Department of Trade and Industry Budget

Meeting report

ECONOMIC AND FOREIGN AFFAIRS SELECT COMMITTEE
19 May 2003
DEPARTMENT OF TRADE AND INDUSTRY BUDGET: BRIEFING

Chairperson: Mr Tolo (ANC)

Documents handed out:
Department Budget presentation

SUMMARY
The Committee was briefed by the Department of Trade and Industry in its budget and programmes for 2003/2004. The Department outlined their entire incentive scheme which focuses only on those projects that demonstrate great potential for job creation. In reply to a query by the Committee on how the incentive program contributes to job creation the Department noted that every infrastructure project it awards must incorporate a labor-intensive component for it to be endorsed. The Committee heard that the DTI is engaged in a program where it supports learnerships in the IT sector and that it is focusing on the growth sector such as manufacturing and services industry in its endeavour to create more jobs.

MINUTES
Briefing by Department of Trade and Industry
Dr Alistair Ruiters: Director General, Department of Trade and Industry, informed the Committee that the Department of Trade and Industry (DTI) seeks to lead and facilitate access to sustainable economic activity and employment for all South Africans. This, he said, would be achieved through higher levels of investment, and increased access for South African products and services in international markets. DTI was striving to create a fair, competitive and efficient market place for domestic and foreign business as well as for consumers. In this way, he added, the dti contributes towards accelerated and shared economic growth in South Africa and the attainment of the government's vision 2014 for the economy.

Discussion
The Chair noted that the National Council of Province's (NCOP's) mandate is to look at the budget from the provincial perspective in order to ensure that national initiatives take into account provincial interests. Were there any special projects that the budget envisages to rollout for provinces?

Dr Ruiters pointed out that the Department took a proactive decision to work with the provinces eighteen months ago and that a strategy has been formulated where a meeting is held once a month to assess progress on joint provincial projects.

Mr Setona (ANC) noted that one of the highlights in the budget is a budgetary allocation of R3.2 million, which has been set aside for the development of the co-operative movement. He asked if the Department has identified such a joint project for the Free State.

Dr Ruiters noted that the Free State is the farming harp of the country and therefore well deserving of the development of a vibrant co-operative movement. The DTI is currently in discussion with the Free State government so that the Department can set up a satellite office in the province to enable people to easily access the DTI programs. The DTI is working with the Department of Agriculture to identify which co-operative movements to work with and to make registration easier for those who want to set up such a body.

Ms Ntwanambi (ANC) lamented the fact that rural people find it very difficult to understand the language used by the Department in the decimation of information on its programs. She asked whether the Department is looking into ways of using the language rural folks could understand in order to engage them more meaningfully.

Dr Ruiters pointed out that the Department is working intimately with provincial structures to determine how best to support them within limited budgetary constraints. The Department is also engaging all metros in the provinces with a view to selling its programs to the people on the ground. He explained that the budget does not reflect a provincial component but that most of the delivery is done at that level.

Ms Ntwanambi asked whether customer care services are available in rural areas as well.

Dr Ruiters replied in the affirmative, pointing out that the customer care line is very accessible to rural outposts. He revealed that the DTI is looking into the possibility of introducing a free customer care hotline but that this project would depend on the availability of resources.

Mr Adams (ANC) asked whether the Department has set time frames for filling the vacant posts that are said to be in the region of 20%.

Dr Ruiters said that the moratorium on the employment of senior management staff has now been lifted and that the Department has some sections with 100% occupancy. There has been some restructuring of the Department and the recruitment drive is already in high gear.

Mr Kolweni (ANC) expressed concern that former mining areas have been left desolate and unemployment has soared in these once economically thriving regions. He asked whether the Department has any plans to convert whatever infrastructure is left in these areas to an incoming generating project to benefit the local residents.

Dr Ruiters acknowledged the fact that the former mining areas were in dire straits noting that poverty and unemployment is ravaging these regions. The Department was running a pilot project with MINTEK (Council for Mineral Technology) to teach miners how to engage in self-employment projects. The Department is also networking with the National Union of Mine Workers (NUM) on ways and means of assisting the mining communities.

Mr Kolweni asked the Department to provide a clear definition of a co-operative movement in view of the disturbing trend where many bogus groups are cropping up claiming to be running legitimate co-operative outfits.

Dr Ruiters explained that any group of people that decide to register themselves as a co-operative would be recognized as such. The Department would not engage anybody who is not legally registered in the manner prescribed by law. It is important for one to acquire a legal identity in order to undertake a meaningful business venture.

Ms Ramodibe (ANC) noted that there was an increase in the budgetary allocation for incentives to small businesses and requested the Director General to explain this phenomenon.

Dr Ruiters pointed out that the Department has in the recent past been inundated with applications from small businesses seeking incentives while others submitted requests to be cushioned against adverse effects arising from a failure of a business venture. The increase in the incentive item was therefore a response to this demand on the ground.

The Chair noted with concern that while people talk about economic growth it was disappointing to see that there was no corresponding expansion of job opportunities. He wondered whether there was anything special in the budget to address this disturbing dilemma.

Dr Ruiters pointed out that the Department of Labour has published a policy paper on the question of job creation. He said that with respect to its entire incentive scheme the DTI travels the extra mile to ensure that it only approves those projects that demonstrate great potential for job creation. Every infrastructure project must show a labour intensive component for it to be endorsed by the Department. The DTI is engaged in a program to support learnerships in the information technology sector and it is focusing on the growth sector such as manufacturing and services industry in its relentless endeavour to create more jobs.

The Chair thanked the Dr Ruiters for his elaborate report, which would go a long way to assist Members in the forthcoming debate on the budget.

The meeting was adjourned.