed by the President himself. The PICC has a mandate to develop a 20-year infrastructure pipeline, to ensure forward planning of infrastructure development and curtail the stop-start syndrome around the building of infrastructure.
Through the PICC process, there is now a co-ordinated National Infrastructure Plan comprising the above-mentioned 18 Strategic Integrated Projects. The ANC's 53rd national conference expressed this obligation to localisation and articulated a comprehensive strategy to attain it through the infrastructure plan when it reaffirmed its commitment to:
… promoting local companies, entrepreneurs and co-operatives through a public procurement and infrastructure spend and our intention to fully utilise the trade and industrial policy space available to South Africa.
The Department of Economic Development, being the secretariat of the PICC, focuses on ensuring that there is adequate co-ordination of both planning and implementation between the various stakeholders involved in each of the Strategic Integrated Projects, monitors progress and intervenes to unblock bottlenecks.
To ensure that there is an enabling legislative and regulatory environment that would ensure fast-tracking, priority in planning, approval and implementation, an Infrastructure Act has been enacted. Indeed the Infrastructure Act aims to ensure that the development goals of the state are promoted through infrastructure development.
In conclusion, I would like to thank you for giving me this opportunity and I clearly indicate that the ANC supports Budget Vote 28. I thank you. [Applause.]
Mr R W T CHANCE
Ms C MATSIMBI
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 237
Mr R W T CHANCE: Chairperson, hon members and visitors in the gallery, good morning. This is my maiden speech, but I do intend to be controversial. In 1994, after years of economic isolation, Anglo American Corporation controlled 44% of the Johannesburg Stock Exchange-listed companies and the top five corporates controlled 84%. Since then, the structure of our economy has changed dramatically. But the concentration of the main economic levers in the hands of new large companies remains a concern.
The Davis Tax Committee report refers to the "missing middle", or entrepreneurial businesses with growth potential. These businesses, according to the NDP, must create 90% of the 11 million jobs we need between now and 2030. But the Davies report laments the fact that total early-stage entrepreneurial activities in South Africa are about half of what is reported in other countries. It goes on to say that regulatory compliance is costly for small business while the benefits of compliance are insignificant. What is to be done about this?
The newly created Department of Small Business Development now has a chance to show that the government is serious about cutting compliance costs and red tape. I noted in the Minister's statement yesterday that she is initiating a review of regulations related to small businesses and co-operatives, which is encouraging.
Turning to the Small Enterprise Finance Agency as custodian of this agency, the Department of Economic Development has failed to scale up the provision of financial assistance to the level required to massively grow the "missing middle" of small and medium enterprises. Its total lending in the 2013 financial year was R440 million, just 78% of its target. The new Minister, Lindiwe Zulu, needs to take a hard look at how Sefa can be made more effective.
The state of the nation address called for radical economic transformation through the implementation of the National Development Plan. Here are three suggestions for the Minister. Firstly, follow Brazil's example by announcing a 40% reduction in interest rates on government loans to small businesses and co-operatives. Secondly, recapitalise the guarantee indemnity scheme because, clearly, Sefa on its own has limited capacity to deal with pent-up demand for funding from small businesses and co-operatives. Thirdly, lean on the Minister of Labour, Mildred Oliphant, to reform the labour legislation, which has a chilling effect on job creation.
Now, let me turn to some of the comments made by my hon colleagues on the other side of the House. The so-called second phase of the transition is a smokescreen obscuring the fact that government policy in the past five years has not delivered the promised growth. Does the Minister seriously expect us to believe that in the last 20 years government was busy with other matters and has suddenly woken up to the need to grow the economy? The argument is threadbare. The second phase of the transition is a desperate attempt by the ANC to buy off its allies in the Congress of South African Trade Unions and the SA Communist Party.
The ANC cannot decide between the NDP and the national democratic revolution, the NDR. I was staggered to read in the conclusion of the committee's report about the department's - and I quote from the report: "… continuous effort to enhance the fight towards a national democratic revolution by applying radical economic transformation". Not a single mention of the NDP. The cat is well and truly out of the bag. If the ANC is confused, is it any wonder the country is so exasperated?
What is particularly appalling is that this was not in the committee's draft report, but was inserted after the committee met to deliberate on the report. Such sleight of hand by the ANC will not go unnoticed by the DA, Chairperson. Until the ANC chooses emphatically between these two ideologies, the country will continue to drift and business confidence will drain away, with negative consequences for job creation and economic growth.
When I challenged the Minister in committee earlier this month on this point, he attempted to dismiss it as petty politicking. Minister, I state here today in Parliament that you and your colleagues in Cosatu and the SACP are holding the country to ransom. We have had enough. No amount of dissembling and smooth talk from you will convince us otherwise. I thank you, Chairperson. [Applause.]
Mr I A PIKININI
Mr R W T Chance
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 238
Mr I A PIKININI: Hon Chair, hon Ministers and Deputy Ministers, hon members, members of the public, colleagues and friends, the ANC that I represent this morning is a tried and tested organisation in the history of South Africa. The ANC is the oldest movement in Africa and South Africa, hence it is voted into power by the majority of South Africans. It will continue with the good work that we started 102 years ago. [Applause.]
The ANC is a national liberation movement that was formed in 1912 to unite the African people in particular and black people in general from political and economic bondages. The ANC has spearheaded the struggle for fundamental political, social and economic change. The ANC's key objective is the creation of a united, nonracial, nonsexist and democratic society. It means uplifting the quality of life of all South Africans, especially the poor, and further promotes economic development for the benefit of all.
In our resolution, it is for this reason that the ANC vision for the pathway to economic participation necessitates and energises a coherent and effective approach by all South Africans. Working together in partnership in order to free our people from poverty and unemployment, our approach to economic issues is informed by the historical principle espoused in the Freedom Charter, the Ready to Govern document and the Reconstruction and Development Programme.
These are further elaborated on in conference resolutions, such as: one, to restructure the economy so that it meets the basic needs of all South Africans; two, to ensure equitable and mutual beneficial regional development in South Africa by fostering integration in economic transformation- there are sources of inequality and among them are the issues of unemployment, poverty, ownership of the means of production and access to finance, education and better health care; three, the limitation of labour absorption is detailed in the New Growth Path, which is the strategy that gives meaning to our National Developmental plan; to place the focus in education and training on skills empowerment as required by the economy, as opposed to availability.
There are major infrastructure gaps in the country, both in spatial distribution and access and the level of infrastructure in rural areas and townships. These require the delivery of services in the short term and their maintenance, especially of electricity, water, logistics and sanitation.
Following from the above, the Strategic Integration Projects, or Sips, are one of the key job generators and ultimate economic growth propellers in the South African economy. We will speak about water and sanitation as, among other things, they will create jobs across all provinces. Hon members will remember that water and sanitation are a national project for a minimum of 10 years and sustainable livelihood thereafter.
The erection of the Umzimvubu Dam and its irrigation system in the Eastern Cape gives meaning to the commitment that this government has made to the millions of people who put their trust in the ANC. The construction of this dam will not only act as a desperately needed water catchment mechanism in the management of this scarce resource but will also propel formal and informal agriculture in the area and directly create sustainable work opportunities. The dam will change people's lives and livelihoods in that particular area.
Indeed, South Africa is better than it was 20 years ago. [Applause.] We need to acknowledge the successes of the past administration. I would like to agree with what the President said in his state of the nation address. It is true that we have seen substantial recovery in employment since 2010 in particular, the year in which the NGP was adopted. Since then, employment in South Africa has risen by over a million, with close to a half-a-million jobs being created in the past year alone. For example, after the adoption of the NGP by the Cabinet in October 2010, about 1,4 million jobs have been created so far. The main contribution has been made by government, which created almost 620 000 jobs. The finance sector has created 360 000 jobs, while the wholesale and retail industries contributed 100 000 jobs including manufacturing even, it did well due to the economic meltdown.
It is in this regard that the core responsibility of the Department of Economic Development is to identify how the state can do more to support job creation and help to take advantage of these opportunities. To this end, it is expected to support the implementation of the NGP, which forms the core operational plan for the NDP, through the job drivers specified in the NGP. We in the country can see the real prospect of overcoming the joblessness and poverty entrenched under apartheid.
The challenge in the coming administration is to step up our efforts to make this vision a reality. We also know that joblessness remains a major burden for our people. That is why, as the ANC, we have made job creation a central element of our strategy to create a more inclusive economy. This is a major commitment in our manifesto. In fact, the job drivers in the NGP show where employment is possible. They provide priorities for the state to support investment. Going forward, the challenge is to ensure the alignment of all state agencies to achieve these aims. This is a core role for the department in the coming administration, hence it is provided for in the Medium-Term Strategic Framework. That is why the Department of Economic Development is charged with the developmental system and structure and to monitor progress in the job drivers and unblocking them. Ultimately, if we realised the potential in all the areas, we would see not only job growth but the emergence of a more diversified, equitable and resilient economy. We would lay the foundation for growth over the coming decades, not only in South Africa but for the African continent as a whole.
The challenge now is to establish similar system for more of the job drivers. This is not an easy task. It requires goodwill from all participants, as well as improved capacity. It requires that all agencies of the state come together; that they move on from singing their own song in isolation to building a great choir, a harmony that can lift our economy onto a truly new, inclusive, job-rich growth path. To enhance government relations through intergovernmental relations is nothing new.
In our manifesto, the ANC committed itself to building the capacity of the state, drawing in expertise from wider society where needed. Our proposal to support the job drivers forms part of meeting this commitment. After our campaign, millions of voters again gave their trust to this people's organisation to continue doing what is best for our people.
We need to see a profound change in the relationship between the state and the economy. A developmental state must do more, especially in understanding the factors that constrain existing and emerging investors and addressing those. On the other hand, it must think ahead of market-led economic development and identify realistic new opportunities that generate growth and job creation led by the state.
This approach means that the state must be able to analyse economic development, understand market constraints and take advantage of new opportunities as they arrive. It requires that all government departments improve their capacity to work with stakeholders, businesses, workers, communities and experts to build new productive capacities.
We inherited a state that was lawless, arbitrary, discriminatory and corrupt. We have gone far in developing a state that is bound by the democratic rule of law but we need to go still further to support job drivers as the basis to sustain inclusive economic development. Bringing about radical economic change - the change that we promised our people in the manifesto and the change in which we as the ANC were elected - is the challenge for the Fifth Administration. It is for this reason that we are sure that the Department of Economic Development will continue playing a leading role in this process.
In conclusion, ever since the ANC came to power we have invited local businesses to invest more and assist in ending unemployment and poverty.
Chair, I think we need to deal with other matters now. The ANC was never confused at any stage. Many years - 350 years - cannot be compared with 20 years. [Applause.]
IsiXhosa:
Kukude apho sivela khona. Sivela kuhlala kwizindlu ezimagumbi mabini thina. Sihlala ezilalini, yiloo nto ke leyo eyasenza ukuba sizabalaze. UVerwoed wathi ngenye imini, esizisa iMfundo yabaNtsundu wathi abantu abantsundu ...
English:
... they must see the greener pastures but they must not reach them. So, it was a time when they introduced technical schools. It was meant for whites only, no one else, and therefore we have fought our way through with the ANC. They are both ANC work and it will be distinguished for the DA and EFF to try and divide the alliance on their own with misconception and deliberate confusion of the two documents, the NDP and the NGP.
IsiXhosa:
Onke amaqela afika engxamile apha kodwa zihamba ziyishiye imbali yombutho wethu ihleli ihleli, ayijiki ngalo lonke ixesha. Enkosi Sihlalo. [Kwaqhwatywa.]
The MINISTER OF ECONOMIC DEVELOPMENT
Mr I A PIKININI
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 22 July 2014 Take: 239
The MINISTER OF ECONOMIC DEVELOPMENT: House Chair, to frame a response to the debate, I would like to thank all the hon members for their contribution and to reiterate that from our point of view the sources of inclusive growth and job creation lie in those six I's: infrastructure, industrialisation, investment, innovation, inclusion and integration. In a way, all of us in Parliament - as should every South African - should ask: How can I contribute to the national goals of progress of job creation and development?
This requires that we work through the complexities of the relationship between the state and the market; the dynamic between business and organised labour; the challenges of bringing the rural poor into the mainstream economy; and the difficulties of operating not only in a world that has changed very dramatically but also in a world that has created new opportunity. So, we can grab that opportunity.
I think that in his contribution the hon Cele brought the human face of development into the discussion. Behind those statistics that we give, there sits Mr Mavhunga who works at Marcopolo; who was unemployed and now has the opportunity to get into a sustainable job, earn an income and be trained in the process. I think that is where we can build a cross-party consensus about what it is that we are doing. It is, I think, a peculiarity that when we have good news in Parliament, some people in the opposition seem to have a great allergy to it. I am encouraging them to celebrate the good news about South Africa - because it can be good news for all of us - and then we can focus on the challenges we face. The story line does not have to be that everything is failing; that everything is doom and gloom.
Hon Marais, thank you for your comments. I would like to point out that the reason that the Department of Economic Development budget is lower has to do with the fact that we had earmarked R250 million from the Pioneer Foods settlement, which went into the Agro-Processing Competitiveness Fund. So, we took the money from a colluder and we put it into the fund that is now creating jobs for small businesses, young people and others. That R250 million is now being transferred in full, over a few years, into the Department of Economic Development, who in turn will put it into the Industrial Development Corporation, IDC, which is doing great work with it. I would like to be granted the opportunity to report on that, perhaps in one of the portfolio committee meetings.
Regarding the point made by hon Marais, that there is too much money for dialogue, I think we should be cautious. Perhaps some of the roots of our industrial conflict, which you drew our attention to, is that there has not been enough dialogue about the problems; that we are not talking enough; finding enough solutions; and implementing the solutions clearly enough. I think we should not dismiss dialogue, in a complex economy such as this, as the means to bring us all together.
Hon Marais, you drew attention to the strikes and you cautioned that foreign direct investors may be concerned and may not bring their money to South Africa. Any caution is always something that we should pay attention to, but I would make the point that the facts tell a very compelling story: In January this year, the United Nations agency responsible for monitoring global investment flows published the Global Investments Trends Monitor. In that monitor, they make a number of interesting points. They say that the developed countries account for only two fifths of global foreign direct investment. They go further and break down what has happened to investment. I can do no better than to read two paragraphs from this. The first one deals with Africa. It says that the foreign direct investment inflows to Africa rose by 6,8%, when estimated, to an estimated US$56,3 billion. This was due to the strongest performance of the Southern African countries, including South Africa and Mozambique, which experienced record inflows of more than U$10 billion and US$7 billion respectively. [Applause.]
I turned the page to see if this good news story from the United Nations continued. There was a section on Brazil, Russia, India, China and South Africa, Brics, which says that Brics continues to be a strong performaner in attracting foreign direct investment. Its current share of global foreign direct investment flow is at 22,2%, twice that of the precrisis level. Total inflows to the five leading emerging economies reached R322 billion, 21% higher than in 2012. There is a key sentence, hon members, and I would really like you to listen to this very carefully. South Africa outperformed other countries in the group with foreign direct investment inflows rising by 126%. [Applause.] So, my point is this: Let us be guided by the facts; let the interjections be a little bit more informed; or at least a little bit more entertaining; and let us, at least, celebrate the successes of our country. It reminds me of hon Shivambu ... [Interjections.]
The HOUSE CHAIRPERSON (Ms A T Didiza): Order! Hon members, please allow the hon Minister to be heard in his response.
The MINISTER OF ECONOMIC DEVELOPMENT: Hon Shivambu, I am struck by the fact that this is going to be an entertaining administration and period in Parliament, because we have heard the EFF telling us that they do not support the Budget Vote. It looks to me that the order was to come in here and find some reason to oppose it. So, the EFF says: "No, we do not like it. It is too close to the National Development Plan." The DA's hon Atkinson responded by saying: "No, we do not like it because it is too hostile to the NDP."
I thought it may be helpful to read from the NDP to help the DA, whose refrain has always been, "Let us fish for division. We cannot defeat them at the poll, so let us fish for a division." On page 117, in chapter three of the NDP, it is stated:
... the New Growth Path is the government's key programme to take the country onto a higher growth trajectory. The New Growth Path is about creating the conditions for faster growth and employment through government investment, microeconomic reforms that lower the costs of business (and for poor households), competitive and equitable wage structures, and the effective unblocking of constraints to investment in specific sectors.
The Deputy Minister gave a compelling and eloquent reply to the point that was made by hon Shivambu that the EDD did not control all the levers of economic power and therefore the hon member could not support the Budget Vote. We work as a team. We would like to help hon Shivambu understand how government works. We have a body called Cabinet where all the Ministers come to represent the mandates for different entities, but there they sit and develop a common approach. It is called governance. That is how things are done when you are in government. [Applause.]
To hon Atkinson ... [Interjections.]
The HOUSE CHAIRPERSON (Ms A T Didiza): Order! Hon Minister, can I just have a moment. Can I ask the guests in the gallery not to participate in what is happening in the House? You can watch and smile but do not clap hands and be part of the debate.
The MINISTER OF ECONOMIC DEVELOPMENT: Hon House Chairperson, I think people can clap in their hearts. The point that was made by hon Atkinson on the Global Competitiveness Report requires a response. We have got to say that, on the one hand, let us recognise the challenges we face in the economy. They are labour market and skills challenges. We have to address them, and that we should not deny. Let us be careful of who and what we cite as the authority and the basis for it.
The Global Competitiveness Report is a very interesting report. This section of the report is actually a survey of opinion. It is not a scientific survey of outcomes. It tracks the views of business people. It means business people in Brazil, China or the United States of America, as the case may be, are more bullish and generally more positive about their own countries than, say, the country that is rated lower. It does not mean that the underlying problem is much worse. It is a survey of sentiment. If we are going to compare labour market outcomes, why do we not compare the fact that income inequality in South Africa is so much higher than many of the countries we are being compared with? When workers see these challenges, the opportunity to build a new social compact, a true partnership in which we work together, is undermined. So, we have got to tackle this problem by addressing the huge income inequalities in our society that fuel the labour dispensation, where, at the end of the day, people are not happy with its outcomes.
I would like to thank the hon Krüger for the support on small business development, but here is the key issue: I do not think it is helpful to point to the Western Cape as the example for small business development. While the Western Cape government closed the Red Door programme, which supported small businesses, the national government put R2 billion into small, medium and macro enterprises. The Western Cape closed that programme... [Interjections.]
Dr D T GEORGE: House Chairperson, I rise on a point of order. It is very clear that the hon Minister's time is up. I saw the flag go up and you gave him an extra 30 seconds. I think his speaking time is up. I am watching this very closely, hon House Chair.
The HOUSE CHAIRPERSON (Ms A T Didiza): Thank you, hon member. I have indicated the 30 second mark and the Minister is rounding up.
The MINISTER OF ECONOMIC DEVELOPMENT: In conclusion, I wanted to point to the very helpful comments from hon Hlengwa, hon Kwankwa, hon Meshoe and others, but I will just offer this thought as my concluding comment: The DA set a target of 30% that they would reach in the general elections. They achieved 24% in the proportional vote in the 2011 local government elections. They now got 22%, a drop when compared to 2011. That is a compelling case for why we should not say that the DA is fit to govern. We have a programme here. I appreciate the support of opposition parties for our budget. Thank you very much. [Applause.]
The HOUSE CHAIRPERSON (Ms A T Didiza): Order! This has been a very lively debate indeed, which indicates that we are all serious about moving South Africa forward and that in our role as the legislatures, we are critical in examining what departments are doing. I also think that we have been given some free education to understand better how the executive does certain things. Hon members, that was an interesting debate indeed.
I wish to remind members that the debate on the Parliamentary Budget Vote will take place at 14:00 in the National Assembly Chamber.
Debate concluded.
The Committee rose at 12:22.
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