Agb Voorsitter en agb lede, soos die Minister genoem het, ek dink dat u met my sal saamstem dat ons, namens hierdie uitgebreide komitee en spesifiek die partye wat in die portefeuljekomitee verteenwoordig is, ons innige meegevoel betuig teenoor agb Peter Maluleka en sy gesin met sy groot verlies. Ons dra ons innige simpatie aan die Maluleka-familie oor. (Translation of Afrikaans paragraph follows.)
[Dr G W KOORNHOF: Hon Chairperson and hon members, as the Minister has mentioned, I think that you will agree with me that we, on behalf of this extended committee and specifically those parties represented in the portfolio committee, wish to express our sincere condolences to hon Peter Maluleka and his family concerning his great loss. Our sincere sympathy is with the Maluleka family.]
I am proud to represent the ANC in this debate for three reasons. Firstly, we have a Minister in charge who takes the responsibility to lead, who gets his hands dirty, who seeks solutions to problems and who leads from the front with visible leadership. He is not shaky - the state solves problems in state-owned companies.
Secondly, as you have just heard, the Department of Public Enterprises has again received a clean audit report from the Auditor-General - for the ninth consecutive year. It is a relatively small department with a small budget, compared to other departments, but it succeeds in successfully overseeing some of the largest SOCs in South Africa. We acknowledge the sterling work done by its director-general, Mr Tshediso Matona, and all our officials in this department in continually strengthening their oversight functions.
Thirdly, we have SOCs that continuously ensure that they remain sustainable and are able to support government's objectives. Our SOCs in this department directly employ in excess of 100 000 workers, who are loyal and hardworking citizens. They are proudly South African SOCs. [Applause.] If you take indirect job creation into consideration, the number of people being employed by these SOCs is probably closer to half a million. [Applause.] They have good, solid leadership and we are proud of them, both management and the boards. This year, Eskom celebrates its 90th birthday and next year South African Airways will celebrate its 80th birthday. When we analyse gross-fixed capital formation in South Africa, it is clear that capital expenditure by SOCs is key in sustaining overall investment growth. Fixed capital investment by public corporations has been on an upward trend since 2004 and has grown over this period by 300%.
Of equal importance, which the Minister alluded to, is that the high levels of growth experienced between 2008 and 2012 during the downward phase of the business cycle have been maintained in support of government's countercyclical approach. This reflects the commitment by the ANC government to the build programme.
Quarterly growth in investments indicates that investments by the state in the economy continued to accelerate in 2012. Although the state investment expenditure is not on a par with that of the private business enterprises, the rate of investment expenditure growth by the state outstrips that of the private sector.
I briefly want to address some governance issues and related oversight responsibilities. Given the complexity of the multiplicity of legislations and policy frameworks of different departments at different spheres of government and their entities, the difficulties of implementing an overarching strategy are acknowledged in the context of decentralised and multiple policy frameworks, legislations and oversight approaches.
The task of the ANC government is to embed a uniform strategy for state- owned commercial entities in South Africa that effectively responds to the developmental state agenda and creates an enabling environment which, among other goals, seeks to create a universal policy framework and legislation, and develops state capacity to effectively monitor and evaluate state-owned commercial entities - in all spheres of government. The absence of this will lead to conflicts of governance and a lack of clarity within boards.
Implementing this strategic perspective is what the ANC requires of this department. However, this cannot be assumed to happen automatically and the portfolio committee will have to ensure that in its responsibility of oversight, key principles of the governance and management of SOCs are met. These would include, firstly, an investment planning framework that is linked to the long-term strategic, economic priorities of the country. These cannot only be determined by balance sheet constraints.
Secondly, there must be expansion and diversification of sources of funding for the investment plan beyond the balance sheet, and the fiscus must include development finance institutions and the private sector.
Thirdly, there must be a focus on localisation in the procurement programmes in order to support local suppliers and hence to promote investment in national industrial capabilities. This must be done through entering into longer-term sustainable contracts to reduce any dependency on imports for intermediate goods and to build stable relationships.
Fourthly, there must be enhanced co-ordination between SOC programmes and all levels of government to ensure that SOC capabilities are fully leveraged, that implementation is accelerated and the impact of the programmes is optimised. This will mean that all provincial governments will have to be involved in the facilitation of this process.
We should partner with the private sector, not unbundle state assets and resources. The theorists who repeatedly call for the unbundling of state assets are locked in a time warp, a failed project of neo-liberal restructuring in order to meet the narrow needs of capital accumulation, while selling off state assets to the highest bidder without any developmental appreciation for the country. Such theorists will probably be rolled out by the opposition in this debate. The solution lies in the following models - they work and can be summarised as follows.
Firstly, there should be partnering between the private and public sectors and the focus should be on collaboration and the alignment of government entities in capital infrastructure programmes. This model has proven to be very successful in developing countries such as China, India and Brazil. Secondly, the state-owned enterprises of South Africa, which is part of the family of Brics countries, should lead and forge strategic commercial partnerships with other experienced state-owned entities to lead in the infrastructure development opportunities on the continent.
Thirdly, SOCs should be required to collaborate through public-private partnerships that plan and implement the strategic programmes of the developmental state. These joint efforts should serve to satisfy the absolute need to increase long-term planning to guide the co-ordination, project selection and effective execution of investment programmes.
Fourthly, strategic programmes and projects developed for roll-out by SOEs should reserve a role for the relevant development finance institutions to act as a financial lead arranger to arrange the financing of such programmes.
We should consider debating further the recommendations of the African Summit of the World Economic Forum, which ended in Cape Town last Friday, with specific reference to the role that public institutions must play. The question is whether we should talk about competition or whether we should rather talk about how we complement one another.
In terms of ANC policy, the two pillars driving our economic growth and the development of our economy are the infrastructure and industrialisation programmes. The infrastructure programme, which is within the National Development Plan's vision, is based on strategic integrated projects that will have a catalytic impact on job creation, unlocking resources, developing the poorest regions of our country, overcoming spatial inequalities and developing the region. I am referring to the Mangaung resolutions of the ANC. [Applause.]
The industrialisation process should seek to construct a new comparative advantage based on our natural resources ... [Interjections.] ... in the context of stronger regional integration. [Interjections.]