Chairperson, the IFP welcomes the fact that the department is in throes of being established properly. The Minister did indicate to us that there is a budget of R418 million and that the process of appointing staff is going to start in earnest. We trust that in choosing their staff the hon Minister and Madam Deputy Minister will not employ only thinkers and planners but also doers. Let's leave the thinking and planning to the National Planning Commission and other bodies.
In spite of the break with apartheid and the establishment of political democracy, the economic situation of most of our people has not improved. The biggest indictment of our political freedom is the fact that it has not been accompanied by the economic emancipation of our people. We heard that almost one million jobs had been lost since the start of the recession in October 2008. Our country has become the most unequal society in the world.
I want to pause here, Chairperson, to refresh our memories regarding some of the interventions made during the height of the recession. One of the interventions was the bail-out mechanism. It will be appreciated if the hon Minister can give some indication of how well this had worked, how many new jobs had been created and how many jobs had been saved, so that we know whether the bail-out intervention was successful or not in the end.
Chairperson, when it was first announced, the mandate and roles of the Economic Development Department, EDD, were unclear and overlapped with other departments such as National Planning Commission, National Treasury, etc. Although we have had sight of the strategic plan which the hon Minister has referred to, not much seems to have changed in defining a specific role for the department, save that some public entities will be falling under the direct control of the new department.
Other than that, reference is made to a number of departments with whom there will be working relationships. In government, we are well aware of "turf protection" and it is hoped that there will be a mutual and co- operative relationship which will lead to economic development in the true sense, in other words, dealing with the high rate of unemployment, the provision of adequate skills training, supporting small business development with know-how and, especially, easy access to finance. Other hon members also referred to access to finance. We believe that not empowering entrant entrepreneurs with finance is still one of the biggest drawbacks in enhancing this sector. This type of support must extend to all sectors, for example, sectors such as agriculture and technology.
Hon Minister, while we have instruments like Khula Enterprise Finance, Sida, South African Micro-finance Apex Fund, Samaf, etc to assist, red tape and bureaucracy does not favour the majority, but only the handful of new entrepreneurs who work through experienced consultants.
Khula, for instance, was established to provide venture capital to small start-up businesses. But since its formation Khula's effectiveness has been the subject of much dispute. Lack of capacity, inadequate funding, political machinations, an obsession with investment rather than servicing the needy, and a focus on the survival of the organisation have been the order of the day. Hon Minister, for Khula to work properly, this way of operating will have to change.
Although long-term viability issues need to be considered, policy changes should be reviewed so that there is no focus on corporatisation and the investment of funds in equity markets, etc. Khula needs to be realigned to meet the strategic priorities of the government and of the EDD in particular.
In most countries it is the small, medium and micro enterprises, SMMEs, that generate the greatest number of jobs, but this is not the case in South Africa, which is fixated on the role of large companies. Raising capital in South Africa is very difficult for new entrants into the economy and we need to remedy this if we are to promote entrepreneurialism.
More funds should be made available to cushion communities that are increasingly being affected by the recession and massive price increases. The channelling of special funds to these organisations by donors and government should not be seen as an investment to yield profits. These funds should be treated the way they are - relief funds.
A few should not continue to become richer at the expense of the poor. Social development should also be a focal area. In this regard, we note the interesting concept of utilising a portion of retirement funds for the development of social and other infrastructure. However, the Minister needs to clearly unpack the modus operandi.
Without faster economic growth and the dramatic improvement of our skills base, poor communities will continue to be downtrodden. It is well documented that the scarcity of skills in South Africa can limit the extent to which our economy grows.
Chairperson, I just like to refer to DFI in KwaZulu-Natal ... Thank you. [Time expired.]