Chairperson, I would like thank all the hon members who participated in the debate for their comments, suggestions, and positive and constructive criticism, where hon members offered that. I am sure hon members will fully appreciate that it is impossible to deal with all the issues raised in 10 or 12 minutes but I will deal with as many as I can. I will try to group issues together and we will take note of some of the issues raised. Obviously, we will discuss some of them further in the portfolio committee. I thank all our colleagues and I will deal with as many of the issues raised as I can.
I would like to start off with the issue raised by the hon Njobe on domestic tourism and link that with the question asked by the hon chairperson and the hon Farrow. She raised the issue of whether we should not have a unit, separate from SA Tourism, to deal with domestic tourism. The two questions asked - I am paraphrasing now - were basically: Did we get the full value of the money we spent?
In my personal view, we are not at a place yet where we can talk about a separate unit responsible for domestic tourism. In my view, SA Tourism is fully empowered, well structured, well budgeted and well financed enough to deal with domestic tourism as well. At this stage, to suddenly have another structure that we have to fund with new staff, new offices, etc, is not what we should do.
Having said that, let me say that what the hon member raised is an issue that we should not run away from. I would like to really confront this issue and not run away from it. The issue is basically: How do all of us - national, provincial and local government - spend our money? Let me ask the question in a straightforward manner: Should provinces and local government spend their money on international marketing? That is the question all of us should answer, whether we are in the National Assembly, the NCOP or provincial legislatures.
There is a constitutional problem here. Constitutionally, tourism is a concurrent power. Whenever we discuss this issue with our colleagues in the provinces, some of them - not all of them - actually say, "Please stop there! It is a concurrent power - we want to market our province internationally." Some will support our emerging view on this issue. I think as national government and Parliament we should seriously engage our colleagues in the other two spheres of government and ask them, "Don't you think it will be much more worthwhile if you spend your money on domestic marketing, so that we can ensure proper competition in the domestic market?" Honestly, I think that is the first stage, which we should discuss with our colleagues in the other two spheres of government.
The chairperson mentioned some examples where he thought we should have done better. One was small business development. Apart from the Tourism Enterprise Partnership - I dealt with that in my initial introductory speech - the incentives programme is also a function that we are now transferring from the DTI to our department. We are in the process of transferring that function to us. There will be an additional R400 million, which we will be able to invest in small, medium and micro enterprises, SMMEs.
Let me just deal with international marketing. The hon Maluleke raised this. She is absolutely right. We should be very careful when we look at new, emerging markets versus our traditional markets. Everybody in the world understands that in the future the numbers will be coming from the emerging markets - China, India and a few others. But it would be a major mistake if we started ignoring our traditional markets. One of the reasons we are outcompeting our direct competitors, in my humble view, is that some of our competitors have made that mistake - but that is good news for us! We would like them to continue making that mistake! The developed countries have taken almost all their money out of the traditional markets and put them into the new, emerging markets. We have opted for a more balanced approach, where we have wanted to put new money into the emerging markets. So, that is what we are going to be doing for a very long time. Although numbers in the emerging markets will grow by leaps and bounds, the spend per capita will still be in the traditional markets. Let us not forget that.
Let us also understand that there is another reality on our doorstep, one that nobody has actually mentioned: The highest spend per capita in our country no longer lies with the American tourist but with the Angolan tourist. So, not only should the African continent not be underestimated, it should be fully appreciated for what it is.
With regard to SA Tourism, the term of office of the present board will expire at the end of May this year and the new board will take over from 1 June 2012. I would like to use this opportunity to thank the outgoing board, even though we will still have a separate function where we will thank them. Let me say to colleagues here that they have been an excellent, if not the best, board that we have had in a parastatal. After six years - as chairperson for two terms and having been on the board for longer than that - Mr Jabu Mabuza will be stepping down. Mr Frank Kilbourn, who was his deputy chairperson, will take over as chairperson. Mr Zweli Mntambo, who was chairperson of the audit committee, will become the new deputy chairperson of the SA Tourism board.
Then, colleagues, in different ways we referred to the cost drivers in our department. What are those cost drivers? There are many more, but I would like to quickly reflect on three: the cost of flying; the cost of accommodation; and taxes - departure taxes, especially to the UK, and the new so-called green taxes, which I have referred to as the EU-ETS.
Just in regard to the cost of flying, if we consider what has happened in our country in real terms over the last 10 to 15 years, it is actually a wonderful success story. In real terms, it is much cheaper to fly now than it was 10 or 15 years ago. There is only one reason for that: increased competition. As government, we say, "Stop overprotection and ensure competition."
We have done that in the domestic market. But colleagues, we are not at the end of the process. I know some people get oversensitive when I say this. We must continue to increase competition in South Africa, domestically, on certain routes. Why should it be more expensive to fly from Cape Town to Kimberley than it is to fly to London? Obviously, it has to do with the size of the market and the maturity of the market.
But we must look at ways of ensuring competition on all our domestic and international routes. In 2005, we had 26 airlines flying to South Africa. Now there are around 50 airlines flying to and from South Africa - and look at what has happened to prices internationally. For us, with its being a long-haul destination, it is good news. But on some of those routes, because of the lack of competition, and obviously because we are a long- haul destination, we need better pricing structures.
As I have said, we are working with Transport to finalise the new airlift strategy. We will take that to Cabinet when it is ready so that we can make sure that all stakeholders are singing from the same hymn sheet and that none of them would like to block a more open approach and greater competition.
On the issue of accommodation, hon Farrow referred to what he viewed as overpricing. Let me just say that in South Africa there is no overpricing as a general trend. I refer the hon member to the Graham Fulton Report 2010, which concluded quite convincingly that it was not a general problem in South Africa. There were a few exceptions and the agreement with the Tourism Business Council was that they should deal with that. I know there are some people who are asking whether government should intervene here or not. Colleagues, it would be the wrong approach if government started to intervene in price controls and the curbing of prices. When there are problems with overpricing, you and I, as Members of Parliament, should shine a light on it. We should sit down with the private sector to ensure that they deal with that. That's the way to do it.
I am very confident that as a destination we are firmly within the bracket of "value-for-money destinations". We are not a cheap destination, but we are a value-for-money destination, and it was a conscious decision to position ourselves there. Some of our competitors changed their status, marketing themselves as cheap destinations, and it is not working for them. So, the challenge is to continue where we are, as a value-for-money destination.
However, let us also be honest. During the Soccer World Cup year our accommodation costs increased by almost 20%. We can't criticise the private sector responsible for building those hotels - those are long-term decisions. They probably took some of those decisions three, five or 10 years ago, and none of us foresaw the economic slowdown. The reality is that we have to deal with it as a sector. We are slowly catching up. I saw a report just this morning, from Fedhasa in the Western Cape, stating that the Western Cape had the biggest challenge when it came to dealing with an oversupply of accommodation and the increase in supply - even if the accommodation people don't want us to say that - but they are catching up. We are almost there when it comes to dealing with this.
When we deal with this issue, we must look at the whole picture. Yes, we have an increase in accommodation prices but I would like to say to the hon Farrow that the serious discussion we need to have with local government in this country is about finding the decisions that need to be taken regarding the factors that impact on those prices. Let me mention just two examples. Local rates and taxes apply to all business establishments, but increases have a huge effect on businesses in our sector. Obviously, there must be a way for those businesses to factor in such increases. The electricity price also has a huge impact on what is happening in the accommodation sector. Let us have a holistic discussion so that we don't just blame other parties. Let us try to find a solution instead. The hon member Swart asked a question relating to budget and political support, as did other members. Colleagues, let us be honest. We are not yet where we want to be, but we now have a standalone department, which we did not have three years ago. We are now one of the six pillars in the national growth plan. Tourism was never in any national growth plan of this government before. Also just look at what happened yesterday, when our President met the Indian president. He dealt with two issues and one of them was tourism! So, in my view, there is much greater political support for us.
Let us deal with the budget. Now, the last thing that I want to do and should do as the Minister is to come and say to you that I do not have enough money.