Chairperson, hon members of the NCOP, leaders of the Department of Trade and Industry, DTI, Deputy Ministers, members of the broad DTI family, ladies and gentlemen, we have repeatedly indicated in addresses in this Council that the promotion of economic growth, development and decent jobs requires us to work together across the three spheres of government, as well as in active collaboration with nonstate actors, including business and labour.
Achieving a higher level of synergy of effort is becoming an increasingly evident imperative as we move forward in a number of areas of responsibility in the DTI. These include industrial policy, the promotion of small, medium and micro enterprises and cooperatives, the management of specific regulated activities such as liquor and gambling, and also the area of international trade and investment promotion.
Our department's main contribution to the collective national effort to place our economy on the New Growth Path, capable of generating five million new jobs by 2020, is through the implementation of our Industrial Policy Action Plan. This is both our flagship programme and the programme that shapes and informs all other activities of the Department of Trade and Industry.
In April this year we released the latest iteration of our three-year rolling Industrial Policy Action Plan 2, Ipap2. This took place against the background of pleasing news that year-on-year growth for the first quarter of 2011 was 4,9% for the manufacturing sector, the highest of any of the economic sectors recorded. However, employment growth in the sector continues to lack output, which remains a major concern and a focus of attention as we move forward. Amongst other things, the latest iteration of Ipap2 highlighted a number of successes achieved during the year 2010-11. These include, firstly, the finalisation and strategic implementation of the Automotive Investment Scheme, AIS. This framed an environment which led a number of automotive assemblers and component supplier companies to announce investment commitments totalling R13 billion, which will support the creation of 24 000 jobs. Of particular significance is the expansion in local component sourcing by the original equipment manufacturers, which is important because most of the job creation in the automotive sector will emerge from smaller companies producing components.
Secondly, we saw the implementation of new procurement policies underpinning significant localisation in a number of sectors. An important example was the awarding of 72% of the recent antiretroviral, ARV, tender to local companies, which will not only result in the growth of the sector locally, but has also led to significant savings for the government. We also saw an advance in localisation and supplier development programmes within some state- owned enterprises, SOEs, resulting in a commitment, for example, to ensuring that 90 of 100 locomotives that will be procured by Transnet will be manufactured in South Africa.
Thirdly, we saw good progress in creating employment opportunities for young people in Business Process Services, BPS, where investments totalling R82 million were announced, which will yield in the region of 1 800 jobs.
Fourthly, with green industries becoming increasingly important globally, Ipap2 identified significant opportunities for business development and job creation in this area. As part of Ipap2, the South African Bureau of Standards, SABS, has successfully drafted new standards for solar water heaters; wind energy turbines; energy efficient lighting; appliances and products; electric batteries and alternative fuel vehicles; and co- generation of electricity and biofuels. Building standards have also been revised to ensure high levels of energy efficiency and mandatory installation of solar water heaters in new buildings. The Interdepartmental Committee, IDC, saw a significant take-up of its specific facility for the production and installation of solar water heaters. Some of the major steps forward that we anticipate making during the current year include further progress regarding the reform of procurement regulations and processes to support localisation. On 6 June 2011 the Minister of Finance gazetted the new preferential procurement regulations, which will come into effect on 7 December. These regulations will empower the DTI to designate specific industries or sectors of critical and/or strategic importance, where tenders should prescribe that only locally manufactured products will be considered, or that only locally manufactured products with prescribed minimum thresholds for local content will be considered.
The DTI is currently hard at work to ensure that when the new regulations come into effect we will be ready with a number of designations to ensure that, as our infrastructure investment programmes advance, they will act as a catalyst to local industrial development.
Work to leverage more from the balance sheet of the IDC has already unlocked between R70 and R100 billion of additional resources to finance new initiatives. And this year we anticipate finalising work to identify a new model of developmental financing for industrial development that we hope can result in an increasing quantum of funding being made available to support industrial development at affordable rates of interest.
While manufacturing remains the backbone of the South African economy due to a combination of factors, it remains largely concentrated in the three main regional hubs. In this regard there is consensus that we need to regionally diversify manufacturing industries to new economic regions in addition to the current hubs. Industrial development zones, IDZs, if effectively managed, can be useful instruments for promoting a more regionally diverse manufacturing industry.
During the 2010-11 financial year two IDZs, namely Coega and the East London IDZ, attracted nine investors with an estimated investment value of R620 million. These investments will support an estimated 4 551 construction jobs and a further 1 400 direct jobs. These developments point to the potential that exists in the IDZ model, which, however, does need to be improved and developed. I am pleased to be able to indicate to the Council that, together with our colleagues in the provinces, we have almost completed a policy review which will be the basis on which we propose working together to advance greater regional diversification of industrial development.
In line with these developments, we continue to learn from our efforts to promote the development of small businesses and cooperatives. An early conclusion of an ongoing review which we have commissioned is that we need to give more priority to incubation programmes, which both our own experience and that of other countries tells us is a particularly promising way to grow real entrepreneurs.
The problem we have is that there are only about 35 recognised incubation projects in South Africa, whereas Brazil, for example, has many hundreds. The Small Enterprise Development Agency, Seda, has embarked on a programme to roll out 250 incubation programmes over the current Medium-Term Expenditure Framework, MTEF, period. I trust that Seda will work with both provincial and local government agencies to ensure that this programme delivers what we need.
On the regulatory front, members will be aware that the new Companies Act is now in force. We strongly believe that the implementation of this new Act will simplify business registration processes, reduce red tape and enhance the transparency of company management.
With regard to implementation, since our previous Budget Vote in this Council, the Companies and Intellectual Property Commission and the National Consumer Commission have both been established and are now operational. More work will be undertaken in the current financial year to extend the provincial footprint of the National Consumer Protection Act, working in harmony with provincial consumer protection agencies.
We reported previously that in December 2009 we launched a Gambling Review Commission to define a new framework for the regulation and roll-out of gambling activities, taking into account both business dynamics and the need to protect the public from unhealthy overstimulation in the context of new developments in the industry. This commission has completed its work and Cabinet has approved our submitting the report to Parliament. It will be tabled as the report of the commission, and it is my earnest hope that both Houses of Parliament will engage with that report and assist us in defining a sensible and sustainable framework for the regulation of this activity.
The DTI, together with the provinces, also regulates the liquor industry. This industry provides employment to thousands of people, and is therefore important economically. However, the negative impact which alcohol abuse, as part of substance abuse, has on our society was recently highlighted at an interministerial conference organised by my colleague, the Minister of Social Development. The National Liquor Regulators' Forum, combining liquor regulators at both national and provincial levels, has developed a number of proposals aimed at more effectively combating alcohol abuse. I trust that in the next National Liquor Policy Council meeting we will be able to engage with these proposals in a spirit of working together to achieve more.
In the Presidency Budget Vote debate in the National Assembly on June 14, President Zuma indicated that we were reviewing the Broad- Based Black Economic Empowerment Act, BBBEE Act, and the codes in order, among other things, to more effectively combat fronting, including complex fronting. He also emphasised the use of BBBEE to support productive activity and training and skills development. A number of proposals have been discussed in the Cabinet Economic Sectors and Employment Cluster. The proposals are being refined for presentation to Cabinet, and through Cabinet to Parliament in the near future.
It is evident that in an increasingly globalised world the prospects for local and regional economic development are greatly influenced by trends in international trade relations. Conversely, through developments at local and regional levels we may impact in varying degrees on what happens in the international sphere. Therefore, while the primary focus of this Council is on provincial and local economic development, giving effect to this mandate also requires engagement with matters of the international economy, and of international trade and investment.
As we all know, the global economy is making a very tentative recovery from the worst recession in 70 years, and this has had very significant implications for our economy, in particular jobs. As the economic recovery in our key traditional export markets in the developed north remains slow, there is at the same time sustained growth in the large developing economies of China, India and Brazil, while Africa is increasingly being seen as the next growth story after China and India.
All of this is necessitating a process of trade adjustment, as we redirect and accelerate our export promotion efforts towards the fast-growing developing countries. Already we have seen a fourfold increase in our exports to our fellow Brics countries - Brazil, Russia, India and China - between 2006 and 2010, while our imports from those countries has doubled. Our admission to Brics earlier this year enables us to participate in a programme to develop a new framework for intra-Brics co-operation. We indicated in early discussions with our fellow Brics members that what we seek is not just a further quantitative increase in that trade, but also a qualitative shift, which will see us exporting more value-added products to those countries.
We have also identified a need to move forward with the promotion of developmental integration on the African continent. This strategic approach is beginning to bear fruit. Last year, the heads of state of the Southern African Customs Union, Sacu, met twice, and those summits have helped to forge a more coherent developmental integration work programme for Sacu. On the basis of that platform, the DTI is focusing on identifying regional value chains that support industrial development across all of the Sacu member states.
We also continue to work to consolidate gains made under the Southern African Development Community, SADC, free trade area. Earlier this month, our President hosted the Tripartite Summit of SADC, the East African Community, EAC, and the Common Market for Eastern and Southern Africa, Comesa. This summit launched a process of negotiation over the next three years of a tripartite free trade area that will encompass all three regional groupings. The economic potential for this tripartite FTA is in our view considerable. It will draw together the markets of 26 countries, with a combined gross domestic product, GDP, projected to reach over US$1 trillion by 2013, and with a population approaching 600 million people.
Substantive progress has also been made in promoting targeted foreign direct investment from a range of countries including China, India, Russia, Brazil, Japan, Spain, Germany, France, the United Kingdom, UK, the United States of America, USA, and countries of the Middle East. This work programme will translate into an investment pipeline of R115 billion's worth of projects over the next three years. Chairperson, R28 billion of this has already been secured, with a potential to create 13 000 jobs.
Finally, I would like to report some very specific local economic development, LED, efforts. During the past year, as a pilot project, the DTI supported the uMngeni Local Municipality in developing the Business Retention and Expansion Strategy, BRE Strategy, and an agricultural development programme.
The department also supported catalytic projects through the Industrial Development Corporation, IDC's, Vutha'Mlilo Fund to create an enabling environment aimed at economic development. Completed projects include the training and employing of youth through a Local Economic Development Cadet Programme in which learners were trained in economic development and governance, and placed in local economic development, LED, agencies in municipalities across the country.
In total 10 projects were supported by the Vutha'Mlilo Fund. They include a forestry initiative in KwaZulu-Natal, the Business Retention and Expansion Programme across several provinces, a chicory production and beneficiation and tourism project in Ingquza in the Eastern Cape, mining in Mutale in Limpopo, and an energy project in the Blue Crane Municipality in the Eastern Cape.
The DTI, in partnership with the University of Johannesburg, UJ, concluded an agreement for UJ to offer a capacity-building programme to provide skills support to municipalities with regard to local economic development.
In conclusion, let me thank the chairperson, Comrade Gumede, and members of the select committee for all the hard work and support they have given to our programmes in the past year. Let me also thank the Deputy Ministers Tobias-Pokolo and Elizabeth Thabethe for the support I receive from them, and also thank the new Director-General of the department, Mr Lionel October, who was not yet appointed when we were here last year, the Deputy Directors-General, DDGs, and all the members of the DTI family for their support.
I have pleasure in calling on the NCOP to support the Budget Vote of the DTI. Thank you very much. [Applause.]
Hon Chairperson, hon Minister, Rob Davies, and the hon Deputy Ministers, Elizabeth Thabethe and Thandi Tobias-Pokolo, firstly, let me on behalf of the committee and the NCOP welcome the Director-General, DG, Mr Lionel October, and thank him for hitting the ground running. Secondly, I want to state that the committee supports this Budget Vote.
In his State of the Nation Address President Jacob Zuma declared that the creation of decent work was at the centre of government's economic policies, and that government's objective was to create a country where millions more South Africans had decent employment opportunities. In addition, he went on to say that government had to ensure the development of modern infrastructure which would help facilitate a vibrant economy and directly impact upon a higher quality of life for all. Chairperson, job creation is an outcome of the collective efforts of state intervention, business investments and a thriving economy, as well as sound regulatory empowerment.
The New Growth Path has as one of its core objectives the mobilisation of the public and private sectors to meet the goal of creating five million jobs over the next decade. Sustainable growth depends greatly upon improving industrial and trade performance, and the strengthening of those critical sectors in which South Africa has the competitive advantage and potential to corner riches in the global market.
The ANC has committed itself to transforming the country's economy so as to achieve its social transformation goals of building a national democratic society whose character will reflect a united, nonracial, nonsexist, democratic and prosperous society, to the extent that the President declared 2011 the year of economic transformation.
Also, note that even the Youth League of the ANC has said: "Economic transformation in our lifetime". The President has said that there must be economic transformation in 2011. Clearly, trade and industry policy reform forms part of the crucial element of intervening decisively in the economy. In this context the Department of Trade and Industry's policies and programmes align themselves with the policies, strategies and programme priorities of the ANC.
Successive policy positions of the ANC have guided the mission and goals of the Department of Trade and Industry, DTI. These, in broad terms, are related to the Freedom Charter's call that, and I quote:
All other industry and trade shall be controlled to assist the wellbeing of the people;
All people shall have equal rights to trade where they choose, to manufacture and to enter all trades, crafts and professions.
This approach ensures that the directive to Trade and Industry is that it must ensure that it acts as a catalyst for economic transformation and development, and provides a predictable, competitive, equitable and socially responsible environment for investment. This will contribute to achieving the government's vision of an adaptive and restructured economy, characterised by accelerated economic growth, employment creation and greater equity by 2014.
The main thrust and focus must therefore be on increased investment levels, increased labour absorption and competitiveness, and broader participation in the economy.
The budget allocation to the various programmes showed the level of priority against the overall government priority in terms of policy direction.
The administration programme provides strategic leadership for the department and its agencies to ensure the successful implementation of its policies through sustainable integrated resource allocation. It also provides support to the DTI with respect to finance resource allocation and management.
The department has an establishment of 1 395 posts, all of which are funded, and 104 are additional to the approved establishment. The number of posts filled increased from 890 in 2007-08, to 1 129 in 2010-11, and is expected to grow to 1 320 over the medium term.
There are 266 vacancies in the department, 86 of which are below middle management, 88 at middle management level, and 94 at senior management level. Most of the vacancies are in the International Trade and Economic Development Programmes, and remain vacant because terminations have exceeded appointments. Promotions in the department and the creation of some new positions have also contributed to this.
However, on behalf of the committee I would like to thank the Chief executive officer, CEO, because the last time we met, we gave her an ultimatum and deadline regarding the filling of posts. Those strategic posts which were supposed to be filled by June were filled before June. So, we say: Thank you very much for that!
The department indicated its intention to decrease its staff vacancy rate to below 10% and to reduce the staff turnover rate to 9%, while interviews to fill senior management positions would be completed by now.
Again let me quote President Jacob Zuma, who said:
The creation of decent work is at the centre of economic policies.
We urge every sector and every business entity ... to focus on job creation.
Chairperson, the International Trade and Economic Development Programme provides leadership regarding South Africa's trade policy to promote economic development. It further aims to build an equitable multilateral trading system that facilitates development and strengthens trade and investments made with key economies. In particular, it seeks to foster African development through regional and continental integration, and development aligned to the objectives of the New Partnership for Africa's Development. The recent meeting of regional leaders, as the Minister hinted regarding free trade, is proof of that.
In broad terms, the development and implementation of trade policy requires ongoing efforts to shape the terms and conditions of South Africa's continued integration into the global economy in a manner that supports South Africa's national economic and industrial developmental objectives.
The International Trade and Economic Development Programme contributes to creating the conditions that enhance the export of higher value-added products so that we close the deficit that we have, especially regarding exports between countries like China and us; promote inward and outward investment; and preserve the space to implement national development policies. It broadens and strengthens national consultative mechanisms, both within government and between government and its stakeholders.
The other issue is South Africa's involvement in Brics. "Brics" is an abbreviation of the countries mentioned, which are Brazil, Russia, India, China and recently South Africa. South Africa's economic outlook is linked to global performance, and if South African industry and exports are to grow more rapidly, skills development, technology modernisation and effective logistics investments are necessary building blocks of sectoral growth strategies.
A recovery in the global economy is well under way, driven by the strong growth in China, India and Brazil - hence South Africa's entry into Brics - and other emerging economies. South Africa's participation in Brics will give local firms expanded access to fastgrowing markets and investment opportunities, and strengthen beneficial trade links for the African continent.
Economic expansion in Africa has been robust and durable, with sub-Saharan Africa growing by a cumulative 74% since 2000. The primary opportunity facing South Africa is to advance the transition to an inclusive diversified economy by encouraging a virtuous cycle of savings and investments, economic participation and sustainable job creation, infrastructure development and skills upgrading.
On the issue of a strategy to fight crime and corruption, the department has developed a fraud prevention plan, the implementation of which assists in creating awareness and combating fraud and corruption. The National Anti- Corruption Hotline is promoted as part of the department's ongoing "Be silent no more" campaign. An ethical culture within the department is promoted through implementation of the ethics management framework. A newly established email-based ethics help desk will further assist to enhance the ethical culture in the department.
Chairperson, in drawing to a conclusion, we are reminded that the key aim of the Department of Trade and Industry is to lead and facilitate access to sustainable economic activity and employment for all South Africans through its understanding of the economy, its knowledge of economic opportunities and potential, and its anticipation of future economic trends.
I'm happy to report that one of the campaigns of the department, "Taking the DTI to the people", was taken to my constituency in March this year, an area that is very remote and where people have never even seen a Minister. So we urge the department to continue with these campaigns and go to the deep rural areas.
The spending focus over the MTEF period will be on publishing, printing and advertising the department's products and services.
Chairperson, it is clear that, assessed against the direction outlined in the 2011 State of the Nation Address, the New Growth Path and Outcome 12 set by Cabinet, the department's budget allocation is consistent, and its allocation should assist in speeding up the implementation of the government's priorities for this financial year. I thank you. [Applause.] The DEPUTY MINISTER OF TRADE AND INDUSTRY (Mrs T V Tobias-Pokolo): Hon Chairperson, hon members, distinguished guests, ladies and gentlemen, I can assure you that I'm not going to take very long; my input is very short.
This budget debate takes place after a successful national congress of the Youth League of the ruling party, which was held at Gallagher Estate on Youth Day, 16 June. They met to celebrate the lives of the gallant fighters of the 1976 generation of youth. The members of the ANC Youth League held themselves in high esteem, portraying revolutionary morality, discipline and commitment to the Freedom Charter.
They committed themselves to bettering the lives of our people, and the 5 000 delegates involved committed themselves to being economic freedom fighters - to fighting poverty, unemployment and lack of access to basic skills, land, education and employment.
They rededicated themselves to re-energising their organisation, the ANC, and to realising the noble objectives of the Freedom Charter. They also acknowledged that whilst we attained political freedom in the 1994 breakthrough, much still needs to be achieved to attain economic freedom, as the black majority still live in squalor, with the means of production still being owned by a small white minority.
Therefore, in building an equal and just society, they saw a need not only to transfer political power to the majority, but also to transfer the mineral wealth of our country to the majority of our people, who were dispossessed by the colonial powers that invaded the African continent three centuries ago, driven by greed and hatred.
We have also had peaceful local government elections, in which the South African masses gave the ANC an overwhelming mandate to continue to lead the revolutionary struggle to emancipate our people.
The people of South Africa ...
... abanamona, abananzondo; bayayidumisa i-ANC. Halala, ANC, halala! [Kwaqhwatywa.] [... don't display jealousy, they do not hold grudges; they praise the ANC. Hail, ANC, hail! [Applause.]]
We therefore promise these voters that, as usual, we will not disappoint them, but we will continue to deliver goods and services, as we have been doing since 1994.
Given the above mandate, we have also observed foreign liberal tendencies, where internal democratic processes when engaging with regard to differences are not explored to the fullest, as anarchists and alarmists resort to violent behaviour. Our organisation will not tolerate this behaviour. The destruction of organisational property is a criminal offence and action to deal with this will be taken against those who commit this crime.
The ANC was also not taken by surprise by those who wanted to claim Madiba. We all know that Madiba is a freedom fighter who fought for the liberation of the oppressed majority. Therefore, no amount of ridicule of our government by the DA, trying to portray the black administration as corrupt, lacking in capacity and having unequal distribution, will demoralise us in implementing our agenda.
Indeed, the ANC government has achieved a lot since 1994. The world respects South Africa because of the ANC. The world respects South Africa because of the changes brought about by the ANC. Today we belong to Brics because of the efforts of the ANC. Our GDP has grown because of this government. But we are still labelled as corrupt! Today we have free basic education. How many houses has the DA built in this country? And where? How many schools, clinics and roads have they built? How many jobs have they created? Where? In Mitchells Plain, in Khayelitsha, in Hamburg? [Interjections.] [Laughter.] I guess not.
What cars do Athol Trollip and Helen Zille drive? They want us to walk to our constituencies, as they never do any constituency work, except to parade black people during elections. [Interjections.]
Let me follow on the report that our Minister has already presented to you.
On a point of order, hon Chairperson: Is it in order for a member to make a statement - which has nothing to do with this debate - reflecting on another member in a derogatory manner, in her absence, as she has done?
To do what? Can you repeat that, Mr Watson? I can't hear you.
To refer to another member in a derogatory manner, saying that she drives only to visit constituencies - that is the only time she drives.
I don't think that is a point of order. Continue, hon member.
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Mrs T V Tobias-Pokolo): I apologise; I was just indicating the fact that Helen Zille does not have a constituency office. [Laughter.] Let me continue, hon members.
As part of trade facilitation, we have developed an Africa strategy which will usher in more trade relations between South Africa and its African counterparts. Government has adopted the south-to-south trade relations which will focus more on nontraditional markets. I can safely report that we have held bilateral meetings with Cuba, China, Brazil, Egypt, the DRC and many other countries that I have not mentioned.
We will continue with our agenda of regional integration and avoid economic partnership agreements that undermine this noble idea. We will only lobby investors who will respect job creation in our country. We will also avoid a situation where South Africa will be used as a launching pad to access the African market. We will pursue exchange programmes for young people, especially in agro processing.
It is high time that small business accessed financial resources. We need to overhaul financial institutions and realise economic activities in each and every small province, town and village. The rhetoric on small business should come to an end.
We need to revamp the Public Service and rid it of inefficient public servants inherited from the past administration which didn't deal with development.
Food eaten in government meetings, including lunches and dinners for budget debates, must come from the people of Gugulethu, Marabastad and Kimberley. The juice we drink must be bottled in the townships, and the bread baked by women.
The youth must not only prune trees and cut grass or sweep streets, but they must plan skyscrapers. They must build trains and bridges. Young women of South Africa must be astronauts and computer engineers. Women's businesses need to be listed on the stock exchange. They must fly Boeing 747s.
We have promised those who will invest and provide skills with incentives. We have bailed out our companies in distress, and will continue to do so. We will continue to use the lottery funds for charity relief. We will continue to expose South African businesses and products to foreign markets through exhibitions, but we will focus more on women and youth.
We will continue to formalise youth companies. Hence we have embarked on the antipiracy campaign, which is slowly gaining momentum in a complex industry and with inexperienced officials. We will continue to protect South African intellectual property by confiscating counterfeit and pirated goods. We will encourage our people to be original and to buy originals. Our government will carefully scrutinise the merchants who enter our markets with these counterfeits and open spaza shops to front the actual criminal and political activities.
We will also not make any policy shift without prior consultation, but we will not be shy to do so, including the implementation of BEE quotes. We will deal harshly with fronting. Beneficiation is no longer a dream, but a reality.
The President will measure our performance through the number of jobs we have created, not the statements made, trips taken or meetings attended. We will be measured through the satellite offices of the DTI that we have established in rural areas and peri-urban communities, regarding how many companies we have assisted to register.
Hon members, I apologise. My time has come to an end. Thank you. [Applause.]
Chairperson, hon Minister Davies, hon Deputy Ministers, hon members, comrades and distinguished guests, ANC policy is a point of departure. This Budget Vote debate is taking place at a time when the ANC- led government is entrenching its commitment to building a developmental state. Within the realm of Trade and Industry there are a number of instruments that have been developed, such as the New Growth Path and the Industrial Policy Action Plan, Ipap, 2011-12 and 2013-14. Through these instruments the department can make strategic interventions in strategic sectors of the economy to stimulate economic development and growth.
Ipap2 is a concrete action plan which requires sustained and focused work in order to ensure its success. Similarly, the New Growth Path seeks to set the economy on a new growth trajectory that is inclusive and labour- absorptive.
Of particular relevance to the current programmes of the department is the ANC's resolution on economic transformation. The resolution stated that the ANC's vision is to transform the economy to realise:
... an economy that is connected to the world, and which benefits from vibrant and balanced trade with the rest of the world. In particular, an economy that is increasingly integrated into the Southern African region and our continent as a whole, in furtherance of the goals of development and regeneration of Africa.
The resolution further calls for the implementation of an active and well- resourced industrial and trade policy. The resolution expressed the view that, in general, industrial policy should lead our overall approach to sector development, whilst trade policy should play a supportive role and be sensitive to employment outcomes.
When reflecting on the economic transformation, one can see that the resolution is being advanced through the three priority programmes which receive the largest share of the department's allocation for this financial year. They are also being advanced through Ipap2 and the Trade Policy Framework Strategy.
It is noticeable that the programmes of the department are directly related to the ANC's priority programmes as articulated in its 2009 election manifesto, namely: the creation of decent work opportunities and sustainable livelihoods as a primary focus of economic policies; ensuring that state-led industrial policy leads to the transformation of the economy, including making adequate resources available to strengthen the state-led industrial policy programme; directing public and private investments to support decent work outcomes, employment creation and broad economic transformation; a focus on labour-intensive production sectors; encouraging activities that have high employment effects; and systemic support for co-operatives.
It is important to understand that policy instruments such as the New Growth Path are driven by the quest to ensure increased economic redistribution. The New Growth Path calls for intensive government support for social economy initiatives, which includes the building of stronger co- operatives and support systems.
With regard to enterprise organisation, it is noticeable that the enterprise organisation programme received the largest budget allocation for the department, amounting to R3,4691 billion or 49% of the total budget. This budget has increased from R3,1 billion in 2010-11 to R3,5 billion in the 2011-12 financial year. This increase is compatible with its objective to stimulate and facilitate the development of sustainable and competitive enterprises through efficient provision of effective and accessible incentive measures that support job creation, investments and development, empowerment and enterprise development.
The budget allocation for the empowerment and enterprise development programme for 2011-12 has increased - it is R839,7 million, as compared to R792 million in the previous year. This increase can be associated with the programme focus on the development of policies, strategies that create a conducive environment for small, medium and micro enterprises, SMMEs, and co-operative enterprises. This budget seems to be in response to the state of the nation address, which called for more support for small businesses and co-operatives.
Re swanet?e go netefat?a gore re agela batho ba gaborena makala a dikgwebo t?e nnyane t?eo di t?welago pele. Lenaneo le le tla netefat?a gore kgoro e ?omi?ana le dikgwebo t?e nnyane gabotse. Le ka netefat?a gape gore dit?haba t?e di nago le dikgwebo t?e nnyane di a ?omi?ana.
Re leboga maano ao kgoro e ilego ya a ?omi?a, kudu matlafat?ong ya basadi go t?a ekonomi, go akaret?a le SA Women Entrepreneurs Network, Sawen, sekhwama sa Isivande, Bavumile le Technology for Women in Business, TWIB. Kgoro e ile ya leboga basadi bao ba ?omi?ago mekgwa ya go fapafapana ya theknolot?i dikgwebong t?a bona ka go ba fa Difoka t?a TWIB.
Re leboga gape le peelet?o ya bjale kagong ya bokgoni bja theknolot?i ka Lenaneo la Techno Girls leo le akaret?ago le baithuti ba bannyane ba basetsana go t?wa Sekolong se se Phagamego sa Ratshisase kua Limpopo. Se se tla thu?a gore mafelelong naga ya gaborena e age diintaseteri t?e di t?welago pele.
Ke rata gape go t?ea sebaka se go leboga kgoro ka go aba diterekere, didiri?wa t?a go nwe?et?a, meetse a go epiwa le ka thu?o ya go thala lenaneo la kgwebo le molaotheo wa prot?eke ya set?haba sa Ga-Dikgale gona kua profenseng ya Limpopo. Maloko a hlohlelet?wa go ?omi?a ditirelo t?e di abjago ke kgoro. Ge maloko a sa ye go kgoro, kgoro e ka se tsebe gore maloko a hloka dilo t?e.
Re swanet?e go hlabolla ekonomi ya rena ka bokgoni bja go itirela dit?welet?wa t?a rena. Re swanet?e go tlogela tsela ya go nt?het?a dit?welet?wa t?a rena ka ntle ga naga, go akaret?a le didiri?wa t?e tala. (Translation of Sepedi paragraphs follows.)
[We have to ensure that we build successful small business ventures for our people. This programme will ensure that the department works co-operatively with small businesses. It will also ensure co-operation among small business communities.
We thank the department for empowering women economically, including SA Women Entrepreneurs Network, Sawen; Isivande Fund; Bavumile; and Technology for Women in Business, TWIB. The department gave TWIB Awards to women who use different technological methods in their businesses.
We also appreciate the current investment in technological skills with the Techno Girl Programme, which includes young girls from Ratshisase School in Limpopo. This will help the country to build successful industries.
I would also like to thank the department for providing tractors, irrigation equipment, boreholes, the business plan and the constitution for the community project at Ga-Dikgale in Limpopo. Members are encouraged to use the services that are provided by the department. Members have to inform the department about their needs. We need to use local production to develop our economy. We need to stop exporting our products, including raw materials.]
With regard to local economic development, because this is the year of job creation, the role of co-operatives and local economic development is critical. This is to ensure a sense of collective social enterprise and the building of social capital. We must ensure collective forms of ownership that build social cohesion through building production and ownership- orientated community social networks.
The small business sector and the co-operatives need to be seen and evaluated within a context of ensuring inclusive local economic development that promotes the participation of vulnerable groups in society such as women, the youth and people with disabilities in mainstream economic activity.
In conclusion, this budget must help us to promote local products in order to build the local economy and social cohesion. The goals of Ipap2 and the New Growth Path must ensure that our economy creates decent work for all our people.
We in the ANC support Budget Vote No 36 - Trade and Industry. Thank you.
Chairperson Mahlangu, members of the NCOP, MECs present, heads of department, officials from the Department of Trade and Industry and the Council of Trade and Industry Institutions, COTII, leaders of organised business and labour, distinguished guests, ladies and gentlemen, this Budget Vote debate takes place at a time when the ANC-led government is increasing its efforts to support the small, medium and micro enterprises, SMME, sector, as we believe that the SMME sector is critical in stimulating economic development and that it is also a critical area in regard to innovation, skills development, entrepreneurship, labour absorption and job creation.
Hon members, as you know, the President declared this year, 2011, the year of job creation, and it is for this reason that they have deployed all tools available at the Department of Trade and Industry to deliver on job creation. In this regard I want to emphasise the pivotal role played by potential small businesspeople, and also co-operatives, in making sure that we can reach our goal of creating five million jobs in 2020.
It is imperative to comprehend that policy instruments such as the New Growth Path are driven by the quest to ensure increased economic redistribution. The growth path also speaks to many social economic initiatives, which include building a stronger co-operative support agency and the possible establishment of a co-operative training academy. We are in the process of finalising the amendments to deal with all of this. We hope that this really will work better, and ensure that we can reach our goals.
These interventions are directed at ensuring that the country has an effective and efficient institutional mechanism to support the social economy initiatives, thus ensuring focused investment on social capital.
For these reasons, our investment going to the small business sector and co- operatives needs to be seen and evaluated within the context of ensuring an inclusive economic paradigm that integrates the participation of marginalised groups. Don't forget that 17 years ago our people were locked into the lowest level of the economy. Groups such as women, youth and people with disabilities should also be included in the mainstream economy. In doing that we are also showing that we don't just promise, as I heard earlier on in this House, but that we, as the ANC-led government, act and make sure that we see progress.
For instance, there are both the co-operatives that we have launched - as hon Mmakgo?i Dikgale said - through the Small Enterprise Development Agency, Seda, and the Community Public-Private Partnership, CPPP, Programme in Limpopo, as well as Mpumalanga. Also, we have guests here from Khondlo, a co-operative from the Mfekayi village in Mtubatuba, as well as Women's Development Enterprise from Zithobeni. We believe that in other provinces where we are doing work, we will see this happening too. We don't promise; we act. The Department of Trade and Industry does exactly that. [Applause.] They are in the gallery today so that we can make sure that we spend their money correctly.
One of the tools we utilise to ensure that we build a viable small business sector is taking the Department of Trade and Industry to the people. Thank you, hon Gamede. This is to report even to the Minister, because at times my Minister doesn't know where I am! That is because I am in the deep rural areas to try to make sure that service delivery can be achieved, and that our people can have access to services. [Applause.] Don't worry, Minister, if you don't see me - I am busy working. [Laughter.] You have the report right here in the National Council of Provinces. That is to make sure you honour the service delivery agreement and that you are not dismissed from work. We will make sure of that. Minister, you are surrounded by two strong women, and we are able to make sure that you sustain this job and can be elevated to an even higher position, so that we can see the ANC working.
We also recognise, as Mmakgo?i has said, Technology for Women in Business, Twib, the South African Women Entrepreneurs' Network, Sawen, and Bavumile. These are programmes that we give to the women, because we believe that if you empower women, you empower the nation. They are then able to look after children and others. So we continue to accelerate them, and the Minister has given us permission to do so. The Director-General, as the accounting officer, is also going to support this - otherwise his job is on the line! The Deputy Directors-General that are here all know that this is a priority for the department. We are going to do it - I am sure, Director-General, aren't we? Good.
Our development as a country remains locked in decentralised economic activity with serious spatial challenges. Furthermore, I think it is better to talk about issues that are recent. It is imperative that we escalate public-private partnerships to contribute towards job creation and skills development.
On Monday, 20 June 2011, I was invited to visit the Atteridgeville Jewellery Project, in which 16 learners were graduating after completing a jewellery design and manufacturing course. I must mention that two of those learners are in the gallery. We have Koketso and Bafana, who come from there. They are part of the Budget Vote today and they are our guests in the gallery. [Applause.] We also have a businesswoman here, Duduma Lebo from Soweto, who is dealing with textile and clothing, as well as the Proudly South African representatives in the gallery today. It is very good to hear this today.
I must also say that in our midst we have Mr Max Dichaba of Dichaba Creations, a young jewellery designer who owns a manufacturing and training company. Dichaba Creations is an SMME that currently employs an overall staff complement of 75 people. This company is also in the gallery today, as our guests and a beneficiary that we can attest to. We don't promise; we act. [Interjections.] This company is also a recipient of Seda's Technology Transfer Fund, to a maximum amount of about R593 973,97, with which it is able to buy bigger machines to employ more people. Thanks to Seda's Chief Executive Officer, Hlonela Lupuwana, for her critical leadership at this institution. These are the beneficiaries of government-facilitated international trade initiatives. We don't just go outside with small businesspeople. Mr Dichaba was able to clinch a deal with Indian businesspeople to provide jewellery to them. Isn't that delivery and not just a promise? [Interjections.]
We hope that our commitment to development is unquestionable. We intend to create more Dichabas in South Africa, as we believe that the SMME sector is a critical vehicle to make sure that we can do it. This has been proved in countries like China and India that are progressing with their economies because they support small business, and we are on the right track, Minister. Don't worry about those after me that I am sure you will hear criticise and say that we don't do anything. We are at work.
The small business sector and the co-operative movement have a responsibility to help us transform the social and economic engineering of apartheid through our current programmes, and there are so many that we've mentioned. We also hope to make sure that we accelerate these and that we can see ourselves in the department assisting people to access our services and ensuring that we can deal with all our work.
In regard to the creative industry, I am glad about the question of exhibitions. We will make sure that we support them through our Deputy Directors-General, as well as the Director-General, who gave the nod in this regard. These are more industries in which we believe we can create more jobs Minister. Count those and make sure that this can work for our people.
Lastly, I want to thank the select committee under the hon Dumisani Gamede, as well as the other parliamentarians, the Director-General and Deputy Directors-General of the department, the COTII agencies, and the members of staff from my office.
I also want to thank our families who are here. My three girls, Anna, Phila, and Patience are seated in the gallery. Those are my three girls who always support me, as well as the other family members that I have. It is through their courage that I can do this job and make sure that services are delivered to the people.
Minister, rest assured that we will make sure that we roll up our sleeves and deliver, especially in the co-operatives. We believe that we must make sure that people understand the concept and what we want to achieve, rather than only getting money. It is not about getting money, although our people do need to get that. For that I want to thank Absa in terms of our partnership through Happy Ntshingila, who is not here today. However, we have Karen, his colleague from the Western Cape, who supported us with the jewellery project, and we want to partner with them to make sure that we can take these projects forward.
Look at the necklace that I am wearing today. It is not a fashion show, Chairperson, but this showcases our work to people who say we just make promises. We don't just promise. It was done by the jewellery project. Am I not beautiful wearing this necklace?
HON MEMBERS: Beautiful!
It is proudly South African and made by the students that we have to support and buy from. So, is it possible then to make sure that these projects get more support through our agencies and divisions, so that we can deliver on these issues, Minister? I am proud to wear this and make sure that we can buy more from them and create more of the jobs we are talking about.
So, please, Minister, we hope that the House will accept this Budget, because we are all for economic transformation.
We must not forget where we come from. Only 17 years of democracy cannot deal with the imbalances and inequalities of many years. People can be sure that it was not the ANC-led government which came up with an education system that produced people who cannot even draft a business plan! Instead they had to learn about your Jan Van Riebeeck, 1652, Drommedaris, Reijger and Goede Hoop. [Laughter.] It was not the ANC-led government that taught that; it was the former apartheid government. We are changing that mind-set to make sure that our people are able to acquire skills and get partnerships.
That's why I wanted to thank Absa. I hope that other firms and companies can do the same, because together we can do more. I thank you. [Applause.]
Sihlalo ohloniphekile, ngicela ukuqala ngokuthi ngibonge uNgqongqoshe nethimba lakhe; uneqembu elikhethekile ngempela. [Hon Chairperson, firstly, I would like to thank the Minister and his team; you have a special team indeed.]
I've really enjoyed working with that team and thank you very much for that. I really do appreciate it.
Hon Chair, I congratulate the Minister on taking this debate seriously and sticking to the subject of the debate. I won't lower myself to the level of the hon Tobias-Pokolo, who wasted half her time talking about issues that were not relevant to the debate. [Interjections.]
Hon Chairperson, it is the stated intention of all state departments, quite rightly, to implement their respective mandates in a way that creates the most jobs possible. There are probably no other state departments that have a greater ability and responsibility to create the kind of economic growth that will lead to the creation of sustainable jobs than the DTI. Certainly, it is far more so than the Department of Economic Development, as well as the Planning Commission, both entities that, if anything, should be programmes within the DTI.
The capacity to effectively carry out its mandate is partly hamstrung because entities that should respond to the DTI have been transferred to the Department of Economic Development. An example of this is the Industrial Development Corporation, IDC, which the DTI still seems to look at as if it is one of their own entities. The DTI's Programme 4 is all about industrial development; why then move the IDC to the Department of Economic Development?
Time does not allow for a full-scale analysis and so I will look at a sector that has lost jobs and is set to continue to lose jobs unless there is a very brave intervention by the government. Here I speak of the clothing sector, and the cut-make-and-trim element in particular. This is an industry within which it is arguably the easiest and quickest to create a large number of jobs. But it is also an industry that has to be competitive with the likes of Bangladesh, China, Lesotho and Swaziland. Unfortunately for the unemployed South Africans who could be employed in this industry, it is an industry that is adversely affected by the impact of centralised bargaining through the Bargaining Council.
The majority of industrialists and employees in this sector have no direct influence on the decisions of the bargaining council, but despite this, they are bound by these decisions. The consequence of this centralised bargaining is that there are thousands of so-called illegal operations where, in order to compete, both industrialists and employees accept less favourable conditions of employment. The bargaining council is in the process of attaching the assets of the bigger, easily found so-called illegal textile factories, thus causing their closure and the loss of thousands of jobs.
I have spent hours on the streets talking to people who have recently lost their jobs in Newcastle and Madadeni because of the actions of the bargaining council. To the very last person they all said that they would like higher salaries but - and here is the rub - not if it meant losing their jobs.
Despite urgent approaches from the apparel industry over the last eight months, there has been no compromise forthcoming from government. This is largely because the SA Clothing and Textile Workers' Union, Sactwu, refuses point blank to find a workable solution that will retain the jobs that are now being lost. We are told that the line must be held, and that the unemployed must find a way of surviving without the jobs that are being lost.
It is somewhat curious that the SA Clothing and Textile Workers' Union, which seems to be the stumbling block in saving jobs, is the previous stamping ground of both the Minister and the Deputy Minister of Economic Development, where both held high office.
Also of interest is that the provident fund of this organisation has apparently made loans of tens of millions of rands to entities controlled by the wife of the Deputy Minister of Economic Development, entities that the Deputy Minister himself was apparently previously involved in. This is the same provident fund that is now desperately trying to recover some R100 billion of its funds apparently unwisely invested.
Whilst the DTI indicates that it will continue improving incentive schemes to boost manufacturing capacity and support job creation in the textile sector, the incentive schemes, which are indeed well devised, are administered by the IDC, which now reports to the Department of Economic Development.
In addition, the IDC does not seem to have the capacity to handle these types of schemes that are geared to relatively small enterprises. As a consequence, the majority of apparel manufacturers are simply unable to access these schemes. Other apparel manufacturers have no way of moving from the so-called "illegal status" to "legal status" in order to be able to access the schemes, without being forced to shut down by the Bargaining Council in the interim.
This is a complex situation that has been brought about by state intervention. However, for the sake of tens of thousands of the unemployed, we have a responsibility to overcome the barriers that are causing job losses, as well as a responsibility to create new jobs. I thank you. [Time expired.] [Applause.]
Hon Chairperson, Ted Turner, the well-known broadcasting entrepreneur, once said, and I quote: "My son is now an 'entrepreneur'. That's what you're called when you don't have a job."
We know that unemployment, joblessness, is the biggest challenge in our society. According to the broader definition of unemployment, 4 out of 10 people are not formally employed. But, hon Minister, in the South African context this joblessness, for many reasons, does not equate to entrepreneurship.
The entrepreneur is pivotal in achieving the very noble strategic objectives encapsulated in the vision and mission statement of your department. The entrepreneur in every winning and prospering country in the world is central to those successes. In coining the term the French economist, Jean-Baptiste Say, defined an "entrepreneur" as:
... one who undertakes an enterprise, especially a contractor, acting as intermediatory between capital and labour.
Entrepreneurs need an environment where they can flourish and do business. Government, as a key partner, must be instrumental in creating that environment.
However, we know that in the South African context the ANC government has not succeeded in creating an environment where specifically the entrepreneur in South Africa can survive and also prosper. Because of this, inter alia, South Africa is closer to being a welfare state than a developmental state. If one excludes Gauteng, the Western Cape and KwaZulu- Natal, South Africa is in effect a survivalist state, where 80% of the population is dependent on the state through grants and support for their daily needs and survival. [Interjections.]
The reason for this might, according to political commentator, Moeletsi Mbeki, be that:
In the 16 years of ANC rule, all the symptoms of a government out of its depth have grown worse.
. Life expectancy has declined from 65 years to 53;
. In 2007, SA became a net food importer;
. The elimination of agricultural subsidies by the government led to the loss of 600 000 farm workers' jobs;
. The ANC stopped controlling the borders, leading to a flood of poor people into SA.
The current uncertainty regarding fundamental constitutional principles is not conducive to investor confidence and an environment where entrepreneurs can flourish.
This has been fuelled by this weekend's decision to adopt the ANC Youth League's proposal on nationalisation and land expropriation as policy. [Interjections.] Despite the ANC's rejecting this, hon Minister, it seems that it is indeed a case of the tail wagging the dog. You will know, hon Minister, that this is not good news for South Africa. Today's Business Day quotes Business Leadership SA chairperson, Bobby Godsell, as saying it is "a bad idea".
Leaders like Julius Malema are bad news for entrepreneurs and South Africa. [Interjections.] It is detrimental to the future of this country that uneducated populists dictate the day-to-day agenda of the economic future of this country.
The time has come for the real leaders, hon Minister, including yourself, to raise their voices in regard to these urgent and potentially damning developments. We need entrepreneurs, not state intervention. We need entrepreneurs, not nationalisation. [Interjections.] We need a principled and sound leadership, not populist head-banging losers. [Interjections.]
The entrepreneur can and must be in the forefront of turning the tide in regard to the ills of unemployment and underdevelopment of our time. I thank you. [Applause.]
Hon Chairperson, hon Minister, hon Deputy Minister, Director- General and officials, ladies and gentlemen, I think that it will be wise to contextualise some of these things. The ANC issued constitutional guidelines for a democratic South Africa in 1988, and at that time you were supposed to have been arrested, hon Sinclair! Listen to the guidelines, which I am quoting:
The stage is now approaching where the Freedom Charter must be converted from a vision for the future into a constitutional reality.
Concerning the economy, the guideline says, and I quote again:
The state shall ensure that the entire economy serves the interests and well-being of all sections of the population.
If you understand this guideline, which was stated in 1988, you will understand what was said by the hon Deputy Minister Tobias-Pokolo - you will understand the context.
One of the greatest revolutionaries, Amilcar Cabral, once said - and let me say it so that you can have it as homework, hon Sinclair - that one cannot solve a problem from the same consciousness that created it. I hope you understand.
Democracy and political freedom are only meaningful if they affect and change the daily lives of people for the better. History teaches us that for this to happen, a democratic system must be accompanied equally by economic democracy and freedom; otherwise it loses its meaning and credibility in the eyes of the majority.
It is for this reason that our nation's Constitution entrenches and protects rights, such as those of prosperity, housing, health care, food, water and social security. How else can these rights be attained and protected if there is no economic democracy and freedom?
Our debate today on the DTI's budget and programmes - and in particular on industrial development, and trade and investment - seeks to address this question. The DTI exists to ensure economic development, growth and management through, among other things, facilitation of industrial development, promotion of trade and investment in the country, and regulation. All these have to be done within the context of a broad agenda of economic transformation, which started with the dawn of democracy in 1994.
In the context of the DTI, this transformation has to be based in the first place on the Freedom Charter's call that: All other industry and trade shall be controlled to assist the well-being of the people;
All people shall have equal rights to trade where they choose, to manufacture and to enter all trades, crafts and professions.
This call directs us to actively take steps that will undo the colonial and apartheid legacy of racial inequalities in regard to ownership and management of industrial corporations, participation in trade, and entrance into appropriate crafts and professions.
From the perspective of the ANC, the DTI forms part of the crucial elements of the required technical capacities of a developmental state. It is one of the key government departments tasked with the role of transforming the economy through active state intervention.
The ANC committed itself in the last elections to a systematic programme of establishing a developmental state as an enabler to transform the country's economy, so that the goals of building a united, nonracial, nonsexist, democratic and prosperous society can be achieved.
We recognise the limitation of operating within a mixed economy system, but believe its contradictions and challenges can be minimised by allowing for an active developmental state. This developmental state should be afforded space to play a strategic leadership and guidance role, using various intervention mechanisms and levers at its disposal to have an impact on transformation and change.
The ANC government has therefore, since 1994, assigned the DTI the task of developing and implementing appropriate policies, legislation and programmes which seek to promote transformation in all areas of the economy, including issues of trade, industrial development and regulations. This has to be done within the policy framework of our economic transformation vision, as is well articulated in our 52nd national conference resolutions. It calls for, among other things:
... an economic transformation which aims to realise ... an economy that is connected to the world, and which benefits from vibrant and balanced trade with the rest of the world. In particular, an economy that is increasingly integrated into the Southern African region and our continent as a whole, in furtherance of the goals of development and regeneration of Africa.
It further calls for implementation of an "active and well-resourced industrial and trade policy", and expresses the view that:
In general, industrial policy should lead our overall approach to sector development, whilst trade policy should play a supporting role and be sensitive to employment outcomes.
In 2009 the ANC was elected, based on its economic transformation programme which promised, among others things, the creation of decent work opportunities and sustainable livelihoods as a primary focus of its economic policies; to ensure that state-led industrial policy led to the transformation of the economy; and to ensure that a comprehensive package of measures was introduced to promote beneficiation programmes, in order to ensure that the natural wealth of the country was shared and developed locally and accelerated the creation of decent work opportunities in manufacturing and services.
In debating this Budget Vote we are encouraged by the DTI's commitment to this vision of economic transformation. Its programmes of industrial development, consumer and corporate regulations, and trade and investment in South Africa bear testimony to this commitment and will indeed lead towards the achievement of this long-term vision of transformation.
We note that for this Medium-Term Expenditure Framework, MTEF, period the main objectives of the department's industrial development programme will be faster implementation of the industrial policy action plan, which now forms the cornerstone of the New Growth Path strategy; addressing issues relating to unsafe and poor quality imports and promoting access to high value export markets; supporting industrial upgrading through various incentive mechanisms; leveraging large procurements; and promoting green industries and resource efficiency.
Through their consumer and corporate programme, they seek to align the relevant laws and policies and how they are implemented in order to increase access to economic opportunities for historically disadvantaged citizens, harmonise consumer protection and intellectual property, and reduce the regulatory burden on business.
On trade, they intend to promote African economic integration and implement spatial development initiatives in Southern Africa; address issues relating to tariff and nontariff barriers that inhibit South African value-added exports in key economies around the world; and build national consensus around trade and investment policy, strategy and negotiation.
As the ANC we welcome and support these initiatives, as they are clearly going to take us towards economic transformation, which will benefit the majority of our population. We want the department to be particularly vigorous in promoting the development and growth of the green industries. This focus will guarantee our future competitiveness in the global economy, as well as the creation of more jobs.
As members of the ANC and the committee, we want to make it clear that it is dangerous for people who do not attend meetings at committee level to come here and make serious unfounded statements without a proper context. If you are going to give us facts and figures about what is happening in South Africa, you should not conclude without telling us why we have this legacy. You must go on and tell us who got us into this situation in South Africa. We are trying to address the legacy that was created by the very same people who are now bold enough to say that they are the people trying to address the people.
The majority of people in South Africa voted the ANC into power because they are convinced that we are in line with addressing the challenges facing them. The ANC calls for the House to support this Budget Vote. Thank you. [Applause.]
Chairperson, I thank the participants in this debate, and I think it has largely been a constructive one. I want to start off with a couple of specific points and then make some more general observations.
First of all, Mr Lees, I think that we agree that the clothing and textile industry is an area where we can not only save existing jobs, but actually grow employment. The analysis we did, which underpinned our production incentive, showed that we actually need to raise productivity and encourage investment in the industry. We launched this scheme last year, and about 200 companies took it up. I am pleased to say that they not only saved jobs, but they actually grew jobs by a thousand.
The way forward is to raise our productivity and competitiveness, as well as identify particular niches in fast fashion, sportswear, and things of that sort.
I do not think that we have a future in this race for the bottom that you seem to be talking about. At one stage in a meeting I heard somebody saying that the workers in KwaZulu-Natal, whom you are talking about, are told: "Well, if you don't take the wages in Lesotho, we are going to go to Lesotho." The workers in Lesotho are told: "If you don't take the wages in Madagascar, we are going to go to Madagascar." The workers in Madagascar are told: "If you don't take the wages in Bangladesh, we are going to Bangladesh. I don't know where Bangladesh workers are going to go, but this race for the bottom does not work.
I also want to say that I don't believe that we went to them with a hard stick. We actually said that we wanted to give them a period of time in which to comply. They were the ones who wouldn't compromise. They did not want to become compliant and said: "To hell with it, we are not going to comply." I'm afraid that a lot of the deadlock is in their court.
Let me come to the question about entrepreneurship that was raised by Mr Sinclair. I need to say to him that we need to understand the context in South Africa. It was not just that the government under apartheid did not support entrepreneurship among black people; it actually intervened to actively discourage and undermine entrepreneurial development through a variety of measures. [Interjections.] That is the legacy that we have.
Now, I said in my speech that we acknowledge that we have not done enough as a government. I said that that was why we were prioritising incubation programmes and the roll-out of 250 of them. The whole idea of that is to train and support real, productive entrepreneurs.
For the rest, I was very pleased to see that a large number of participants recognised the fact that South Africa has a very strategic place in the world economy. This is reflected in the fact that we are a member of Brics. This is the most important grouping of developing countries in the world, one which is shaping a new agenda around governance of the world economy and developing a programme of co-operation between its own members. We are also a pivotal country in the most significant step in regional integration in the African continent, namely the tripartite integration process to which I have referred.
However, the point is that none of this will matter if we do not actually make an impact on the lives of our people right on the ground. I think that the hon Nyambi put the context of the remarks that were made by Deputy Minister Tobias-Pokolo correctly. The fact of the matter is that the majority of unemployed people in this country are under 25. The majority of young people in this country in that age group are also unemployed.
I think that the demand which is being heard, and which we have to respond to, is that we need to accelerate economic transformation and democratisation. That's what it's about! Business as usual and the status quo are not going to crack it. I think that is exactly what the growth path is about. The hon Gamede also put it correctly when he said that what we have to do is not just raise growth, carry on as we were, and get good marks from this or that rating agency because of this or that way we manage the economy. We have to increase investment in the real economy, increase labour absorption and broaden participation. That is the absolute imperative that confronts us.
We also have to take our services out to the poor and marginalised areas and communities in this country. That is the work Deputy Minister Thabethe does. We don't send her on international trips - or hardly ever. That is what we want to do; we want to take the services of the DTI out.
I just want to conclude as I started. We can't do it on our own. However much the DTI may be able to run around taking services to the people, we need active partnerships. We need active partnerships with provincial and local government. We discussed this at executive level through Minmec. However, I think that this House, the NCOP, is very well placed to do legislative oversight and to give us advice, encouragement and criticism about how we can do this better. We need that co-operation across the three spheres of government. We also need co-operation with the private sector and trade unions.
For example, we cannot run 250 incubation programmes with government officials alone. We need more active co-operation from business. That is one of the reasons we are turning around and saying the following to big business people who are earning black economic empowerment, BEE, points for various things - there are a variety of things in the scorecard. They can earn BEE points on things like enterprise development, procurement from black companies, and so on. Far too few of them do, and we are turning around and saying we will give them points if they do. But let us now start thinking about taking points away from their overall total if they don't. That's the debate and the discussion we want to have.
We are committed to creating real, genuine entrepreneurship, to reducing unemployment in this country, and in particular to focusing on youth, women, and young women, who are the poorest of the poor and the most disadvantaged, because they constitute more than 50% of the young unemployed.
Thank you very much for the debate and the input. We look forward to working with the NCOP and the select committee in the future. Thank you very much. [Applause.]
Debate concluded.