Chairperson, the global financial crisis currently being written into history as the cause of the great recession reveals a number of shortcomings in the operation of the financial marketplace. It reveals that interruptions in the flow of cash within the global financial system can destroy and disrupt activity in the real economy, and that risk is not only about pricing and volatility.
It revealed that data not properly collected, analysed and understood can have devastating consequences. Statistics SA is the official source of important data that informs the daily decisions of all participants in our economy.
When the size of government was unnecessarily increased last year with the establishment of the Ministry in the Presidency for National Planning, executive authority over Statistics SA was transferred from the Minister of Finance to the Minister of National Planning. There was no discussion over this in Parliament, nor was there any clarity on how Parliament would hold Statistics SA to account, and there still isn't any. The Standing Committee on Finance has considered the budget and strategic plans of Statistics SA for 2010-11 and has made its recommendations. There is, however, no certainty about whether we will ever see Statistics SA again or whether we will receive any feedback on our recommendations. As a result of this confusion, we only received feedback a few days ago on the recommendations we made in June 2009. This does not make for effective oversight.
The DA has proposed that a committee should be established to provide oversight over the Presidency. Hopefully this will resolve the unacceptable situation in which the Standing Committee on Finance appears to be involved with the current Statistics SA's strategy and budget at the whim of the Minister, necessitated by the requirement for Parliament to approve its budget.
We need to be sure of exactly where the oversight accountability lies, especially in the lead-up to Census 2011 and the massive public participation that will be required in this crucial activity of national importance.
It is pleasing to see that action has been taken on our previous recommendations. That includes the following: an awareness programme for the census; improvements to communication to avoid public misunderstanding when statistical results are publicised, particularly on the issue of methodologically acceptable statistical adjustments that are misreported as manipulation of the results; plans to reduce the vacancy rate; and progress on the single integrated business registration system.
Every day millions of participants in our economy make a number of decisions based on data and information that they receive all the time from many sources. This is the basis on which the market economy operates. We do know that this is not fully efficient given the fact and the extent of asymmetrical information as highlighted in the financial crisis.
In its pursuit of a so-called developmental state, government, however, assumes that it can plan centrally and that a small group in a commission can process vast amounts of data to inform the decisions they make regarding the allocation of our scarce resources. This is, no doubt, the reason why executive authority for Statistics SA was shifted to the new Ministry.
In this model the role of Statistics SA becomes crucial to informing the actions of the central decision-maker. Statistics SA's strategic plan reflects its commitment to a major shift in the way it discharges its mandate. It will move towards accessing administrative records as a source of statistical data.
While the survey method provided a primary data source - and its use will be continued - this new method will yield secondary data and be reliant on the administration that supplies it. In its presentation to the committee, Statistics SA expressed its concern over the reliability of these data sources, especially those from the Companies and Intellectual Properties Registration Office.
In its work programme Statistics SA pointed out the poor quality of some of our public services, declining trust and confidence in public institutions, and weak planning across the three spheres of government. Under these circumstances, it will be necessary for Statistics SA to treat the data emanating from government departments with the appropriate level of circumspection, especially if these are informing decisions of national economic importance.
Management of government departments must be improved to ensure that the data they generate is valid and reliable. In its feedback from last year on the development of the South African Statistical Quality Assessment Framework - which aims to improve the quality of all statistics used for the public good - to ensure their elevation to the status of official statistics, Statistics SA reports that the demand for training provision on SASQAF is increasing beyond its capacity. This needs to be addressed if meaningful data are to be extracted from government departments.
Anecdotal evidence from the former Eastern European centrally planned economies reflected how a surplus of shoes for left feet was produced as a result of faulty data. The burden of higher demand for data for central planning will fall to Statistics SA and they must be equipped to meet that demand.
The DA prefers a less intrusive role for the state in the economy - as facilitator rather than central planner and controller of economic activity. The role of Statistics SA should be to enrich the capacity of individual participants in the economy to make the most efficient decisions about the allocation of our scarce resources. The purpose of statistics is to inform the decision-makers, who turn it into usable information. It is not clear how the National Planning Commission will interface with Statistics SA and how the advisory panel appointed by the Minister of Economic Development will interface with the National Planning Commission and Statistics SA. This requires clarity to avoid any uncertainty, which our economy does not need.
The strategic plan makes reference to a new era for statistical development in South Africa which results from the need for evidence-based policy- making. This means that Statistics SA needs to go beyond providing quantitative statistics and ask the qualitative question of why a phenomenon yields a particular result.
What action will be required to encourage the statistic in the right direction? Another question that needs to be asked is: What is it that we do not know about our economy? There are still many quantitative questions that we haven't answered yet. For example, how big is the informal sector? How much illicit trading is going on in our economy? Are recent reports on illicit financial flows from our economy correct? How big is the mismatch between earned and declared income in our economy? Then we need to look at why this is so and the necessary remedies.
We need a firm understanding of the socioeconomic impediments to economic growth and development. The Minister of National Planning, when he was Minister of Finance, promised in his Budget Speech that a poverty line index would be released within weeks. We did ask for progress on this on several occasions and were told that it was in progress.
The Minister has mentioned that it will be available shortly. When exactly will it be in place? Poverty is an enormous threat to our stability and must be addressed. The poverty line data is vital to achieve this objective.
Interdepartmental collaboration to improve the quality of statistics available for policy-making decisions is a welcome step in the right direction. More comprehensive statistics on education and health can enrich the debate on how to achieve the most benefit from the application of limited resources. Effective statistics can inform meaningful interventions in the right place and at the right time.
Crime statistics are generally perceived to be understated and unavailable for public scrutiny. This statistical information and quality gap will not be closed until a robust system is established that proves itself to be accurate and accessible over time.
Statistics SA's support to the SA Police Service will enable it to deliver better statistics and to package them for more effective communication.
We also need more in-depth demographic and social analysis. Our ancestors have been migrating for millions of years. We need to take this phenomenon for granted and ensure that we can understand the impact that this will have on the ability of government to deliver those basic services that define our economy as functional and caring.
Our education system is not producing sufficient numbers of numerate learners and students who want to pursue a career in statistics. It is possible to enthuse young people about the magical qualities of numbers; how a close analysis of patterns formed by a set of numbers can tell a remarkable story just waiting to be discovered; and that a set of financial statements can read like a storybook, just written in another language, the language of numbers. To achieve this, we need more teachers with better skills in mathematics.
Census 2011 offers an opportunity to generate interest in what Statistics SA does, why it does it and how it contributes to the unfolding story of South Africa.
Why not hold a competition for entrants to make predictions about the results that the census will reveal? For example, how many people are resident in South Africa? How many are under the age of 18? What is the average age? This will help to develop a culture where it's cool to be counted and help reduce the undercount over time. My colleague, hon Swart, will address this issue in greater detail.
The cost-cutting initiatives implemented by Statistics SA are welcome and these should be extended to other departments.
Statistics SA also needs to ensure that it achieves and maintains world- class standards in its technical work. Its international collaboration with statistics bodies across the globe is encouraged and should continue to be strengthened over time.
There is ongoing debate on the adequacy of statistical measures such as GDP and we must ensure that we participate in and follow the debate, given that our own economy has unique features that are of interest to the broader international community of statisticians and economists. Attention must remain focused on continual improvements to the sampling frames, because "garbage in is garbage out". Statistics SA's reputation is recovering from the damage caused by the CPI measurement fiasco, but it will be recalled every time that the numbers produced by Statistics SA goes wrong. This can be avoided by continual improvements to the process of statistics production and rigorous quality control.
There is a risk that Statistics SA will be swallowed by the Ministry in the Presidency for National Planning and provide statistics to support the policy decisions made by the National Planning Commission and the advisory panel to the Minister of Economic Development, and not the other way around. This needs to be avoided.
The only way to ensure this beyond doubt and enhance public confidence and trust in statistics is to implement an unambiguous process for oversight over Statistics SA. Statistics SA is improving over time and is a valuable national asset that serves us well in our quest to improve the lives of all the people in South Africa. Its efforts are greatly appreciated.
The DA is committed to its success. We should focus on the future, Hon Mufamadi, and not dwell on the past. Thank you very much. [Applause.]