Hansard: NCOP: Unrevised hansard

House: National Council of Provinces

Date of Meeting: 04 Nov 2015


No summary available.








The Council met at 14:02.


The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.






The CHAIRPERSON OF THE NATIONAL COUNCIL OF PROVINCES: Order! Hon members, I’ve been informed that the Whippery has agreed that there will be no notices of motions or motions without notice except for the motion that is on the Order Paper. We now come to that motion on the Order Paper as printed in the name of the Chief Whip of the National Council of Provinces. The Chief Whip of the National Council of Provinces!


The CHIEF WHIP OF THE NATIONAL COUNCIL OF PROVINCES: Hon Chairperson of the Council, I hereby move:


That, notwithstanding Rule 247(1), which provides that a sitting of the Council will be dedicated for oral questions, the Council considers the report of Select Committee on Finance.


I move accordingly, Chair. Thank you.


The CHAIRPERSON OF THE NATIONAL COUNCIL OF PROVINCES: There’s no Speaker’s List. I shall now put the question. The question is that this motion be agreed to. The decision is dealt with in terms of section 65 of the Constitution. I shall first ascertain whether all delegation heads are present in the Chamber. They are. We shall then proceed in accordance to Rule 71. I shall allow all provinces the opportunity to make their declarations before they vote if they so wish. Does any province wish to make a declaration? None, thank you very much.


We shall now proceed to the voting on the question and I shall do this in alphabetical order per province. Heads of delegation will vote by pressing in favour, against or abstain buttons. I shall now proceed to call on the provinces to vote.


Question put: That the motion be agreed to.


In Favour: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West.


Against: Western Cape.


Motion accordingly agreed to in accordance with section 65 of the Constitution.


The CHAIRPERSON OF THE NATIONAL COUNCIL OF PROVINCES: Order! I would like to proceed, hon members, to welcome the Deputy President to this session of his answering of the questions from this honourable House. We shall now proceed to put the first question as printed in our Question Paper to the Deputy President. The Deputy President!






Participation of women/youth in economy


19.       Ms M F Tlake (Free State: ANC) asked the Deputy President:


  1. Whether the Government has any mechanisms and/or plans in place to ensure that the transformation of the economy involves active participation and empowerment of women and youth; if not, why not; if so, what are the relevant details;


(2)        whether such plans include employment equity plans that are aimed at putting mechanisms and instruments in place to ensure that the nation forges towards a society where everyone has the opportunity to embrace their full potential without the threat of unfair discrimination; if not, why not; if so, what are the relevant details?                                                                                                                                                CO708E


The DEPUTY PRESIDENT: Hon Chairperson, hon members, as part of the work that is being done and undertaken by government, acting together with a number of stakeholders to transform our economy and society, we have put in place a range of policies and actions to undo the historical marginalisation of women and youth in our country.


We have placed the advancement of black South Africans, women, young people and people with disabilities at the centre of the government’s broader policy frameworks. These include what has been set out in the National Development Plan, NDP, in the New Growth Path and in the industrial and agricultural action plans that government has adopted. This commitment to fundamentally transform our economy runs through government’s affirmative action legislation. It also runs through our broad-based black economic empowerment policies and through various other sectoral charters that have been adopted by various sectors in our country.


Government’s preferential procurement policies continue to provide economic opportunities to historically disadvantaged groups. We are also using our infrastructure build programme to advance all these objectives.


The Infrastructure Development Act makes specific reference to youth employment and the economic empowerment of women. Government has allocated, and, indeed, continues to allocate resources to advance the economic participation of women and youth in our economy. During the 2014-15 financial year, for example, the Industrial Development Corporation, IDC, approved funding worth about R800 million for businesses with 25% or more women ownership and R159 million for businesses with 25% or more youth ownership.


Through the Youth Employment Accord, which was signed in 2013, government and its social partners agreed on a number of measures to promote youth employment as well as youth entrepreneurship. These included steps to address the gap between school-leaving and first-time employment, work exposure for young people and youth targets set aside in infrastructure and other projects. The Employment Tax Incentive scheme that was introduced to encourage the private sector to do more to draw young people has also made a contribution in this regard. So, some progress has been made. Much more still needs to be done.


Across the economy in the past 12 months, 375 000 additional young people were employed and 335 000 additional jobs were created for women, as found by Statistics SA. However, we need to make far more progress and work much harder, with greater urgency, to bring the high levels of employment among young people and women down.


The advancement of women in the workplace is one of the objectives set out in the Employment Equity Act. It aims to promote equal opportunity and fair treatment in employment through the elimination of unfair discrimination and the implementation of affirmative action measures.


We will continue therefore to scale up all these actions, all these measures that contribute most effectively in ensuring that women and young people can take their rightful place in the economic transformation of our country. This government is seeking to do as much as it can to advance the cause of women and young people in our economy. As we move ahead, we will be getting more and more young people and women to play a key role in the economy of our country. Thank you, Madam Chair. [Applause.]


Ms Z B NCITHA: Chairperson, I appreciate the response, which was well articulated. I would like to ask the Deputy President: How has the recent launch of the War on Leaks project in the Nelson Mandela Bay Metropolitan Municipality, launched by the President, contributed to the efforts for the economic empowerment of the youth and women in South Africa? I would also like to know how the informal sector contributes towards government efforts for the economic empowerment of the poor and disadvantaged in our communities. Thank you.


The DEPUTY PRESIDENT: Chairperson, starting off with the last question, the informal sector plays a critical role in the economy of our country. A lot of money is exchanged at the informal sector level as people get involved in those small businesses where trade takes place, where exchange of money for goods takes place, and where services are also given for money.


Now, this informal sector has been in existence for many, many years and we want to see how people who are active in the informal sector can be helped and assisted to get more and more into the formal sector. A number of towns and municipalities in our country are setting up well-built and well-serviced malls, small malls for informal trading, to enable them to play a critical role. As I have gone around the country, this is what I have seen and admired greatly, as those municipalities and metros are creating hubs for informal businesspeople to play a role in trading and in conducting their own businesses. Some of them do finally migrate to start running more serious businesses as they are given infrastructure.


The more infrastructure we build in our towns, the more the informal traders will be able to have the possibility of growing their businesses. Indeed, the regulatory framework also needs to be more favourable to them so that it does not impede the running of their businesses.


Coming to the first question, the contribution that the War on Leaks has made in the Nelson Mandela Bay area, when the President went to see how this is happening and when he launched it, we found that there was a lot of participation from young people. This is a ready army of young people which can be raised right across the country to do a lot of work on stopping the leakages. One could say this could well be our water revolution. We lose a lot of water through leaks, and the more we train young people, the more we will be able to save the water, a scarce resource in our country, more effectively.


I first saw this in the North West province when I went to Matlosana. There, I saw young people in their hundreds being trained as plumbers. Training of young people like this gives them something to do, gives them respect and can lead them to doing something more effective for the country. So, this is an important project to which we need to pay attention, and one would like to see it being rolled out in as many municipalities and areas as we possibly can.


Now that we are also rolling out water more effectively, even in the rural areas, this is a necessary task that has to be undertaken. It’s all very well putting in taps with running water, but if those taps break down, we need people who will maintain and repair them. So, this is a very good project. Thank you very much.


Mr J W W JULIUS: Chairperson, hon Deputy President, this question refers only to the empowerment of women and children. It excludes another vulnerable part of our society – people living with disabilities. I am very glad that you touched on it. I think our thinking is alike, in that fashion, seeing as we are heading for Disability Month. [Interjections.] The Deputy President can shift to me.


The government set a target of 2% employment equity for employable people with disabilities in the Public Service. It is reliably estimated that we are at 1,4%, thus missing the target by 0,6%. What are the reasons for not achieving this target; and what are the plans to achieve this target concerning employable people with disabilities in the Public Service? Thank you, Chair.


The DEPUTY PRESIDENT: Chair, I am pleased to hear that the member’s thinking has migrated to my thinking as far as this matter is concerned. [Laughter.] So, there is quite a bit of progress that we are making. Thank you very much. [Applause.]


You are right. We are missing the target by 0,6%. This is something we keep track of. On a quarterly basis, we do an evaluation at departmental level and even at Cabinet level to see how far we are missing out on the various outcomes that we have set for ourselves. This is one target that we have plans to reach. We are working to make sure that this one is achieved, and we will be achieving it.


The various departments in government have a clear mandate to make sure that we do employ people with disabilities and put them in positions where they can be gainfully employed and contribute effectively to the growth of our economy. Various measures are being taken through all the various Ministries that we have to focus on this area.


I’m sure that, in another year, we will be giving much more positive news in this regard, because we have, as the ruling party, set our minds on ensuring that not only women and youth but also people living with disabilities are brought into the mainstream of the economy, are employed and are employed in meaningful tasks - not just tasks where they answer the telephone, as has been the case for many decades, but where they are brought in and they play critical roles in making sure that our economy moves forward.


So, it will be done. The next time we report, you will see a different figure altogether as we move towards 2%. Thank you very much.


Ms M C DIKGALE: Hon Chairperson, Deputy President, in your response, you mentioned the advancement of women among the vulnerable group. Does this transformation seek to include the traditional women leaders? I am referring to the wives of the chiefs, the women izinduna ... [Interjections.] ... and their sisters-in-law.




Ms M C DIKGALE: Dikgadi tša mošate. [The aunts to the traditional leaders.]


... as leaders of their own communities, as they maintain our rich and traditional heritage. Thank you.


The DEPUTY PRESIDENT: Yes, Chair, when we say women, we include all women, irrespective of the roles that they play in our society. Obviously, as a country that respects tradition, we pay due regard and respect to the women who are either wives, aunts, or in whatever relationship they are to our traditional leaders, we pay due regard to them. So, the empowerment process of women like that is all-encompassing. We obviously would like to see them play a key role themselves, because in many ways, they are role models. They are seen as women who are leaders in society. They are respected by many of our people.


So, if we have initiatives that are meant to empower women, we would not like to see them folding their arms. We want to see them making sure that they also get involved. They must roll up their sleeves and be part of this transformation process that is under way, because if they do not do so, we will remain impoverished without their participation, without their involvement, their voices, and their wisdom. So, this process needs to include those sisters ...


Bo rakgadi ba mošate ... [The aunts to the traditional leaders ...]


MUFARISA MUPHURESIDENNDE: ... vho makhadzi. Ri khou ṱoḓa uri na vhone vha dzhenise tshanḓa vha vhe tshipiḓa kha hezwo zwithu zwine zwa itiwa. Vha songo sokou dzula fhasi vha ri riṋe ri vhakololo, riṋe ri vhathu vhahulwane, a ri zwi dzheni hezwi. Ri khou ṱoḓa u vhona na vhone vha tshi shuma u itela mini? U itela uri na vhathu vhoṱhe vha vhone uri na vhathu vhahulwane vha a zwi dzhena hezwi, vha a kona uri vha dzhenise tshanḓa vha shume zwi takadze vhathu vhoṱhe. Ndo livhuwa. [U vhanda zwanḓa.] (Translation of Tshivenḓa paragraph follows.)


[The DEPUTY PRESIDENT: My aunt, we also want you to participate in what is being done. You should not just sit and say because you are princesses and old you do not participate. We want to see you working so that everybody can see that even older people do also participate and this will make everybody happy. I thank you. [Applause.]]


Mr L G MOKOENA: Chair, hon Deputy President, the Freedom Charter, in its economic clauses, addresses the transfer of wealth to the people. It then addresses land and mines, and so on. Then it states that all other industry and trade shall be controlled to assist in the wellbeing of the people. Now, that “all other industry and trade” belongs in the private sector, which is where we are seeing the inequality of women. The government has done really well. We can quote the numbers. We spoke about numbers the last time.


However, government has no control of the private sector, and there are many examples. For instance, the mining industry has just told the country outright that they are going to expel people, and so on. There was nothing we could do about that.


What is it that we do then, as government, in the private sector, to exercise that control that the Freedom Charter refers to, in order for us to then empower women in that industry? Thank you very much.


The DEPUTY PRESIDENT: Chair, I must say that is a very good question. Clearly, the government is a regulator. Government is a regulator elected by the people of this country to play a key role in regulating the affairs and activity that takes place in the country. One of those activities is in business - the running and the functioning of business. Government, clearly, passes many laws and regulations at every level - national, provincial and local. Through these laws, government will seek to act in the interests of the majority of the people, or the people, as a whole.


What our government has done is to overlay other laws and regulations in addition to the various other laws, like licensing, to prescribe that there shall be employment equity. For instance, if you are in the private sector, you are meant to make sure that there is equity on a gender-based level, as you employ people. There is also equity now in terms of making sure that you bring in disabled people or people living with disabilities or you also bring in young people.


Now, these are laws and regulations that are in place. They need to be enforced. Yes, it is at the enforcement level where we need to gain more traction. We must admit that the gaining of traction is an ongoing process. We could never have passed a law to undo various conventions and practices of the past and hoped that they will change overnight. They are changing on a regular basis. For instance, the department of labour is in the process of strengthening its resolve as far as making sure that employment equity is adhered to.


I had occasion to meet the commissioners of the Employment Equity Commission, who did say that they are seeing progress on an ongoing basis. It has not been easy because there has been quite a lot of resistance, particularly from the private sector, which has not seen it easy to adhere to the new dispensation that we now have in our country. So, adherence to and enforcement of employment equity provisions are things that need to be speeded up. We need to deepen it. We need to broaden it, and that is going to be improving on an ongoing basis.


Similar to this is the employment of people with disabilities, even in government. We have reported that we have not reached that 2% level that we wanted but we are in the process of doing so. We are going to reach that target.


When it comes to youth unemployment, we are encouraging the private sector to take on a number of young people, as many as possible, into internships and learnerships. This is a process through which we need to be encouraging everyone who is a role-player in our economy to do something. In the end, all stakeholders in our economy need to do something to grow the economy, to make sure the iniquities of the past are obliterated from the face of South Africa, so that we now begin to have a system, or a country, where there will be equity; where black people will be treated as equal citizens, even in the workplace, and where gender will be treated on an equal basis, as well.


That is the direction that we are going in. That is why I said it was a very good question, because everybody, including all parties that are here, is called upon to act on this matter. Thank you very much. [Applause.]



(New Member)


The CHAIRPERSON OF THE NCOP: Hon members, forgive my oversight. The NCOP has a new member who has just been sworn in, the hon Engelbrecht. I am sure all of us welcome her in the House. [Applause.] [Interjections.] Order, members! Hon members, she is a redhead. All of you can identify her. [Laughter.]


Economic growth in Nelson Mandela Bay


20.       Ms E C van Lingen (Eastern Cape: DA) asked the Deputy President:


Whether the Government will take any steps to (a) stimulate economic growth which will create much needed jobs and (b) alleviate gross inequalities and poverty in the Nelson Mandela Bay Metropolitan Municipality, Eastern Cape (details furnished); if not, why not; if so, what steps?                  CO703E


The DEPUTY PRESIDENT: Hon Chairperson, hon members, the national government is engaged in a number of actions to support a range of local initiatives in the Nelson Mandela Bay Metropolitan Municipality to improve the performance of the local economy and to create jobs, to reduce inequality and to fight poverty. The actions government is taking include support for industrial investment in Nelson Mandela Bay through a number of investment initiatives that have been embarked upon by, for instance, the IDC, the Industrial Development Corporation.


Over time, the IDC has invested more than R4 billion in the area, covering projects that produce, among other things, renewable energy components, steel products, dairy products, clothing and textiles, bags, pharmaceuticals, electronic products and motor vehicle components. Government also provides support through industrial initiatives to the auto sector, which continues to be important to the economy of the metro and surrounding areas. These include incentives provided through government’s Automotive Production and Development Programme and the Automotive Investment Scheme. Other measures include infrastructure projects in areas such as housing, electricity, schools and the installation of solar water geysers.


We are also focused on expanding economic infrastructure projects over the next few years. These include the export of manganese from the Port of Ngqura and the manufacture of train wagons at the Uitenhage factory of Transnet Rail Engineering. Government will continue to provide industrial financing to boost economic activity at the Ngqura industrial development zone and other economic nodes in the Nelson Mandela Bay Metro, focusing on empowerment and especially also focusing on the development of black industrialists.


Owing to their size and strategic location, metros like Nelson Mandela Bay are expected to lead in economic development. They are also expected to lead in job creation. They can achieve economies of scale. They can also achieve increased productivity and greater market opportunities, market opportunities that can be all-encompassing and that involve a lot of our people in meaningful economic activity.


A metro like the Nelson Mandela Bay is therefore critical to the implementation of the National Development Plan, the NDP, and the achievement of our goals to eliminate poverty and to reduce inequality and unemployment. These metros – and we have quite a few of them – are critical nodes of the economic development of our country and they need support. They need to be given all the assistance they can get, because many of our people live in those metros and we need to make sure that they get economically engaged and involved. Therefore these metros are key. This is what the government is continuing to do, focusing on empowering all these metros to make sure that they live up to what a proper metro should be doing, which is becoming an economic engine of the area where they are located. This is what we are seeking to do in the Nelson Mandela Bay metro area. Thank you very much.


The CHAIRPERSON OF THE NCOP: Thank you, Deputy President. The hon Van Lingen has stepped out. I am instructed that in her absence the hon Athol Trollip will ask the supplementary question.


Mr R A P TROLLIP: Thank you, hon Chairperson. Hon Deputy President, despite your response of metros being responsible for leading economic growth and implementing the National Development Plan, the high and rising unemployment rate in the Eastern Cape continues to plague the future opportunities of especially young job seekers in the province. The recent increase in unemployment in the third quarter of this year from 29,1% to 29,2% has meant there are 4 000 more households without income in the Nelson Mandela Bay metro.


The Nelson Mandela Bay metro has the highest unemployment rate of all metros in South Africa at 34,3% and the highest unemployment rate of all metros at 47%. These figures are not only cause for grave concern for what is supposed to be the economic “engine room”, in your words, and also a critical economic growth node of the province, they are also directly due to the leadership instability in this metro, with six mayors and six municipal managers in the past 15 years. Owing to this, this local government neglects the economy, cuts out businesses and corruption flourishes, so much so that the national Department of Human Settlements does not trust that municipality with R4,3 billion to build houses in that city.


Now, against that background, I would like to ask the hon Deputy President what steps the national government will take to make sure that this metro is an economic hub, that it will become an engine room of growth and that it will stem the loss of jobs and stimulate the potential of the Coega industrial development zone or IDZ, and what they will do to create jobs in the tourism and agricultural sector where the most potential resides. Thank you.


The DEPUTY PRESIDENT: The figures you are quoting are figures that could be extrapolated and applied to many areas in our country in as far as the challenge of unemployment is concerned. The key question one should ask is: Are we doing something meaningful to try to stem these figures, to bring them down? And the answer is yes.


It is for this reason that the Nelson Mandela Bay area has been targeted, even by our development finance institutions, DFIs, to invest up to R4 billion, and there is much more money to come. You have just noted that yourself. [Applause.] You have just noted that yourself: R4,3 billion in housing in terms of which we are going to be able to roll out housing. Yes, we have had challenges and problems at a leadership level. We have had these, and as soon as they were noticed, even at a national level, we moved in and appointed a mayor, a leader who is changing the fortunes not only of governance in that metro but of the economy as well. You watch and see what is going to happen there. [Applause.] Sit back and watch and see, or participate in being part of this growth process that you are going to see unfolding with your own two eyes. You are going to see changes that are going to happen at Nelson Mandela Bay. [Applause.]


If ever there was a metro that we were really excited about at a national level, it is the Nelson Mandela Bay metro because change is coming there and you will see it. [Applause.] Thank you, Madam Chair.


Mr M KHAWULA: Thank you, hon Chairperson. Your Excellency Deputy President ...


Sawubona baba. Ngiyajabula ukukubona. Ngithi ngiyathokoza mhlonishwa ukuthi unathi la. [I greet you sir. I am pleased to see you. I thank you hon for being here with us.]


The CHAIRPERSON OF THE NCOP: Order! Order! The hon Khawula is being drowned out.


Mr M KHAWULA: The hon Deputy President has counted quite a number of initiatives that government has taken in terms of boosting economic development in the Nelson Mandela Bay metro.


The first part of my response is a comment, sir, to say that I wish that what you are doing in Nelson Mandela Bay you could also do in Richards Bay, which is an industrial development zone, just as Coega is also an IDZ, but the pace of development in the two is not the same.


My question is in respect of corrective measures – where government is putting in money for infrastructure and economic development. You find out that corruption is taking place in that people get involved in pocketing what is not due to them, such as what has happened in Nelson Mandela Bay with the Bus Rapid Transit – BRT - recapitalisation system.


What corrective measures are taken by government? This is because money was put in by Transport to the Nelson Mandela Bay metro and money was paid to the consortium that is running Bhongolwethu Transport. Buses were parked, but people were pocketing money. What corrective measures are in place so that people can benefit and the economy can grow smoothly? Thank you.


The DEPUTY PRESIDENT: Thank you, Madam Chair.


Ngiyabonga mhlonishwa ngalombuzo wakho kodwa mangiqale lapha kuloku qhathanisa okwenzile nge-Richards Bay ngoba akusilona iqiniso ukuthi i-Richards Bay asiyinakile. Nayo i-Richards Bay ibalulekile kakhulu ngoba nakhona kuhlala abantu bakithi. Baphila khona manje ngeke nithi asiyinakile i-Richards Bay, empeleni ngizoya khona e-Richards Bay ngelinye ilanga ngiyozibonela kahle ukuthi umsebenzi owenziwa uhulumeni omuphi na. Ngingathanda kakhulu ukuthi mina nawe sihlangane khona lapho e-Richards Bay. [Uhleko.] Ngingathokoza ngempela. [Ihlombe.] (Translation of isiZulu paragraph follows.)


[Thank you hon for your question but let me start with the comparison you made concerning Richards Bay because it is not true that we have neglected Richards Bay. Richards Bay is also very important because our people live there too. They live there, so you cannot say we are neglecting Richards Bay, in fact I will go to Richards Bay one day for an oversight visit. I would really love for you and me to meet there in Richards Bay. [Laughter.] I will be really happy. [Applause.]]


Now, coming to the issue of what corrective measures are being taken. The reality that we face is that, yes, corruption is present. It is a daily occurrence in our lives. We acknowledge that. But what we must also acknowledge is that we are not the only country, the only place under the sun and the only continent where there is corruption. Corruption is all over. I’ve just come back from an overseas trip where I heard stories of corruption and how they are dealing with it, and the measures that they continue to take.


So, government has to be continually vigilant in dealing with corruption and seek out those who are corrupt, seek out those who are stealing public money and make sure that they are dealt with effectively. That is something we are very serious about, and that is why we have all these agencies, these measures that are in place. If anyone seeks to steal money, he or she should be dealt with. For that reason we are looking at not only civil servants, but people who work with them in the business community, as well as politicians. It happens that corruption can become an all-pervasive type of ailment, but we need to continue with our resolve to deal with all those people. Now, if people have information about people who are stealing money - be it in the BRT, be it in whatever - what they need to do is to come forward and say, “This is what is happening. We want action to be taken.” [Interjections.] And I promise you if that happens, action will be taken indeed. Thank you very much. [Applause.]


Dr Y C VAWDA: Thank you very much, hon Chair. Please allow me to greet everyone including the Deputy President with As-saalamu-alay-kum [Peace be with you.]. Over R140 billion has been anticipated as investments in the Coega industrial development zone since 2000. This has not materialised. The question that we are asking is whether the government has done an assessment of the industrial development zones to see exactly what impact they are going to have – the industrial development zones – on economic growth. Also, what is it that is preventing the IDZs at present from contributing meaningfully towards economic growth and job creation? Thank you, Chair.


The DEPUTY PRESIDENT: Thank you, Madam Chair. Industrial development zones are a growing concept throughout the world, I have found, and similarly in our country as well. As we move forward with our own transformation, I am finding that this is an area of economic activity which we can utilise as a node to grow our economy. The Coega one is a very good example. The Richards Bay is another good example. And we are now going to be rolling out more of these IDZs, because we have realised that they have great potential because they can act as an investment magnet, which can attract people or investors to invest and pour in their money either in infrastructure or in the building up of capacity, be it logistics and what have you. That is what is beginning to pick up.


Now, this R140 billion was never going to happen in one day, but it is the process and it is in the planning. The Ngqura development zone in the past was seen as a nonstarter, but I promise you it is getting off the ground and it is going to start galloping, because if you work on the principle that if you build it they will come, then this is precisely what is happening. We have a number of foreign investors who are looking at that development zone with great interest. They want to utilise it as a platform to invest in South Africa and to use it as a manufacturing base. It is well positioned near another important node that we are talking about, Nelson Mandela Bay. Therefore it has great advantages which are going to unfold and attract a great deal of investment.


Now, if you ever wanted to attract foreign investment - this, I found in my few travels around - IDZs are one of your best ways of making your country more attractive, of putting a bit of a shine on your country, because through this type of initiative, investors see that you are going to help them with certain incentives, you are going to support them, and you are going to put in infrastructure in a focused manner, which is what IDZs are all about.


Infrastructure is just poured in - electricity, roads, water and communications, be they broadband and what have you. Once it is built, it just takes off like a rocket. We are going to see a rocket taking off not just with Coega but with a whole lot of others. Have faith and you see what is going to happen there. [Applause.]


Mr F ESSACK: Hon Chairperson, thank you for this opportunity. Hon Deputy President, it’s always good to see you again. Welcome.




Mr F ESSACK: And, of course, as you are Leader of Government Business I feel compelled to ask you this question. I will ask it slowly so that you will grasp it. The fact is that the Financial and Fiscal Commission, FFC, has clearly pointed out that there is very limited room to respond to unexpected spending pressure or revenue underperformance. How much longer then, hon Deputy President, will you condone the sale of state assets to continually bail out SOEs? Of course with your experience in business, you would full well realise the implications of our contingency reserves, having dwindled to a level which is just not acceptable for South Africa. I would appreciate just an honest and sincere reply. Thank you.


The CHAIRPERSON OF THE NCOP: Hon Essack, that is not a supplementary question. That is a completely new question. [Interjections.] Yes, it is. It does not flow from the response of the Deputy President to the principal question as posed by the hon Van Lingen. [Interjections.] That is a completely new question. Hon Labuschagne, you have the last question.


Ms C LABUSCHAGNE: Thank you very much, Chair. Hon Deputy President, in reference to your comment on corruption – that it is worldwide – and the sincerity and the commitment of this government to curb and erase corruption, will you in your position as Leader of Government Business be prepared to publish a report for the nation, or for the residents of this country, to make known what action has been taken against people, departments and businesses, and what the monetary value attached to that is? This is because whenever we talk about this, government gives us the assurance that they are doing something, but the people of this country don’t see the evidence of what is being done. Thank you.


The DEPUTY PRESIDENT: Thank you. Yes, a lot is being done in terms of taking action against the people who seek to defraud or who indeed do defraud the state in one way or another. Clearly, some of this does filter into the public arena. It is reported, as far as I recall, in the media how people have either been arrested or dealt with. Now, what you are saying is: “Publish this in a sort of composite report, and say, ‘This is what has been done, and this is the monetary value that has either been recovered or that was involved.’”


I’d like to think about that, if you will allow me. I’d like to think about how this type of report could be put together, because we do take a number of actions against these people. And, in a way, this report is available from a number of centres. If we go through various measures that are being taken, we will find that there is quite a lot of evidence. But what you are asking for is a composite report. With your kind permission, Madam Chair, I would like to think about it and look at the feasibility of doing so. Thank you very much.


Higher education fees


21.       Ms L C Dlamini (Mpumalanga: ANC) asked the Deputy President:


  1. Whether the 2nd National Higher Education Transformation Summit he attended in Durban in October 2015 has dealt with strategic interventions to curb the exorbitant higher education fees in the country (details furnished); if not, what is the position in this regard; if so, what are the relevant details;


  1. whether the Government and the higher education sector have any plans and/or strategies in place to ensure that (a) higher education fees do not become a barrier for the achievement of the objectives of the National Development Plan and (b) poor learners have access to economic opportunities like higher education; if not, why not; if so, what are the relevant details in each case;


  1. whether such plans and/or strategies involve the expansion of government financial support to poor learners; if not, why not; if so, what are the relevant details;


(4)        whether the Government is engaging the higher education sector and the private sector to develop interventions in order to curb the escalating higher education fees; if not, why not; if so, what are the relevant details? CO709E


The DEPUTY PRESIDENT: Chairperson and hon members, the issue of university fees was discussed at length at the Second National Higher Education Transformation Summit that was held in October, just a month ago. I happened to be asked to open that summit, which I did. They remained, discussing a whole number of issues.


Amongst the things that the summit discussed and resolved was, one, the higher education sector should support current initiatives to address student funding and debt problems. They recognised that there is a huge challenge when it comes to the funding of students, which has been even more evident as our young people have taken up the cudgels and demonstrated that they are living under great stress with debt and the problem of student funding.


The second issue was that universities, as they resolved, must be more transparent about the structures and the increments, and engage more effectively on these issues with relevant constituencies. Transparency about fees is what the summit felt needed to happen. The third issue was that the National Student Financial Aid Scheme, NSFAS, must be strengthened to increase student funding for the poor and to improve recovery and repayment rates for NSFAS.


Fourthly, all stakeholders in higher education, including government and the private sector, must work together to increase the funding of universities. This issue is very important because it calls upon the key stakeholders in our economy and our country to work together to increase the funding allocated to universities. This is a call we are making and hoping that the private sector particularly will heed.


I have, for instance, even made the suggestion that the government roll out R9,5 billion for NSFAS. Surely, that amount, which is a big chunk of money, can be leveraged by financial institutions maybe two times, maybe even three times? It could even be done four times, to make sure that we have funding available to fund young people who want to go to university.


Now, R9,5 billion is no child’s play. If you put it out there and you leverage it you can come up with a number of financial instruments, financial engineering to make sure that young people do get the resources to learn. They are hungry for education. They want to be skilled. They want to learn so that they can contribute to the economy of our country, and we should give them the opportunity to do so.


So, if we all work together – the private sector, government, various organisations including university authorities and the student bodies themselves - we can find the answers. One of the first ports of call is obviously the government. The second will be the financial institutions - the private sector as a whole. So, there is an answer and we can try to explore that answer.


The work to establish expanded student funding models must be accelerated to enable the progressive introduction of free quality education for the poor. That’s precisely what I’ve been talking about. There are various models that we can come up with. Members should be aware that President Zuma convened a meeting with representatives of the higher education sector on 23 October to address the issue of university fee increases.


The government is currently working with universities to explore various options to meet the commitment from that meeting of a 0% increase in university fees. The reality is that higher education subsidies have simply not kept pace with the significant and necessary increase in student numbers over the past 20 years. In a way, we are suffering from our own success.


We’ve succeeded in getting our young people into centres of higher learning. And that success has overrun our own capabilities and abilities. We must now catch up and make sure that we make real this promise that we have given to our young people.


At the same time, the government has massively expanded support through NSFAS. This is a reality. The scheme has enabled 1,5 million financially needy students to access higher education as well as Technical Vocational Education and Training college programmes, or TVET college programmes. The government is in the process of engaging the private sector, as I said, to come up with a number of other interventions. The banking sector has been approached and this proposition has been put forward.


We are hoping that we will engage and come up with solutions. With this I’m hoping that we will be able to give not only hope but real answers to the young people of our country who are, after all, the future of our country. I will address the work of that task team in my reply to the next question. Thank you very much, Madam Chair. [Applause.]


Ms L C DLAMINI: Ngiyabonga kakhulu, Mgcinisihlalo. Ngiyatfokota kakhulu nekutsi dzimate ube khona nalamuhla, Sekela Mengameli utesinika timphendvulo. [Thank you very much, Chairperson. I am so glad that you managed to come even today, Deputy President to answer our questions.]


My follow-up question is the following. In engaging the private sector, as you have correctly said, has the government explored the possibility of consolidating all bursaries that the government is giving in all departments at national level, provincial governments at municipal level, including that of state-owned enterprises, SOEs?


I’m asking this because, when you engage the private sector, you are talking about the realistic figure that the government is contributing towards the bursaries, not only NSFAS. Also, in terms of the government intervention, is government going to consider those who already owe the universities? This is because some of them are not able to continue the following year, owing to the debt that they have with their university. Thank you, hon Chair.


The DEPUTY PRESIDENT: Thank you, hon Chair. Ngiyabonga, mama. [Thank you, Ma’am.] Yes, I think that you have come up with a very important point: an assessment and evaluation of the various bursary or scholarship schemes that the government has set up, not only at a national level, but at departmental level, at SOE level, at provincial level and some even at local government level.

Wherever you go, you will find that young people are being funded in one way or another and the government has been playing a critical role. Similarly, the private sector has also been playing a very key role - that we must concede and accept. What needs to be done is precisely what you are suggesting: to evaluate all that and to have that consolidated information, so that when this process that the President has come up with of evaluating everything is then properly evaluated, that will begin to point us in a particular direction.


I think it is possible for us to come up with answers, including the answer to the debts that young people have - where they have not been able to pay and therefore don’t get their results, even if they may have performed well. That must also be factored into the whole process. In the end, I think we should be grateful that the young people of our country have taken this issue up in the way that they have: in a very disciplined way, in a mainly orderly way and they have brought it to national attention or the national agenda. That we should be grateful for. [Applause.]


What we should now do is support their effort to find solutions. But this time we must work with them. We must work together collectively and begin the process of finding answers, answers that will lead us in the direction of making their education more meaningful, so that it is not a burden on them and their families.


This is so that we educate them in an atmosphere where they will feel that they are not carrying a burden of uncertainty of where the money is going to come from. So, as we put our heads together, I am certain we are going to come up with really good answers. This is a moment we should never lose. This is a moment that should unleash energy - intellectual energy and real creative energy - to put our young people on a firm footing of learning and going forward with into the future with a great deal of confidence. I am certain that we will get there. Thank you very much. [Applause.]


Mr R JANKIELSOHN: Thank you, hon Chairperson. I think what is very important from the Deputy President’s reply is the acknowledgement that subsidies have not kept pace with the demands on universities. This acknowledgement and lack of support by government, in fact, takes us to the core of the problem in our education system.


Now, if students are to benefit from the interventions that government wants to take and that have come out of the summit which the Deputy President mentioned, then we have to ensure that universities continue to supply quality tuition, good research and meaningful community service. The people who make this happen are the staff members of universities. These are people at this stage who feel very vulnerable in this process. Would the Deputy President ensure that the staff at universities – the academic staff, the administrative staff, the support staff – do not become victims of any of the interventions that the government wants to implement, and was this in fact discussed at the summit? Thank you.


The DEPUTY PRESIDENT: I think what we should realise is that there is a great deal of vulnerability. Not only the staff feel vulnerable but the students also feel vulnerable. And it is their problems that we have to address. But as we address their problems and challenges, obviously we have to address the problems and challenges of those who deliver their education: the administration and their support. In the end, all of us as South Africans also feel vulnerable.


Therefore, this means that we must also act to make sure that we rid ourselves of this vulnerability that is prevailing now. Once we have that resolved, half the problem is solved. And we have the resilience. Who we are we? We are South Africans. We have been able to solve difficult problems in the past, and this problem we shall also solve. We will solve this problem. [Applause.]


So, what do we want from the lecturers and the administrators from universities? We want them to act with great commitment, great determination, great focus. They must deliver quality education and tuition to the young people who are at university, and they must come out with great products, great products that can compete anywhere in the world. That is what we expect from them.


So, as we address their vulnerabilities, their working conditions and so forth, so must we do this from the lady who sweeps the rooms and the offices at the university, to the man who tends the gardens at the university, to the driver. So, the people who are working at the university, who were either outsourced or whatever, also have to factored into this equation.


For this equation to balance, everybody’s interests must be addressed. Everybody’s concerns must be addressed. We cannot address the concerns of one entity only and leave out the others. So, if what you are saying is: “Address the concerns of everybody globally or collectively,” then we are friends. But if you are saying: “Address only the one section of lecturers,” then we cannot be friends. But I think you are my friend because you say: “Let’s address everyone’s concerns,” so I thank you for that. [Applause.]


Mr B KOMPHELA: Thank you, hon Deputy President. Hon Deputy President, contrary to the view that there is a lack of support from government to the universities, 70% of the life of the university is dependent on government. That’s a fact. Deputy President, what is government doing in regulating the universities? I ask this because the universities and the view that people hold is that government pumps in money, turns its back and does nothing, and therefore everybody just does as he or she wishes. [Applause.]


The DEPUTY PRESIDENT: Well, once again we must thank the students. We must thank the young people of our country. [Applause.] We really must thank them. If there ever was a month that should be called the month of the youth or of young people at higher education institutions, this is it. Maybe it will even be the year of young people. This is because by bringing this matter to the fore, they have also raised the issue of the autonomy of these universities. They are saying, “Address this issue.” In the past, university authorities have always said, “This is a no-go area.” They say, “Give us money, but don’t ever bother to ask us how we spend the money; how we do this and that.” Some of them even say, “We are not even going to meet you to discuss this matter.” So the young people have said, “No, this is an area that you must also deal with and address.”


So that is why I say that this is a great moment in the life of our country, which will enable all of us as society and as people of this country to look at everything about higher education more introspectively. The Minister is ready for it. The President is ready for it. And, I am saying, the students are even more ready for it. The people who are running universities must not be afraid. They must not feel that this is the Holy Grail, and you don’t go there. They must also be ready for it.


Let us have an inclusive process in which everyone in university education will be able to engage meaningfully, constructively and effectively in a process that will produce good answers for our universities when it comes to everything. [Applause.]


So, I think, let’s say we are open to everything that needs to be looked at at our universities. After this, we should really have absolutely world-class universities that are going to hum with knowledge, with intellect, with creativity, with great research, with students who are committed and ready to learn and who are passing at a high rate, so that our students must not be told that they are nonperformers. There is nothing wrong with our young people. There is everything that is right about them. They just want to be given the right opportunities. And this is the moment we can do so. [Applause.]


Mr K RAMULIFHO: Thank you, Chairperson, and Deputy President. Regarding my follow-up question, you were saying you are open to all ideas. The DA just made a proposal. I want to check whether you will consider the DA proposal of how we deal with the current funding. As much as you made concessions, the budget presented doesn’t really talk about the current challenges. I want to check if, from your side, you are going to consider that proposal so that we ... You are saying there will be no increase for this current financial year regarding the institutions so that we deal with the challenges rather than allow the institutions to go down. I want to check whether this is something you are going to consider.


The DEPUTY PRESIDENT: No. I think this challenge we are facing should not be given labels. The students themselves have not given what they are going through a label. It’s not an ANC label; it’s not a DA label. They have said no. It is a South African label. That’s what it is. [Applause.] So let’s not come up with cheap shots that say refer to a party’s proposition and so forth. Let’s not come with that. Let’s come up with good shots. A good shot will say, “This is a proposal of the people of South Africa to solve the question of higher education.” [Applause.] That is what we should be saying.


Mr M KHAWULA: Hon Chairperson, this is a point of order addressed to the hon Deputy President. When he talks about labels, he talks about the DA and the ANC. [Interjections.] I should also have been mentioned, sir. [Laughter.]


The CHAIRPERSON OF THE NCOP: Deputy President, the IFP wants to be mentioned too.


The DEPUTY PRESIDENT: I have accepted the point of order. [Laughter.] The IFP as well. The NFP as well. [Laughter.] You don’t want me to mention the other ... [Laughter.] Okay, so I should only mention the IFP.


The CHAIRPERSON OF THE NCOP: Deputy President, that takes care of the question which was posed by the hon Dlamini.


Provision of free quality education


22.       Ms T J Mokwele (North West: EFF) asked the Deputy President:


Whether he has conducted an investigation into the desirability and feasibility of providing free quality education until the attainment of a first degree in order to build the human resource capacity in South Africa (details furnished); if not, why not; if so, what are the relevant details?                   CO706E


The DEPUTY PRESIDENT: Hon Chairperson, hon members, in 2012 the Minister of Higher Education and Training established a working group to investigate again the feasibility - and it’s more or less the same issue that we were addressing earlier - of free education for the poor.


The working group was asked to: Firstly, determine the actual cost of introducing fee-free university education for poor people in South Africa; secondly, suggest a working definition of “poor people” in South Africa; thirdly, examine various models for providing fee-free higher education for poor people used elsewhere in the world; and fourthly, contemplate all possible implications and consequences of having a fee-free higher education system for the poor. A copy of the report, and I think most of us have looked at it, is on the website of the Department of Higher Education and Training.

The working group agreed that a well-considered system, of free university education for the poor would both increase access to higher education and improve its quality. The working group also concluded that free university education for the poor is feasible, but will require significant additional funding of both the National Student Financial Aid Scheme, NSFAS, and the university system. The report recommended that NSFAS should be strengthened to implement the scheme and that a policy dialogue should be put in place to discuss the parameters and develop regulations for implementation. This policy dialogue comprising representatives of government, academic institutions, the students and NSFAS is identifying current projected funding challenges as we speak.


It is expected to propose policy and legislative amendments to give effect to the recommendations of the working group and the recommendation in the National Development Plan that all students who qualify for NSFAS must be provided access to full funding through loans and bursaries to cover costs of tuition, books, accommodation and living expenses.


Free higher education for undergraduate students is socially and economically desirable. It can be financially feasible as well, as they concluded already. Much work has been done to lay the foundation for the achievement of this objective. Much work still needs to be done and critical choices, however, need to be made if we are to develop a sustainable funding model that ensures access and achieves quality outcomes. It is precisely what I was talking about earlier that it is when all sectors of our community are able, particularly key role-players, to get together so that we will be able to find solutions for this very important vexed question of providing fee-free university education for the poor young people of our country. And if we focus on that, we will then be able to be on the path of having a system of education that young people will have great confidence in and that will be able to ensure that we can grow the economic prospects of our country. Thank you.


Ms T J MOKWELE: Chairperson, thank you, Deputy President, for your response and that you acknowledge that we still need to do more, but what I can say to you is that the Freedom Charter says that education, especially higher education, will be open to all by means of state allowances and scholarships. As the EFF we are saying let there be free education for all until the first degree – that is founding manifesto.


Deputy President, it is clear that both you and the Minister of Education have acknowledged that we really need free education, but you don’t have the mechanisms as to how you are going to achieve this moving forward. So, we are saying as the EFF that we are still open to say we are giving you our votes ... [Interjections.] ... and our support.


The DEPUTY PRESIDENT: ... your support ... Votes? That’s even better! [Laughter.]


Ms T J MOKWELE: We are giving you our support and our 25% to say let’s change the Constitution, let’s expropriate the land without compensation, let’s nationalise key sectors of the economy so that this is achievable and doable. [Interjections.] Besides kicking us out of the House as the EFF, let’s sit down and discuss this. We are here to assist you. [Time expired.]


The DEPUTY PRESIDENT: Deputy Chairperson, as I understood it, it was much more of a statement than a question.




The DEPUTY PRESIDENT: And it is pleasing to hear the EFF saying, “we are here to support you”. [Laughter.] We welcome the support. Thank you very much. [Applause.]


Mr T C MOTLASHUPING: Deputy Chairperson, Deputy President, the Polokwane Conference of the African National Congress reaffirmed what was said in Kliptown in 1955 in terms of education that there shall be free education for the poor. That is the resolution of Polokwane of the ruling party – not for all.


My question relates to student fees. The workers who are nurses, teachers and all these civil servants that we have in South Africa cannot afford these exorbitant fees. Is government not in a position now or looking into reviewing the determination that it arrived at in terms of determining who is poor, is there any view to review the 22 000 as a threshold that has been there for determination of a person who is poor? Thank you.


The DEPUTY PRESIDENT: Deputy Chairperson, as you heard, the working group identified a number of areas or issues that need to be addressed and one of those, in seeking to give credence to this concept and notion of fee-free university education to the poor, is what constitutes a poor person. The criteria for that needs to be looked at. That is a vexed question which we need to look at.


When you look at it just in a pictorial way, you can arrive at some definition of what that constitutes. You can look at income levels and say below this income level constitutes you as poor. And we have many poor people in our country. But if you are now talking about nurses and teachers and so forth, I think you are talking about a different type of category.


I would like to propose that we look at students who are in the system right now, young people at universities, and those who will get into the system, and look at how we address the challenges that they face. Those who may either be now working, but trying to become more professional – like teachers and nurses – that is another category that at a later stage. But right now our focus must be on the young people who are in the system and those who are about to get into the system to set good policy positions and instruments that are going to alleviate the real serious burdens that they currently experience. Thank you.


Mr J W W JULIUS: Chair, I didn’t realise that you noticed me. We have had interventions on higher education on numerous occasions. There was a ministerial task team on review of NSFAS in 2010; we had the ministerial committee for review of funding of universities, released on October 2013; and again the second higher education summit and new task teams; and the list goes on and on.


Hon Deputy President, you were the chairperson of the ministerial review of the funding of universities in 2013 with the purpose of reviewing the experiences of the past years on the framework of funding for universities and changes that were needed in these funding models. The committee had to look at transformational goals according to the Education White Paper of 1997, the National Plan for Higher Education 2001. In addition this committee had to look at and analyse shortfalls that occurred in the resourcing of universities. So, this thing has been going on. It’s not a new thing.


What I want to know is: What were the findings of the 2013 ministerial task team; and was it implemented or not? What will be different now in our new interventions? Thank you.


The DEPUTY CHAIRPERSON OF THE NCOP: Deputy President, I don’t know whether you picked it up. You are now being referred to an outcome of a report which is not relevant to the question. However, I don’t know if it would be fair. Hon members, order! Reference is made to a report, a specific report, which the Deputy President is expected to respond to, whereas here we are dealing with a specific question.


The DEPUTY PRESIDENT: I’m happy to say the following: The moment that we are at now, as I have said, and without repeating myself, is a new dawn moment, a moment that we should not lose, to address these key issues. If there ever was a time when we needed to act, this is it. We have done a lot of analyses, we have done a lot of other processes, what the President is considering is to get us to put everything together to come up with a solution that is going to be all-encompassing to address the key problems that the education sector faces.


The students themselves have already highlighted the key issues. For instance, the report that you referred to, which I was asked to participate in as chairperson – the interministerial committee – it looks at the funding of universities. The earlier one looked at NSFAS and other task teams looked at other processes. The students themselves have already set the agenda. They say: We want you to look at everything. Don’t look at things in a piecemeal fashion. Look at everything, including the autonomy of universities, including the insourcing of services at universities, our accommodation, our fees structure, our fees, whether we should pay registration fees or not. They are saying: Look at everything.


This is a moment that we should not dismiss. It’s a moment that we should all utilise to address all these issues in totality. You’ve never had a moment like this. It’s almost a new dawn, a new moment, which will yield even better answers. Will it take into account the work that has been done in the past? Yes. It has to. It must look at that. Will it be an inclusive process? Yes. It must be an inclusive process. I would say it should also include the portfolio committee that deals with education in Parliament. It should include Members of Parliament, it should include various other stakeholders - the youth themselves, business and government departments. Let us not pour cold water on this moment. It’s a new dawn. Let us utilise it effectively. Thank you.


Mr L B GAEHLER: Chair, Deputy President, thank you.


Sekela Mongameli, indawo yokuqala siyavuma ukuba zininzi izinto ezenziwe ngurhulumente kwaye zininzi nezinto ezifunwa ngabantu. Loo nto ke asinakho ukuyibaleka. [Deputy President, firstly we agree that the government has done many things for the people but there are many more things that people still want. That we can’t ignore.]


The DEPUTY CHAIRPERSON OF THE NCOP: I can’t hear. I’m also struggling to follow.


Mnu L B GAEHLER: Yima ndikulungiselele ngolu hlobo; emva kokuba kwenzeke esi sehlo saba bantwana, kuye kwavela iingxoxo ezininzi, ezinye ziphuma koonoomathotholo ezinye ziphuma koomabonakude. Ndiye ndafunda kwiphepha i-News24 apho u-Antjie Krog ebuza umbuzo wokuba ingaba kufuneka senze ntoni na singabantu beli. Eyona nto ibalulekileyo yileyo bendiyiphulaphule ngoMvulo kwisikhululo i-SAfm apho bekuthetha amadoda amadala e-ANC... (Translation of isiXhosa paragraph follows.)


[Mr L B GAEHLER: Let me explain to you as follows; after the eruption of the student protest, many discussions came up - some from the radios and others from the televisions. I read the news from News24 where Antjie Krog asked what must we do as citizens of this country. What is more important is what I heard on Monday on SAFm where stalwarts of the ANC were talking ...]


... Prof Ben Turok was one of them and some unions even phoned in. There’s a cry from civil society, from political leaders, elders of the ANC that...


... ndicela uthule wena ... [... please keep quiet ...]


...it is high time that we call an economic indaba to address the economy, because what they are saying is that places that have free education are not only funded by government; but also by the private sector. Yet that cannot happen unless we address the economy of this country, which is one-sided. Are you prepared to support that cry that we must have an economic Convention for a Democratic South Africa, Codesa, to address our problems in this country, because these problems will always be with us? Thank you.


The DEPUTY CHAIRPERSON OF THE NCOP: No, it’s not for you to ask me that. I’ve got my clock here that I am following and it will guide me.


The question is quite irrelevant, and, Deputy President, I won’t encourage you to respond to questions that are not relevant to the principal question. Because, once we do that, we will be setting a trend for members to do that. So, the question is irrelevant and that brings us to the end of this question.


Hon members, we shall then proceed to Question...


Mr V E MTILENI: Deputy Chairperson, on a point of order: That talk show was about the no-fees. So, the question can then not be irrelevant, because it was a talk show about how we are going to fund the no-fees. How is it irrelevant?


The DEPUTY CHAIRPERSON OF THE NCOP: Is the question: How then do we proceed with the no-fee programme? That should have been the question, not the economic indaba to address all the Codesas and all that. [Interjections.] Deputy President?




The DEPUTY CHAIRPERSON OF THE NCOP: In the first place, I’m not a House Chair; and in the second place, I’m not recognising you, hon member. [Interjections.] I am not recognising you, because I am allowing the Deputy President to respond to the last follow-up question that I took. Please take your seat, hon member. [Interjections.] I’m not recognising you. Take your seat. [Interjections.] Hon Mtileni, take your seat. [Interjections.]


Ms T J MOKWELE: Motlatsa Modulasetilo, ke emelela mo ntlheng ya kgalemo: ... [Deputy Chairperson, I am rising on a point of order...]


The DEPUTY CHAIRPERSON OF THE NCOP: On what point are you rising on hon member?


Akere ke a go bolelela gore ke ema ka eng Modulasetilo, fa Leloko le le Tlotlegang Mtileni a emelela, o ne a emelela go tlhagisa ntlha ya kgalemo. [Chairperson, I am giving you my reason for rising. Hon member Mtileni raised a point of order.]


Why don’t you allow him to raise his point of order?


The DEPUTY CHAIRPERSON OF THE NCOP: No, that is not a point of order.


Ms T J MOKWELE: Why won’t you? We are pleading with you, Chair.




Ms T J MOKWELE: I’m requesting you to ...


The DEPUTY CHAIRPERSON OF THE NCOP: No. Take your seat so I may address you. [Interjections.] Very well, let me respond to your plea. [Interjections.] Hon member, please take your seat. Hon Mtileni, please take your seat. Order! Hon Deputy President, please continue with the reply.


The DEPUTY PRESIDENT: Deputy Chairperson, the answer to the last question about finding the money for fee-free education is exactly, more or less, what I’d said earlier. There is nothing more to be added. Clearly, the resources to fund fee-free education have to be found and it is for that reason that we’ve got to come up with a number of models. We’ve got to come up with a number of suggestions and initiatives that will get as many stakeholders as possible involved. Already the call has been made to the private sector, which is a reservoir of a lot of wealth and money to participate also in the process of education for our children. And at the same time government must also come up with initiatives that will be enriched by various proposals that will come from all key stakeholders and role-players in our country. Thank you very much.


Assistance to people of Sri Lanka


23.       Mr E R Makue (Gauteng: ANC) asked the Deputy President:


  1. Whether there are any initiatives to assist the people of Sri Lanka regarding (a) truth and reconciliation and (b) the constitution-making process; if not, why not; if so, what are the relevant details;


  1. whether any progress has been made regarding South Africa’s involvement in conflict resolution and post-conflict reconstruction and the development of initiatives in Africa; if not, (a) why not and (b) what challenges are experienced in this regard; if so, what are the relevant details;


(3)        whether South Africa has considered leveraging strategic institutions such as the Southern African Development Community Parliamentary Forum and the Pan African Parliament in advancing the shared objectives of building an economic resilient continent that is characterised by peaceful resistance of conflicts and democratic practices, especially in resolving political differences; if not, why not; if so, what are the relevant details?                        CO710E


The DEPUTY PRESIDENT: Chairperson, hon members, since my appointment as Special Envoy to Sri Lanka various stakeholders have requested and proposed that South Africa should assist in sharing her experience with regard to the Truth and Reconciliation Commission.


In September 2015‚ the Sri Lankan Prime Minister asked South Africa to share its experiences and for technical assistance with the setting up of a truth and reconciliation mechanism in Sri Lanka. It is expected that a number of engagements will take place between Sri Lanka and South Africa over the next few months, discussing precisely this matter. A number of them will come and visit our country and exchange views and experiences with a number of our South African compatriots who participated in the Truth and Reconciliation Commission process. We will also be sending a number of people out there who will also share their thoughts and views.


All this is intended to support and capacitate the government of Sri Lanka‚ religious leaders and civil society to fulfil the commitments they have made with regard to setting up a credible domestic accountability mechanism, which they want to set up.


The government of Sri Lanka has to date not requested assistance from South Africa with respect to constitution making. South Africa’s involvement in conflict resolution on the continent is undertaken in line with the African Peace and Security Architecture, which was established by the African Union to address the challenges of peace and security on the continent, and ultimately work towards post conflict reconstruction and development.


Our participation includes a number of interventions, diplomatic, mediation‚ fact finding missions by eminent South Africans, and promoting dialogue and negotiations. We have been involved in such initiatives in Burundi‚ the Democratic Republic of the Congo‚ Madagascar‚ Zimbabwe‚ South Sudan‚ Côte d’Ivoire and more recently in Lesotho.


South Africa is involved in capacity-building in the area of mediation and hosts what we call “Post Conflict Reconstruction and Development courses” for participants from elsewhere on the continent. We are convinced that after peace talks‚ reconstructing and development is something that needs to the order of the day in affected countries, and that is often the only way to ensure that those countries do not relapse into conflict, again.


In support of post-conflict reconstruction and development‚ South Africa has deployed troops in various UN peace missions on the continent‚ including in Darfur‚ South Sudan and the DRC. And institutions like the SADC Parliamentary Forum and the Pan African Parliament have a critical role to play in advancing these efforts‚ and it is important that our representatives in those structures work deliberately to pursue the objectives, which we have as a country.


The challenges we face in these endeavours and the resources we use in fulfilling these mandates are worth the effort if they contribute to the restoration and maintenance of peace and stability throughout the continent. This is a worthy course for us to be involved in. As South Africans, we should really be proud that we are called upon as a nation, as a government and as a people to participate in this very important work of helping as many countries as we possible can to reach out for peace to achieve the achievements that we have also achieved when we ended the apartheid conflict. I thank you. [Applause.]


Mr E MAKUE: Deputy Chairperson, thank you Deputy President for the answer. We do note with appreciation that in the AU we are party to agenda 2063 wherein specific mention is made to silencing the guns; my question, therefore, Mr President would be ... [Interjections.]


AN HON MEMBER: Deputy! [Laughter.]


Mr E MAKUE: Sorry, sorry, sorry; thank you Deputy President. The brier; the very brier of South African women that we have serving in the SA National Defence Force, working with other troops from the UN are the ones who are on the ground; bringing that peace. To what extend are we able to say to the families of these brave men and women that we will not put their lives at risk; the second part of the question Deputy President is when we look at the years that have past since our democracy; would you say that South Africa has given substance to the AU approach of using African solutions to fight problems for Africa rather than other parts of the world where we find that conflicts are resolved by bombing certain cities.


Mr V E MTILENI: It is smuggled in, but if it were somebody like me, I would have been ruled automatically for saying no this is out of order because I think hon Makue is smuggling in a completely new question but you are mum about it because he is in your camp. This is unfair.


The DEPUTY CHAIRPERSON OF THE NCOP: That is not a point of order, can you continue, Deputy President.


The DEPUTY PRESIDENT: Deputy Chairperson, the question dealing with the issue of peacekeeping and the process of peacemaking is something that I referred to earlier in my reply and in extending it I would like to say that what we should all be proud of as South Africans are the young men and women who serve in the SANDF who agree to take orders from their commanders and ultimately the commander in chief to be posted to various countries for peacekeeping missions.


Now, that is something that should give us a great deal of pride as South Africans that we have young people who are prepared to put their lives on the line to go and serve the effort of peacemaking on the continent. We need to applaud them because they are truly outstanding young people.


It saddens us greatly when anyone of them falls in the line of duty and we have witnessed that in the past and more recently when one of those young people fell on the line of duty. And we should deep our heads and pay our respect to all those young people. They are true soldiers of peace who come from our South African soil. What are we able to say to their families; can we give them protection – as you said. Yes to the extend that we are able to as a government and as a country; yes we do offer them that and make sure that whenever they are deployed in countries where there is conflict they act within means where they can be safe, but at the same time make sure that they do install peace, wherever they are operating.

With regards the second question – it skipped my mind for a while – just give me a trigger word again ... [Laughter.] Yes, on the issue of African solutions has South Africa been able to spread that message to inculcate that concept, notion or value in whatever we do? The answer is yes, South Africa is very proud to be part of the AU and where we are given roles which we execute we do so without any measure of arrogance, with a great deal of humility and we bring values of inclusiveness, human rights and working together with others to find solutions and at the same time we bring a key value of dialogues, conflict resolution to make sure that the conflicts that we may get into on the continent are resolved in that way.


So, we subject ourselves to the African discipline of working inclusively and working together with others to find peace and so therefore we are well steeped in the notion of African solutions for African problems. We believe that as Africans we have it all in us to resolve our own problems and as we move towards 2063 together with all the countries in Africa we move together as proud members of the AU knowing that the destiny of Africa is in our hands as we are Africans we must resolve our own problems using African solutions; African traditions; African culture; African practices; African principles and African ideology and everything to get us to where we need to go. Thank you. [Applause.]


Mr W F FABER: Chairperson, I am so happy that you are not just doing the rules of the road by looking right left and then right because we don’t get seen on this side of the House. [Laughter.]


Thank you, Deputy President. The ANC has a 100-year history as a liberation movement and considering the alliances they have built in those years with the rest of the continent and the world ... [Interjections.] 


The DEPUTY CHAIRPERSON OF THE NCOP: Order! Hon members, can you allow me an opportunity to also follow the question.


Mr W F FABER: Okay, can I go on, hon Chair?



The DEPUTY CHAIRPERSON OF THE NCOP: Can you present your follow-up question?


Mr W F FABER: Hon Deputy President, does South Africa have the political will to help resolve African conflicts by not taking sides? How would it be possible for them or neutral in negotiations when negotiating if you look at the history of the ANC with some of these other alliances?


The DEPUTY CHAIRPERSON OF THE NCOP: What negotiations are you referring to? Can I take the point of order?

Mr A J NYAMBI: Thanks, Deputy Chair. I am rising in terms of rule 46(b) member making a statement in the House that is false, as a disciplined member of the ANC it is misrepresenting the organisation which I am representing in this NCOP. He is saying the ANC is 100 years old and that statement is false. So, before his question can even be attended to, let him be corrected because he is misleading us and the public.


The DEPUTY CHAIRPERSON OF THE NCOP: Hon members, may I rule by saying that hon members let us not make statements in the House that are ill-informed, and border on misleading the House and the public at large; because it might not be correct. Hon Faber, take your seat. Take your seat, hon Faber. Take your seat. There is a standing ruling in the House that we need to try and contain ourselves to a point where we avoid making any statements that has got to do with other political parties for which we do not have facts. Especially when it comes to internal matters of other political parties ... [Interjections.]


No! I am just addressing you hon members. I am reminding you of something that has happened before. Now if then this is the case because it could be that hon Faber might have misled the House; therefore my ruling would be that I would verify the facts and comeback with a ruling on whether hon Faber misled the House or not. That would be my ruling on the matter.


Hon members, three of you are on you feet. I don’t know whether you are contesting my ruling.


Mr F ESSACK: Chair, on a point of order ... [Interjections.]


The DEPUTY CHAIRPERSON OF THE NCOP: Can I take your order.


Mr W F FABER: To guide you hon Chair, when hon Motlashuping spoke of the ANC nobody intervened or stopped him! So, I don’t think it is far for you to say you will comeback and make a ruling where else the hon colleague here is giving you a question based on the ANC being a liberation movement and its history. [Interjections.] So, honestly when hon Motlashuping spoke nobody interjected. I think, in all fairness, you should allow the colleague to carry on ... [Interjections.]


The DEPUTY CHAIRPERSON OF THE NCOP: Hon member you have made your point. Can you take your seat, hon member! I will recognise you. My ruling on the matter is that there is a point of order ... [Interjections.] Order, hon members! You see that is the problem. I will make a ruling and you are not listening then you comeback on the same issue. In my ruling I said, hon Faber made a statement and there was a point of order that then spoke to hon Faber misleading the House. And I am requesting the House to then allow me an opportunity to verify whether if hon Faber truly misled the House and therefore comeback to the House with a ruling. Are we agreed on that? Agreed to. Hon members I have made a ruling on this matter.  Can we avoid dialogue on this matter? Hon Faber are you rising on a different matter.


Mr W F FABER: Hon Chair, I would like to know on what basis I have misled the House hon Chair.


The DEPUTY CHAIRPERSON OF THE NCOP: Hon Faber, that is why I ... [Interjections.]


Mr W F FABER: I would take out the technicalities on the 100 or 101 years if that is the problem!


The DEPUTY CHAIRPERSON OF THE NCOP: Hon Faber can I comeback and make a ruling whether it is true that the House was misled or not. [Interjections.] Is that a point of order hon Van Lingen?


Ms E C VAN LINGEN: Chairperson, the hon Faber said the ANC has a 100-year history ... [Interjections.]


The DEPUTY CHAIRPERSON OF THE NCOP: No, no, no, no! Hon Van Lingen ... [Interjections.]


Ms E C VAN LINGEN: You cannot make a ruling ... [Interjections.]


The DEPUTY CHAIRPERSON OF THE NCOP: No, no, no. Hon Van Lingen, I am not recognising you primarily because I have made a ruling on the matter. I don’t need any clarity. [Interjections.] No! You can’t tell me how to make a ruling. If you not happy with my ruling it is fine; there are processes that you can follow on that matter but for now I have made a ruling on the matter. Can we proceed, hon members by recognising hon Labuschagne?


Ms C LABUSCHAGNE: Hon Deputy Chair, I would like to know on what rule; which rule in this book did you use to make the ruling? Because in this book there is no rule that says that when you talk about another party it is misleading the House. [Interjections.] I am so sorry Chair; we can’t go on with this ... [Interjections.] [Applause.]


The DEPUTY CHAIRPERSON OF THE NCOP: No, no, no! I don’t know ... [Interjections.] Take your seat hon Dlamini. [Interjections.]


Ms C LABUSCHAGNE: No, no. I would like the chair to quote the rule.


The DEPUTY CHAIRPERSON OF THE NCOP: Hon members, [Interjections.] take your seat hon Dlamini. I don’t know what this excitement is; hon members, I have made on the matter, and therefore on the basis of that we shall proceed with the business of the day. [Applause.]


The DEPUTY PRESIDENT: Deputy Chairperson, hon members, whenever our government interacts with a number of other countries on the continent, it does so without any bias, any favour, and without violating any diplomatic rules. Whenever we are called upon to intervene in any situation we make sure and extremely careful not to take sides; but just to take the side of the mission that we have been given of helping to restore peace and stability in the various countries where we operate.


When South Africans are sent to whatever nation be they diplomats, be they soldiers, be they peacekeepers or in whatever form the standard way of behaviour and deportment is that we should, at all time, never be biased towards any political orientation but be bias towards peace and stability. That is what we do and that is why South African is often called upon to make a contribution in peacemaking processes right throughout the continent. And that is what we are respected for; that is what we are recognised for; and that is what we are accepted for. Thank you. [Applause.]


Ms T J MOKWELE: Deputy Chairperson, in terms of building economic resilient continent that is characterised by democratic practises; Deputy President, what is the government doing about the South African companies that goes around African countries who operate with complete disregard of domestic legislation like MTN did in Nigeria? What is your problem sit down!


Ms L C DLAMINI: Deputy Chair, on a point of order, is it parliamentary for hon Mtileni to eat chappies in the House? [Laughter.]


The DEPUTY CHAIRPERSON OF THE NCOP: May I not take that as a point of order.


The DEPUTY PRESIDENT: Deputy Chairperson, we as a country have made sure that we published a code of ethics and business behaviour that we would like South African born companies as they operate in other countries, particularly on the African continent to adhere to. We knew sometime ago that our companies flung their wings across the various countries in the world and the continent, and we would like them toe behave and deport themselves in a way that will make sure that they comply with local rules and regulations. We therefore, seek at all times to make sure that our companies get to know this and well informed about this.


More importantly we would like them to comply with local laws of the countries where they operate. The same would apply to companies such as MTN and others that they need to subject themselves to the laws of the countries where they operate. And if they violet those laws they should know that like any other country the country will take arm rich to what may well have been done. So, that we make very clear ourselves. Thank you.


Mr J P PARKIES: Hon Deputy President, the progressive people of the continent and we in the mighty ANC knows that economics play a pivotal role in the reconstruction of our country and the rest of the continent; thus economic cannot be separated from post conflict reconstruction. Can you indicate and share with us about the African heads or states as to what they are doing on economic challenges for our continent?


The DEPUTY CHAIRPERSON OF THE NCOP: But the question is irrelevant to the principal question; therefore I shall not allow the question to be proceeded with. Hon members, that brings us to the end of that question. We shall then proceed to question 24.


Tax evasion


24.       Mr M Khawula (KwaZulu-Natal: IFP) asked the Deputy President:


Whether South Africa will take any actions against companies and persons who (a) evade paying tax and (b) move funds through illicit financial outlaws from South Africa; if not, why not; if so, what actions?                                                                                             CO705E


The DEPUTY PRESIDENT: Deputy Chairperson, hon members, in many ways I have responded to this question before. As I and the Minister of Finance have previously answered, the SA Revenue Service, Sars, the Reserve Bank, the Financial Intelligence Centre and the criminal investigation prosecuting authorities do act against instances of tax evasion of illicit financial flows as part of their routine activities.


The SA Revenue Service and the Reserve Bank continually assess taxpayers, be they individuals, be they companies. They also assess significant financial transactions in terms of which they believe that such activities are not declared or are not legitimate. Tax evasion is illegal and entails acts of fraud, such as nondisclosure, underdeclaration, overstating deductions and fictitious entities committing VAT fraud. These acts are criminal acts and lead to criminal prosecution.


South Africa continues to act against tax evasion and has also strengthened its ability to counter tax avoidance practices, which are, in most cases, not illegal at face value. Some of these include practices like base erosion and profit shifting. This is one of the issues taken up by the Tax Review Committee chaired by Judge Dennis Davis, which was established to evaluate South Africa’s tax system against internationally accepted tax trends, principles and practices and to improve tax compliance. It has produced an initial report on base erosion and profit shifting. South Africa will continue to play a role in international efforts through structures like the Organisation for Economic Co-operation and Development, or the OECD, and the G20 to tackle the various forms of tax avoidance.


On the matter of financial flows, these are necessary for economic growth, to facilitate investment, and to support trade and our export sectors. The Reserve Bank itself monitors outflows and inflows through the administration of exchange controls in terms of a delegation by the Minister of Finance. To the extent that the Reserve Bank and the Financial Intelligence Centre identify any criminal violations, they report such activities to the prosecuting authorities over and above any administrative action they may take. The Reserve Bank and Sars work closely together to monitor capital flow movements.


Applications for cross-border transactions often require tax clearance by Sars to ensure that tax risks are being reduced. Ongoing interaction between the two means that attempts to move capital offshore for tax reasons are reduced.


South Africa has firm and effective measures in place to counter tax evasion, tax avoidance and illicit financial outflows, and it is continually working to strengthen them. I thank you. [Applause.]


Mr M KHAWULA: Deputy Chairperson, thank you. Hon Deputy President, thank you for the response. I think we agree with each other on most of the issues you have raised in that, at face value, these activities may appear not to be illegal. My issue here is the issue of moral obligation. What is the position of South Africa in respect of the moral obligation pertaining to these activities: profits shifted with the intention of tax evasion, which may not be illegal technically but is morally wrong?


An issue attached to that is that of leading by example. There is a significance period with respect specifically to MTN - a specific period - 2001 to 2013 - when these activities took place: profit shifting to Dubai and to Mauritius. And that is very significant, sir, as you will agree with me. By leading by example, can we hold on to that with our leaders in the country?


The DEPUTY PRESIDENT: Indeed, there is the issue of illegality as well as legality, and these matters clearly are matters that need to be looked at by the various authorities that I was talking about. If fault is found, action should be taken. The morality of this, clearly, is something that is now being raised more globally. It is not only here that it is being raised; it is being raised in a number of countries at the AU level and at the European level where examinations are beginning to happen about issues of morality when it comes to taxation, and the various measures and structures that are put in place to give effect to those types of practices.


I am not able to answer for any specific company, but what I can say is that where there is real fault and criminal activity, it should be investigated and action should be taken. The issue of the morality of it all is clearly an issue that needs to be discussed more broadly so that there can be a clear, conscious decision of how we deal with these matters and how everybody deals with these matters going forward. Thank you very much. [Applause.]


Mr R A P TROLLIP: Hon Deputy Chairperson, thank you very much. Hon Deputy President, my question has been partly answered and asked. Let me just say, in light of the fact that the Nigerian government has recently imposed a hefty fine on MTN, that this is not an illicit outflow but a major loss for the South African fiscus and economy. Will the South African government take any action itself around the morality of this issue?


The DEPUTY PRESIDENT: As I understand it, this has to do with the Regulation of Interception of Communications and Provision of Communication-Related Information Act, or Rica. As we know, we are going through a Rica process, but when it started we needed to Rica everybody’s Sim card and there was a cutoff point. It does seem as though, in the case of Nigeria, there were issues and those issues need to be addressed. Will we, at our level as the South African government, be doing anything about it? We will, obviously, be taking note of what is happening with a view to seeing how the company that is involved responds, reacts and acts in this matter. As I was saying earlier, we have the ethics code that we have adopted, which we would like our companies to adhere to wherever they operate.


So it is in the light of that, where we will be saying, as I said earlier, that we would like our companies to comply with the laws and regulations of countries where they operate, without violating those. They should know that, wherever they operate, they are carrying the South African flag. In this regard, if this fine is indeed imposed as it is, it is going to impact on South Africa as well. Our revenue fortunes, from a taxation point of view, are going to be lower. Thank you very much.


Mr L G MOKOENA: Thank you, Chair. Deputy President, this issue is a lot more serious than perhaps the weight we are giving it and it goes to the heart of the last question that we addressed, which is the relationship that the government has with the private sector. We run away from the concept of a protectionist economy, which means more control in the private sector. We run away from it, because the West tells us that we should. At the core of it, there are fundamental issues that we should be dealing with. Profit shifting in this country is not illegal. That is the first thing. Base erosion is not illegal. You talked about Sars, for instance. The SA Revenue Service does not have the capacity at borders or at ports to check whether companies are declaring correctly or not, because many of these companies are underdeclaring. So we are losing a lot of money. President Mbeki’s report just reported R1 trillion or so that we are losing every year. This is money that could be going into education, housing and all sorts of things. What are we doing in order to address these basic things: capacitating Sars, dealing with profit shifting as a rule in the business sector? Those basic things. Those details are the ones that will help us to deal with the issue a little bit more seriously. Thank you.


The DEPUTY PRESIDENT: Clearly, this is what I put in the category of global megatrends, trends that are emerging right across the world on issues that need to be addressed and tackled; on issues where, at face value, you will find that the illegality is not easily found, but there is something that is emerging as a trend that says, “Even if that is so, should it be like that?”


To me another megatrend that is emerging is to have shared value. You need to have shared value in terms of, for example, extracting resources from the ground. Should a company just extract resources and export them, and then leave without the local people benefiting? In terms of this megatrend, the answer is no - that should not be case. So, many countries are dealing with this and, similarly, on this issue too, we have to deal with it. We have to deal precisely with the issue that you addressing. At face value it is not illegal; at face value it is not even seen as tax avoidance. There is underdeclaration and all those things you referred to. What should we do? Should we sit back and do nothing? Should we sit up and do something about it and look at it in an introspective way? You are referring to the AU report which was given to the AU by former president Thabo Mbeki. That is part of the process. So it is part of the process that is unfolding. In this country we are beginning to look at it and talk about it.


Indeed, our sense of understanding on consciousness is going to keep rising until we get to the point of saying: How do we close those loopholes? How do we, for instance, make sure that our border, Sars or customs people are wide awake, so that there’s no underdeclaration of containers as they come in, because sometimes a container is said to hold toilet paper, but when you look at it closely it holds electronics.


How do you then jack up yourself and jack up your systems to make sure that you do find a clever and more effective way of dealing with these matters, so that you don’t have money slipping through your fingers and don’t have leakage in order to be able to collect as much tax as you possibly can? So, our level of awareness, consciousness and attention is going to keep rising, and as it rises we will, clearly, give attention to this matter, as we must. Thank you very much.


Mr B G NTHEBE: Deputy President, you are right that during the course of the better part of last year you were at the same podium answering the same question. You also did so in the National Assembly, and I want to quote you. You said:


Tax evasion is not only a crime against the state it’s also a crime against the people of our country, ordinary people. It is a practice we would like to discourage; to root out of our body politic.


Is this government – the collective leadership leading this government – still committed to that?


The DEPUTY PRESIDENT: I am a lucky guy. [Laughter.] [Interjections.] Should I ask myself a question? Is that what you would like? [Interjections.]


Does the government have the resolve to deal with this matter? The answer is yes. We have various structures, which I alluded to earlier. We have structures that are wide awake, structures that are effective and, as I have said, we all raise our gaze and turn our attention to this matter. We will find that we can find solutions. The resolve is there, and we will act in a way that advances the interests of our people. Where there have been lapses, as at times there are lapses which we must admit to, we will correct those and make sure that we put the interests of our people ahead of any other interest. That is something that we are committed to as a government, and that I can assure you we will do. Thank you very much. [Applause.]


The DEPUTY CHAIRPERSON OF THE NCOP (Mr R J Tau): Thank you very much, Deputy President. Hon members, may I take this opportunity to thank the Deputy President for having availed himself to take questions in the House. That brings us to the end of questions for  the Deputy President. Thank you very much, Deputy President.


The DEPUTY PRESIDENT: Thank you. [Applause.]




Mr C J DE BEER: Hon Deputy Chairperson, hon Deputy President, the Minister of Finance tabled the 2015 Medium Term Budget Policy Statement, MTBPS, before Parliament on 21 October 2015.


Following engagement with the Minister of Finance on 23 October 2015, the Standing and Select Committees on Finance received inputs from the Parliamentary Budget Office, PBO, on 27 October 2015 and held public hearings on 28 October 2015. The following stakeholders made submissions: the Federation of Unions of SA, Fedusa, Ilifa Labantwana, it is a nongovernmental organisation, Rural Health Advocacy Project, RHAP, it is also NGO, Professor Rossouw on behalf of himself and researchers F Joubert and A Breytenbach; Congress of SA Trade Union, Cosatu and the Financial Fiscal Commission, FFC.


We have to acknowledge what has been achieved over the past decade. There has been substantial progress in our social and economic transformation although much more can be done. The hon Minister Radebe recently released the latest Development Indicators Report. It shows that South Africa’s life expectancy increased from 52 years in 2004 to 61 in 2014. Infant mortality dropped from 58 to 34 deaths per 1000 live births between 2002 and 2014. Over this period, the number of households living in formal dwellings increased from approximately eight million to 12.4 million. The share of households with basic access to electricity increased from 77% to 86%. Access to water increased from 80% to 86% and access to sanitation increased from 62% to 79%. This is because of prudent fiscal policies were followed. Since 1994, the economy grew on average by 3% per annum although we went to a financial debt, economic crisis and we are still trying to recover, not only South Africa but the globe as well.


The National Treasury aims to reduce the budget deficit over the medium term from 3.3% in 2016-17 to 3% in 2018-19. Risks to the fiscal outlook pose threats to this fiscal objective; particular lower growth estimates over medium term mean government spending would have to decrease or revenue would have to increase, or both a decrease in spending and as increase in revenue to maintain the same deficit as a share of Gross Domestic Product, GDP. The expenditure ceiling was maintained in line with budget review levels and close to what was set out in the 2014 MTBPS.


South Africa’s revenue collected as a share GDP is broadly similar to other emerging market economies; however, the poor growth outlook in the medium term affects revenue collection. South Africa’s debt rations have been improved by a revaluing of the country’s GDP conducted by Statistics SA.


When we speak about South Africa we say we put South Africa and the people of this country first. Restoring the momentum of growth requires policy certainty, confidence and trust shared between government, business, workers and households.


The committee made the following observations: despite the economic growth and revenue raising challenges, the revised fiscal framework must seek to bring about greater equity and address the challenges of unemployment, poverty and inequality. The committee acknowledges the difficult economic conditions in which the MTBPS is tabled and believe that it is a reasonable attempt to balance the need to manage expenditure and to ensure resources to advance the developmental goals of the country.


The committees are concerned about the downward revision of economic growth and revenue forecasts and the impact this will have in the long term on the need to reduce inequalities, poverty and unemployment. While recognising that government programmes as a whole are directed towards economic growth, the committees believe the MTBPS does not focus enough on how economic growth is to be stimulated over the MTEF period.


We support the students demand for no fee increase during 2016. This was democracy in practice, this was accountability in practice. The committees also believe that there should be free tertiary education for those in need, and government, through engagement with key stakeholders, needs to explore the possibilities of this. This should include defining who qualifies as needy. The committee believe that tertiary education should be more directed to producing the skills the economy needs, partly to ensure that graduates are more likely to be employed and contribute to the country’s developmental goals.


The committee notes the expanding public sector wage bill and believe that a performance management and development system in the public sector is long overdue. The committee believe that any public sector salary increases need to be linked to improvements in the productivity of public sector workers and advancing the broader developmental goals of the country. The committee has concerns with regard to the decline in revenues during the Medium Term Expenditure Framework, MTEF period, the decline in the contingency reserve.


The fiscal risks posed by SA Airways; the high rate of debt to GDP ratio and the increasing debt service costs and believe that this should be managed in ways that does not undermine the country’s developmental goals.


The committee noted that it has been discovered that there are about 36 000 ghost workers in the North West province and believes that other provinces and national government department needs to do more to identify and stamp out any ghost workers. The committee notes the severity of drought in some parts of the country, its impact on the economy, and particularly on food security, food prices and possible job losses. The committee welcome the efforts being made to assists in this regard by the Department of Agriculture, Forestry and Fisheries, the Department of Cooperative Governance and Traditional Affairs, and the Department of Water and Sanitation. The committees believe that government has to, within its constraints do more to assist. The committee notes with concern that in the past financial year, the provinces could not spend about R6 billion and that this have probably compromised service delivery.


The committee recommend that the National Treasury considers the submissions made by stakeholders referred to in section 3 of the report and provide a response to them when it comes before the committee to present the 2016 budget next year. Also recommends that in future the MTBPS should set out in more concrete detail proposals on stimulating economic growth. The Standing and Select Committees on Finance have to work closely with the Standing and Select Committees on Appropriations in addressing issues on financing of tertiary education. From Parliament’s side, it will be the Appropriations Committee that will have to address many key issues as has happened this morning. The committees will have to address many of the key issues. Overall, there are two key aspects: the no fee increases for 2016 and the funding of tertiary free education for the needy.


While recognising the complexities, the finance committees recommend that the presidential task team dealing with the funding for no fee increases finalise its work as soon as possible. Universities should, within their means contribute to this funding as far as possible, but government will have to find the remainder of the funds from within the national fiscus. The Appropriations Committee will, after engaging with the Higher Education and Training Portfolio and Select committees, have the primary say from Parliament’s side on this, but for now the finance committees suggest that government looks into the possibility of the budget of Department of Higher Education and Training being reprioritised to find some funding for no for increases. Consideration needs to also be given to allocating unused funds from the National Skills Funds and the Skills Education Training Authorities, Setas, while ensuring that skills training needs are not unduly undermined.


The Finance Committees recommend that government, through engagement with all the relevant stakeholders, consider providing free tertiary education to the needy reasonably soon and this process will unfold in Parliament. The committee recommends within the norms and protocols the interdepartmental exchanges, engages with the Department of Higher Education and Training and the Department of Planning, Monitoring and Evaluation on the need for universities to produce graduates who are more likely to be employed and meet the developmental needs of the country. The provincial government departments need to visit high schools to encourage learners to consider studying in areas of needed skills, such as civil engineering, financial management, boilermakers, and fitters and turners. When we visit our schools and address our senior learners in Grades 10, 11 and 12 is also our responsibility to motivate them to study in this direction.


The committee require the National Treasury to brief them in the first quarter of 2016 on the fiscal rule of thumb guideline that links the expenditure ceiling to long term economic growth projections over the MTEF period, bearing in mind the reservations raised by the Public Benefit Organisation, PBO, in section 2.1 of the report also on improvements on the capital projects appraisal models. Also to provides a comprehensive report in writing on progress on its cost containment goals within 21 days of the adoption of this report by Parliament.


The committee broadly support the positions of llifa Labantwana set out in section 2.3 of the report and recommends that National Treasury engage with them and the Department of Social Development and seeks within budgetary and other constraints to progressively address their concerns – Early Childhood Development, ECD, centres and ECD education.


The committees support the key concerns raised by RHAP in section 2.5 of the report and that the National Treasury meet with them and the National Department of Health and report back to the committees on this when the 2016-17 national budget is brought before the committees. While recognising the complexities, the committees recommends that the National Treasury seek to ensure that SAA is financially viable reasonably soon. The National Treasury should work with the provincial Treasuries to finalise the personnel headcount projects in the provincial departments and report to the Finance Committees. The National Treasury should work with national and provincial department to determine the causes of under spending and contribute more to ensure more efficient and effecting spending, and the tabling of more credible budget aligned to the government priorities. The National Treasury needs to monitor the fiscal performance of provincial treasuries more effectively as there are cases of accruals of over R1 billion, while cash in the bank is minimal.


In the 2015 fiscal framework report, the committees recommend that the National Treasury considers reviewing the revenue sharing formula with regards to Southern African Customs Union, Sacu. The committee request an update from the National Treasury in this regard. The committees recommend that the Stakeholder Management Bill designed to more clearly define the shareholders role in state owned Companies be introduced as soon as possible.


I move that the Council consider this report. Thank you. [Applause.]


Debate concluded.


Question put: That the Report be adopted.


IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West.


AGAINST: Western Cape.


Report accordingly adopted in accordance with section 65 of the Constitution.


The Council adjourned 16:42.



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