Chairperson, the committee supports both Budget Votes, the one on Trade and Industry and the other one on Tourism. I will deal with both departments, but my colleagues will deal specifically with each department separately.
We are happy as a committee that both departments have been getting a clean bill on their finances. We commend them for that. During the first decade of freedom government succeeded to a moderately significant degree in promoting the implementation of policies on industrial development, enterprise promotion and broad-based black economic empowerment. Although government programmes qualitatively assisted the poor, its redistributive capacity failed to integrate the poor into the main stream economy except for a smaller section of the black population.
This failure was attributed to the adoption of restrictive macroeconomic indicators and targets. The previous government's industrial plan fell short on creating labour-intensive jobs and reintegrating small and micro enterprises into the main stream of the economy.
The economy had an average growth rate of 3% from 1995 to 2002, but the rise in unemployment from 1,9 million to 4,4 million during the same period effectively meant a jobless growth. The economy had shed jobs in the manufacturing and mining sectors and showed the growth in financial and services sectors. In its National General Council, NGC, in 2005 the ANC concluded that central challenges facing our movement in the second decade are to defeat poverty and substantially reduce the level of unemployment.
Therefore, it is against this background that the 2010 strategic plan of the Department of Trade and Industry, DTI, needs to be analysed for its compatibility with the ANC's strategy and tactics. Against this backdrop of the 2007-08 economic recession, the DTI's Medium-Term Strategic Framework, MTSF, has identified the rapid fall in gross domestic product, GDP, and substantial rise in unemployment as major challenges that require urgent intervention by government. According to the 2010 Budget Review, GDP declined by 1,8% in 2009 compared to the annual growth of 4,9% between 2006 to 2008. As has been said, the official unemployment rate was about 24% to 26% in 2009 compared to the annual average of 22% in 2006 and 2008 as the hon Minister said in the interview on TV this morning.
In the light of this, one needs to examine the strategic plan of the DTI to ascertain whether it addresses the ANC's goals of decent work, economic growth, infrastructure development and balanced global trade as levers of fundamentally transforming the South African economy.
In the 2010 Division of Revenue, provinces were allocated R261 billion and local government R938 million. The DTI implemented policy interventions in the automotive, clothing and textile sectors.
Challenges that were identified are lack of mainstreaming of the Industrial Policy Action Plan, Ipap, in state-owned infrastructure projects. We call on the department to intensify its co-ordination with provinces in support of industrial interventions in labour-intensive sectors.
On empowerment enterprise development and development finance, the challenge has been fragmented on interdepartmental and intergovernmental co- ordination. The department must address the issue of access to start-up finance and micro loans even for townships and rural areas. There are situations where communities would be assisted to get finance of about R100 000, but they would say you must put up about R10 000 first. This issue is a challenge.
As the Minister also said in the media yesterday we envisage investors investing about R105 billion. We urge the department to make the cost of doing business cheaper and accessible so that these investors come in. In Richards Bay, for example, a desert has been lying fallow since 2002. However, a few weeks ago, it did get some funds from the department and there is some action now. In trying to make business better, we would like the department to facilitate the access in doing that.
During our oversight visit to Mtubatuba a few months back, we identified challenges where people had markets - plants or something but they were short of markets. The Small Enterprise Development Agency, Seda, was contacted on the spot, but to date we haven't gone far with that issue. The same thing happened when there was the Taking Parliament to the People event in Limpopo. People were saying, "We can assist and help ourselves but we need markets to sell these things so that we can fend for ourselves."
There is an issue which I raised with the director-general about a committee member, Mr Khuzwayo, who said something about accessing these offices as they are far away from the rural areas. He was once asked to drive to an office that was about 75km away, only to sit in a meeting for two minutes to arrange the next meeting. That is the nature of the inaccessibility of offices. That meeting was aimed at setting up a business plan.
We commend your leadership and participation in the World Trade Organisation, WTO, and hope that your further participation in the forthcoming round of negotiations assists the country. The country needs more participation on India, Brazil and South Africa, Ibsa, and Brazil- Russia-India-China, Bric, so that it becomes Brazil-Russia-India-China- South Africa, Bricsa.
We would want to strengthen the south-south relations on the European Union, EU. Today we have ratified one agreement on the EU, the African Union, AU, and Southern African Development Community, SADC. We are happy as a committee that the Ipap2 is moving and is now in motion and is in the implementation phase.
On the issue of tourism, I would be referring to two of the ANC's identified priority areas for the next five years, namely the creation of decent work and sustainable livelihoods, education and capacitating our people to play productive roles in building our nation and to fill positions of employment successfully.
A sustainable increase in the number of both domestic and foreign tourists has resulted in the continued creation of decent jobs in the tourism sector. It is estimated that for every 11 tourists who arrive, a job is created. On this basis, it is projected that direct employment will increase from 600 000 to 800 000 over the medium-term.
In total tourism has contributed R356 billion to our national economy since 2003, with an average spending of R8 300 per tourist, even though our target was R9 900. The aim is to increase this average and the direct contribution of tourism to South Africa's GDP by 3%, as the hon Minister has said. It is at 3,6 over the medium-term.
Business tourism currently represents approximately 6% of all foreign arrivals in South Africa. This represents more than half a million visitors per year who come to South Africa for meetings, incentives, conferences and events. In 2008 these business tourists spent an average of R5 600 when in South Africa. This is an increase of 40%.
The prevailing international conditions did not cause the ANC-led government to retreat and withdraw as has been the case in so many other countries. They are rather provided a space for moving towards a significantly more labour-intensive growth trajectory.
ANC policy recognises that our cultural heritage sources and facilities, including those previously neglected, should be popularised, preserved, democratised, be opened and belong to all people. It also follows that because we are proud of our rich culture and heritage we want the rest of the world to also feel, see and experience these emotional assets.
The 2010 Budget was tabled within the context of a deep global crisis brought on by the crisis in the financial sector in developed countries. Although not immune to the ensuing global economic downturn, South African tourism has so far resisted the financial crisis better than any other sectors. There is growing evidence that tourism and travel can make a valuable contribution to the process of economic recovery.
There are still many areas that remain undiscovered by tourists and these areas range from our cultural villages in deep rural areas to our heritage places that define our new democracy and the heart of South Africa's attraction.
It is important to note that South Africa is home to eight World Heritage Sites. All these places are of outstanding value to humanity. The transformation process, which is a key issue in tourism, has over the past 16 years undergone a number of phases, each building upon what has gone before, but with a necessary continuity and change, as demanded by the ANC and by the objective conditions that face our economy.
We are entering a new phase of a new growth path. It is this new growth path that today's Budget Vote debate must speak to. For far too long tourism has lacked the necessary economic transformative component of building broad-based black economic empowerment, BBBEE. In particular, the sector lacked in building one of the most important components of broad- based black economic empowerment - that of social capital - whereby the broadest sections of our communities become economically empowered by collectively owning their wealth.
When we look at the annual report, there are certain issues which were raised by the Auditor-General. We hope the department has been taking care in respect of these issues of ever since they were raised last March.
The use of consultants by the department was another issue of concern. We think this is improving. The committee supports the budget.