Deputy Chair, the interventions that we are making already in regard to local economic development are quite serious, because the revenue for municipalities has gone down. This situation has been compounded by the fact that there was the problem of the global recession.
When revenues for municipalities in South Africa were conceptualised in terms of intergovernmental fiscal relations, the thinking was that 95% of the revenue of municipalities was going to be generated by them. Only 5% of nationally raised revenue would be due to them, which they get. But the reality, as we speak, is that almost 40% of municipalities' income is dependent on grants. Others are almost 100% dependent on money from other spheres of government. Clearly, something has to be done. I can tell you that we have not managed to crack local economic development in South Africa over the past 16 years. It has been seen more as tenders, and so on, than actual utilisation and empowerment of people on the ground.
There are two things that we are doing. The first one is that we are involved in a programme called the Community Works Programme. We have an amount of about R500 million, where we are looking at intervening in areas of municipalities to ensure that people are able to create jobs, and that jobs are there on the ground.
The first intervention is that we are looking at a situation where, by 2014, there must be at least two wards per municipality. We must be able to have that.
The second intervention is in regard to the co-operatives. We are saying that if you read the Local Government Turnaround Strategy, it is very clear: It says that there must be a co-operative in every ward, a co- operative where people will say that these are the resources that they have - land and other things - and how they are using them to generate income rather than waiting for the big truck of government to deliver services.
They are asking, "What can we do in our own area of jurisdiction?" And government must be able to help there because in the past people were helping themselves, but today people are waiting for the government for everything, including disciplining their children! Clearly, we are building a society of lazy people who can't do things on their own, and that could make us uncompetitive across the globe.
That is why we are saying we want to come up with co-operatives in every ward so that people are able to generate income, looking at the resources that they have and what they can do that can be useful. We are moving those programmes so as to ensure that economic development and resources that are prevalent in local areas are utilised, not by the few but by the majority of the people of South Africa. They are part of the economic activity; but as you see them now, they are not.
Those are the two interventions that we are making, and we believe that they are going to be able to go a long away in ensuring that South Africa becomes a nation at work. Thank you very much.
Hon Deputy Chairperson, once again, in regard to the response, the intentions of the Minister and the government are very good, but in reality, in terms of the evidence that we've got, it's not working, and it's not going to work in the future.
Referring to the Expanded Public Works Programme Phase 2, EPWP P2, let me say it's good. It's a good initiative - it must be co-ordinated and it can work. But in regard to the second one, of co-operatives, I want to ask the hon Minister if he's aware that only 12% of co-operatives in South Africa are functional. Now the department and the Minister want to try to convince us that to stimulate the local economy it would be better to start new co- operatives. The question is, do we need more co-operatives or don't we need better partnerships with private entrepreneurs and the sectors in the local towns? Thank you.
Deputy Chair, Mr Sinclair is comparing apples and oranges, in the sense that there is not a single provincial government and very few municipalities - and far between - that have taken conscious decisions to establish and create co- operatives. The only province that did that on a limited scale was KwaZulu- Natal. Now, you can't come here and say that this thing has failed. Who has attempted it? Is it government?
The department has taken a conscious decision, in terms of the Local Government Turnaround Strategy, that, for the employment of the masses of South Africans, so that they are part of the economic activity, we'll take this route. We'll utilise all the resources that there are. What we are talking about when we speak of the private sector is the fact that it is part of the resources that are available in a ward, because every institution and business is within a ward. Those are a part of the resources that will be utilised to ensure that we are going to move forward. Therefore, from our point of view, we believe that that is the route to take, and we are going to succeed, working together.
There'll be a lot of challenges. We've studied the issue of the 12% success rate in regard to co-operatives, and so on, but we understand the mitigating circumstances and reasons for that. That is why we are saying that, despite all that, this is the best route. I mean, if you go to many other countries in the world, such as Italy, their economies are based on co-operatives, where you ensure that you get economies of scale in whatever you are doing. From our point of view, Mr Sinclair, that's what we must do. Observe us - we have not implemented it before, but we are going to do it. Thank you very much.
Hon Deputy Chair, this is again a question to the hon Minister and my previous chairperson of our committee in this esteemed House. I hope it's within the scope of the question on job creation by municipalities.
A lot of the municipalities employ consultants to do the work and there's no skills transfer, whereas if that did not take place, it might take more people at that municipality, there would be more local skills, and more jobs would be created. Likewise, they subcontract a lot of the work, from window cleaning to you name it, where there's a municipality which could take direct control, creating jobs locally, probably being able to employ more people at the same amount. Thanks.
Hon Deputy Chair, to Mr Darryl Worth, my former colleague on the committee, we've identified what you are saying. It's not only applicable to municipalities but to the provincial and national governments as well, and even to other departments. When you ask officials to do work, they give it to a service provider who does the work, and they come and give it to you as if they had done the work themselves. You find that in the process people don't develop and hone skills themselves, because they give the work to outsiders.
We are ensuring that what we are doing in local government specifically is a skills audit to look at what skills these municipalities have and, on the basis of that, what they are capable and not capable of doing. We are therefore looking at assisting them in ensuring that we reduce the number of consultants, that people are able to do the work, and that with those employed and paid with taxpayers' money we will get value for money. That's what we are doing.
In that respect, we therefore agree with you, hon Worth. We are saying it's something that we are turning around. We hope that before the end of the year we will have concluded a skills audit in every municipality in South Africa and, on that basis, we'll understand the gaps that must be filled and ensure that we deal with the situation. But we want people to do the work themselves so that we get value for the money that we are paying. Thank you very much.
Deputy Chair, through you to the hon Minister: Hon Minister, you have indicated that you are aware of the dramatic failure of co- operatives - some 20 000 co-operatives that have failed over the past five years, I think it is - and that you can do the job better than the other departments which set up those co-operatives. Could you give us an idea of the kind of things that you believe you will do which will make those co- operatives a success, whereas the other ones, the 20 000 odd, have failed? What would you do differently? Thank you.
Deputy Chair, the first thing that is very important to the masses of our people is access to finance. That becomes a major problem when you find that people have ideas and see things that they can do, but they don't have access to resources.
The second thing that is important is training. People must be able to be trained and understand. Besides training, it's mentoring.
These co-operatives fail because people want to see returns by tomorrow. You start work today with the co-operatives and want to see profits by tomorrow. It is so that you are be able to see things. We want to encourage our people to understand that business is not run like that. Once they have these resources, they want to buy beautiful cars, move and cruise, go on holiday, and all that, not understanding that you must be able to reinvest in business, so that you are able to make more money when you go forward.
We have looked at a myriad of issues that must be attended to to ensure that we address this problem. What you must actually understand is that the majority of Africans are not used to business because of the apartheid legacy. When you had a business, a spaza shop on the corner there, you were not exposed to business. The areas that are involved in economic activity are two in the main, one of which is the stokvels and so on. These stokvels prepare for deaths or to go to church.
The masses getting involved in economic activity does not exist. It means we must be able engender a spirit of entrepreneurship for people to understand that business is run differently. That is what we are trying to do in going forward.
There are many of these things that we think we will do, and we feel that this is the route that we must take going forward, colleague. We think that the NCOP and all public representatives must support this initiative. So, wherever you are in your wards, you must check whether a co-operative is being established, because all of you here come from a ward. You must therefore look at this in your own areas to ensure that our people become active in economic activity. Thank you very much.
Deputy Chairperson, through you to the Minister: Minister, you know that economic and industrial development don't benefit all our people. Only individuals benefit out of these frameworks. What else can you come up with so that the broader society will benefit, because all that we have benefits only an exclusive few people?
You referred to the capacity of local government, which can't even raise its own revenue. It is true. But when the new demarcations are considered, economic hubs in the different municipalities are not considered when we come with our proposals in our demarcations.
Do you know that in a country like France their system has a bridge to close the gap between those who have and those who don't have? If you cross the bridge, and you can be economically sustainable, then you are able to help assist someone else. But in South Africa, because we have this culture of nonpayments and handouts, to me it clearly seems we are going to need another 20 years to change, to have an impact at the local government level.
I also agree that maybe a solution, and one system of services to the public, might partly be pooling skills so that you can deal with the issue of nonperformance in local government. Thank you very much.
Deputy Chairperson, I still have to be convinced by anybody who says that co- operatives don't involve the broader society, because there everybody is equal. It's unlike private entities where you have a situation where some benefit more than others. Here is a situation where we believe that everybody is equal. In that respect, the involvement of the masses is what we are aiming for to ensure that they are part of it, so that the economic activity is not the preserve of a few.
When you talk about issues of demarcation, if you look at the Act that deals with demarcation, one of the criteria is to look at the economic nodes, and I think that's all you are doing. The problem is not with the demarcation; the problem is with our being able to crack local economic development to ensure that people, as South Africans, are involved in the economic activity of this country. That is why we are raising this issue.
Let me give two examples. In South Africa, 60% of the red meat comes from the O R Tambo District Municipality area. But I can assure you that the O R Tambo area is a poor area in South Africa because people have not seen value in actually having these cattle. To them cattle must grow and be old, and zingabinamazinyo [become toothless] and then to them they benefit. They want to look at them. They don't look at them in a modern way and say that they should ensure that they look after the cattle that they have, and so on.
If you look at that O R Tambo district, it is the richest amongst South African districts in terms of the land - the land is rich - but the people are not utilising the resources that they have in order to be able to move forward.
They always look at umlungu, ndiy' eGoli [the white people, or going to Johannesburg to find work].
They must go to the mines and be employed. We are saying, "Let's create mines wherever we are. We have the land and resources; whatever you have in your own area, utilise it. Government will give support, mentoring, access to finance and everything that is required, but do the work wherever you are." These are examples that I'm giving; there are many, many examples.
When you go to the mining towns in South Africa, you find that the local people are not benefiting; the people who are benefiting are outsiders, whilst they have resources in their own areas. We want to change all that. That's what we want to do in going forward. Therefore, from our point of view, we are saying we want to close the gap, as you are correctly pointing out, between the haves and have-nots. Thank you very much.
Hon Sinclair?
Deputy Chair, it is not a follow-up. It's not a follow-up; it's a question of clarity.
There have been follow- ups and I've exhausted the follow-up questions.
Madam, with due respect, I indicated that it's not a follow-up. It's a ... [Interjections.]
I did hear that, but right now we're dealing with follow-ups to the questions, and this question was actually put by you. Can I proceed?
Madam, I just want your ruling on the procedure. With due respect, I want to raise some statistics that are very questionable with the Minister. I just want to engage him on that.
May I ask you to put it in writing? Thank you.
Thank you, Madam.
Methods adopted by government to deal with dramatic increase in number of rodents 64. Mr M W Makhubela (Cope) asked the Minister for Co-operative Governance and Traditional Affairs:
Whether the government has encouraged municipalities and other local government authorities to build suitably designed and sited nesting boxes for breeding owls to encourage natural and continuous control of rodents in areas where they are proliferating; if not, how is the government dealing with the dramatic increase of rodents in many areas of the country, which is posing an enormous health risk; if so, what are the relevant details?