Chairperson, hon Minister, is there any training for those who are retrenched; if so, to what extent; if not, what are the plans of the department in this regard? Thank you.
Chairperson, what I like about the way we function in the Department of Labour is that the responsibility does not lie with the department only. May I make an example? We have key strategic projects that are decided on by provincial governments, whom we have given money; the Eastern Cape has been given R99 million.
Kodwa loo mali bamelwe kukuba babe bayisebenzisile engekafiki uDisemba walo nyaka ka-2009. [The money is supposed to have been spent before December 2009.]
The Free State was allocated R96 million; Gauteng R99 million; and KwaZulu- Natal R97 million.
I do want to say in this House, that ...
... ndiyincoma kakhulu iKwaZulu-Natala, ngoba ela phondo lisebenzise ngaphezu kwama-90 ekhulwini emali ayabelweyo. [Kwaqhwatywa.]
ILimpopo siyabele izigidi ezingama-95 zeerandi [R95 million]; iMpumalanga yabelwe izigidi ezingama-99 zeerandi [R99 million]; uMntla Koloni wona wabelwe izigidi ezingama-99 zeerandi [R99 million]; uMntla Ntshona wabelwe izigidi ezingama-98 zeerandi [R98 million]; iNtshona Koloni yabelwe izigidi ezingama-99 zeerandi [R99 million].
Asibuzanga ke okokuba abantu bakuwaphi na amaqela ezopolitiko. EMpuma Koloni, iphondo endizalelwe kulo, bathe bona baza kuba namaphulo ofundelo- msebenzi. Bathi barhwebeshe abaqeqeshwa abali-1 963. Bakwathe baza kujongana noqeqeshelo-msebenzi kwanokusebenza kwabaqeqeshwa njengabalingwa emsebenzini. Asithi xa kuthethwa ngoqeqeshelo-msebenzi makungaqatshelwa abantu abathe nabo badendwa emisebenzini. Asithanga lo makangavunyelwa; lo makavunyelwe. Wonke umntu onqwenela ukufumana uqeqesho, nonqwenela ukuba akwazi ukuphakama azenzele ngokwakhe, umele ukuba alufumane olo ncedo.
Ukuba ithuba belikho, mhlalingaphambili, bendiya kuyichazela iNdlu le ukuba iMpuma Koloni isebenzise ama-66 ekhulwini emali eyabelweyo. IFreyistata isebenzise ama-70 ekhulwini emali eyabelweyo - ndiyakhawulezisa ke ngoku, mhlalingaphambili. IGauteng isebenzise ama-42 ekhulwini emali eyabelweyo. Yaza iKwaZulu-Natala yasebenzisa ama-94,8 ekhulwini emali eyabelweyo. Yiyo ke le nto ndisithi ndibancoma kakhulu phaya KwaZulu-Natala. ILimpopo isebenzise ama-33 ekhulwini emali eyabelweyo, phondo elo asuka kulo uWillie Madisha. IMpumalanga isebenzise ... (Translation of isiXhosa paragraphs follows.)
[... I commend KwaZulu-Natal because they have spent more than 90% of the money allocated to the province. [Applause.]
We have allocated R95 million to Limpopo; R99 million to Mpumalanga; North West has been allocated R98 million; and Western Cape R99 million. We didn't ask people about their political affiliation.
In the Eastern Cape where I was born, they said they will have learnership campaigns. They said they have attracted 1 963 learners. They also said that they will focus on training and internship programmes. We are not saying that people who were retrenched must not be considered when we are talking about internships. We did not say that this one should be accepted and that one should not. Everybody who wishes to receive training and those who wish to embark on self-sustainable development initiatives must get assistance.
If there was enough time Chairperson, I would tell the House that the Eastern Cape has spent 66 per cent of the money allocated to it. Free State has spent 70 per cent of the money allocated to it - I am speed reading now Chairperson. Gauteng has spent 42 per cent of the money allocated to it and KwaZulu-Natal spent 94,8 per cent of the money allocated. That is why I am saying I applaud KwaZulu-Natal. Limpopo has spent 33 per cent of the money allocated to it, the province Willie Madisha is coming from. Mpumalanga has spent ...]
... only R12 million of the R99 million allocated to it.
UMntla Koloni usebenzise ama-32 ekhulwini; uMntla Ntshona usebenzise ama-44 ekhulwini.
USIHLALO WENDLU (Mnu M B Skosana): Uphelelwe lixesha, Mphathiswa.
UMPHATHISWA WEZABASEBENZI: Ndiyavuya ke xa lithe laphela ndingekalibizi elakho iphondo. [Kwahlekwa.] (Translation of isiXhosa paragraphs follows.)
[The Northern Cape has spent 32 per cent of the money allocated to it, and the North West spent 44 per cent.
Hon Minister, your time has expired.
I am glad the time expired before mentioning your province. [Laughter.]]
Chairperson, is the Minister aware that none of the companies have applied for the temporary layoff programme, and that more than 300 000 people have been retrenched in quarters one and two, according to Statistics SA?
What is being done about this disastrous state of affairs?
UMPHATHISWA WEZABASEBENZI: Mhlalingaphambili, umntu owayelixhwele phaya ekhaya ngumakhulu, owasweleka kudala. Nguye ke owayenakho ukuphosa amathambo azi ukuba yeyiphi na inkampani efake isicelo, iyeyiphi engasifakanga.
Okwangoku, silindele ukuba inkampani esengxakini ifake isicelo ngokusesikweni. Ukuba ke iyinyani laa nto ibithethwa ngumhlekazi lowa, yokuba iinkampani azifakanga zicelo, makube ke besixelelwa into engekhoyo xa bekusithiwa iinkampani zisengxakini, yiyo loo nto zidenda abasebenzi. Ndingavuya ke ukuba unokusinika loo ngcombolo, yokuba zeziphi na ezi nkampani athetha ngazo ukwenzela ukuba sikhangele ukuba ayizizo na ezi zithi zidende abasebenzi zibe zingenangxaki. [Kwaqhwatywa.] (Translation of isiXhosa paragraphs follows.)
[The MINISTER OF LABOUR: Chairperson, the only person who was a sangoma at home was my grandmother who passed away a long time ago. She was the one who would throw the bones and know which company has made an application and which one has not. As of now, we are waiting for a company in crisis to make an application formally. If it is true what the hon member said about companies not making applications, it means we have been deceived when we were told that the reason these companies are retrenching people is because they are in deep crisis.
I will be very honoured if you can give us information of the companies that you are talking about in order to establish if they are not the ones that are retrenching people whereas they are not in crisis. [Applause.]]
Chairperson, hon Minister, I've been covered to a large degree by your responses already. Possibly, you could just indicate to me the degree to which the funds you have allocated have already been used for training purposes, notwithstanding the fact that a number of companies have not yet applied for those funds. I'm sure that there are already training schemes on the go, through the usage of those funds that have been allocated as you indicated. Thank you.
Chairperson, fortunately again, the discussion about these training layoffs was not initiated by the Department of Labour or by government alone. We took this decision together with the employers' organisations and the trade union federations.
We have already provided the financial resources to do this work. Therefore, it is important for us to monitor this. I know, hon member, that at the end of the day, you will be asking: Out of the R2,4 billion, how much money has been spent? And I will have to come and account for it, because that money is not manna.
Hon Minister, are these projects linked to the skills development programme of the economic meltdown rescue package? If so, what sectors are being targeted?
Secondly, what plans do you have to accommodate the anticipated loss of 70 000 jobs in the construction industry after the completion of the soccer stadia?
Mhlalingaphambili, ndiyawuthanda laa mbuzo ngoba ela lungu likulaa Komiti yeMicimbi yeSebe lezaBasebenzi, ... [Chairperson, I like that question because that member is in the Portfolio Committee on Labour, ... ]
... which has been fully briefed on this. We are waiting for him to tell us ...
Not true!
That sounds like in America. But, I will pray for you. You know that some of the sectors that are affected are mining and manufacturing. In particular, the workers within the National Union of Metalworkers, Numsa, are the ones who made the first approach in relation to the training for layoffs.
I can also inform the hon members here, that there are many trade unions that have taken decisions about short time in order to make sure that the company doesn't go bust. We really need to commend those trade unions that participated in taking those decisions. What we are now doing is merely to say that for the two days or one day that the workers have no work to do, they must be trained.
We are in dark times now, but I know that the sun will shine again. And when it does, you must not run around and start looking for people to train, saying that there are no skills in the country. Start training the workers now. This is the opportunity for employers to train their workers. That's exactly what we are encouraging our employers to do.
The same applies to the construction industry, my brother. In terms of the agreement that they reached during collective bargaining, they have formed task teams to discuss relevant programmes and issues such as what's going to happen to some of those workers.
Of course, you know, people in the construction industry are not employed on a permanent basis. When the building has been finished, the worker goes and looks for a job elsewhere. You know that; you have been leading one of the best trade unions in the country. I don't know why you left it. [Time expired.]
Particulars regarding awarding of a contract to render services for presidential inauguration
84. Mr M W Rabotapi (DA) asked the Minister of Public Works:
(1) Whether a certain company (name furnished) was awarded a contract to render services for the presidential inauguration on 9 May 2009; if so,
(2) whether this contract was awarded on the basis of a public tender process; if not, why not; if so, (a) how many tenders were received, (b) from whom, (c) what amounts were tendered in each case, (d) in which edition of the Government Tender Bulletin was the (i) tender advertised and (ii) successful tender announced and (e) what criteria were used to assess the capabilities of the said company with regard to (i) service delivery, (ii) price and (iii) the sustainability of the services to be supplied;
(3) whether his department has paid the said company in full; if not, why not; if so, what are the relevant details? NO1398E
Hon Chairperson, we have agreed with the hon member that we will table the question and he will get the response in the form of a hard copy, because it is six pages long and the annexure is 10 pages, which is too much to handle as an oral question.
With your permission, Chairperson, the question is therefore responded to.
Chairperson, on a point of order: Is it not possible for the Minister, notwithstanding the agreement, to give a prcis or summary of that response to the House? It is not an answer to that individual member, but an answer to the House that is required.
Hon House Chairperson, as I said, the response is six pages long. If you allow me twenty minutes then I will do the response.
No. I think members know that the convention is if it is that long, it should be tabled. If the Minister is unable to make a summary at this moment, then the answer will be tabled.
Chairperson, the problem with that is it does not allow for a follow-up question, and the whole point of oral questions is to allow that interaction with members of the Cabinet.
Hon Davidson, it is a convention that the House has agreed to follow. We cannot jump and change this agreement.
It is a dangerous precedent that you are setting. It allows members of the Cabinet to get around tricky questions by submitting an answer the way they have, because then we are not allowed to ask follow-up questions. I ask you to consider that and come back with a response.
Hon Davidson, this will be considered also by the Chief Whips' Forum to see what it can do about matters like these. I understand your frustration.
Hon Chairperson, would you allow a follow-up statement in this regard, which is asking for a response by the Minister?
No. I will not allow that. I'll stick to the convention that the answer be tabled because of its length. Is there any other follow-up question? [Interjections.]
Effect of fiscal stimulus package, infrastructure programme and other measures in cushioning the economy and preventing further job losses
100. Mr S N Swart (ACDP) asked the Minister of Economic Development:
(1) Whether the Government's fiscal stimulus package and the R787 billion infrastructure programme has succeeded in cushioning the economy against the worst effects of the global economic meltdown; if not, why not; if so, how did he reach this conclusion;
(2) whether any other factors contributed to the recession and the loss of 500 000 jobs this year; if so, what are the relevant details;
(3) whether the additional package of measures announced recently flowing from the framework agreement between business, labour and Government in February will prevent further job losses; if not, why not; if so, how? NO1433E
Chairperson, hon member, it is the view of the government that the stimulus package is cushioning the economy against the worst effects of the global economic crisis. The cushioning has been achieved in a number of ways. In the first instance, government took the deliberate stance that we would not cut spending levels despite the decrease in revenues and a likely increase in the budget deficit.
Public sector expenditure and investment levels have been maintained in the face of the serious contraction in private sector investment. By pumping liquidity into the economy in recessionary conditions, government is using what economists refer to as countercyclical measures aimed at maintaining economic activity in the face of international and domestic demand contraction.
The R787 billion Infrastructure Investment Programme is illustrative of the significant increase in capital spending by the broader public sector. This investment programme has two broad effects: Firstly, it has directly created thousands of jobs during the construction period, assuring our businesses in several supplies sectors of the economy. A cursory glance at either the employment data or the gross domestic product, GDP, data shows that construction and civil engineering have been leading performers in the economy. If it was not for these projects, the economy would have contracted faster and more jobs would have been lost.
Secondly, these investments raise the future growth in South Africa through lifting the infrastructure bottlenecks in electricity generation, roads, ports, rail, water and other social sectors. These investments provide a platform for private sector investment that is reliant on reliable, affordable and efficient public infrastructure.
Now, we recognise that government spending can only partially cushion the economy against a decline in demand in its exports. For example, if the global demand for motor vehicles were to fall, as it has now, then, we would export less platinum. While fiscal spending in itself cannot create jobs in other sectors, it is not likely to be able to offset job losses in the platinum mining sector. For this reason government has decided to defer the introduction of the mining royalty tax by a year to help companies in the sector to cope with lower demand. So, we've tried to give a few illustrations of different aspects of - if you like - the fiscal stimulus.
Regarding the second part of the question, clearly, the recession is the critical factor that has led to job losses, as cited by the hon member. The recession, of course, is the expression of the contraction of the economic activity which resulted in job losses. The collapse in global demand was the trigger which has resulted in global commodity prices and the falling of our exports causing retrenchments, particularly in mining and manufacturing. And that, of course, has a knock- on effect in the domestic economy. Nevertheless, some structural features of our economy clearly make us more vulnerable to this spirit of the economic turmoil and government is now working on policy initiatives to address this.
Regarding the third part of the question yes, we believe that the measures we have announced will minimise the rate of job losses. For example, the training layoff scheme that my colleague, the hon Minister of Labour, referred to earlier, will have three positive effects on jobs. Firstly, it is an alternative to retrenchment. So, instead of the company laying off a worker, they can be enrolled on the training layoff. Secondly, it's an opportunity ... [Time expired.]
Chairperson, thank you hon Minister for your lengthy response.
We, as the ACDP, share the view that the stimulus package, particularly, the infrastructure programme, has undoubtedly provided the cushion for our economy enabling the construction sector to sustain double digit growth rates over the last three recessionary quarters, and creating jobs, as you have pointed out.
However, the main engines of our economy - as the Minister of Labour has mentioned - are mining and manufacturing, and that is where we have severe job losses. Hon Minister, whilst we appreciate that hindsight is perfect vision, would the infrastructure plan not have provided more of a boost to domestic manufacturing if it wasn't so import intensive?
Secondly, is it not the central reason why South Africa's fiscal stimulus, whilst very important, had a limited impact, and not the fact that private sector investment - which accounts for 76 per cent of net fixed investment, as well as domestic consumption and bank lending - slowed to a crawl?
Lastly, what further progress has been made regarding the implementation of the Framework Agreement which you announced on 20 August 2009 in addition to what the Minister of Labour has pointed out? We will appreciate a short briefing on that, and we realise that time is very limited. Thank you.
Chairperson, in respect of the first question; yes, Sir, clearly, if we had the industrial policy initiatives in place some years ago that prepared for a dynamic forward-looking manufacturing sector more of what is required for the infrastructure development and infrastructure investment could have been procured locally. So, we hope part of the R787 billion that the government is investing in the economy will create domestic demand and industrial policy. Minister Rob Davis is working on a programme to ensure that - and there is a question that I will later give more details on - our industrial policy initiatives enable the economy to provide more goods that could go into our infrastructure programme. But I will mention that the efficacy of the R787 billion is going to be dependent on the extent to which we are able to concentrate resources in the local economy and reduce the level of what economists call "leakage".
With regard to the second question of private sector investment, we are very concerned with the collapse of the private sector investment. One of the effects - as I indicated in my reply - of government maintaining very high levels of public investment, relates to crowding in private sector investment. They are often partners in some of the programmes that we are involved with, and, at times, in some of the economic activities that the private sector engages in. These require adequate infrastructure and the modernisation of our rail and other networks for which the R787 billion has been earmarked. I thank you.
Chairperson, and hon Minister, the stimulus package replaces private sector economic activity that has currently slowed down considerably. The stimulus package cannot last forever. You have mentioned in your reply that some concessions were given to the platinum sector. My question to you, Minister, is what specific steps has government taken to ensure that private sector activity will resume once the stimulus package ends? I think that is very important, because we need continuity, Mr Minister. Thank you.
Chairperson, in response to the hon member's question, we agree that the stimulus package cannot last forever. In fact, there was a very interesting debate in the G20 Minister of Finance's meeting that Minister Gordon reported on recently, precisely on this issue.
Firstly, part of government's response is to ensure that we are able to save our industrial capacity. If we lose most or much of our manufacturing sector as a result of the current contraction, then when conditions on the demand side improve - when consumers buy more; when the exports recover - we would not have the capacity to employ people in those areas. That's part of what we want to do; to rescue companies as a temporary measure and enable them to resume their normal roles when the economy recovers.
Secondly, we are seeking to facilitate private sector investment, particularly in the real economy; we are talking to the finance sector to maintain the flow of credit to the real economy. Companies need working capital, and without its sustenance, many companies that have markets - where there is a demand for their goods and services - would otherwise close down. So, those are two policy initiatives by government to ensure that we deal with that.
The third aspect is, of course, skills enhancement. The long-term requirements of growth include a skilled workforce, and we are taking the challenge of a slowdown in the economy and turning it into an opportunity to garner skills and train workers. Thank you.
Chairperson, some of the issues have already been covered. The ID certainly agrees with the economic stimulus package, but, as you said, it cannot continue forever, and we can't pull off dealing with some of the structural constraints of our economy.
I think one of the things that this global crisis has exposed is, in fact, the shallowness of our economy. What we have seen is the erosion of our industrial capacity over the last 15 years. When we go forward, we have to put emphasis on how we not only save our industrial capacity but also build it over the long term and generate local resilience in the process. Has the Minister considered the long-term plan on how we go about building up that local industrial capacity again? Thank you.
Yes, government has commenced work on an initiative to develop South Africa's growth path in a way that is more employment intensive. Hon members would have seen in the release of the government's Medium-Term Strategic Framework a new set of challenges and actions that government is committed to. In this work, we seem to, firstly, identify ways in the economy in which more people can be employed. For example, how do we increase the labour intensity in the design of those programmes?
Secondly, how do we ensure that the capital allocated flows to the most labour intensive part of the economy? For example, do we put incentives up that stimulate investment in capital intensive programmes that generate low employment economic activities, or we do the opposite?
Now, this is complex work. If there were easy answers, then all countries across the world would implement them immediately. So, I hope we will be able to report after the completion of this work. It's officially in the programme of action, and was publicly announced by the government.
Chairperson, and hon Minister, thanks for your responses. As the IFP we welcome the infrastructure programme. But what we need to know the hon Minister will motivate that more money be spent on basic infrastructure in our country, especially when it comes to the rehabilitation of water reticulation systems. Eskom will have a problem that we know is a historical problem, but people need basic delivery. Therefore, we need to ensure that the basic infrastructure is rehabilitated and that more money goes into it.
My next question is related to subsection 3, and here, in particular, I refer to the textile industry with cheap imports of goods. Does this framework agreement protect the workers who are involved in the textile industry? Thank you.
Regarding the first question of basic infrastructure, yes, we agree that it is important, but I would also like to highlight the importance of economic infrastructure. We have to lay the foundation for long-term growth as much as we deal with the immediate and urgent challenges of social delivery. So, the investment that government is making in energy and transport infrastructure is absolutely vital for balanced economic development, and for addressing the challenges of poverty.
In relation to the question of trade policy and distress sectors, the framework agreement sets out a policy direction. It is up to companies and trade unions to use the provisions of the law to apply for the necessary relief. There have been applications for relief which have gone to the International Trade Administration Commission. It has applied itself to the matter and made recommendations to the Minister of Trade and Industry who decides on these matters. It's in the public domain that, in fact, parties in the clothing and textile sector, including employers and trade unions, have made applications, and these matters are receiving the necessary attention.
Minister's intentions regarding migration of PBMR into Eskom, and facilitation of nuclear partnership and nuclear energy programme for Eskom
112. Ms M P Mentor (ANC) asked the Minister of Public Enterprises:
(1) Whether she intends migrating the pebble bed modular reactor (PBMR) into Eskom as the main nuclear energy generator; if not, why not; if so,
(2) whether her department will consider facilitating a nuclear partnership and a nuclear energy programme for Eskom within the country and abroad; if not, why not; if so, what are the relevant details? NO1448E
Chairperson, the Pebble Bed Modular Reactor, PBMR, business model is in the process of being revised in light of the current global economic conditions and also because of the pressures placed on the fiscus. It is expected that this will be finalised during the course of this year.
There is consensus though that the highly specialised and sought after human resources and intellectual property that have been developed within the Pebble Bed Modular Reactor, PBMR, are of significant value to the country and it must be retained. This is especially important in light of the country's intended future pressurised water reactor nuclear procurement and the build programme. The capacity developed in terms of human resources in the PBMR can undoubtedly be leveraged to fast-track and reduce the risk of nuclear build and localisation.
In response to the second question, as directed by Cabinet at the end of 2008, a government task team is working on the framework for the procurement of a fleet of nuclear reactors through strategic partnership and the associated localisation of the advanced manufacturing of the components as well as the implications in terms of government's policy. This work is well underway, and we should be able to provide some clarity on the outcome of the work by the end of the year, as promised, and map the way forward.
Chairperson, I will make two follow-ups, because there are two questions. With regard to the first question, will the Minister take steps to ensure that she prevents the possible skills flight or brain drain on the part of the expertise at the Pebble Bed Module Reactor that might occur because of uncertainty?
With regard to the second question, in line with the industrial policy framework within which manufacturing is a key focal point for economic development, will the Minister ensure that all state-owned enterprises interact with the Department of Trade and Industry and get ready for the manufacturing of all key components that would become necessary for the nuclear project in order to continue to stimulate the economy and avoid importing such components? Thank you.
Chairperson, thank you for the question. One of the benefits of the Pebble Bed Modular Reactor, PBMR, has been that we, as government, were able to leverage the nuclear skills and capabilities that were in the country after apartheid. These people have been instrumental in building up the PBMR model, and have also been instrumental in building a new generation of nuclear engineers in the country.
For those who are interested, if you go to North West University, there is a training facility that was specifically designed and set up by these nuclear engineers of the past for nuclear engineers in the country. Every country in the world is going to have to face the possibility of going nuclear because of the clean energy requirements. We are very fortunate in this country that we have been able to shore up a considerable nuclear skills capability in this country, and I say to my colleague, most definitely, these people' skills and abilities will be retained in this country. We need them.
In terms of nuclear build, Eskom embarked on a nuclear procurement process the last 18 months or so. We did not then go ahead to procure, but in the process an enormous amount was learnt about the procurement of nuclear capability. In addition to that, there are the localisation components, and we will still be going further with regard to that. One of the issues that we do need to address is that, if you are going to build up any major advanced manufacturing capability, you have to make sure that there is sufficient procurement within a country to warrant the kind of investment in significantly advanced manufacturing capability. That is why the possibility of a fleet of nuclear reactors is more beneficial than just one simple nuclear reactor, because it gives us the ground basis for going forward.
Obviously, that nuclear engineering capability is then used to run the nuclear generators to go forward. May I also add that the Nuclear Energy Corporation of South Africa, Necsa, itself, is now the world's only producer and exporter of medical isotopes in the country, and we were able to do this because of our nuclear engineering capabilities. Thank you. [Applause.]
Chairperson, my question is related to the previous question.
Thank you.
Chairperson, I must say that, listening to the Minister, the process of procuring and then stopping the procurement of a nuclear reactor was a way to learn how to procure, and that was a very expensive way to go about it. Nonetheless, I have two questions to the Minister. The first one is, whether government actually has an intention to invest in conventional nuclear energy; and if so, when will we see the results of this? The delays in Eskom's build programme clearly indicate that if government does intend doing this, there is no fixed timeframe, and I think without that it really is of no use to the economy.
Secondly, when will a Pebble Bed Modular Reactor be built, if ever; and if so, when?
As I indicated in the second part to my question, there is a government task team whose task is specifically to work on the framework for the procurement of a fleet of nuclear reactors. So we are in the process of doing that procurement on the pebble bed, which are smaller nuclear reactors that are much more flexible. It's a very different thing to the high-powered third-generation nuclear power reactors that we've been looking at. Yes, government is committed to that. We have to, in terms of our base load, invest in nuclear energy. So we will be going forward.
In addition to that, government has to look at its energy mix. It is not only nuclear; it is sustainable energy as well. We are building Kusile and Medupi Power Stations, but we all know that we cannot just be coal-reliant. We have to look at a complete range of energy.
Whether the Pebble Bed Modular Reactor, PBMR, will ever be built, the Chinese are engaged in the Pebble Bed Modular Reactor industry. They are going full-steam ahead and they will use it to supplement it as most people would. For us, we are facing major fiscal constraints at the moment. That does not mean that we will shut down the PBMR at all, but it does mean that we cannot go ahead at the pace that we would have wanted to on the matter.
We have been submitting and are engaged with the Americans' programme of new generation nuclear power, and have been engaged with some of the testing of the facilities for the Pebble Bed Modular Reactor. You would have seen that we are also engaged with the Russians. They are going to test some of the things that we have been doing.
We, as South Africa, are still on the cutting edge of that nuclear technology, but the pebble bed is not going to be the primary base of our nuclear buy. Our primary base pebble bed is very good for heat process work, not just for the generation of electricity. Ours would be looking at second to third-generation nuclear generation. Thank you.
Chairperson, Minister, I disagree with you. This experiment of the Pebble Bed Modular Reactor, PBMR, nuclear was rejected by Germany who initiated this project. PBMR struggles to get international funding and partnership, and it will cost the taxpayer in South Africa R80 billion to generate a possible only 165MW over six years.
You also requested Parliament in August 2009 for an extension regarding the submission of the PBMR 2009 annual report to avoid a qualified audit report. There appears to be no fixed policy with regard to the direction of PBMR. Originally, the PBMR was established in 1999 with the intention to develop and market small-scale high temperature reactors both locally and internationally. Then earlier this year, PBMR redesigned itself from the original concept as a single direct cycle electricity-generating machine that would use helium to power a gas turbine to a more flexible machine. Now it seems as if PBMR is not sure about its own future. What is the way forward or should we expect a repeat of the uncertainty that has characterised the implementation of this project? Thank you.
Chairperson, I don't know, but would like to discuss with Dr Van Dyk the amount of R80 billion. I know that government's commitment at this stage has been R8 billion, but perhaps lets look at those figures and I'd like to compare your estimation on that.
Definitely, I would like to agree with everyone here that the future of the PBMR is of concern to all South Africans. As I said in my question, the model is in the process of being revised in light of the current economic situation and the restraints on the fiscus. That is why we have asked for postponement of the Annual General Meeting, AGM, because we want to engage in a serious review of the Pebble Bed Modular Reactor, PBMR, programme. We will be coming to Parliament and to the AGM with a better understanding of that particular programme.
Chairperson, Minister, has your department been involved in prioritising and interrogating issues around waste management and other security concerns; and have community concerns been thoroughly investigated and engaged from the perspective of public enterprises? Thank you.
Our department is really not responsible for waste management. That falls under the Department of Energy. But let me just say in respect of the Pebble Bed Modular Reactor, PBMR, perspective, it is regarded as possibly the safest of the nuclear reactors, because its technology means it cannot go into a meltdown. So, from that perspective it is regarded as safer than anything else.
In terms of waste management, obviously there is waste generated at Koeberg, and there is medium-risk waste that is sited further away in the Northern Cape. This site is very far away from any local community. I think we have to distinguish between concerns that are raised by residents who live around Pelindaba - and I don't think many of them are well founded - and concerns around waste management, which is in a very remote area and subjected to international protocols. It is not high-risk waste that is stored there, but simply medium-risk waste. Steps taken to promote export opportunities for agricultural products at competitive prices and to protect local grain producers
94. Dr L L BOSMAN (DA) asked the Minister of Agriculture, Forestry and Fisheries:
(1) Whether her department has taken any steps to (a) promote export opportunities for agricultural products and (b) ensure competitive prices for these products on global markets; if not, what is the position in this regard; if so, what steps;
(2) whether any mechanisms are used by her department to protect local grain producers from competing against the importation of highly subsidised products from abroad; if not, why not; if so, what are the relevant details? NO1408E
The MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES: Chairperson, the Department of Agriculture Forestry and Fisheries works closely with the Department of Trade and Industry on the agricultural export promotion drives. We hope to work even closer on export promotion for agricultural products.
Since the phasing out of export subsidy schemes, like the General Export Incentive Scheme of the Department of Trade and Industry, the government does not subsidise exports or prices in any distorting way. There are no direct interventions to ensure that prices are internationally competitive.
The Department of Agriculture Forestry and Fisheries has been working very hard for a number of years to lobby international forums to motivate for the elimination of export subsidies because of its distorting effects on trade. The removal of these subsidies will ensure that our products compete on a fair basis. Direct export subsidies will be removed only by 2013, if the Doha Round concludes, and other production subsidies that could result in unfair competition will be reduced.
It is also important to acknowledge that the global trading system is unfair and inequitable, particularly with regard to agricultural products. Trade remedies offer only limited possibilities. The real challenge is to continue to campaign against unfair trade rules. Both the United States and the European Union have recently reinstated export subsidies on dairy products. Thank you.
Chairperson, I would like to thank the Minister for the answer. I think the hon Minister will understand that the local wheat production industry has decreased, in terms of the area planted, by 52,7% since 1997, due to these uncompetitive prices and the scenario sketched.
The question is: Is the Minister considering introducing an import tariff in line with the World Trade Organisation, WTO, Rules, which she has just mentioned, to stimulate local wheat production for South Africa to become self-sufficient again?
The import levy system used by government before 2003 imposed levies of up to 34%, while thereafter it was replaced by an import tariff which varied between zero and 2,32%, which resulted in huge losses to producers and consequently also a decline in the production of wheat.
Due to this decline in production, South Africa currently imports 1 million tons of low-grade wheat, resulting in the industry losing local producers, thousands of job opportunities, as well as hard-earned foreign exchange. Thank you.
The MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES: Chairperson, the farmers and farm organisations have, over a number of years, approached the International Trade and Administration Commission, Itac, where they experienced unfair trade, and the commission has always investigated such requests.
The wheat industry has recently approached the Minister of Trade and Industry as well as the Minister of Agriculture, Forestry and Fisheries regarding the possibility of import tariffs to stimulate the wheat industry. We have invited the organisation to apply and put their request in writing in order to be considered.
We, as the Department of Agriculture, Forestry and Fisheries, also developed an Agricultural Tariff Policy Framework for consideration by the DTI at its International Trade and Administration Commission. We are, in particular, looking at the application of a tariff policy on agricultural products. Thank you.
Chairperson, regarding the Minister's response to question 1(a), I would, firstly, like to ask the hon the Minister what the role of the National Agricultural Marketing Council is.
Secondly, arising further from the hon the Minister's reply to 1(b), there are commodities which are being imported from countries which are highly subsidised. Yet, there are no import tariffs and our emergent sector needs to be protected against cheap imports.
What measures do the hon the Minister's department and other departments have in place? Thank you.
The MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES: Chairperson, I would like to thank the hon Phaliso for the question.
The Agricultural Marketing Council assists the Department of Agriculture, Forestry and Fisheries in ensuring that all sectors in the industry, as well as all commodity sectors, have access to equitable shares in the agricultural marketing sector. The department has been working quite closely with the Agricultural Marketing Council to ensure that historically disadvantaged farmers or black farmers have equal access to markets.
However, we are compromised by countries which are highly subsidising their agricultural products. As I have previously expressed, we are working with the Department of Trade and Industry in our application of trade policy on all agricultural products. Thank you.
Chairperson, I'm sure that we would accept the explanation that the Minister has given to us with regard to the cushioning of some of these produce, especially grain.
Firstly, we would actually like the Minister to explain exactly which of the other agricultural produce - except for grain - are actually affected by these heavily subsidised importations.
Secondly, in South Africa we are beginning to experience a situation with regard to agriculture where we are importing more than we are exporting. It means therefore that agriculture is shrinking. Is there any strategy in place to revive and reinforce agriculture in South Africa so that it becomes self-sufficient? Thank you.
The MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES: Chairperson, the product that I can immediately speak of, off the cuff, is the importation of sugar from Swaziland. Swaziland produces sugar at a price that is hugely reduced in comparison to South Africa, and imports of sugar from Swaziland thus happen to be far cheaper.
The situation in our country, as of the end of last year, including the first quarter of this year, showed a net decline in agricultural production by more than 17%. Our country has also, for the first time, recorded being a net importer of food instead of being a net exporter of food.
The cost of production in agriculture is extremely high. It is this type of production costs that we are looking at in terms of the industry sector organisations, as well as the Department of Trade and Industry.
Mitigating the high production costs is a very challenging situation for us. It is particularly challenging when it comes to production costs for our historically disadvantaged farmers. It is one of the reasons why a number of farms, which were sold via the Land Bank, could not repay their debt burden. It is now the department's programme of action to intervene with regard to these distressed farms, particularly when it comes to production capital or production loans. I thank you.
Chairperson, the hon Minister has been quoted as saying that South Africa was spearheading a debate in Africa on the decommodification of basic foodstuffs. So, I was wondering if the hon Minister could give us some idea, from the department's point of view, of what decommodification of basic foodstuffs actually means, what the benefits are and where the challenges lie. Thank you.
The MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES: Chairperson, the decommodification of basic foodstuffs is in line with the African Union as well the Southern African Development Community's emphasis on food security and food sovereignty.
We are specifically looking at the development of drought-resistant seeds for basic foodstuffs like maize, sugar and wheat. We then look at the tariffs which are imposed on these foodstuffs and how the tariffs make these foodstuffs totally too expensive and beyond the reach of the general working class population in Africa. So, when it comes to decommodification, the discussion and the debate is still ongoing. I thank you.
Steps to ensure financial accountability from new Board and management of the SABC, as a politically unbiased public broadcaster
101. Ms J D Kilian (Cope) asked the Minister of Communications:
(1) Whether his department intends taking any steps to ensure financial accountability from the new Board and management of the SA Broadcasting Corporation (SABC); if not, why not; if so, what are the relevant details;
(2) whether he will take any steps to ensure that the SABC carries out its mandate as an independent, politically unbiased public broadcaster; if not, why not; if so, what are the relevant details? NO1434E
Chairperson, the answer to the first question is as follows: The Department of Communications intends taking additional steps to ensure financial accountability from the new board and management of the South African Broadcasting Corporation, SABC. These will be based on the provisions of the Broadcasting Act of 1999 and the Public Finance Management Act of 1999, the relevant treasury regulations, the Articles of Association for the SABC, and the Shareholder Compact agreed upon annually with the SABC. All of which define specific roles for the Ministers, directors-general and Parliament regarding financial accountability and oversight. I am committed to ensuring adherence to these principles, as mentioned, and I will also ensure that the SABC board adheres to the principles of good corporate governance outlined in the King III report.
The specific steps the department intends to take are as follows: Firstly, more regular meetings between the SABC board and management and the department; secondly, regular meetings between the department and the SABC to discuss the SABC's quarterly performance report, both financial and nonfinancial; thirdly, more regular financial reporting to the department, that is quarterly financial statements and monthly management accounts; fourthly, regular reports to the department from the audit and/or risk committees; and, fifthly, access to all internal audit reports of the SABC. The pending reports from the Auditor-General and the SABC interim board, as well as the SABC task team, will also indicate what steps need to be taken.
My answer to the second question is that it should be noted that the news editor of the SABC is always appointed by the board of the SABC without any interference or influence from or by the Minister. In addition, the Broadcasting Act of 1999, specifically protects the SABC's editorial independence. Section 6(3) states:
In terms of the Charter, the Corporation will, in pursuit of its objectives and in exercise of its powers, enjoy freedom of expression and journalistic creativity and programming independence.
Section 6(2) of the Act gives the responsibility of ensuring compliance with the Charter of the SABC to the Independent Communications Authority of South Africa, Icasa. Furthermore, the Shareholder Compact shall also provide that the corporation adheres to all the provisions of the Broadcasting Act, including the ones on the independence of the SABC. The Department of Communications and I are committed to the principle of editorial independence and freedom of expression as enshrined in the Constitution of South Africa. [Time expired.]
Minister, unfortunately your time has expired. I gave you an extra one minute for your maiden speech, but it has expired.
Chairperson, firstly, let me say that we are particularly happy, as Cope, that the Minister has expressed his firm support for an independent news bulletin and coverage. However, we would like to make two points as far as this is concerned.
Firstly, there is a concern that, as a result of very eager participation by the ruling alliance in the nomination of the board process, there is a perception that many of the candidates have very straight links with the ANC at very high levels, and it will, therefore, be particularly important for the Minister to prove that he will make sure that there will be no further political interference.
By way of indication, would he support an independent investigation by an independent agency into news coverage that is being portrayed on the news bulletins, as well as the daily news activity programmes, to ensure that there is equitable coverage of all political parties in South Africa?
Secondly, will he ... [Interjections.] [Time expired.]
On a point of order: Chairperson, I want it to be clarified to the House that we only have one ruling party, which is the ANC. We don't have what is called "the ruling alliance" in South Africa.
It is not a point of order. Thank you very much.
Chairperson, as I said, we will jealously guard the independence of the SABC, its news and editorial policy. We will support any measure that seeks to ensure that this happens. I thank you.
Chairperson, let me thank the hon Minister for the responses. Except for coverage during the election debates on a Sunday evening, which were fair in terms of time representation, it is common knowledge that the ruling party of this country gets more time than any other party on news coverage. Will the hon Minister be able to obtain and furnish this House with statistics of times that different political parties receive in the news broadcast in a period of, say, six months?
Chairperson, the SABC and its board are appointed by this Assembly. If there are any doubts as to its editorial independence or bias in the news, they are summoned to this Assembly and to the relevant portfolio committee to answer and that should be explored. We, from the point of view of the Department, will ensure, as I indicated, greater monitoring of the SABC, as well as of its editorial independence going forward. Thank you.
Chairperson, thank you Minister for the commendable efforts with regard to ensuring sound corporate governance and financial accountability within the SABC. We are satisfied that the Ministry of Communications supports an independent and politically unbiased public broadcaster.
However, we need more clarity on the financial model proposed for the SABC in the intended Public Service Broadcasting Bill. Thank you very much.
Chairperson, in the Bill it is proposed that a public service broadcasting fund be established. Money paid to this fund will come from, amongst others, public service broadcasting levies collected in terms of the Income Tax Act of 1962, money appropriated by Parliament, money accruing to the public service broadcasting fund from any other sources and contributions from business. [Interjections.]
We have tabled a Public Service Broadcasting Act for public discussion, and it contains some of these provisions. The money from this fund will be utilised for the purpose of international service divisions; to pay subsidies to the media development and diversity agency; to subsidise broadcasting licences; and any such measures and uses determined by the Minister from time to time after consultation with the Minister of Finance. I thank you.
Order!
Chairperson, I'm sure the Minister hasn't got a written reply to my question. [Laughter.] I'm sure about that. It's very easy to talk about independency and throw around a lot of words, but the House would want to know what the Minister's definition of independency is. Is it the ANC's version of independency or the real meaning of the word, as the DA sees it? Thank you.
Chairperson, I don't know through which eyes or tainted spectacles the DA sees the issue of independence. Independence is an objective term. It means that the broadcaster is free to determine its own editorial policy without any interference from any political party.
Chairperson, on a point of order: There is no such thing as "independency". I would just like to point that out to hon Van Den Berg on that side.
Hon member, grammar can be rectified somewhere else.
Strategies of Khula to deal with risk factors faced by commercial banks and risks attached to loadable funds
120. Mr A J Williams (ANC) asked the Minister of Trade and Industry:
(a) How will Khula deal with (i) the risk factors faced by commercial banks and (ii) the high risks attached to loadable funds and (b) how will Khula's strategies differ from those used by commercial banks?