Hon Minister of Trade and Industry, hon Deputy Ministers, hon members, Chairperson, the ANC supports Budget Vote No 36, the budget for Trade and Industry. There are many reasons for the ANC's support of this budget, but let me draw the attention of this House to three of them, which are: broadening economic participation through SMMEs, co-operatives and the informal business sector; skills development; and addressing the challenges of the estate agency sector.
The creation of decent and sustainable jobs, the elimination of income and social inequalities, and the eradication of poverty and hunger through the manufacturing sector of our economy, lie at the centre of the ANC government's economic policy. Small, medium and micro enterprises, co- operatives and informal businesses are some of the tools for creating decent jobs and achieving inclusive economic development. The SMMEs have a significant contribution to make to sustainable and equitable economic development, to social cohesion and to employment creation and wealth redistribution. The Department of Trade and Industry, together with the Department of Economic Development, has allocated significant resources towards developing the SMME sector.
Hon Harris, what you call duplication between the DTI and the Department of Economic Development is called co-operative and integrated governance. However, it must be acknowledged that notwithstanding huge amounts of money and the support programmes designed to assist SMMEs and co-operatives, there have been low levels of entrepreneurial activity and limited success in creating sustainable small businesses and co-operatives.
For SMMEs to succeed, they should be supported with several measures including incubation, monitoring and mentoring. The Department of Trade and Industry intends to increase growth of the SMME sector through the Black Business Supplier Development Programme as a vehicle for broadening black economic empowerment. This is also going to ensure that broad-based black economic empowerment, BBBEE, entrepreneurs are enabled to participate in the productive sectors of the economy, particularly in manufacturing.
The DTI also seeks to use the support programme for industrial innovation to encourage SMMEs to be innovative and competitive. This is further supported by the Technology and Human Resources for Industry Programme, which seeks to increase the number of skilled people. With the support of the Small Enterprise Development Agency, Seda, through its technology programme and the expansion of the centre for entrepreneurs, SMMEs will be the catalyst for job creation.
These are positive steps which the department is taking to enhance the work of the developmental finance institutions, DFIs, to reduce the failure rate of the SMMEs and to boost entrepreneurial activity. There needs to be constant and consistent contact between the DFIs, the SMMEs and the co- operatives community - a social dialogue similar to Nedlac is suggested here.
As a member of the Bric group - Brazil, Russia, India and China - South Africa must realise that co-operatives play a significant role in the global economy. India, China and Brazil have a significant amount of their GDP generated by their co-operatives. For example, 90% of India's dairy industry is managed by a single co-operative, and 40% of Brazil's agricultural GDP comes from co-ops. Even our trading partners in the North - the European Union and the USA - have used co-operatives to develop their economies. It is estimated, for instance, that in the USA and Germany one in four citizens is a member of a co-operative. The United Nations has proclaimed 2012 the International Year of Co-operatives, and South Africa must play its role to increase participation and the number of successful co-operatives in 2012. The co-operatives offer direct economic participation to a large number of people and communities as they provide worker control of the means of production and the equitable distribution of wealth. Co-ops are a powerful incentive for social cohesion and a potent tool for creating the developmental state. Even more importantly, they provide a tool for involving the rural communities, women, the youth and people with disabilities in mainstream economic activity.
To address the challenges facing the co-operative sector, the DTI has presented to Cabinet the Co-operatives Amendment Bill, and the committee is looking forward to engaging with this amending Bill. There are also incentives through which the DTI seeks to encourage the development of co- operatives. The co-operative incentive scheme is one of these for which a co-operative can qualify for up to R350 000. With technical and financial support, co-operatives can contribute significantly to the growth of the local manufacturing base.
There is also a need to use co-ops to revitalise the farming and manufacturing sectors in the former homelands. Among these are is cotton farming on the Makhathini Flats in KwaZulu-Natal, in Tonga in Mpumalanga and in parts of the Eastern Cape. It is reported that cotton used to be grown on 200 000 hectares of farm land but it has since shrunk to about 8 000 hectares. South Africa's largest spinning mill, which used to produce 40% of local cotton, closed down in 2009 and this has impacted negatively on jobs. This sector alone has the potential to create 1 million jobs and to revive our ailing clothing and textile industry.
A sector that remains completely ignored is the informal business sector and its informal market. There is a need to integrate this sector into the formal economy by providing the people involved with capital, skills and institutional support for them to be active participants in the economy and to contribute meaningfully to the development of SMMEs and co-operatives.
In addition, the Department of Trade and Industry needs to turn its attention to the estate agency sector. The Estate Agency Affairs Board was established in terms of the Estate Agency Affairs Act, Act 112 of 1976. I thank you. [Time expired.] [Applause.]