House Chairperson, Cabinet colleagues present, hon members of the Portfolio Committee on Communications, senior officials of the Department of Communications, captains of the information and communications technology industry, members of the media, distinguished guests, ladies and gentlemen, the presentation of the Department of Communications 2010 budget takes place against the backdrop of a global recovery from the debilitating economic crisis in which, once more, the poorest nations have been severely affected.
The impact of this recession is most felt in the developing world, where aid and investment from the rich countries have shrunk considerably, resulting in job losses and increased poverty. South Africa, like any other developing country, has not been immune to the effects of the recession. Given the commitments we made to voters in 2009, we, as government, should not shy away from our responsibility to deliver on the mandate they gave us to ensure that their lives are improved. Therefore, it is necessary to nurture, promote and establish private and public partnerships, as well as to mobilise international assistance and the participation of civil society, labour and academia.
Our approach to building the developmental state can no longer be along the same old lines. Our government has introduced a clear programme of action to overcome our developmental challenges. In his 2010 state of the nation address, President Jacob Zuma emphasised the need to create sustainable jobs, to provide opportunities for the youth and to ensure rapid service delivery for marginalised areas.
Esteemed members, the information and communications technology, ICT, industry is a potentially transformative developmental tool, provided it is well located within the overall policy framework and is not seen as an end in itself but a necessary means. It is the hump that feeds the camel. The strategy of ICT should be determined by the reality of our people's needs. These needs are, among other things, our human resources development, ICT growth and competitiveness, and the uplifting of underdeveloped rural areas.
Our strategic objective is to encourage social access to technologies within a people-centred, development-orientated paradigm. Our people should be empowered to access information and knowledge to bring about social transformation and cohesion. Sustainable service delivery that impacts on communities requires the effective use and deployment of appropriate integrated ICT at all levels. The building of the developmental state without the effective appropriation of ICT across government, business and civil society will delay and hamper the achievement of our developmental goals. This technology is a catalyst for service delivery and the backbone of 21st century socioeconomic development.
In 1995 government initiated the development of a SA Information Technology Industry Strategy, Saitis. That project set out an Information and Communications Technology Sector Strategy Development Framework for South Africa. Its main objective was, and I quote:
... the bridging of the global development gap and the development of a robust, growing and sustainable ICT sector that would directly support and contribute to sustainable economic growth, social upliftment and empowerment.
Saitis estimates that the telecommunications sectors contribute more than 7% to GDP. Therefore, it has become important for us to quantify business streams within the industry which contribute to the current percentage. This will assist us to develop appropriate policies that will add to the sector's contribution to GDP. The question that arises is: What are we doing to develop policies and regulations that will stimulate further growth in the sector in order to attract new investors and create more jobs? In the previous financial year we committed to develop and pass policies and legislation aimed at further growing the ICT sector.
I am pleased to report that Cabinet has approved the Radio Frequency Spectrum Policy. This policy provides for spectrum management, which involves the allocation of frequency according to the country's developmental needs and international standards. It will ensure efficient radio frequency utilisation and management of this scarce national resource.
In addition, this policy will further contribute to economic growth by promoting new services where required. We have finalised the broadband policy, and the vision is to ensure that South Africans have universal access and services to broadband by 2019. The benefits accruing from the policy will include the provision of multimedia and e-government throughout the country. The implementation of the broadband policy will impact on the growth of the economy through expanding markets, increasing business efficiency and promoting competition.
I have also submitted for the consideration of this House the South African Post Office Bill. This Bill seeks to establish a governance model for the Post Office that will ensure greater transparency, accountability and efficiency. I am pleased to report that the Post Office managed to implement a business model fashioned according to its market. It is looking into introducing two other business units, one of them being to concentrate on compliance.
We can highlight some of its successes, such as the roll-out of 47 new post office branches in the past financial year. Revenue increased to R6,3 billion, due mainly to increases in revenue in the Post Office's mail and financial services. [Applause.] This was because of expansion of addresses and value-added financial services. Moving forward, the Post Office is expected to maintain the surplus it has been making for the past four years.
The Post Office has also been faced with challenges, including expanding its footprint and bridging the digital divide. However, for the 2010-11 financial year it intends to focus on its financial sustainability, diversification programme, rural and youth programmes and achieving customer satisfaction.
Its branch expansion programme will continue with the addition of 20 new offices and the relocation of 11 other offices. I wish to commend the Post Office for maintaining a good financial position. I would urge it to accelerate its expansion programme, including allocation of physical addresses, as this has a direct impact on connectivity and other services such as banking. In addition, this will improve the Post Office's market reach.
The Post Bank Bill, which is also before the House, seeks to corporatise the bank so that it exists as a separate, independent legal entity. I wish to stress that corporatisation should not be misunderstood to mean privatisation, or even that there is a likelihood of privatisation being considered in the future.
The Post Bank will render transactional services and lending facilities through, among others, the existing infrastructure of the Post Office, and will develop into a bank of first choice, particularly for communities that have little or no access to commercial banking services or facilities. The Post Bank will also respond to local community banking needs, which will minimise travel costs.
The Cybersecurity Policy was gazetted in February for public comment. The policy is being discussed with relevant stakeholders.
In this parliamentary session, we intend to introduce legislation aimed at further strengthening our ICT policy framework. Therefore, we will table the following Bills: the Independent Communications Authority of South Africa, Icasa, Amendment Bill; the Public Service Broadcasting Bill; and the Electronic Communications Amendment Bill. The latter seeks to align ministerial directives, clear up ambiguity of some definitions and further include the creation of strategic support structures such as the Tariff Advisory Council, among other things. In addition, a policy directive will be issued to Icasa to conclude the unbundling of the local loop.
We have commenced the development of the local content strategy. However, this will be finalised once the South African Local Content Advisory Council is appointed.
I am happy to report to the House that our interventions have stabilised the SABC, which was plagued by serious corporate governance and financial challenges last year. In June 2009, I established a ministerial task team to investigate more deeply the root causes which led to the collapse of corporate governance and financial challenges at both the SABC and Sentech. The task team concluded their assignment and we are beginning to see the positive effects of their recommendations.
As you will recall, the SABC was hit by a liquidity crisis and organisational instability. An interim board was appointed, which engaged with management in putting in place mechanisms to ensure the curtailment of expenditure and revenue increment. The corporation was granted a R1,4 billion government guarantee to enable it to borrow from private banks. A tripartite monitoring team, comprising officials from the Department of Communications, Treasury and the SABC, has been established to monitor the financial performance of the corporation, and its adherence to the terms and conditions underpinning the government's guarantee. We will ensure that the SABC does not do anything to trigger the recall of the guarantee and that the going-concern status of the corporation is not compromised.
A new board was appointed and continues to implement a turnaround strategy, which includes austerity measures, to enhance revenue and reduce costs. The corporation's radio sales unit achieved its sale targets and recorded an 11% improvement in advertising. Going forward, the corporation must implement the turnaround strategy. It must support delivery on the core mandate. The corporation must focus on procuring local content over the current Medium-Term Expenditure Framework, MTEF.
I wish to thank the SABC for developing public viewing areas for the World Cup, as this further contributes to bringing broadcast services to our people. I am sure this will not be a once-off service only, but that access to quality broadcasting services will continue to be a top priority for the