Chairperson, hon members, I recently visited Doringbaai, a small fishing village on the West Coast. For many generations, the main source of income for residents was a lobster processing factory which closed a few years ago. No new industrial activity has been set up since then.
Denise Classe was a joint breadwinner for a family of seven. She worked in the lobster factory for more than 20 years, as did her late husband and, at different times, two of her brothers, her mother, father and grandmother. In a good week she earned about R900 and in a slack week R400. When the factory closed, Denise said, "It wasn't only our mouths that went hungry, but also the mouths of our families and neighbours."
Denise and her husband found casual work on local farms, picking potatoes and tomatoes, but this ended in 2007. Her husband then worked as a handyman for a contractor at a mine in a neighbouring town, but the contract and his job ended in 2009.
They eventually sustained themselves on three child grants totalling R720 a month for a family of seven. Her husband died in January this year, and there are many days without food in the house. The family's hopes now lie with a R5 million grant from government to start an abalone farm on the fish processing factory's premises. It is planned to employ about 50 people initially. Denise is one of 5,8 million South Africans without work, either because they are unemployed or they are too discouraged to seek work.
I present to you today the first budget of the Economic Development Department, EDD. This is, of course, the first completely new government department to be created in the 10 years.
The context of the department's formation is clear: many South Africans lead a precarious existence. There are not enough jobs and too many working poor. Take Sibongile Mchunu, a factory worker in Mobeni, who leaves home at 5:15 in the morning and returns at 6:30 pm. She earns R677 a week before deductions. Her daughter receives a child grant. They spend about R300 a week on food for a family of six.
This department was created to address a gap in government's economic policymaking, planning and co-ordination machinery, so that, working with other parts of government, we can have better economic and employment outcomes. The work of the department in the year ahead must address the concerns of Denise Classe, Sibongile Mchunu and the many other South Africans who face the challenges of poverty, inequality and unemployment.
To provide the basis for the budget request we are making today, we prepared a Medium-Term Strategic Plan for three years and a chapter for the Estimates of National Expenditure, published by the Minister of Finance on 17 February 2010. All of this is based on the mandate of the department set by President Zuma last year and the four programmes that we shared with the portfolio committee.
The EDD's budget allocation is R418 million, which covers the work of the department and certain entities that report to it. We propose the distribution of this budget as follows; R18,2 million for policy development work; R25,8 million for economic planning and co-ordination; R11,2 million for economic development and dialogue; R44,8 million for administration for the Ministry and capital expenditure; R152 million for small business funding through transfers to Khula and the SA Micro-Finance Apex Fund; R102 million for the competition authorities to strengthen their work and R64 million to the International Trade and Administration Commission for trade administration.
Permit me to address the different areas of focus of the department for the period ahead. Our policy development work will focus strongly on the elaboration of the developmental growth path. We face a massive unemployment challenge. For the past few decades, the economy has not created enough jobs for all South Africans able and willing to work. This resulted in unemployment levels that are among the highest in the world. It has been compounded by the recession, caused by the most serious economic crisis that the world has seen in 70 years.
In South Africa, as hon members know, three consecutive quarters of Gross Domestic Product contraction followed. Real GDP fell by 1,8% in 2009. Between the fourth quarters of 2008 and 2009, 870 000 people lost their jobs and 518 000 joined the ranks of discouraged work seekers.
Faced with these realities and the challenges of very high inequality and deep levels of poverty, we are working on ways to improve the employment performance of the economy and create many more decent work opportunities and better social outcomes. We call this "the development of a new growth path".
The central ideas in the developmental growth path are to enhance the labour-absorbing capacity of the economy, to build a lower carbon-emission economy and to find ways to connect knowledge and innovation to the challenge of jobs and growth. Through this work, we have identified a number of areas with the potential for new jobs. They are infrastructure development; the green economy; the manufacturing sector; knowledge economy activities; the rural, agriculture and agro-processing sector; tourism and business process services; the social economy, which includes co- operatives; public sector growth; and the continental and regional economy.
We are now working on how to realise new jobs in each of these areas. It means looking at economic opportunities, mechanisms to maximise the number of jobs that can be created and the policy support required to realise this potential.
Policies are important for the achievement of the growth path but they are not sufficient. We are therefore looking at how to improve the performance and impact of public institutions that are vital to economic development. An example is the duplication in small business development institutions and the lack of coherence in their work.
The growth-path work recognises the crucial role of the private sector in creating jobs. We want to use the potential of social dialogue with organised labour and business to contribute to economic development and strengthen the technical capacity, particularly of small businesses and organised labour.
Our policy work will consider both macroeconomic and microeconomic policies. More than 10 areas have been identified. They range from industrial policy, competitiveness, skills development, and both access to and the cost of capital for businesses.
Sam Khotle is a 27-year-old man with a matric qualification, a certificate for computer services, a credit for a university degree and the dream of becoming an industrial psychologist. Yet, since 2007 he has been working as a petrol attendant in Botshabelo, earning R530 a week because he cannot find better-paid work. An important policy focus of the department will be the creation of sustainable livelihoods and addressing the challenges of enterprises in the second economy. Take the example of Joey Johnson, a 47-year-old who lives in Port Elizabeth. Joey operates a mechanic business from his home. He specialises in Toyotas and Volkswagens. Some days he has work, others not. He cannot afford to buy the parts and tools he needs to expand his business. He wants to build a proper workshop, but he does not know how to get a loan. He does not even have a bank account.
Our policies will seek to transform second-economy activities such as that of Joey Johnson into dynamic, competitive and better-paid activities that are part of the economic mainstream and to use and not waste the skills of the Sam Khotles of our country.
It is about promoting decent work. President Mandela put it well when he said:
The principles of decent work exemplify our common values, our shared respect for dialogue and our concerns about the plight of our impoverished fellow citizens. Decent work is based on the efforts of personal dignity, on democracies that deliver for people, and economic growth that expands opportunities for productive jobs and enterprise development. Decent work also underpins the principle that the purpose of creating work and wealth is to eradicate poverty. Part of what we will do is conduct research and policy development. We will also convene discussions with Members of Parliament, Cabinet members, social partners and economists.
Last year we hosted several policy platforms, including those on the global economic crisis, income inequality and rural economic development. Discussions were also held with companies, industry associations and organised labour on matters such as the exchange rate, industrial policy, trade issues, localisation of the supply chain, factory closures and co- ordination within government.
This evening we will be hosting the first in a new set of policy platforms, The Next Economy Dialogue Series. We are doing this in association with the Cape Times. I will be engaging with Mr Bobby Godsell and Mr Zwelinzima Vavi at the first session.
In the year ahead we will host at least 10 policy platforms to draw South Africans into conversations about policy issues. We will establish a ministerial advisory panel to serve as an ideas forum. It will give an opportunity to test ideas and learn about new developments. We can then take some of these ideas to Nedlac for discussion and dialogue.
I am pleased to announce that we have made good progress in establishing the panel since my announcement of the idea some two weeks ago here in Parliament. Professor Joseph Stiglitz, Nobel Economics Laureate and previously Chief Economist of the World Bank, has agreed to serve on the panel. He will be joined by a number of South African experts such as Professor Haroon Bhorat of UCT; Dr Michael Power, a strategist from Investec Bank; Professor Chris Malikane from Wits University; Mr Goolarn Ballim, Group Chief Economist of Standard Bank; Dr Olive Shisana, the CEO of the Human Sciences Research Council; Mr Geoffrey Qhena, CEO of the Industrial Development Corporation; Dr Simon Roberts, Chief Economist of the Competition Commission; and Dr Neva Makgetla, lead economist in the development planning division of the Development Bank of South Africa.
We will be adding more names to the panel, and we will also have active business people and unionists who will be able to interact with the panel's economists.
By the end of this year we plan to have the core of the Economic Development Institute in place and, by next March, to have produced 10 policy documents on growth and employment issues.
Our work on economic planning and co-ordination will contribute to connecting the dots in government, since economic planning is a critical part of any overall national plan. The department will therefore work closely with the National Planning Commission and Minister Manuel and will develop spatial and sector economic development action plans, including for distressed areas. EDD is actively engaged with provinces. In the last year I have met with my provincial counterparts through Minmec, including meetings at a two-day Spatial Economic Development Symposium, and I addressed three provincial jobs summits. Deputy Minister Mahlangu-Nkabinde visited a number of provinces for detailed engagements.
In the year ahead, the department will work with provincial economic development departments to ensure the coherence of spatial economic development plans between national and local spheres, and with the new growth path.
Our work on sector policy aims, among others, to support the Industrial Policy Action Plan announced last month, as well as rural economic development initiatives. By the end of the next financial year, we intend to have reviewed or produced five sector plans and 10 spatial plans.
Our work will only be successful, however, if government operates as a coherent team. The Ministry is therefore participating in a number of interdepartmental and interministerial committees, including committees on energy, poverty, broadband, the aerospace industry, the pebble-bed modular reactor, trade policy and National Health Insurance.
The EDD's focus in these forums is on how to improve job opportunities and support economic development. This same focus also informs our work on the councils on which we serve, such as the Broad-Based Black Economic Empowerment Council, the Human Resource Development Council and the Electricity Stakeholders Council.
From 1 April, the EDD will guide the work of three economic regulatory bodies, namely the Competition Commission, the Competition Tribunal and the International Trade Administration Commission; and three development finance institutions, namely Khula Enterprise, the South African Micro- Finance Apex Fund, Samaf, and the Industrial Development Corporation.
As the reporting authority for these agencies, the EDD will provide oversight, strategic direction, ongoing review and the development of policy frameworks. We will review international trends and lessons learnt and promote alignment between the policies and strategic plans of these entities and those of government.
We plan to finalise proposals for small business funding by November this year. We have also set a target to generate financing worth R2 billion for small businesses, targeted growth sectors and companies in distress.
Development finance institutions, DFIs, and investment bodies control assets and investments worth hundreds of billions of rands. There is scope to improve the development and employment yield of DFIs, public and private sector investments, retirement funds and the Public Investment Corporation.
The international experience shows that successful industrialising countries are ones that use their public and private investment institutions well. This is not a new idea in South Africa. At the 2003 Growth and Development Summit, business, labour, government and community organisations agreed to target 5% of investible funds into development areas and activities. What has been lacking to date has been appropriate instruments to give effect to this commitment. Various options that combine prudent investment policy with development goals are open to us, including the issue of a development bond.
As an example of this, the IDC has recently issued a R2 billion bond that has been taken up by the Unemployment Insurance Fund. The bond is priced at highly beneficial rates, and the funding that the IDC provides through the utilisation of the bond will fund businesses with labour-intensive operations that are creating and saving jobs.
The competition authorities will be strongly supported in their efforts to combat price-fixing, collusion and tender-rigging. In the past 12 months, the tribunal has issued fines of close to half a billion rand for anticompetitive conduct. In the past three months alone there have been no less than 30 admissions of wrongdoing by companies, mainly related to price- fixing. I have mentioned the importance of building a lower carbon-emission economy. The green economy has huge potential for employment creation in the energy, agriculture, manufacturing and services sectors, including ecotourism.
Other countries are steaming ahead to build their green economies. For example, the green economy in China is reported to employ more than 1,1 million workers and is growing by 100 000 new jobs a year. We will allocate R2 million for policy and co-ordination work on the green economy and green jobs and will mobilise additional resources for the actual investment.
To promote employment and decent work opportunities we will establish an office on local procurement. We have budgeted R3,8 million for work in this area. The Department of Economic Development intends to monitor local procurement within the state while supporting and promoting the work of the Proudly South African campaign.
We have created a programme to promote social dialogue in order to foster economic development. Its role will be to help negotiate social pacts on our country's challenges as well as to undertake the technical work to support such pacts.
Building on our successful national social dialogue, for the year ahead we plan to develop social dialogue on growth and social equity issues at sector and workplace level so that we build partnerships at the heart of the wealth-creating machinery of our country.
We will set up a series of knowledge networks by November this year to bring together economic expertise across the state and we will host the first annual economic development conference before the end of the forthcoming financial year.
We have established a subprogramme to address the role of productivity, innovation and entrepreneurship in driving economic growth and development.
Alice Mpatuli is a South African entrepreneur. She was retrenched after 30 years in the textile industry. She established her own cut, make and trim business in rented premises with rented machines. Work is piecemeal and sporadic and because of this she can employ people only on short-term contracts. Alice needs to learn basic management skills and needs to access financing to buy her own equipment and machines.
The policies and programmes we develop at the Department of Economic Development must provide an answer to the challenges that Alice Mpatuli and many like her face.
The EDD will promote workplace productivity agreements and foster entrepreneurial endeavours in the economy, particularly those of black entrepreneurs.
In the month the EDD was established, we assumed responsibility for co- ordinating government's work on the Framework for South Africa's Response to the International Economic Crisis. Our dialogue programme will now focus on better implementation of the actions under this Framework. Working closely with our social partners, we have already launched about 20 actions to address the crisis, from efforts to respond to communities in distress, to vulnerable workers and troubled enterprises and sectors.
We set up a training layoff scheme supported by funding of R2,9 billion to provide companies with an alternative to retrenchment by providing funding for training.
Richard Matsomela has worked at BMW at Rosslyn since 1999. Orders in the auto industry worldwide declined markedly as a result of the economic recession. Richard says, "The recession affected us a lot. It frustrated us. I didn't know where to go, where to start. The possibility of a shutdown troubled me. I'm paying bills, schools fees, transport and a bond."
As part of a strategy to avoid retrenchment, BMW and Richard's trade union, Numsa, accessed the training layoff scheme. Through this effort BMW placed over 1 100 workers on the scheme and trained workers in a variety of skills accredited with the Seta. They also paid social security contributions and workers received 50% of their wage.
We launched a fund for enterprises in distress, and the IDC allocated R6,1 billion to support companies hard hit by the crisis. Applications to the value of R1,1 billion have been approved. We worked with the CCMA to strengthen efforts to avoid retrenchments in the economy. More than 15 000 jobs have now been saved through these three interventions.
To address the challenge of food prices, we asked the competition authorities to speed up their investigations of price-fixing and cartels in the food supply chain. We are now looking at 10 parts of this industry and a number of companies have been prosecuted.
Government has increased the age for child grants to ensure that this limited lifeline offered to many families is not withdrawn during the recession. An additional 750 000 children will now be covered by the child grant.
In the year ahead, we will expand the number of actions that are successfully carried out under the framework. We will hold at least 10 social dialogue- and capacity-building engagements, and conclude a number of economic development agreements with social partners at national, sectoral and workplace levels.
We have established a programme on administration to build an effective, dynamic department. Over the past nine months, we undertook the legal work to establish the department; developed a budget for the establishment phase as well as for the three-year period to 2013; recruited a core of staff on contract to commence work on policy and co-ordination; secured and furnished new offices; wrote a strategic plan for the department; developed a staff structure for a staff complement of 264 persons; and undertook the first job evaluations in the department.
You would be pleased to know that we received more than 1 000 applications for the first 13 posts we advertised recently and expect to make the first permanent appointments by June this year.
We have set an ambitious programme of work because our times require ambition and purpose. We will implement it in a phased manner.
In closing, I would like to thank my colleague, Minister Rob Davies, and his department for supporting the EDD in our establishment, and Minister Pravin Gordhan for the support of National Treasury with the finalisation of the Budget.
I would like particularly to acknowledge Deputy Minister Mahlangu-Nkabinde and the small, dedicated team in the Ministry and department for their role in bringing our work to this point. I would like to acknowledge the social partners for their commitment to implementing the framework. I look forward to working with them in the coming months in promoting economic development and decent work opportunities for all our people.
In closing, I spoke earlier of the challenges of the recession and the opportunities that we are identifying with the new Growth Path. We are confident that we can repair the damage of the recession and build an inclusive economy.
I conclude with the words of United States President Franklin Roosevelt, from his inaugural address in 1937, in the middle of the Great Depression, when he said:
Our progress out of the depression is obvious. But that is not all that you and I mean by the new order of things. Our pledge was not merely to do a patchwork job with second-hand materials. By using the new materials of social justice we have undertaken to erect on the old foundations a more enduring structure for the better use of future generations.
In that purpose we have been helped by achievements of mind and spirit. Old truths have been relearned; untruths have been unlearned. We have always known that heedless self-interest was bad morals; we know now that it is bad economics.
These words are as apt today as they were 73 years ago. I thank you.
House Chair, hon Minister Patel, hon Deputy Minister Mahlangu-Nkabinde, hon Members of Parliament, distinguished guests, ladies and gentlemen, the beauty and bounty of our magnificent country and its people are counterbalanced only by the ominous trinity of grinding poverty, gaping inequality and debilitating unemployment experienced by a growing legion of South Africans who seem to be trapped in these conditions.
The great gains we have made since our liberation in 1994 are constantly being challenged and even eroded by a rampant and unequal global political economy, escalating prices, a currency that is volatile in relation to others, skewed economic growth, and the collapse of service delivery in some areas in the country.
This is, however, not the time to be despondent and to allow these trends to describe the economic landscape of our country in perpetuity. The opportunities that abound, the potential that needs to be unlocked and the hope of our people enjoin all of us not to fail in our sacrosanct duty.
During the landmark Polokwane conference of the ANC in 2007, it was identified that the first weapon in our arsenal to restructure the economy and finally deal with unemployment decisively was to reshape the executive of the government. Out of this exercise, President Zuma announced the reconfiguration of Cabinet and the birth of the economic development ministry and department. As a stand-alone government department, it is the newest line function. It heralds the start of a new era in economic development in an effort to single out the decent work agenda as a defining factor in the mandate of the department.
Hon members, to establish a new department is no small and frivolous endeavour. The task at hand for this new department is gigantic indeed. Going forward, it has to be equal to the scale of the challenge in its response. To date we have seen an infant ministry and department that have been proactive, and their timely interventions during the recession attest to this. The fact that they were on the pulse quickly, playing a key role in formulating and implementing the framework of South Africa's response to the global economic crisis, further underscores this.
Hon Chairperson, allow me to congratulate Minister Patel, Deputy Minister Mahlangu-Nkabinde, director-general Prof Levin, the then advisor to the Minister, Mr Coleman, and their small team for submitting its first Medium- Term Strategic Plan. The strategic plan sets the tone for the performance of the department over the next three years, the nature of its operations and the resources required to fulfil its mandate. Moreover, from where we are sitting it will be the basis for the oversight of the legislature over the executive.
It should be welcomed that the Industrial Development Corporation, Khula Enterprise Finance and South African Micro-Finance Apex Fund, Samaf, will be at the disposal of the department as vehicles for economic development.
The most striking criticism of the strategic plan related to the notion of prescribed assets for retirement funds. As was noted by Ricardo Hansby in an article in the Business Day, which was supportive of the Minister, it is not as if prescribed assets do not entirely exist.
Ricardo aptly pointed out that the challenge for the department is to ensure that conditions and platforms are created to turn the many opportunities in the country into sustainable business ventures. That is where jobs are created. All our efforts need to be channelled in this direction.
Hon members, today is not an opportunity for unfairly lamenting the performance of a department barely out of the starting blocks. It is rather an opportunity to reflect on the challenges and risks this infant will face in its own development. With the benefit of hindsight, the department is in a unique and favourable position. It can learn from the experience of government over the past 15 years. It can avoid the trap of low or nonperformance, unnecessary bureaucracy and red tape, duplication, high staff turnover, indecision and rent-seeking. It is a rare opportunity to embrace excellence and efficiency as the cornerstones of its existence.
The most glaring risk in the Medium-Term Strategic Plan of the department is its all-embracing mandate. It is recognised that economic development is the responsibility of all departments. However, to initially expect such a small and new department to hold together the actions of all government departments on the economic development front, including the provinces and local authorities, has the potential to render the department ineffectual from the outset.
We recommend that the department should start from a manageable core and, over time, fan out as its systems, capacity and resources permit. It should focus on core areas of delivery and implementation. Policy coherence and co- ordination are simply not enough for a developing country.
Although we have arrested the economic downturn and stabilised the situation pertaining to the concomitant losses of jobs during the recession, we have not actually turned the corner yet and the scale of the task at hand remains daunting. To this end, an unbalanced focus borne out of a fixation on macroeconomic policy should be avoided. While macroeconomic concerns, such as the impact of the exchange rate on exports, remain important, the department should focus on restructuring the real economy by focusing on boosting output in the productive sectors.
The potential of the value chains in agriculture, mining, tourism and manufacturing remains largely untapped, and the department needs to demonstrate that it will develop new approaches to unlock actual opportunities and turn them into business ventures. Again, that is where jobs are created.
In an economy like ours, with its many structural problems, we cannot merely rely only on policy instruments. The hallmark of a developmental state is implementation, and we encourage the Minister to lead this department down this difficult path. This is what the President had in mind when he encouraged government to work faster, harder and smarter.
The cluster system has worked to the benefit of this department. It ensured support from related departments. However, to say in the strategic plan that the department will work "collegially" with other departments is also not sufficient. The department needs to demonstrate that it will actively and in a structured manner integrate its efforts with other departments in the economic and employment cluster. As a structure of oversight, the Portfolio Committee on Economic Development will continually work with fellow committees to ensure that outcomes are integrated, and we expect the same from the department.
It is laudable that the economic development and the DTI have worked together so well from the outset. We are concerned that the DTI will be expected to deliver on key policy outcomes while the agenda is perceived to be set by the economic development department. This is exactly the disjointedness we were trying to avoid when the executive was reconfigured in the first place.
This has the potential to lead to further confusion and operational inefficiency. Economic development and the DTI need to work together by all means but need to ensure that the outcomes are more optimal. The department is, therefore, encouraged to sharpen its focus and, over time, take full control of areas in its functional purview. This will lead to a seamless progression from policy to implementation.
Parliament is concerned about the slow pace of appointing capable and delivery-oriented public servants. Media reports shockingly suggest that on average it takes 18 months to fill public service posts. We are concerned, Minister Patel, that this will not be a defining characteristic of your department too. The strategic plan makes provision to appoint the department's staff complement of more than 200 over three years. While it is understood that this needs to be balanced with concerns over service delivery, surely the one cannot proceed without the other. We, therefore, encourage the department to redouble its efforts to appoint most of the key staff members over a shorter timeframe. I know it is there in the plans but we must make sure that it is fast-tracked.
Our government is replete with leading intellectuals. I want to put it to this august House today that the challenge is not one of policy as such. We have some of the best in the world. Our challenge remains one of implementation. So, even if we change the macroeconomic policy completely tomorrow, our afflictions will not disappear. Economic development requires political will, hard work, diligence, consistency and quick decision- making. It is asserted in the strategic plan itself that "economic development refers to more than the quantum of growth. It embraces the impact on the quality of life of South Africans".
The strategic plan, the Industrial Policy Action Plan 2, and other policy prescripts do not adequately address the "how" of developing this economy. Critical concerns remain about the institutional platform required, the nature of the partnerships the department intends establishing with the social partners, how programmes will be packaged to unlock the economic potential of the country, and so forth. In other words, we are saying that this includes its approach to economic management and the specific components of the economic management machinery, which will put together and lead the onslaught on unemployment, poverty and inequality.
The Portfolio Committee on Economic Development is aware that the strategic plan was not meant to address all our concerns. It is hoped that many of the gaps I have highlighted will be addressed in the eagerly anticipated new growth path that the Minister will table in June of this year.
In the meantime, the committee will be vigorous in terms of its role in relation to the department. It will be vigorous in scrutinising the details, but it will do so in a way that adds value to what the department has set out to do. I am sure I speak on behalf of all the members of the committee when I say the department can rely on our active support. To this end, the committee has tabled its report on Budget Vote No 27: Economic Development, with its recommendations. We recommend that the Budget Vote be supported.
Let me thank the Minister, as the leader of the department, and the Deputy Minister for the work done so far and for their continuous co-operation with the committee. I would also like to thank the members of the committee for their attendance and participation. I thank you. [Time expired.] [Applause.]
Hon members, you will observe that we are trying to time you and to be fair. We are using a clock this time rather than just stopping you abruptly.
Hon Chairperson, hon Ministers, hon Deputy Ministers, and hon members, allow me first and foremost to congratulate Professor Levin on his appointment as the new Director-General, DG, of the Department of Economic Development. I want to wish him well and good luck in his new position.
The Department of Economic Development was established in 2009. At present, it is unclear who will dictate macroeconomic policy: will it be the Treasury, the Department of Planning, or the Department of Economic Development? The DA is the largest opposition party and as such we believe that tough questions regarding these particular briefs must be asked.
Another question we need to answer is whether we need a new department, considering the capacity of Treasury, the Department of Trade and Industry, and the new Department of Planning.
The Department of Economic Development will also be responsible for oversight of the Industrial Development Corporation, IDC, Khula Enterprise Finance, the South African Micro Apex Fund, the Competition Commission and the Tribunal, and the International Trade Administration Commission. These are key institutions - especially the IDC, which is a state-owned corporation with a balance sheet of more than R80 billion.
In his submission to the Portfolio Committee, the hon Minister of Economic Development submitted a strategic plan that cuts across a number of departments in government which, in time, will overlap in a significant way with the work of other departments. The hon Minister mentioned in his submission to the parliamentary portfolio committee that overlapping is a benefit, not a problem. But, hon Minister, it is important that duplication of any kind be reduced to a minimum. The question remains: how will we be able to reduce the high number of parallel activities currently taking place to achieve the required economic outcome?
The budget of R1,4 billion for the next three years is a vast amount of money. In order to create sustainable jobs and accepted economic growth, a number of ANC spokespersons have referred to the so-called developmental state. The main initial argument was put forward by the hon Minister Manuel in 2004 in a speech titled 'Budgeting challenges in the developmental state', where he said, "Expanding economic opportunities and fighting social deprivation is critical and providing public facilities to the poor is paramount". The DA has no problem with that. What is a problem, however, is that a number of spokespersons of the ruling ANC has reworded what Mr Manuel said. In essence, what they are saying is that instead of defining development in terms of the extent to which the state expands opportunities and equips citizens with the tools they need to take advantage of those opportunities to direct their own lives, the ANC has come to identify economic development with state intervention and centralised control. This version of the developmental state puts the state, not the citizenry, at the centre of policy and, in doing so, retards the very development that is required.
The legacy of apartheid contradicted all the rules of sound economic development and proper pro-active steps must be taken to rectify the injustices of the past. The DA appeals for the New Growth Path Document, which will be submitted to Cabinet for consultation in June, to include the following:
Firstly, the politicisation of the public service and cadre deployment will be stopped and merit taken into account regarding vacancies in all three spheres of government.
Secondly, the regular and substantial bale-out of state-owned entities and the huge wage bonuses of chief executive officers, CEOs, will be stopped and greater public-private partnerships regarding management of these institutions will be instituted.
Thirdly, poor service delivery and the reasons for it will be addressed.
Fourth, that set outcomes be given to all state departments.
Fifth, the abuse of public money for personal gain, corruption and nepotism will be stopped.
Lastly, the present system regarding the procurement of government tenders should be revised in order to allow wider accessibility to tender.
In his address to the Portfolio Committee the hon Minister stressed the importance of decent, sustainable jobs - and we agree with him entirely. Hon Minister, you mentioned the sad reality that 900 000 South Africans lost their jobs during the past economic recession. The government has taken a number of positive steps to encourage business confidence and the DA gives them credit for retaining inflation targeting, retaining the floating exchange rate, and curbing the budget deficit.
Economic development and the role of the state is an extremely complex issue and no consensus exists about how poverty can be addressed in a developing country such as South Africa. For all practical purposes, the present South Africa can be classified as a quasi-welfare state because 14 million South Africans receive some form of a grant from the state, while only 12 million South Africans are permanently employed and only 5, 3 million are registered taxpayers. This is unacceptable and drastic action is urgently required.
The DA believes that creating an open opportunity society based on the rule of law, which separates the state and the ruling party, will create a society in which every person will be given the opportunity to improve his or her own circumstances. In the open opportunity society, those who take responsibility for their lives and use their chances flourish and understand that taking control of their own lives is infinitely preferable to a lifeline of dependency on the state.
Hon Minister, in your submission to the Portfolio Committee, you mentioned a number of strategic goals that relate to policy development, economic planning and co-ordination. The Department of Economic Development is an integral part of the public service. Allow me to mention that development depends on a delivery-focused public service with the right people, with the right skills, in the right positions. Whether we need an entire new department is questionable, especially with our present decline in state revenue. I think money is one of those inhibiting factors in the civil service and this must always be taken into account.
In an excellent, unpublished paper by C Boissiac, titled "A South African Developmental State" and submitted in June 2009, it is mentioned that apart from the absence of skilled bureaucrats and public servants, the following statistics paint a very gloomy picture of corruption in our public sector. Again, I think the private sector can be excluded from corruption but, at the moment, we are confining ourselves to the public sector. I think the following must be emphasised:
As far back as 2002, 400 officials were charged with financial misconduct. In 2003 the Road Accident Fund lost at least R1 billion. In 2004, the Minister of Social Welfare indicated that grant scams were costing the state R2 billion per year. The Public Service Commission revealed that between 2006 and 2007 there had been a 46% increase in cases of corruption reported to the National Anti-Corruption Hotline. A reply to a DA member of Parliament revealed that the number of cases of corruption in the Department of Home Affairs increased by 415% between 2006 and 2008, from 82 to 422 cases.
An investigation by the Auditor-General, Terence Nombembe, into government officials who moonlight as business executives, made public in May 2009, found that more than 2 000 were involved in tender-rigging and corruption worth more than R610 million. The same report found that a total of 49 state employees were directors or members of companies that did business with national departments. Only 4% had permission to do this. For the period between August 2007 and July 2008, a total amount R35 million was paid to these companies. This state of affairs is untenable and not conducive to economic development. The DA will do everything in its power to stop corruption so that we can beat this particular cancer, which is inhibiting growth.
My colleague, Dr George, will elaborate on the DA's position regarding pension funds. I thank you, Madam Chair.
Chairperson, hon Minister, hon Deputy Minister and the House, Cope accepts that there must be proper co-ordination to make the economy grow. As a nation, we are depending on economic development to help us in transforming the economy so that key components of our economy, namely decent work and agrarian reform, can be transformed to ultimately ensure food security, universal and affordable education, a national healthcare system and a comprehensive plan to fight crime and corruption, and to ensure that we deliver and achieve clean governance.
We therefore agree with the need for proper co-ordination across all spheres of government. We also take cognisance of the commitment of the Minister, the Deputy Minister and the team at the Department of Economic Development, EDD, to achieving this goal.
However, we would like to sound a word of caution, drawing on the lessons and history of the Redeployment Development Programme, RDP. The four fundamental and key pillars on which the RDP rested were meeting basic economic needs, developing human resources, building the economy and democratising the state and society at large. Because the RDP department tread on many toes and did not have its own line functions, it was rendered futile and had to be shut down. We sincerely hope that this will not be the case again. If this were to happen, it would set back our economic development and would have wasted valuable resources.
Therefore, for the department to be respected as a delivery mechanism in our country, it would do good to develop its own profile and its own niche.
For Cope, the central issue of co-ordinated planning is the elimination of poverty through job creation and ensuring that we are dealing with unemployment through the development of entrepreneurship. However, in regard to the budgetary allocation, we believe the amount allocated to entrepreneurship, the second economy, is completely inadequate. This was noted by the portfolio committee.
If we are to deal with the scourge of unemployment that is facing us, we need to focus on the second economy so that its potential can be unlocked. We know that a large number of people in our country derive their livelihood in this segment of the economy. Therefore, we need to invest a lot in the second economy.
For 16 years, the greatest challenge to our state has been that of defeating poverty and creating decent jobs on a massive scale. Without a concentrated drive on teaching and stimulating entrepreneurship across all strata of society, no success can be achieved. For us in Cope, developing entrepreneurship is key in addressing income, wealth inequality and the serious challenges of unemployment and rural underdevelopment.
Fundamental to this drive is access to finance and speeding up delivery. For entrepreneurship to flourish, it is important that finance be made available. The Industrial Development Corporation, IDC, Khula and the South African Micro-finance Apex Fund, Samaf, all need to be adequately capitalised. We were excited by the elaboration given to this House earlier on the amount that will be injected into these institutions.
Furthermore, we need to draw lessons from the Brazilian model: it is important that the cost of borrowing for emerging businesses is reduced. For our people to be self-sufficient in the economy, they need to borrow at a relatively low cost. Cope is of the view that legislation must be introduced to make it possible for Khula to lend directly to the entrepreneur cheaper than commercial banks. It is clear that we have the infrastructure, like post banks and post offices. Therefore, it is important that we take this decision swiftly.
Cope agrees that the EDD will have to monitor closely how these development finance institutions, DFIs, perform with regard to economic development in our country. However, it means the department would have to have the capacity to do this. At the present moment, we are not sure whether the department will have that kind of capacity.
A very important component of our economy is the Competition Commission, which the Minister referred to. It has achieved a number of victories yet it is incapacitated. It is not used as the very important tool it can be to transform our economy.
Minister, while the growth path is still under discussion and has not been submitted to Cabinet yet, we believe that the point of focus should be the elimination of poverty, nothing else. You gave examples of the communities you visited and they make it clear that our people are living in grinding poverty. Therefore, our growth path must actually focus on the elimination of poverty and unemployment.
Meanwhile, Cope fully endorses the portfolio committee's request that EDD produce quarterly progress reports in respect of the Economic Development Index, IDI. Likewise, the committee is correct in asking for the establishment of a database on the real economy by the fourth quarter. The work of monitoring will require accurate information and statistics to be produced. There should be no sucking of information from the fingers.
The issue of the protection of intellectual property is very important to Cope. There are lessons to be learnt from countries like India, Taiwan and South Korea, because South Africa is number one in our continent with regard to creativity and innovation. Thank you. [Time expired.]
Chairperson, the IFP welcomes the fact that the department is in throes of being established properly. The Minister did indicate to us that there is a budget of R418 million and that the process of appointing staff is going to start in earnest. We trust that in choosing their staff the hon Minister and Madam Deputy Minister will not employ only thinkers and planners but also doers. Let's leave the thinking and planning to the National Planning Commission and other bodies.
In spite of the break with apartheid and the establishment of political democracy, the economic situation of most of our people has not improved. The biggest indictment of our political freedom is the fact that it has not been accompanied by the economic emancipation of our people. We heard that almost one million jobs had been lost since the start of the recession in October 2008. Our country has become the most unequal society in the world.
I want to pause here, Chairperson, to refresh our memories regarding some of the interventions made during the height of the recession. One of the interventions was the bail-out mechanism. It will be appreciated if the hon Minister can give some indication of how well this had worked, how many new jobs had been created and how many jobs had been saved, so that we know whether the bail-out intervention was successful or not in the end.
Chairperson, when it was first announced, the mandate and roles of the Economic Development Department, EDD, were unclear and overlapped with other departments such as National Planning Commission, National Treasury, etc. Although we have had sight of the strategic plan which the hon Minister has referred to, not much seems to have changed in defining a specific role for the department, save that some public entities will be falling under the direct control of the new department.
Other than that, reference is made to a number of departments with whom there will be working relationships. In government, we are well aware of "turf protection" and it is hoped that there will be a mutual and co- operative relationship which will lead to economic development in the true sense, in other words, dealing with the high rate of unemployment, the provision of adequate skills training, supporting small business development with know-how and, especially, easy access to finance. Other hon members also referred to access to finance. We believe that not empowering entrant entrepreneurs with finance is still one of the biggest drawbacks in enhancing this sector. This type of support must extend to all sectors, for example, sectors such as agriculture and technology.
Hon Minister, while we have instruments like Khula Enterprise Finance, Sida, South African Micro-finance Apex Fund, Samaf, etc to assist, red tape and bureaucracy does not favour the majority, but only the handful of new entrepreneurs who work through experienced consultants.
Khula, for instance, was established to provide venture capital to small start-up businesses. But since its formation Khula's effectiveness has been the subject of much dispute. Lack of capacity, inadequate funding, political machinations, an obsession with investment rather than servicing the needy, and a focus on the survival of the organisation have been the order of the day. Hon Minister, for Khula to work properly, this way of operating will have to change.
Although long-term viability issues need to be considered, policy changes should be reviewed so that there is no focus on corporatisation and the investment of funds in equity markets, etc. Khula needs to be realigned to meet the strategic priorities of the government and of the EDD in particular.
In most countries it is the small, medium and micro enterprises, SMMEs, that generate the greatest number of jobs, but this is not the case in South Africa, which is fixated on the role of large companies. Raising capital in South Africa is very difficult for new entrants into the economy and we need to remedy this if we are to promote entrepreneurialism.
More funds should be made available to cushion communities that are increasingly being affected by the recession and massive price increases. The channelling of special funds to these organisations by donors and government should not be seen as an investment to yield profits. These funds should be treated the way they are - relief funds.
A few should not continue to become richer at the expense of the poor. Social development should also be a focal area. In this regard, we note the interesting concept of utilising a portion of retirement funds for the development of social and other infrastructure. However, the Minister needs to clearly unpack the modus operandi.
Without faster economic growth and the dramatic improvement of our skills base, poor communities will continue to be downtrodden. It is well documented that the scarcity of skills in South Africa can limit the extent to which our economy grows.
Chairperson, I just like to refer to DFI in KwaZulu-Natal ... Thank you. [Time expired.]
Chairperson, in 2007 the national conference of the ANC emphasised that in matters of economic growth the ANC will employ continuity in change. It noted that since 1994 we have made substantial progress in transforming the economy to benefit the majority but serious challenges of unemployment, poverty and inequality remain. A developmental state with strategic organisational and technical capacity to drive economic growth was seen as key to overcoming these challenges. Therefore, after the general elections in 2009 the hon President announced the establishment of a new department on economic development.
The January 08 statement by our hon President makes it an obligation to pursue sustained development based on inclusive growth and to commit to ensuring that state-led industrial policy leads to the transformation of the economy. It further states that such state-led industrial policy programmes will direct public and private investment to support decent work outcomes, including employment creation and broad economic transformation. This programme will target labour-intensive production sectors and encourage activities that have employment effect. It will include systematic support for co-operatives by way of dedicated support institutions, small business development, and support for investment in productive sectors. The ANC is very aware of the impact that the economic crisis has on the pace and sequencing of delivery. The crisis is caused by a range of factors, including gross imbalances and inequalities in the global economic system. The impact of the financialisation of economics and poor business practices has resulted in a significant depreciation of assets, closure of companies, rising unemployment and a sharp slowing of economic growth during the recession.
Like other developing countries that are strongly integrated into the world economy and significantly dependent on its good health, South Africa has been affected by the sharp fall of the demand for its export products and a fall in the prices of key export commodities. In addition, the national credit crisis has meant that funds have become scarce and expensive. Consequently, portfolio investors are wary of emerging markets, including South Africa.
Sihlalo, Malungu EPhalamende, ngaleyo ndlela siyi Ningizimu Afrika kumele sihlangane sibe munye ukuze siqinisekise, futhi sibe nesiqiniseko sokuthi lo monakalo odalekile awusihlukanisi njengoba sibumbene nje. Ukuze kuthi labo asebephumelele bakwazi ukusiza ukutakuleni labo abasafufusa nalabo asebelahlekelwe kulesi simo sokufadalala komnotho.
Okwethu okumela sikwenze ukuthi sithwalisane lo mthwalo ngokuhlanganyela, ukuze labo abahluphekayo, nababengenawo amathuba bavikeleke kulesi simo. Nokuthi futhi sibe nesiqiniseko sokuthi umnotho wethu uthatha elinye igxathu, ukuze sonke sizuze ngokukhula kwawo. Nokuthi futhi sabelane ngawo njengabantu baseNingizumu Afrika.
Sibuye sandise namathuba emisebenzi nasezindaweni zasemakhaya ngoba bona basasalele emumva njengoba kusandliwa imbuya ngothi nje. Nokuthi phela lo hulumeni onakekelayo oholwa uKhongolose uzimisele ukusiza imiphakathi yasemakhaya ngohlelo lokuthuthukisa nokwakha kabusha futhi ubuye uvuselele nalezo zimboni esezavalwa, ukuze abantu bayeke ukufudukela ezindaweni zase madolobheni, kodwa bakwazi ukusebenza besemakhaya.
Lokhu kungasiza kakhulu uhulumeni wethu njengoba kunokwanda kokutelekela izidingongqangi ngenxa yokuthi iningi labantu abahlala ezindaweni ezingahlelekile yilabo abasuke emakhaya beyofuna amathuba emisebenzi emadolobheni. (Translation of isiZulu paragraphs follows.)
[Chairperson and Members of Parliament, in that way we need to unite and be one as South Africans to ensure that the damage done does not divide us as we are this united. Those who are successful could bail out those who are still suffering as well as those who have lost everything in this recession.
What we need to do is to carry this burden together so that the needy and those who were previously disadvantaged could be protected in these circumstances. And we also need to ensure that our economy takes a step forward so that we are able to benefit through its growth. And we need to share it as South Africans.
We also need to increase employment opportunities in rural areas as these areas are still lagging behind since they are impoverished. This caring ANC- led government is committed to uplifting the rural communities with the Reconstruction and Development Programme and also in rebuilding those factories that were closed down, so as to stop people from migrating to urban areas and by so doing enabling them to work in their own areas.
This will help our government a lot as there are always service delivery strikes since most of the people who are living in these areas that have no infrastructure are those who left their homes to look for job opportunities in the urban areas.]
Therefore, in December 2008, the social partners that make up the Presidential Economic Joint Working Group, namely organised labour, business and government, met to consider how South Africa should collectively respond to the more difficult economic conditions the country is facing, largely as a result of the international economic crisis.
South Africa agreed on a collective response to challenges facing us. That collective response has been set out. Addressing the problems of access to credit and working capital, the Industrial Development Corporation, as a direct response to the crisis, has made R6 billion available over the next two years.
The ANC-led government is committed to the implementation of the framework for South Africa's response to the international economic crisis. The framework was developed and agreed to at the National Economic Development and Labour Council, Nedlac, in February 2009 and it sets out principles and programmes to tackle this crisis. This framework has strong principles that seek to protect the poor, the vulnerable, the unemployed, as well as low- income workers. It also aims to strengthen the country's capacity to grow decent work in future and to maintain high levels of investment.
Among the programmes that should be intensified are ensuring the spending of the R787 billion budget on improving infrastructure, and tailoring the fiscal and monetary measures in a manner that complements trade and industrial policies. The manner in which we tailor these measures should be such that they contribute to the achievement of overall development objectives, including ensuring that the funds meant to assist companies in distress flow to deserving enterprises.
During its oversight visits to companies in distress, the Portfolio Committee on Economic Development identified the following challenges. First, there are companies where retrenchments have taken place because they were unaware of the labour lay-off schemes provided by the Department of Labour. However, some companies indicated that they have already rehired some of the retrenched workers. Second, in some companies there is little or no relationship between unions and employers, whereas others have a good working relationship between the two. Finally, we also found that some companies lacked proper marketing strategies. The main purpose of assisting companies in distress was to save jobs. Therefore major interventions in saving and retaining jobs were done through the training lay-off schemes.
The macroeconomic policy context in which the 2010 budget is tabled is characterised by a shift of emphasis away from inflation control to growth and employment creation. Pressures on inflation are significantly reduced. However, electricity rates have increased and we shall have to monitor the real effect of this increase. Demand for goods and services, which has been on the decline for the better part of 2009, showed some turnaround in the last quarter of the same year.
In the state of the nation address the hon President gave a broad overview of how ANC policy proposals are being translated into government programmes and how the Budget should respond to these. The 2010 Budget was delivered in the midst of an ongoing global economic crisis during which millions of jobs have been lost. In 2009 South Africa lost 870 000 jobs, mainly in the manufacturing sector.
Sihlalo, malungu ahloniphekile, phezu kwalesi simo sokufadalala komnotho, abanye ogalakajana babe sebethola ithuba lokukhuphula amanani ngokungemthetho. Bakwenze lokhu bazi ukuthi kuzoba nomthelela omubi kanjani ebantwini bakithi abahlwempu.
Ukuba khona koPhiko Olulwa Nenkohlakalo Kwezokuncintisana okwaziwa nge-the Competition Commission, kube nempumelelo enkulu ekubambeni nasekubekeni amacala nasekuhlawulisweni kanzima kwalezo zimboni ezitholakale zenza le mikhuba. Kubalwa la ukukhushulwa kwamanani ekudleni okufana nesinkwa, ubisi, inyama ebomvu neyenkukhu, nomanyolo (fertilisers), nokunye okuningi.
Siyawuncoma kakhulu umsebenzi owenziwe yile khomishana ngoba nokukhushulwa kwamanani okugibela izindiza kunqandiwe, ngoba bese kuzodala ukungathembeki njengoba siyi Ningizimu Afrika sizokwengamela lo mqhudelwano oyingqophamlando wendebe yomhlaba webhola lezinyawo. (Translation of isiZulu paragraphs follows.)
[Chairperson and hon members, on top of this recession, there were the witty ones who used this opportunity to unlawfully hike prices. They have done this while they were fully aware of the negative impact this would have on our poor people.
The introduction of the unit that fights price fixing, known as the Competition Commission, has had great successes in capturing, charging and imposing heavy fines on those companies that were found practising this scam. This includes price fixing of food stuff like bread, milk, red and white meat, and fertilisers and many other things.
We greatly commend the commission for its good work because even the price fixing with regard to the prices of flights was aborted because that would have resulted in us, as South Africa, being an unreliable country as we will be hosting the historic event, the Fifa World Cup.]
The ANC-led government has also taken the necessary steps to strengthen the ability and capacity of Sars in order to address custom fraud, which has also led to many job losses. As part of its mandate to support the economy and provide the revenue needed by the government to build democracy, Sars performs several important roles in international and local trade. These roles include enforcing customs and related trade laws in order to ensure the social welfare of citizens, controlling the importation and exportation of prohibited and restricted goods, as well as facilitating the speedy movement of travellers through South African borders.
As the Portfolio Committee on Economic Development we undertook an oversight visit to ports of entry, such as the Lebombo border post and O R Tambo Airport. I would like to express my appreciation of the manner in which Sars conducts activities relating to customs fraud. With regard to Sars's risk management framework, it was noted that the framework guides Sars's interventions that are in support of their strategic goals. Furthermore, the framework allows Sars to focus resources on high-risk and medium-risk areas. Sars includes the co-ordination of activities of border agencies in its strategic goals, providing strategic direction for ports of entry and protecting the South African society and economy.
In conclusion, I would like to thank the Minister for work well done in this new department. I would also like to thank the hon Deputy Minister for her programme of visiting the provinces to make sure that the mandate of the department is fulfilled. The ANC supports the Budget Vote. [Applause.]
Chair, the ID supports the creation of this Ministry and with this Budget Vote it will now become a fully functional and independent entity that is able to implement its strategic mandate.
The ID sees the creation of this Ministry as evidence that the government is attempting to pursue a more aggressive economic policy, with the state intervening to address the structural constraints of our economy.
The ID believes that this is long overdue. For too long we lived under the illusion that our economy was sound, while our unemployment rate remained one of the highest in the world, our gross inequalities widened even more and the natural wealth of our country was unsustainably depleted.
However, while we support this new economic approach, we do feel there are some major pitfalls which we need to avoid as we embark on this ambitious programme.
This Ministry needs to be more than just an economic think tank. It must possess the machinery and political will to ensure that the necessary interventions are driven through all government departments. Many government departments failed to implement the measures required from the first industrial policy and created bottlenecks in the system. This cannot be allowed to happen again.
This department must be willing to address both market and government failures. It must be alive to the possibility of state entities and programmes being captured by special interests and corrupt forces. All potential conflicts of interest must therefore be dealt with aggressively.
Any form of support that is offered to companies or sectors must be done according to a measurable set of indicators. Obviously job creation must be a primary indicator, but so must increased competitiveness and ability to export. Infant industries cannot stay in government nappies for too long.
The ID has also noted your intention to utilise pension funds to provide financing for developmental objectives. Other countries have done this with some success, but we must ensure that the overriding priority is to generate sustainable returns for pensioners without incurring unacceptable levels of risk.
Finally I would urge this department to push the envelope and seek to position South Africa ahead of the new technological curve. The world is rapidly changing and the old economic models have shown their severe limitations in dealing with the challenges of the 21st century. Let us therefore pioneer a new economic approach and effectively deal with our vast socioeconomic and environmental problems. I thank you.
Chairperson, hon Minister, hon Deputy Minister and hon Members, in the past 15 years we have failed to significantly change the apartheid economic framework which locked the majority of black South Africans out of the economy. The UDM supports Budget Vote 27. However, we need to guard against repeating past mistakes.
Since 1994 we've seen various ministers introducing different economic policies. First it was the Reconstruction and Development Programme, RDP, then Growth Employment and Redistribution, Gear, then the Accelerated Shared Growth Initiative for South Africa, Asgisa. Now we are getting invitations to attend a dialogue on the next economy.
This continuous changing of economic policies whenever a new minister is appointed is not helpful, nor should it be a symptom of ideological battles between the ruling party and its alliance partners. Often the only beneficiaries of this process are the consultants who develop these so- called new policies, which only end up gathering dust in government offices while poverty persists.
First things must be first. What we need is an economic indaba where a genuinely representative council of South Africans can plot our economic path. The objective of such an indaba, first and foremost, must be to create a meaningful and genuine role for all black South Africans in the economy. To achieve this, it would be necessary to review the progress made since 1994 and identify any inherent defects in the overall economic approach. Such a review must particularly investigate whether some of the sunset clauses agreed to between the National Party and the ANC - especially surrounding questions of property and land - have played a role in slow economic reform. Such an indaba could consider whether we need to rearrange our priorities, for instance to prioritise the integration and upgrading of townships and former homeland infrastructure with the rest of the country.
At such a national indaba, South Africans would have the opportunity to deliberate on questions such as the nationalisation of mines and whether these calls are merely the last desperate bid of black economic empowerment, BEE, mining magnates for a bail-out by the state. Indeed, we need a proper audit of our resources and who manages them for future generations, not the current situation where there seems to be a free-for- all in the looting of state resources.
Already we see the signs of widespread frustration in many communities. A radical economic transformation has to occur within acceptable timeframes to avert the type of social explosion that the Convention for a Democratic South Africa, Codesa, negotiations succeeded in avoiding. I thank you.
Die VF Plus vind dit sinvol dat die regering gefokusde aandag gee aan ekonomiese groei. Dat daardie ekonomiese groei gepaard moet gaan met behoorlike werkskepping, is verder van kardinale belang. Ons wil ook die regering se poging om die gebruik van die begroting te meet aan tasbare uitkomste erken as 'n stap in die regte rigting. Dit moet in der waarheid die taak van alle staatsdepartemente wees om hulle besig te hou met die gedagte dat hulle uitsette die vrye mark in staat moet stel om kwaliteit werk te skep. Uiteindelik moet die staat krimp en die vrye mark moet volhoubaar groei.
Wat betref die Departement van Ekonomiese Ontwikkeling, is die mandaat van beleidskordinasie sinvol, aangesien ons binne 'n komplekse sisteem vorentoe moet kyk. Ek is egter steeds nie seker hoe die departement se werksaamhede sal saamval of losval, ten aansien van die beoogde Beplanningskommissie nie. Dalk sal die Minister so gaaf wees om dit aan ons te verduidelik.
Die begrotingsverslag dui ook aan dat die departement personeel sal moet aanstel. Dit behels natuurlik 'n swaarder las op die fiskus en dus die belastingbetaler. Ons sal dus ook wil weet hoe daar verseker gaan word dat die nuwe aanstellings maksimaal tot voordeel van die land sal wees. Ons wil verder weet of die Minister aanstellings op meriete gaan oorweeg, of moet ons weer tevrede wees met nog ANC-kaders wat struggle-vergoeding kry deur poste waarvoor hulle geen kapasiteit het nie. (Translation of Afrikaans paragraphs follows.)
[Adv A D ALBERTS: The FF Plus says it makes sense for the government to pay focused attention to economic growth. It is also of the utmost importance that this economic growth is attended by proper job creation. We also want to acknowledge the government's attempt at measuring utilisation of the budget against concrete outcomes as a step in the right direction. It should indeed be the task of all government departments to busy themselves with the idea that their outputs must enable the free market to create quality jobs. The state should eventually contract and the free market should grow in a sustainable manner. As regards the Department of Economic Development, the mandate of policy co- ordination makes sense, because we have to look ahead within a complex system. However, I am still not sure how the department's activities will fall together or fall free in respect of the envisaged Planning Commission. Maybe the Minister will be so kind as to explain this to us.
The budget report indicates that the department will have to appoint staff. Of course this entails a heavier burden on the fiscus and therefore on the taxpayer. We will therefore have to know how one can guarantee that these new appointments will take place optimally to the country's advantage. Furthermore, we want to know whether the Minister will consider appointments on merit, or must we again be satisfied with more ANC cadres receiving struggle compensation through posts for which they do not have the capacity.]
As for the institutions that the department will oversee, I would like to comment as follows. First, I want to comment on the Competition Commission. The further investigation into high food and banking costs must proceed with speed and intensity. This must be a key priority in raising the quality of life in South Africa.
Second, I want to comment on the Industrial Development Corporation, IDC. The department and the IDC must, as a focus area, pledge its support to the film and television industry, because this industry creates jobs fast and fairly effortlessly. We believe that by adding tax incentives to the mix, more long-term international productions will come to South Africa, leading to the quick creation of jobs. The director of the film District 9, Neill Blomkamp, a South African - or ex-South African - should not be living in Vancouver, but actually in Johannesburg.
We also believe that the essence of the problems besieging South Africa is the inability to deliver policy outcomes. This means that we have a people problem, as such. Therefore, I wish to know whether merit will somehow make its comeback to South Africa, so that we can deliver excellence, not only in our daydreams but also in the real world, in South Africa, for all its people. And when you talk about building an inclusive economy, we would like to know if it means that there is a place for minorities.
I have a last note to the official opposition. When you mention your special type of liberalism, of the Alan Paton-type, you talk of a generosity of spirit. I do not see that when you play games by excluding certain oppositions from talks to oppose the ANC. Mr Trollip is not here, but I would like to address this to him. I believe he is a reasonable and sensible man. I, therefore, ask him to think again and not to exclude certain segments of South Africans from fighting for a better life. Otherwise the electorate will punish you in the end, for they care not about our egos but only about what is good for them. Thank you.
Chairperson, hon Minister Patel, hon Deputy Minister Tobias-Pokolo, hon Minister Pandor, hon members, ladies and gentlemen, allow me to greet you this afternoon as we, as a collective, look at solutions urgently needed by our country's economy at this time.
Before I continue with my speech, I would like to say that we are all worried about the 14% of our people on social development grants, but we have to put it in context. Who created that situation? It is not us. The government of yesterday - and some hon members who are in this House will actually relate much better to that - had determined that some people, Africans in particular, should be servants and domestic workers.
A responsible government does not come in and turn a blind eye to something like that. A responsible government has to make an intervention. As we mention these figures, we need to make sure that we also educate people, so that we do not just throw money at that 14%. We do not like the situation. If there is a way of getting people out of it, we will do so.
The singular and most consistent known vehicle for economic growth is strategic investment in human capital. Our best asset in this country cannot be anything else but its people. Once you properly invest in human capital, you are assured of a high rate of return because this is when inventions, discoveries as well as innovations become a reality. Effective investment in human capital has a multiplier effect, where it is not only the individual who benefits but others too, through job creation and the opening up of frontiers so that internal and external markets become competitive. The skills that are then developed become "human-made" brain power and go beyond a major dependence on mineral commodities. This has been clearly demonstrated by Asian nations such as Japan, Korea, Malaysia and Singapore.
The world indices do not reflect a South Africa that is investing strategically in human capital. For example, we are rated poorly in areas like mathematics and natural sciences, and this is where strategic inventions and innovations come from. We need to focus more on these areas.
In this regard, I would like to say thank you to the body of former teachers in Gauteng - and I am one of them - who are pledging to assist with this. I am so happy that I can go back to the classroom and teach mathematics. [Applause.]
An inclusive approach will focus on developing academics who will propound theories and models of economic growth, but this will certainly not happen to the exclusion of people on lower academic levels in our society. There is a tendency to leave our people behind and I wouldn't want us, this new department, to do that as well. We must urgently produce more artisans. We need them more than ever before. What happened to our vocational schools?
Die ambagskole, waar is hulle vandag? [Where are our trade schools today?]
We must get them back because we need to train as many people as possible.
Let's look at the match between the institutions we have and the demand from the economy. In most cases there is no match. The Sector Education and Training Authorities, Setas, must be driven by these gaps in the economy for them to be meaningful tools in our economy. This would help greatly to sustain our economic growth and development.
We are currently experimenting with infrastructure development projects throughout the country. Their success will depend on the utilisation of intellectual thinking and the availability of artisans. The future development of skills will depend entirely on how we use skills after the infrastructure boom years.
We need to develop a competitive economy. This requires an understanding of the structural features that are impacting positively and negatively on the growth and development of our economy. Some of these structural features are the following: Our country has a history of a lack of investment in its human capital. We concentrated at the top, but left out the bottom. It is high time that we go there and make sure our people become part of the mainstream economy.
Our economy exhibits a high dependence on mineral commodities, and the entire economy relies on the strength of a single province: Gauteng. Just imagine what would happen if the economy of that province collapsed. The entire country would have a problem. It is important for us to unlock the potential in other provinces.
The Minister mentioned that I have been doing the rounds in provinces. I have discovered, for instance, that the Free State - a province that produces quality agricultural goods - does not add value to their produce. The MEC said to me that his province produces potatoes but for him to eat chips, the potatoes must leave the Free State and come back fully processed. So, making sure there are processing plants is one of the easy things we can do.
The decline of agriculture in the South African economy is a major threat to the growth and development of the economy. We must concentrate on bringing agro-processes closer to agricultural communities to give these communities the opportunity to grow their industries and add value to the food they produce. This is doable, and we call on all South Africans with expertise to come forward and save our crops. Our country shows a lack of global competitiveness. We could be exporting more than we are at the moment. We are importing more than 50% of the chicken we eat in South Africa. This means that more than half of the chicken eaten in South Africa does not come from within South Africa. We are importing fruit and yet we can produce so much food.
So, if hon members could look at the latest report from Sars, and if we work together as South Africans to bring relief to South Africa, we can do a lot.
For instance, we have a ... I think my clock is wrong. Instead of going down, it is going up!
Hon Deputy Minister, your time has not expired! [Laughter.]
I know, Chair, but I think I have more time than I need. Should I go on with the clock that is going up?
Hon Deputy, you owe yourself another three solid minutes.
Thank you, Chair. We as a government ... I was talking about imports and exports, but I think we need to ... [Interjections.] I said it, and I said it in Afrikaans. I thought you understood. [Interjections.]
What I am saying here is that I don't know who was monitoring the reports from the South African Revenue Service, Sars, to check imports and exports, and at what stage this was done. But I have made it my responsibility - hon Minister, you know that. I am sitting on those reports, and I'm also looking at what we can produce.
I have been to a number of provinces. Some of the things I have said and wanted to say can be touched on later; I think I must use my remaining two minutes to say the following:
We cannot say much about small, medium and micro enterprises, SMMEs. When we mention them, some of our colleagues talk about it as "grassroots economics". But even the scholars that the Minister mentioned, people like Joseph Stiglitz, say that a country that leaves its people behind is a country that is definitely going to fail. So, we need to make sure that those SMMEs succeed, and they can only succeed if there is incubation. We need to make sure we stay with them until they know how to use the public purse. We need to make sure that the money given to them comes back and trains other people.
This does not mean that we want a person to jump from one department to the other - registering an SMME, not producing, going to another department ... We are going to make sure that all departments speak to each other. When you are Gwen Mahlangu who goes to the health department, you should be Gwen Mahlangu at all the other departments. If people go to another department, we will find them and make sure they don't access the public purse repeatedly.
In conclusion, I want to say that we need to encourage our provinces to profile themselves. We need to know what we have in the provinces, even at ward level, so that the interventions address their actual problems.
As I went around the country, I saw a number of skills centres not being used by anybody right now ...
Hon Deputy Minister, your prayers have been answered: Please conclude.
Thank you, Chair. My last point deals with patriotism. It is high time, South Africans, that we love South Africa. It is high time that we love our products. As I was travelling through the country, I discovered the best coffee in South Africa in an area called Sabi, in Mpumalanga. I never knew about it. Had I not been there, I would not have known about it. It is better than the Blue Mountain coffee of Jamaica - for those of you who travel. I think Nic Koornhof knows about that ... [Time expired.] [Applause.]
Chairperson, economic development has been defined as the reduction or elimination of poverty, inequality and unemployment within the context of a growing economy. The central aim of this department is to increase the number of decent jobs in the economy. The ACDP is fully supportive of these worthy aspirations. The million dollar question is, of course, how to achieve this.
According to the strategic plan, the department will have a "cross-cutting" role, straddling many departments. Last year there was great uncertainty about who bears the ultimate responsibility for formulating economic policy, a function given to National Treasury in terms of the Public Finance Management Act. That uncertainty persists today.
There is also a considerable degree of overlapping with regard to, for example, the stated aims of "evaluating macroeconomic and microeconomic policy tools and improving their alignment" and doing economic modelling. These are already a core function of National Treasury. There also appears to be some overlap with the National Planning Commission and the functions of the National Economic Development and Labour Council, Nedlac.
The question arises: Is there not a danger that economic policy may become "deharmonised" in the process, or will this department's co-ordinating function prevent this? Clearly, a harmonised economic policy that provides certainty and predictability is crucial to attracting foreign investment, particularly in a climate of global economic uncertainty.
The Minister is to take responsibility for developing a new growth path for the economy. The challenge, then, will be to get buy-in from all social sectors and to obtain the resources to fund this model. As far as the former is concerned, let us be reminded what the chief executive officer of Business Leadership South Africa said recently:
South Africa is not making sufficient progress because there is no shared vision that prioritises growth as a national goal. The first step would be for society, led by government, but with business, labour and civil society in close support, to agree on a vision of doubling the size of the economy within a generation.
The ACDP agrees with this. Last year we called on various sectors, on all the social sectors, to enter a social pact, which the Minister referred to earlier; a shared vision. The framework agreement on the international economic crisis was the first step in this regard. We believe that much more can be done. We believe a social pact, based on patriotism, can be achieved. To conclude, the ACDP believes that as far as funding is concerned, we should be cautious about exploiting retirement funds. Developing bonds may be a feasible alternative option to attract foreign and domestic investors. We support an economic policy that is aimed at enabling a sustainable growth path that broadens the economic net and absorbs the high level of unemployed work seekers. The department faces huge challenges to achieve this, and we as the ACDP wish the Minister and the Deputy Minister well in this regard. I thank you. [Applause.]
Hon members, it is not often that a confession comes from where I sit. I confess that I have been using three watches, and I am advised that they don't have equal authority. Hon Deputy Minister, I owe you one minute because I used a watch with less authority. I have now changed the way in which I consult the watches. Thank you very much.
Sihlalo, Ngqongqoshe uPatel, Ngqongqoshe mama uNaledi, Sekela Ngqongqoshe mama uMahlangu-Nkabinde, bahlonishwa, nabahlonishwakazi, nezihambeli, nezikhulu zoMnyango ngiyanibingelela.
Ngithatha leli thuba ngesikhathi esihle impela njengoba besigubha Usuku Lwamalungelo Abantu. Umbuzo uthi, Ngabe lingabonakala yini ilungelo eliphelele uma kungaqinisiwe izinsika zomnotho na? Ngabe izikhungo ezisingethe ukunikezelwa nokulondolozwa kwezimali zingabasebenzela yini abantu uma zingaguqulwanga ngendlela ezisebenza ngayo njengamanje.
Izimpendulo zithi akufakwe izimali ezithe xaxa ukuze kukhuthazwe intuthuko nezinguquko kuzo zonke izikhungo zezimali ukuze abantu bonke abaswele bakwazi ukufinyelela kuzo. Lokhu kuyinto esiyikhuthaza ngazo zonke izikhathi ukuze silwe nendlala kumele kube khona izinhlelo zokwenza ukuthi kube lula ukufinyelela kubantu emnothweni nengcebo yezwe labo - ngokuthi senze ukuthi izimboni ezizimele, uhulumeni namabhizinisi akhe nemiphakathi basebenzisane ukuze kunikezelwe ngezidingo kubantu. (Translation of isiZulu paragraphs follows.)
[Mr Z C NTULI: Chairperson, Minister Patel, Minister Ms Naledi, Deputy Minister Ms Mahlangu-Nkabinde, ladies and gentlemen, visitors and the departmental officials, I greet you.
I take this opportunity at a very good time as we were celebrating Human Rights Day. The question is, can a full right be observed if the pillars of the economy are not strengthened? Can the development finance institutions work for the people if they are not re-structured from the way in which they are working presently?
The answers are that more money should be put in, in order for progress and change to be encouraged in all these development finance institutions so that all poor people are able to have access to them. This is what we are encouraging at all times. In order to fight poverty there must be some programmes in place which will make it easy for the people to access the economy and the riches of their country - by allowing private companies, the government and its businesses and the communities to collaborate in order to deliver services to the people.]
I want to agree with hon Singh that together we can do more if we change the workings of development finance institutions, DFIs. Chairperson, the 52nd ANC National Conference at Polokwane gave a mandate to build and strengthen development finance institutions, as well as, and I quote:
... nonfinancial institutions, which are accessible to the people, and which are able to effectively channel financial and institutional resources towards a variety of economic transformation objectives, including industrial diversification and development, small businesses and co-operatives, small-scale agriculture, micro-enterprises and local and regional economic development, and the empowerment of youth and women.
This indicates a major reorientation and transformation of the DFIs to focus more on the development agenda, placing high priority on infrastructure development not only in the areas of water, sanitation, health and education but also transport and irrigation. This is in line with our agrarian reform and rural development strategy.
Sihlalo, kuphinde kulindeleke ukuthi lezi zikhungo zidlale indima ebalulekile ukuvala igebe lezinsiza ekunikezelweni kwezimali kosomabhizinisi abancane nalaba abasafufusa uma kuwukuthi izikhungo ezinkulu zihlulekile ukubasiza ngezimali.
Okunye okuqaphelekayo ukuthi lesi simo esikhona sokuwa komnotho kanye nezinkinga ezikhona emabhange amakhulu, kuzoza nomthwalo osinda kakhudlwana ophoqa ama-DFI ukuthi axhase amabhizinisi antengayo futhi adlale indima enkulu yokubuyisela umnotho ezingeni elifanele. Sithi akabe ngomafika kuqala ekuvuselelweni komnotho wezwe lakithi. (Translation of isiZulu paragraphs follows.)
[Chairperson, it is also expected that these institutions should play an important role in closing the gap in terms of resources in that it should provide money to small and upcoming businesses if the major institutions failed to assist them financially.
What has also been observed is that the present economic decline and the problems in major banks will come with a heavier load which will compel the DFIs to fund the unstable businesses and to play a big role in bringing back the economy to the right level. We say they should be the first to revive our country's economy.]
South African DFIs have been correctly criticised for gravitating towards traditional norms and standards of commercial banks. Their lending standards and requirements have been seen to be restrictive, using criteria that support businesses that are already formalised and meet the criteria for commercial lending.
Thus, DFIs have simply become about cheaper lending rates instead of being critical drivers of development. Lending rates of DFIs have remained unsustainable for small and upcoming businesses, and the focus has been on DFIs making returns while receiving significant government injections. Further, the mandates of the various DFIs have not been properly co- ordinated, which led to duplication of roles and, in some cases, loss of opportunities.
Kunesidingo esikhulu sokwenza uhlelo lokudidiyela kanye nokuhlanganisa ekuthuthukiseni izikhungo zemali. Ngaleyo ndlela kudingeka ukuthi ama-DFI ahlelwe kabusha ukuze ahambisane nezidingongqangi zabantu bezwe lakithi.
Iqhaza lemboni yezimali yaseNingizimu Afrika likhulu futhi lemboni yezimali ibonakala kuyiyo enkulu nethuthuka masinyane e-Afrika yonkana. (Translation of isiZulu paragraph follows.)
[There is a great need to put in place a programme that will integrate and combine the development of the finance institutions. In a way what is required is that the DFIs should be restructured in order to bring them in line with the basic needs of the people of our country.]
Currently, the financial services sector accounts for 20% of our gross domestic product, GDP, an increase from 12,4% in 1991. However, this sector remains largely untransformed, not strongly regulated and exploitative in its practices.
This means that South African DFIs have to take responsibility for transforming the financial sector and the lack of finance for development. This should not be done only by providing cheaper and competitive lending rates but by collaborating with commercial banks in creating unique financial packages for development. For example, research shows that linkages between formal and informal financial institution systems create new opportunities for delivering microfinance to the rural poor. Therefore, DFIs must play a significant role in helping to facilitate formalised banks in rural areas where commercial banking has fallen short.
Ake sibuke indlela ama-DFI asiza ngayo ngezimali kuma co-operatives kanye namanye amabhizinisi amancane. UKhongolose uyakholelwa emnothweni oxubile ozolawula uhulumeni. (Translation of isiZulu paragraph follows.)
[Let us look at the way in which the DFIs financially help the co- operatives and other small businesses. The ANC believes in a mixed economy that will control the government.]
A mixed economy requires a sizable portion of entrepreneurships, co- operatives and small businesses to diversify the large monopolised corporate environment.
Therefore, DFIs must play a critical role in the augmentation of risk and reducing the cost and time of starting a business in this country. The risk aversion patterns and lending rates of our DFIs must therefore be significantly lowered for them to successfully achieve this mandate.
Izindawo ezinamahhovisi alama-DFI kumele zifinyeleleke kalula, futhi kubhekwe nendawo ezakhiwa kuyona. Amahhovisi ama-DFI siwathola emadolobheni amakhulu, ezifundazweni kanti ayadingeka abe khona nakuma-ditrict kanye nakwezinye izindawo zomasipala, nasemakhaya ukuze osomabhizinisi basemakhaya basizakale. (Translation of isiZulu paragraph follows.)
[These DFIs should be easily accessible, hence we should also look at where they are built. We find DFI offices in major cities but in fact they need to be available even in the districts and in other municipal areas, as well as in rural areas in order for the rural businesses to receive assistance.] Apart from entrepreneurship and small business development, DFIs must re- orientate themselves to fund infrastructure and developmental projects in the main. This will shift their focus from mere business development funding towards more of a developmental philosophy.
Therefore, there must be a dedicated infrastructure and development fund in DFIs, allowing funding for municipalities and nongovernmental organisations, NGOs, to assist the national government in addressing the service delivery and infrastructure backlogs. Funding must also encourage business to employ large numbers of people and use labour-productive methods.
This is also why broad-based black economic empowerment must remain the focus. Anomalies that have been noted, such as looking only at ownership structures and not at the entire component of black management and the number of staff, window dressing, former beneficiaries and consortiums using DFIs for cheaper financing when not benefitting a broad base, will need to be addressed.
To run quickly over the competencies of the three DFIs, I will start with the Industrial Development Corporation, IDC. Based on its extensive investment and involvement in various sectors, the IDC has detailed knowledge of the real economy, capacity to assist in promoting sector development strategies and considerable research and technical ability ... Sengivala Sihlalo, bengithanda ukuphonsela inselelo kubaholi bonke bala-DFI ukuthi akebeze kuma constituencies amalungu ePhalamende siwabone. Ngiyabonga. [Isikhathi Siphelile.] (Translation of isiZulu paragraph follows.)
[In closing Chairperson, I would like to challenge all the DFI leaders to come to the constituency offices of the MPs so that we can see them. Thank you. [Time expired.]]
Chairperson, hon Minister and Deputy Minister, hon members, the House and our guests in the gallery, it is important to briefly state where we come from regarding developmental issues and governance in general. The regime before 1994, now counted among the dead, institutionalised separate development and thus broadened social and economic inequalities. For instance, R6 million would be spent to build five toilets for whites only in a community of four to five million people. On the other hand, R2 million would be spent to build three toilets in a black community of about 20 million people. The difference in expenditure tells you more about the quality of infrastructure for the white community as compared to the infrastructure in the black community.
This was a sectarian government which believed the development of poor communities should largely be financed through private capital rather than public-sector funds. They created greater reliance on the market, minimised state intervention and could not account for public funds. They preferred liberalising exchange controls, which has the potential to make South Africa vulnerable to foreign capital flows.
They also wanted to see the implementation of industrial development through investments in private companies, thus holding the government to ransom as far as economic development was concerned. Now the government of the day is expected to correct the mess of more than 100 years in 16 years.
Chairperson, this is practically impossible. All normal thinking people in the world would bear testimony that the level of socioeconomic development in South Africa, with the ANC-led government, is something to write home about, hence the country has attracted foreign investment. It is unfortunate that others chose to be ignorant and say the government did nothing. Yes, we acknowledge that more needs to be done.
Today, we're talking about planning economic development that is inclusive and accessible to all in the country. The Economic Development Department, EDD, applied strategies through the creation of economic development policies to make the environment conducive to participation by all in the process of empowering communities and creating decent jobs. The effective application of economic development policies finds expression in good co- ordination, planning and the alignment of programmes. The main role or objective of development plans and strategies is to transform society. We are striving for a common goal: nation building. The industrial policy action plan takes cognisance of the need to be biased in favour of historically disadvantaged individuals, hence the emphasis on the promotion of a labour-absorbing industrialisation path.
However, this policy is abused by historically advantaged people. They use poor people as fronts. In the name of Broad Based Black Economic Empowerment, BBBEE, gardeners and domestic helpers are fronted as directors of companies they don't know about or have ever heard of. And so-called educated people, according to the evaluation or standards of the historically advantaged, are appointed as managers when they can hardly call a meeting, let alone have any knowledge about the company's budget. These tendencies are mainly found in those who have excessive power over the economy - they know who they are.
We are advocates of being proudly South African - local is lekker - but as the campaign intensifies, let us also nurture the global competitiveness of small businesses. Very often potential competitors do not have the required capital and collateral. This is where policy plays its role again. This caring government has put in place development finance institutions or entities to assist small businesses with capital, training and mentoring and thus enabling them to access funds and sustain their businesses. Those who are obsessed with greed abuse the situation and fix prices. Through good planning, the developmental state has put in place a mechanism to combat such bad practices. We have the Competition Commission, which has done a good job recently in dealing with the airlines, which fixed prices of air tickets. This price fixing has the potential to discourage tourists from coming to the famous Fifa 2010 event, from which small businesses stand to benefit. The Competition Commission has proved that it does not bark to scare but barks to bite.
The mandate of the Department of Economic Development cuts across all departments. This integrated approach is the way to go in order to reach other departments. The economic crisis came as a storm and resulted in job losses. The department intervened through the Industrial Development Corporation, IDC, and provided financial assistance to companies in distress. This intervention saved more than 6 000 jobs. Due to the integrated approach, the intervention automatically reached the Departments of Labour and Trade and Industry.
Through oversight, the department, together with the committee, will be able to monitor the progress made by companies that have been assisted. At the same time it will identify new areas that are potentially threatening economic development, and so save jobs. To save more jobs, the department should prioritise labour-absorbing sectors. Developmental plans and strategies must respond to the demands of the markets and the corporate world.
The Department of Education, from basic to higher learning, must come to the party to design a school curriculum that will produce graduates who are economically valuable. Departments should not compete against one another but complement and augment one another.
We have a history where the school curriculum systematically forced students to major in biblical studies and criminology even when they had no intention to serve in the Police Service or legal system. While biblical studies are good for maintaining social order, they do not play a role in economic growth.
The monitoring and evaluation of the application of development policies will enable the department to review them in accordance with the new challenges, hence the need for policy conferences. Public participation or public hearings also play a pivotal role in policy-making and monitoring. Economic policies are meant to address socio-economic conditions and enhance quality of life. Through public hearings people are given a platform to interact with government and give feedback on whether policies effectively serve their intended purpose. They do not give feedback only but also make inputs. This is what happens in a government of the people by the people.
Land ownership is another challenge to the development, especially rural development. The 1913 Land Act is dead alive - dead on the statute books, but alive in action, albeit subtly. It is true that in parts of our rural areas the land is vast but, sadly, much of it is not productive but barren. These areas need water, irrigation equipment, fertilisers, etc, to give life to the barren land.
Most of the time rural communities have the skills to till their land, but they need resources and the necessary infrastructure. And when a rural community has productive land, they are threatened by pollution. Traditional healers are also affected because their medicinal plants are usually found in the veld. The solution lies in a partnership with the Department of Water and Environmental Affairs and other related departments.
Infrastructure for rural development is faced with a number of challenges but this must not be the reason for neglecting it. We must go to the extremes, like when that barren land is identified for commercial development by developers in the private sector. The expenditure on government researchers must prove to be value for money and they must advise government on how we could best deal with the situation.
Modulasetulo re se re entse tse ngata empa ha re a etsa kahohlehohle. Ka hara naha re na le bafumanehi ba bangata le phephetso ya baphaphathehi ba lokelang ho hlokomelwa ke mmuso. Manyane a rona a feketswa ke kgolo e potlakileng ya setjhaba. Kahoo, re etsa boipiletso ho setjhaba ka kakaretso ho ba le tjantjello ya tekanyo ya malapa hore mmuso o kgone ho hlokomela bongata ba bana le thuto ya bona. Kokwanahloko ya HIV/AIDS e re amoha boiphihlello le setjhaba se nang le bokamoso. (Translation of Sesotho paragraph follows.)
[Chairperson, we have done many things, but not everything. We have many poor people in the country, as well as the challenge of refugees who must be maintained by government. Our budget is not enough to accommodate the increasing number of citizens. So, we humbly appeal to the entire nation to consider family planning so that the government can take care of the children and their education. The HIV/Aids virus is robbing our nation of its potential and a bright future.]
That is a loss of skills owing to HIV and Aids.
Dipatlisiso di bontsha hore kokwanahloko ena e jele setsi matitjhereng le batjheng, haholoholo bathong ba basadi. Ha re bue ka seo re se balang masedinyaneng kapa seo re se utlwang diyalemoyeng, re bua ka seo re se bonang ka mahlo hoba re mmuso wa batho ka batho, re ya metseng le metsaneng ho buisana le batho. (Translation of Sesotho paragraph follows.)
[Researchers have shown that this virus mostly affects teachers and youth, especially women. We are not talking about what we read in the newspapers or hear on radio, but what we see with our eyes, because we are a government of the people by the people, we go to the communities to talk to people.]
However, the Department of Health is on track in dealing with the challenge. Otherwise, the rapid loss of teachers, youth and women owing to HIV and Aids would render investment in socio-economic development tantamount to fruitless expenditure. This would be because the government would be investing heavily in training, but the fruits thereof might be short-lived or never even see the light of day.
Looking back again at where we come from, we are proud to say that the ANC- led government has proved to be a caring one that promotes a nonracial and nonsexist South Africa, where the potential of people across the colour line, also those with disabilities, is recognised and nurtured. In the past, disabled people were declared nonexistent.
In conclusion, we applaud EDD for committing themselves to the minimal utilisation of consultants. They will do this by appointing senior managers who are specialists in various areas of development. I thank you. [Applause.]
Hon members, it was brought to my attention that the Deputy Minister's time had not run out when she was told to stop. So, hon Deputy Minister, I will give you a minute and a half to conclude.
Chair, I was making a point about proudly South African products and that we do not support what we produce. We are not proud of what we have. Some of what I have seen is that there is tea in Limpopo and Mthatha but you don't see it anywhere. This institution itself serves close to 600 cups of tea per day. If we were buying from those people, we would be keeping a lot of people employed. We also have silk in the North West province, but we go to Asia to get proper silk. There is silk just around the corner. As you would have seen in a Sunday newspaper, it was in Magoba's farm where Minister Nkwinti was trying to make interventions.
On our national airline carrier, SAA, try to ask for rooibos tea the next time you fly back home. It is an effort: they have to go to some corner, somewhere at the back, yet on their trolley they have a product from Sri Lanka. Some of these are things that can change immediately. The entertainment that we have on board SAA flights comes from Canada, whereas our country has so many good artists. Those are some of the things we can change quickly. [Applause.]
In conclusion, Nelson Mandela's last words to a joint sitting of Parliament on 10 May 2004 were the following:
Our democracy must bring its material fruits to all, particularly the poor, marginalised and vulnerable. Our belief in the common good ultimately translates into deep concern for those who suffer want and deprivation of any kind.
Hon members, it is up to us here to make sure that we change the status quo of our people. We can do so if we want to. The DFIs are travelling; I made sure that I travelled with them. I started with them - the Khulas, IDCs, all of them - in Soweto because at times our people do not even have the money to go to the offices to make applications. So, if government belongs to the people, we must take it to the people.
On Thursday and Friday, for those of you who can ... [Interjections.] ... the DFIs will be in Hammanskraal. Thank you. [Applause.]
Chairperson, although the strategic plan presented by the Department of Economic Development claims to be focused on one over-riding outcome, "to increase the number of decent work opportunities in the economy", the central theme is completely different and exposes its real agenda: to control economic policy and centrally command our economy. The department should focus on how the economic activity can be increased. This will assist the people mentioned by the Minister in his speech and help our economy to become robust enough to withstand the effects of a competitive and uncertain global economy. Instead, the department aspires to a so-called developmental state economy which needs to be protected and controlled by the firm hand of government. This strategic plan positions the department at the centre of economic policy making, ignoring the fact that the National Treasury is responsible for public finance and budget management, economic policy and international financial relations and, crucially, managing public debt and government assets.
The fatal flaw in this plan is that it seeks to position government as the controller of the economy, with the department duplicating the activities of several others at its centre, and the private sector serving merely as a convenient source of funding. It is clearly evident from the plan to compel private sector pension funds to apply 5% of their assets to development finance instruments that this department needs to generate new income streams, and that it is not satisfied with the R1,8 billion that will be wrung from the exhausted pockets and patience of hardworking taxpayers over the next three years.
The plan ignores the fact that pension funds exist for a specific purpose: to provide their members with the most optimum returns on their contributions to finance their old age. Any suboptimum return will make pensioners even poorer than they are now. The plan means that private pension funds will be compelled to invest R35 billion in government development bonds earmarked to fund specific projects, or into the parastatal development finance institutions. Although government, that is, taxpayers, can underwrite the investment to ensure that a reasonable rate is returned, this is not assured.
Past performance of the parastatals does not inspire confidence, nor can it be assured that specific projects will yield any returns at all. Given acknowledged failures in the tender system, fund members cannot be certain that the money drained from their pension funds will translate into any actual project development. In the event that government does guarantee the capital invested and a particular rate of return, it simply means that government debt is increasing along with the liability of current and future generations of taxpayers to meet these obligations. If government underwrites the loans, members will be paying tax to fund returns on money that they lent to government.
Taxpayers who are not members of pension funds will be paying to provide returns to those who are - a regressive taxation from the poor to the less poor.
Government already guarantees the benefits of the Government Employees Pension Fund, therefore any suboptimal return on prescribed investments automatically translates into an additional expense for taxpayers to fund - R45 billion, if 5% of its assets is underwritten. The plan offers no benefit to those who must pay for it, other than the vague notion that our economy will benefit from planned projects over time that will benefit everyone and make everyone better off.
This is not so, as evidenced in failed centrally planned economies across the globe. Instead of raiding pension funds, investment from the private sector that does have money to invest under the right circumstances should be attracted. This would mean, however, that government would need to be more efficient and accountable to its funders, something it has no intention of doing.
Pension funds already have assets invested in bonds and guaranteed portfolios. The Minister cannot compel funds to switch investments and incur penalties on early withdrawals. This is not in the interest of members and it is irrational. We cannot return to apartheid-era prescribed assets. Although some adherents to failed ideologies do not support them, property rights are constitutionally protected and the DA will defend them.
We need clarity on the plan to intervene in a macro-economy and to facilitate transformation and diversification in the private financial sector. Instead of dubiously tinkering with economic policy, the Minister should rather focus on dismantling the barriers to job creation that condemn millions of our people to unemployment, starting with the bargaining process that excludes first-time jobseekers and rewards underproductive behaviour. This is where the social dialogue should begin.
On 2 March 2010, Parliament adopted the Fiscal Framework and Revenue Proposals for 2010-11. Although we supported the Fiscal Framework and Revenue Proposals, the DA raised its concern over rapidly rising levels of public debt, which will reach 45% of forecast Gross Domestic Products, GDP, by 2012-13. There is no fiscal space for the Department of Economic Development to indulge in activity that will increase the public debt burden.
The very existence of this department is the result of the deep divisions within the tripartite alliance which compelled government to appease its allies, whose ideological paradigm is not compatible with the realities of participation in the modern global economy. Taxpayers will pay R1,4 billion over the next three years for a department that promises to promote economic development through participatory, coherent and co-ordinated economic policy and planning, something that North Korea and Cuba are still trying to do.
The DA has serious concerns about the affordability of and necessity for this department. In his overview, the director-general points out that in May 2009, there was no infrastructure in place, no staff, no department and no resources. Perhaps it should have stayed that way.
Finally, we would like to respond to the FF Plus, but they seem to have left the debate. Perhaps this is a reflection of their relevance to this and any other debate in South Africa today. Thank you. [Applause.]
Mutshamaxitulu, Holobye Ibrahim Patel, Xandla xa Holobye, Man Gwen Mahlangu-Nkabinde, Holobye, Man Pandor, Swirho swa Huvo, ndza mi xeweta. Loko ku ri leswaku mi ta rivala leswi ndzi nga ta swi vula laha, kambe tsundzukani leswaku makolo ya bihile na swona ya dlaya. (Translation of Xitsonga paragraph follows.)
[Mr X MABASA: Chairperson, Minister Ibrahim Patel, Deputy Minister, Mrs Gwen Mahlangu-Nkabinde, Minister, Mrs Pandor, Members of the House, I salute you. If it means that you will forget what I am about to say, then you should remember that greed is not good and it kills.]
Redistribution of wealth is important in a country like South Africa. Human nature has it that those who have tended to be given more and those who have very little tend to be given very little.
Xikombiso, a ku ri na manana loyi a nga loveriwa. A ri xisiwana xo ambala macakala. Etlhelo a ku ri na manana un'wana loyi na yena a loveriwile kambe a fumile. Loko vanhu va endla nhlengo, eka manana loyi wa xisiwana va hlenga tiR5 na tiR2. Eka manana lowo fuma va tsala ticheke na tiR500.
Leswi swi fanele ku lunghisiwa eka miehleketo ya hina hikuva ku hangalasa rifuwo swi vula leswaku hi fanela ku yisa swinene eka loyi a nga xisiwana. Swin'wana leswi ndzi lavaka leswaku mi nga swi rivali hi leswaku ndyangu hi wona rimitsu ra ku humelela ka rixaka. Ku humelela ka vandyangu swi komba ku humelela no ya emahlweni ka rixaka.
Brazil ri na timfenhe to tala swinene. Xana ma swi tiva leswaku eBrazil va ti khoma njhani timfenhe? Va nghenisa timanga ebodhleleni ra nomo wo lala kutani va ri bohelela emurhini. Mfenhe yi ta ta yi nghenisa voko yi pambula timanga. Mfenhe yi na makolo, yi ta pambula timanga to tala yi hetelela yi endla xibakele lexikulu. Loko xibakele xi kurile a xi koti ku huma ebodhleleni. Hi ndlela leyi, va yi khoma. Loko a yi nga ri na makolo, a yi ta pambula timbirhi ntsena yi kota ku humesa voko yi ya dya. Tin'wana ti ta kota ku pambula na tona.
Leswi swi tatisa rito ra Manana Tsotetsi loko a ku:
Hambileswi hi nge 1913 i xiphemu xa matimu, kambe i matimu lama hi ma vonaka loko hi famba.
Matiko lamakulu ya ha ri emavokweni ya valungu lava hlayiwaka hi tintiho. Lawa i makolo. Swi ala kwihi leswaku n'wina mi nga na matiko lamakulu lawa mi nga ya yiva, lawa mi nga tiviki na leswaku mi ya xavile kwihi, mi tsemela vanhu va ntima leswaku hinkwerhu hi va na rifuwo ra ikhonomi leyi?
Hinkwako i ndhawu. Loko u aka xibedlhele kumbe feme u lava ndhawu. Loko u aka mabindzu ya nhlengelo, ya nga mabindzu ya ku hlangana ka vanhu no hlanganisa mavoko leswaku lexi va xi endlaka va kota ku tsemelana hinkwavo, ku laveka ndhawu. Hambi ku aka xikolo ku lava ndhawu.
Loko mi hi komba hi tintiho leswaku ANC a yi endli nchumu, mi nga rivali leswaku swo tala leswi i mbewu ya xihlawuhlawu. Tsundzukani leswaku i malembe ya khumetsevu ntsena hi ri eka mfumo. Mi nga hi avanyisi tanihi vanhu lava nga eka mfumo malembe ya makumenhungu. Hikwalaho, ha mi tshembisa leswaku hi ta mi korhokela hi xihatla na hi ku hetiseka.
Afrika Dzonga ri na mahahlwa. Hahlwa lerin'wana ri huma eka ndyangu wo fuma, lerin'wana i xisiwana xo ambala macakala. Eka ikhonomi leyo sungula, vana na vatswari va kona va dya zambhala ra pondho. Eka ikhonomi leyin'wana i swisiwana leswi rholelaka swakudya.
Exikolweni xa vana va le ka ikhonomi leyo sungula va dyondza va ri 25 kumbe 30 etlilasini. Eka ikhonomi leya matikoxikaya, laha ku rilaka xinyenyana vusiku na nhlekanhi, hilaha u kumaka vana va kona va pangana va kala va fika eka 80. Loko mpfula kumbe moya wa xidzedze swi ta, swi kukula xona xikolo lexiya xa le makaya hikuva xi akeriwe vanhu va ntima hi nkarhi wa xihlawuhlawu.
Kwalomu ka 80% ya vanhu va Afrika Dzonga va tshunguriwa eka swibedhlele swa rihanyu ra mani na mani. I 20% ntsena ya vanhu va tshunguriwaka eka titliliniki ta le swihundleni.
Xuma xa mfumo, mpimanyeto wa timali wa vanhu hinkwavo, mali ya swipfuno swa vutshunguri yi pangana eka titliliniki ta le swihundleni yi tshungula ntsena kwalomu ka 20% ya vanhu. Hikokwalaho Holobye wa swa Rihanyu a vulaka leswaku hi fanele hi lunghisa leswi leswaku ku va na vutshunguri bya rixaka lebyi nga ta langutisa vanhu hinkwavo hi ku ringana. Ku nga vi na loyi va nga ta n'wi tlherisa exibedhlele va vula leswaku a va koti ku n'wi hlantswa tinso hikuva xibedhlele xi tele, tanihileswi hi nga swi twa la Western Cape.
Loko hi vulavula hi swisiwana leswi nga eka tlhelo ro pfumala ra misava, hi vulavula hi swisiwana leswi vatswari va swona a va tirha emigodini kambe sweswi va nga helela hi mitirho. Hi vulavula hi vana lava ku kumekaka leswaku ku hava na munhu na un'we loyi a tirhaka endyangwini wolowo.
Mfumo wa hina wu tiyimiserile ku tumbuluxa mitirho. Holobye wa Nhluvukiso wa Ikhonomi, mitirho yi ta tumbuluxiwa hi mabindzu ya nhlengelo. Mabindzu ya nhlengelo a hi xilo xintshwa, i xilo lexi vanhu vantima va xi tivaka ngopfu. Tsima ma ri tiva. (Translation of Xitsonga paragraphs follows.)
[For example, there was a woman who was widowed. She was so poor that she wore tattered clothes. In contrast, there was another woman who was also widowed, but rich. When people made a collection for this poor widow, it was R5 and R2. For the rich widow they wrote cheques and put in no less than R500 each.
This has to be corrected in our minds because the distribution of wealth means that we should give more to the one who is poor. One other thing that you should not forget is that the family is the foundation of the success of the nation. The success of the family shows the success and progress of the nation.
Brazil has so many baboons. Do you know how they capture them in Brazil? They put groundnuts in a bottle with a tiny opening, and hang it on a tree. The baboon will insert its hand to take the groundnuts. A baboon is greedy and will take a lot of groundnuts such that its hand will become a big fist. When the fist is big, it cannot come out of the bottle. In this way they capture it. If it was not greedy, it would take two only and eat them, so that the others could also take. This is in addition to Mrs Tsotetsi's words when she said:
Even if we say 1913 is part of history, but this is history that we see when we walk around.
Large tracts of land are still in the hands of whites who are in the minority. This is greed. What is the problem with those of you who have the land which you have stolen, and who do not even know where you have bought it from? Why don't you share it with black people so that we can share in the wealth of this economy? The land is everywhere. When you build a hospital or a factory you need land. When you start a co-operative in which people join forces to share the profits, you need land. Even when you want to build a school you need land.
When you point fingers at the ANC saying that it is not doing anything, you should not forget that a lot of these are the seeds of apartheid. Remember that we have been in government for sixteen years only. Do not judge us as though we have been in government for eighty years. For this reason, we promise that we will render our services urgently and appropriately.
South Africa has twins. The one twin is from a rich family, and the other is poor and wears tattered clothes. In the first economy the children and their parents have food in abundance. In the second economy they are the poorest of the poor. In a school for those in the first economy, there are 25 or 30 learners in a class. In rural areas where they are very poor, the class can be so overcrowded with up to 80 learners in one class. When it rains or there is a storm, the rural school is destroyed because it was built for black people during the apartheid era. About 80% of the people of South Africa are treated at public hospitals. Only 20% of the people are treated at private clinics.
Government funds, national Budget and medical aid funds are pumped into private clinics which are predominantly used by 20% of the population. This is why the Minister of Health says we have to address this and have a national health insurance which will cater for all the people equally. No one should go to a hospital to have kidney dialysis and get turned away under the pretext that the hospital is full, as we have heard here in the Western Cape.
When we talk about poor and landless people, we refer to those whose parents were working in the mines, but have now lost their jobs. We refer to those children in whose families no one is employed. Our government is prepared to create employment opportunities. The Minister of Economic Development said employment opportunities will be created by co-operatives. The co-operative concept is not something new, but something black people know much about. You know teamwork.]
Ilima niyalazi. [You are familiar with the campaign.] Vanhu va ka hina a va hlangana hinkwavo va rima nsimu, loko va heta va hundzela eka nsimu ya Mkhize, loko va heta va hundzela eka ya Milokotsi. Hi ndlela yaleyo va heta masimu hinkwawo va tirhisa matimba ya nhlengelo.
Ndzi kombela leswaku mfumo wu tshemba vanhu va ka hina. A hi tshembeni vanhu lava nga hlupheka. Maendlelo ya leswaku mali yi ya laha ku nga na mali, tipeni eka tipeni, a ya nga lunghisi Afrika Dzonga.
Vamanana lava fambaka tisosayiti va na byona vuswikoti byo fambisa sosayiti yo lahla. Vamanana lava va endlaka mabindzu ya nhlengelo yo aka tindlu va na byona vutivi byo fambisa bindzu. Hi nga va soli hi vona onge i swiphukuphuku leswi nga ta tlanga hi mali. A hi tshembeni vanhu lava pfumalaka. Va ta tihlayisela xuma xa vona. Va swi kota ku tihlayisela mali yo lahla. Loko hi nga va tshembi hi ta va na xivhiko xo va nyika swimalana swintsongo. Xana va ta kula njhani?
Matiko lamakulu, xikombiso, England na USA, hi wona lawa ya humesaka moya wo tala wa 'Carbon dioxide'. Va humesa moya wo tala ku hundza misava hinkwayo. Moya lowu wu cinca maxele, timpfula letikulu ti na kutani swibyariwa swi fa. Loko mpfula yi na swinene yi dlaya ngopfu swisiwana na matiko yo fana na Afrika. Matiko lawa hi wona lawa ya vitaniwaka 'First World'. Loko va fanele ku hakela nxavo, nxavo wolowo wu hakela hi matiko ya 'Third World'.
Hi kombela leswaku hinkwerhu hi ringana, hi hloniphana. Makete lowu vuriwaka hi DA wu nge swi koti ku endla hinkwaswo. Mfumo wu fanele wu nghenelela laha makete wu tsandzekaka kona. Inkomu. [Nkarhi wu herile.] (Translation of Xitsonga paragraphs follows.)
[Our people would join forces to plough the field; when they were finished they would proceed to plough Mkhize's field, and once they finished there they would proceed to that of Milokotsi. In this manner they would finish all the fields by joint forces.
I am pleading with the government that it should have confidence in our people. Let us believe in the poor people. The issue of giving money to the rich and nothing to the poor will not bring about change in South Africa.
Women who attend societies have the aptitude to manage burial societies. Women who engage in co-operatives of building houses have the knowledge of managing business. We should not undermine them and think they are fools who will mismanage the funds. We should have confidence in the poor people. They will manage their own finances. They are able to keep their burial society funds safe. If we do not have confidence in them, we will use it as a scapegoat to give them very little funding. How are they going to develop?
Developed countries such as England and the USA are the ones which emit a lot of greenhouse gases such as carbon dioxide. They emit a lot of greenhouse gases compared to the rest of the world. Greenhouse gases cause climate change, which results in torrential rains that lead to crop failure. When it rains heavily, it is the poor people who perish, especially in countries such as Africa. These are the countries which are referred to as the First World. When there is a price to be paid, it is paid by the Third World.
We are pleading for equality and respect among ourselves. The market that was mentioned by the DA will not be able to do everything. The government has to intervene where the market fails. Thank you. [Time expired.]]
Order! Before I call the hon Minister to respond, I'm tempted to say something to the Minister. It is something I heard some time ago from the father of the Minister of Science and Technology. He said there was a leader who went to his economic adviser to ask for advice. The economic adviser said, "Well, if things develop this way, things will go that way. On the other hand, if things develop this way, the economy will go that way. But, on the other hand, if things go this way, then things will go this way." The leader then said, "Can somebody give me an adviser with one hand? I'm getting confused now - just one hand to go this way, not this way and that way."
Chairperson and hon members, this reminds me of a saying that, I hope, you don't ask our department to adopt, which is, "I only use one hand."
Chairperson, a number of comments have been made by hon members. I want to thank them for the contributions they made and, more importantly, the wide support they have given to the budget. I recognise that in Parliament opposition parties have to show why government should be replaced at the next election, but I hear subtext that there is support for the budget. We hope we can work hard in the next 12 months to spend the money in the budget wisely and to make a big difference in the lives of South Africans, working with other government departments.
I've also had a number of pieces of advice, advice on policy, advice in terms of focus and implementation, and advice on specific sectors that we should focus on. We have taken careful note of that. Certainly, in the discussions on the growth path, these would be substantially addressed, I hope. Thank you again for that. I won't comment on each of the individual suggestions.
A few speakers raised the issue of mandates. I trust that both the budget speech today and the strategic plan have helped to clarify the particular areas this department will focus on. This also makes the point that we can only achieve government's mandate if, in fact, we work together. That would be a very big theme of the work of this department. [Applause.]
A set of turf battles was eagerly awaited and constantly predicted. They haven't taken place. The unspectacular story of Ministers working with each other and departments co-operating doesn't make headlines, but that is the reality of government inside the Cabinet system. It's the interministerial committees, the clusters where we work together and formulate proposals that go to Cabinet. To those members who asked who makes policy, the answer is: Cabinet makes policy. From where does Cabinet draw its inspiration and its ideas? From the cluster system, where we work together.
The issues of development and finance came up in a number of contributions. They varied, for example, from the hon Bhengu's comment that we needed to promote access for enterprises to finance, to the hon Ntuli's detailed comments and quite useful insights on the challenges facing development finance institutions, to the hon George's comments on retirement funds.
Let me briefly address the issue of retirement funds, since it's a theme that has been picked up on both by the hon George and the media. I was somewhat puzzled while listening to the hon George about what document he was reading.
If, hon Minister, you could wind up. I think they took up more of your minutes.
Chairperson, it's not the document that was prepared by the department. We've looked carefully at the international experience as such - if you want to call them "centrally planned economies" - at Brazil, Germany, Singapore and modern China. In fact, the lessons distilled from each of those show that development requires the careful evaluation of financing mechanisms. Many of the ideas we will be putting forward will be based on that rich and interesting international experience.
I conclude with two comments. The one is about the support that has been given for us to focus on co-operatives. A number of members have raised this issue. Looking at the international landscape again, what is clear is that we can create many more jobs in co-operatives. There are 100 million people working in co-operatives across the world. South Africa's share of that is much too small. We hope, in the next few months, to be putting forward proposals, together with the Department of Trade and Industry, for a dedicated agency to promote co-operatives.
Finally, thank you very much, hon members, for the advice you have offered on capacity. We are working very hard not only on our own staffing but also on the effectiveness of the development finance institutions and economic advisory bodies - and on one other resource, one other important capacity: pulling the private sector and the trade union movement into the discussion, into the debate, into the challenge and into the implementation of government's programme to promote decent work. Thank you very much. [Applause.]
Debate concluded.