Chairperson, Cabinet colleagues, hon members, Judge President Dennis Davis, officials of development finance institutions and commissions, the Department of Economic Development, social partners, special guests and members of the public, today I have the honour to present to you the third budget of the Department of Economic Development.
About 18 months ago, Cabinet adopted the New Growth Path as the framework for our economic policies. It places employment and decent work opportunities at the centre of our efforts and aims to rebuild the productive sectors of the economy, moving away from a consumption-led, unsustainable growth trajectory.
In the past year we focused on implementation, laying the basis for more inclusive growth and greater social equity, drawing in departments across the state and social partners in business and labour. In January last year, Cabinet set a goal to reverse job shedding in the economy, given the 118 000 job losses in 2010. How well did we fare?
The economy did indeed stem the tide of job losses of the preceding two years. According to Statistics SA's Quarterly Labour Force Survey, the economy created an average of 1 000 net new jobs a day in 2011 and employment grew by 2,8%. The employed labour force stood at 13,49% million by year end, from a low of 12,9% million in September 2010. This is an excellent start, but more needs to be done, particularly to grow jobs in manufacturing and agriculture.
The gross domestic product expanded by 3,1% in 2011, slightly higher than the previous year, driven by strong consumer spending. Manufacturing production grew slower than in 2010, rising by 2,4% last year. Output has not yet recovered to the levels before the global slowdown of 2009.
Mining production increased in some sectors. However, the commodity price boom of the last few years had peaked and prices softened markedly last year. Fixed investment recovered in 2011, growing by 4,4% - its best performance since 2008. The manufacturing investment is still below levels of four years ago. Foreign investment levels grew.
Demand for imports, particularly consumer items and intermediate goods, increased by 9,7% in volume terms, significantly faster than exports. China is our largest export market, principally for raw materials, but the rest of Africa, Europe and the United States remain key markets for manufactured goods.
South Africa is strongly integrated in the global economy. Our trade as a percentage of GDP is about the same as that of China and significantly higher than that of Brazil or the United States. The 2008 global economic downturn therefore had a particularly sharp and negative impact on employment in South Africa. Therefore, global economic prospects matter to us.
The International Monetary Fund's latest World Economic Outlook indicates continued fragile and uncertain global economic performance. China's growth is slowing and most organisations for economic co-operation and development growth forecasts for their countries are low or negative. We must thus reduce our vulnerability by diversifying the economy's sources of growth, rely more on the domestic market, local production and African integration, and ensure greater balance in our external economic relations.
I wish to highlight progress under the New Growth Path themes and conclude with the department's spending proposals for the year. Industrial finance is identified as a critical engine for industrialisation and jobs in the New Growth Path. The Industrial Development Corporation is the country's largest industrial funding agency. Two years ago, we identified the key challenges it faced. Working closely with management, we began a systematic reorientation of the IDC to improve its impact. Significant progress has been made, which we can all be proud of. Last year the IDC increased its investment target to R102 billion over five years - a substantial increase over the preceding period. It introduced a new low-cost lending facility for job-rich projects, at prime less 3%. It refocused investment to the New Growth Path industrial sectors. What has been the impact of that?
Over the past 12 months, IDC approvals of funding grew strongly, from R8,7 billion to R13,5 billion. This is an increase of 55%. At this rate of growth, the IDC is confident that it will reach its new investment and lending targets. The IDC has become faster in processing applications - turnaround times for the approval of projects improved from an average of 82 days when we started to measure it to 50 days. We now monitor developmental targets every quarter, starting with jobs impact.
It is my pleasure to advise you that the IDC has issued a "jobs bond" to the value of R4 billion, taken up by the Unemployment Insurance Fund by R2 billion in 2010 and, based on its exceptional success, a further R2 billion this year, to promote lending with a strong jobs impact.
In November we reconstituted the board of the IDC and brought in fresh talent and new skills, drawn from the engines of the economy, the business sector and trade unions, to reflect the diversity of experience and a strong developmental focus. I thank the previous board members and wish the new board, under chairperson Monhla Hlahla, well.
Let me highlight some significant investments. The IDC support for Ford encouraged the company to invest R3,4 billion here and select South Africa as one of only three global production hubs for the Ford Ranger, for export to 148 countries, supporting jobs in Ford and its supplier companies. The IDC financed a project to use discarded plastic bottles as feedstock to produce polyester fibres for domestic use and exports, creating 110 jobs in the Propet factory in Milnerton. With additional funding for the agreement we signed earlier today, 90 new jobs will now be created by July, with an estimated 5 000 jobs in the informal sector for people who collect and recycle the plastic bottles.
The IDC provided support to Bell Equipment during the 2009-10 economic downturn, which sustained the company during a difficult period. I visited the factory in Richards Bay recently and saw the company expanding production of earth-moving equipment. It rehired 1 000 workers in the past 18 months, bringing its employment to 3 500 persons.
The expansion of an existing large shallow open-cast platinum mine and processing plant in the North West, with potential for downstream beneficiation in future, will create about 10 000 jobs in construction and mining. The local community will own 27% of the expanded mine. [Applause.]
The agro-processing fund approved nine projects for a total of R66 million, including a small pasta manufacturer, two dairies and a producer of dried fruit and nuts. All in all, the jobs impact of the IDC's work is encouraging, with net approvals last year expected to create 30 127 new jobs and save a further 11 000 existing jobs. I think you can say that is a job well done. [Applause.]
I am pleased to announce that the IDC will now issue a R5 billion "green bond", to be taken up by the Public Investment Commission with a 14-year tenure, in order to raise the resources to invest actively in the green economy. I wish to thank the IDC management for their efforts to transform the corporation to reflect new shareholder requirements. Furthermore, I wish to address the competition policy, which is given prominence in the New Growth Path. We inherited an economy with high levels of what we may call "lazy capitalism", characterised by monopolies, price- fixing, market segmentation and corporate collusion. A dynamic economy that can create large numbers of decent jobs require strong, competitive enterprises.
Over the past year, the Competition Commission dealt with 472 cases. I wish to highlight the construction industry probe, which found widespread evidence of collusion. The commission identified about 200 different projects where bids were effectively rigged, including Soccer World Cup stadia and some freeways. About 21 construction firms have come forward to admit involvement. These include the top five construction companies.
The Competition Tribunal granted consent orders worth R345 million in the past year and heard 63 merger cases. It imposed conditions in 11 cases, mostly related to competition conditions, with four related to requirements around employment.
Competition is vital, but our legislative framework does not subscribe to what we may call a trickle-down approach, which assumes competition alone will ensure the desired developmental impact. The Act actively mandates the competition authorities to consider public interest criteria, including the impact on employment and linked industries when evaluating proposed mergers and acquisitions.
We emphasise these legally mandated criteria in our engagement with the competition authorities. A stronger public-interest competition regime is emerging. The settlement with Pioneer Foods provided for reparations to consumers through lower prices of bread and flour. An amount of R250 million of the fine imposed was set aside for an IDC-managed agro- processing fund, which will promote new entrants and job creation.
When a Japanese company, Kansai Paint, took over the local paint manufacturer Freeworld Coatings Ltd, it undertook to retain employment and industrial capacity in South Africa and invest in expanded production, research and development. Last week I met with the President of Kansai and he was optimistic about the prospects of the company locally. He is working with us to more than double the company's industrial capacity and jobs. Walmart applied to take over Massmart Holdings Ltd in late 2010. We requested a binding commitment to support and strengthen local suppliers and respect worker rights. When it declined to do so, we argued the case at the Competition Tribunal and the Competition Appeal Court. These efforts have been positive. More than 500 retrenched workers have been reinstated. A supplier development fund has been mandated and its terms are the subject of an expert investigation. The thoughtful judgment of the Competition Appeal Court expanded the jurisprudence and endorsed our view that when considering mergers and acquisitions, public interest criteria in the Act are not cosmetic but fundamental.
We nominated a Nobel Laureate in Economics, Professor Joseph Stiglitz, as the government expert on a committee that will report to the courts on appropriate conditions within the next few months. Of course these interventions have not been without controversy and criticism, but government cannot take the easy road when doing so will damage employment and industrial capacity.
I now turn to small business development, where the New Growth Path identified the need to support entrepreneurship with a more rational and integrated institutional framework for small business public funding. Yesterday I was particularly pleased to launch the Small Enterprise Finance Agency. I would like to welcome the chair of the board, Ms Sizeka Rensburg, and the newly appointed Board members. This new agency consolidates Khula Enterprises, the SA Microfinance Apex Fund and the IDC small business lending book. Sefa will offer loans, initially up to R3 million. By reducing the number of agencies, we estimate annual savings in excess of R20 million through cutting the duplication of costs and services. That money can flow into more lending to small businesses rather than into the bureaucracy, but it is not simply cost-cutting that motivated the amalgamation. We want a better service to small businesses a one-stop shop for funding.
China Development Bank and the IDC signed an agreement today to access US$100 million for small business lending on favourable terms, based on a 10-year tenure. So, about R800 million will be made available by China Development Bank for small business lending in South Africa. This will boost the IDC's capacity to support Sefa. [Applause.]
The availability and cost of funding to small businesses is vital but it is not all that is important. More needs to be done to strengthen technical skills and promote market access. That is the reason we were pleased to sign a co-operation agreement with the SA Institute of Chartered Accountants, where they undertook to train 100 accountants to support small businesses and to set up a business hub to provide technical assistance to small, medium and micro enterprises. Government will make R6 million available to support this important initiative. [Applause.]
Sefa will have resources to fund its lending programmes. An amount of R2 billion will be available over the next three years for lending, through fiscal transfers, reserves and a R921 million shareholder loan from the IDC. Yesterday we launched Sefa and today we signed an agreement with the Institute of Chartered Accounts to provide technical support. We now have the resources available.
I visited Roodepoort with Deputy President Motlanthe recently, as part of the antipoverty campaign. We met Mrs Fikile Zikhali, who is with us today. She runs a shoe-manufacturing corporative called Ujima Bakwena. They face difficulty with the supply of leather and with their technical capacity. Earlier today, Mrs Zikhali concluded an agreement with Mossop Western Leather and United Fram that will save this shoe co-operative at least R200 000 a year. [Applause.] I have chosen this selection of examples to illustrate the kind of work that government is engaged on across a very wide front.
The green economy is shaping the next wave of industrialisation and is a key sector in the New Growth Path. What have we done?
Following the release of the green jobs report, we concluded an accord on the green economy in November last year, which signalled a partnership between social partners to seize green job opportunities for South Africa. It contains clear commitments by each partner, with measurable targets. About 250 000 solar water heaters have now been installed in South Africa, a solid step towards the set target of one million. There has been a partnership between a number of departments and entities to achieve this. We worked with industry in order to manufacture more of the units locally. In January this year, the SA Bureau of Standards approved a new factory in Alrode with the capacity to produce 8 000 units a month. The IDC itself committed about R5 billion in industrial funding for projects in the green energy programme, including supporting the entry of community empowerment groups. The department unblocked projects in green energy that had become stuck in bureaucratic delays, for example, a wind farm in Coega in the Eastern Cape.
South Africa hosted a very successful Cop 17. The Department of Economic Development were part of the technical team and played a role in showcasing green economy opportunities to visitors and investors.
Hon members, I invite you, after the debate today, to accompany me to the green economy exhibition that will take place and where we will be serving snacks. You will see a package consisting of visuals, posters and touch- screen videos that tell the story of the green economy. We will do a provincial road show to bring the green economy message to our people.
My next focus is on infrastructure development, the first driver in the New Growth Path. Last year, Cabinet set up the Presidential Infrastructure Co- ordinating Commission, headed by the President. It produced an infrastructure plan, which integrates the actions of the state and lays the foundation for long-term job creation, growth and social inclusion. Last week, we released details of the plan and its 17 strategic integrated projects at the Economic Development Conference on Infrastructure and Development, where it was widely and very warmly supported by the private sector, trade unions, community groups and academics.
At the request of the President, I chair the secretariat responsible for the day-to-day work of the PICC and draw on the department for planning, costing and evaluation services. It has been a real privilege to work with a committed and talented group of Ministers, Deputy Ministers and a very hardworking technical team of officials on the PICC. Localisation is vital to reverse deindustrialisation pressures and strengthen our capacity to design and make things. We signed a local procurement accord with the business sector. This included 85 of the largest companies, with labour and community partners. We set an aspirational target of 75% local procurement, with concrete commitments. This is the first agreement of its kind in South Africa. Cabinet approved procurement regulations that require all public entities to procure designated goods only from South African manufacturers. The first designated products are bus bodies, power pylons, rolling stock, canned vegetables, clothing, textiles, footwear and leather, set-top boxes and oral solid pharmaceuticals.
The infrastructure plan has a strong localisation component for the purchase of trains, boilers, earth-moving equipment, turbines and other key inputs. Minister Davies recently released the updated version of the Industrial Policy Action Plan, which is the manufacturing driver of the New Growth Path, to increase the competitiveness of local companies.
South Africans do not always know where to buy locally produced goods and services. To remedy this we have now commissioned Proudly SA to drive more focused marketing and "buy local" campaigns and compile a database of local suppliers. To this end the Department of Economic Development has made available R8 million in funding. We have reached an agreement with a local manufacturer to illustrate what can be done to buy conference files at a lower price than the imported product and make a saving, just to one department, of about R35 000 a year. I will now focus on African development, which is key to achieving the New Growth Path goal of widening and deepening our markets. Ten months ago, President Zuma hosted talks involving 26 African heads of state and government to promote a free-trade area that would include 600 million people across the continent, from Cape to Cairo, and create a large market for our goods and an opportunity to expand continental economic development.
Complementing this, the PICC identified 11 major infrastructure projects on the continent. The IDC actively invests elsewhere on the continent. It has a portfolio in 20 other countries on the continent, with a market value of some R19 billion.
Last year, for the first time, we worked with the Namibian competition authorities on the Walmart matter, deepening policy co-ordination in the region. Economic development rests on skills and infrastructure, hence their importance in the NGP.
In 2009, the Department of Economic Development set up a training lay-off fund, now administered by the Department of Higher Education and Training, which provides support to workers as an alternative to retrenchment. I recently visited the BMW plant in Rosslyn, Pretoria, to launch the new 3- series production facility. The company had used the training lay-off scheme during the recession and has now invested R2,2 billion in upgrading the operation, almost doubling its production of cars to over 90 000 unit, and employing 600 additional workers in well-paid, decent jobs. Government matters! [Applause.]
In July last year, we concluded a National Skills Accord. The department has done a survey of engineers and artisans. We sponsored a course for provincial and local government officials at Wits University.
Finally, the NGP's biggest value-add is its call for integration across government. The best example is the PICC. There were numerous other examples this past year, from inter-ministerial committees and Minmecs to the discussions and negotiations with our partners in business and labour.
I now turn to steps taken to improve the department's internal capacity and budget spending this past year. The Department of Economic Development's staff numbers increased by 26%. We also tapped into additional personnel, without incurring any cost for the department, through the secondment of staff by other public agencies to our work on infrastructure. This is part of building a 21st-century delivery capacity, using networks of talent across the state. The department's projected spending for the past financial year, excluding transfers, is expected to be about R91 million, or 105% higher than the preceding financial year. The capacity to spend has increased.
Looking forward, the key priorities in the year ahead are to implement the strategic plan and strengthen the various areas of work referred to today. They include the roll-out of the infrastructure plan; strengthening institutional capacity in the Department of Economic Development and its agencies; focusing on the employment impact of policies; and improving small business performance, including through the step-by-step roll-out of Sefa across the country.
One of the challenges is to get better development impact of small business spending across the three spheres of government. To that end I have appointed an advisory committee to put proposals to me, consisting of Mr Thami Mazwai, Ms Sizeka Rensburg and Ms Monhla Hlahla. We will finalise with the Department of Trade and Industry further support for co-operative and strengthen links with provinces and local government.
The budget allocation for this financial year amounts to R672 million, most of which will go to agencies. We propose to distribute the budget as follows: R169 million for small business funding to Sefa; R172,8 million for the competition authorities; R73,7 million for trade administration to the International Trade Administration Commission, or Itac; R108 million to the IDC for the agro-processing fund; R60 million for administration, the Ministry and capital expenditure; R29 million for economic policy development; R42 million for economic planning and co-ordination; and R18 million for economic development and dialogue.
South Africa today is vastly different from the country that the founding members of today's ANC lived in when they met in Mangaung in 1912 to resist the planned 1913 natures land Act. I pay tribute to those who fought for a better future for all South Africans. I wish to recognise and welcome three visitors to Parliament today: Ms Ann Kotane, daughter of the late Moses Kotane; Mrs Martha Mahlangu, mother of the late Solomon Mahlangu; and Lethu Ngcobo, a scholar from Durban. [Applause.] [Interjections.]
Minister Patel, please wait for a second. It would be nice if the comrades could stand up so that we can see them. I thank you. [Applause.]
May I also ask the presiding officer if we can ask Mr Lethu Ngcobo, a scholar from Durban, to stand up. [Applause.]
Let me tell you a story. It was 50 years ago this past December when Chief Albert Luthuli, ANC president, stepped onto a plane to Oslo to receive the Nobel Peace Prize - the first South African to do so. In December last year, Geoffrey Qhena and I made an appeal for contributions to provide solar water geysers to a nominated township or rural area. We raised R802 000 from corporates, unions and visitors to the Department of Economic Development stand at Cop 17. We selected iLembe as the area where 500 solar water geysers would be installed. Groutville, home of Chief Albert Luthuli, is in iLembe. Installation started in late January, using locally produced water tanks. All 500 units were installed six weeks later, bringing hot water to a poor community and paying tribute to the memory of Chief Luthuli.
However, there is one more element to this story: During Cop 17, Lethu Ngcobo's mother brought him to visit the expo. He saw the board for pledges to install solar water geysers. Normally, corporates and other institutions contribute but he pulled his mom by the arm and said, "Let me give some money." He took R10 from his pocket and paid it over to the staff. This young man showed the spirit of solidarity that we need as we build an inclusive economy. [Applause.]
Young Lethu, what you have done was to give us an example of how every South African, however little we may have, can contribute to creating broader welfare and ensure that we are able to create 5 million new jobs by 2020. Hon members, please join me in applauding young Lethu. [Applause.]
I wish to acknowledge the support given by President Zuma and Deputy President Motlanthe during the past 12 months. Colleagues on the PICC and in the Economic cluster, including Ministers Nkwinti, Davies, Pandor, Gordhan, Gigaba, Nzimande, Peters, Ndebele, Nxesi and others have all made the work of the department a success.
I thank my former Deputy Minister, Enoch Godongwana; previous director- general of the department, Richard Levin; the acting director-general of the department, Saleem Mowzer; heads of agencies we have worked hard with in the Department of Economic Development to ensure that jobs are truly placed at the forefront of all of their mandates: staff in the Ministry, who work very long hours; and the staff in the department for the work they have performed during this period. All of them deserve my thanks and appreciation.
I thank members of the portfolio committee for the constant friendly spirit in which they have engaged with the Ministry and the department. I would also like to thank my family for their support. [Applause.]
Chairperson of the EPC, Minister Patel and other Ministers present, comrades and compatriots, Members of Parliament and distinguished guests in the gallery, each year, when dealing with Budget Vote No 28: Economic Development, we are constantly reminded of the magnitude of the responsibility that has been given to this committee to oversee the development of the financing of government that will result in growth, decent work and greater equity. There can be few Budget Votes that are charged with the responsibility and scope that we have.
When dealing with this Budget Vote, we are faced with the core challenges of mass joblessness, poverty and inequality. We have to deal with this in the context of a difficult global economic crisis, which has consciously been brought out. However, we must deal with this in our national context and produce an outcome, at the end of this debate, that will make a difference in the lives of our people.
Equally, this global and national context brings with it important opportunities, which we should seize upon in this debate. This is a debate about economic development policy and the financing of it through this Vote. The debate is about the alignment of policy to the political and economic objectives and mandate that the executive set out to government when it established the Department of Economic Development in 2009.
Our collective and common point of departure in this debate must therefore be that the vote of funds must result in the creation of decent work through inclusive growth and development. We are responsible for the oversight of the implementation of the New Growth Path, not only by the department but by other departments as well. Our focus as a committee must be to ensure that the legacy we leave in 2014, at the end of our term of office, is one in which we can be said to have been focused on the priorities that confront us as public representatives.
These priorities can be broadly defined in terms of these categories: Firstly, overseeing the implementation of the New Growth Path; secondly, overseeing government's response to the global economic crisis; thirdly, oversight over the three development finance institutions we are responsible for; and fourthly, being engaged with impact assessment of the macro- and micro-economic policies of government.
This Budget Vote must be used as a tool of evaluation of a political and financial instrument that the ANC-led government uses to ensure that its policy programmes are operational through the allocation of financial resources the Budget Vote of the Department of Economic Development for its programmes and projects.
It reflects an outcomes-centred public spending approach. The challenge is to evaluate whether the macro-economic perspectives of economic development in this Budget Vote meet the requirements of ANC-led government policies and to give substance to the ANC-led government's five-year plan.
In order to do this we have to ask key questions of this Budget Vote: Firstly, does the Budget Vote reflect the funding of policy priorities of the ANC-led government, and can this be traced to government programmes and projects in the Votes? Secondly, can we trace a progression of funding of policy priorities from the 2011-12 Economic Development Budget Vote to this 2012-13 Economic Development Budget Vote? Thirdly, does the Vote address issues of adequacy, given the mandate of the Department of Economic Development? Fourthly, does the vote reinforce issues of equity and does it deal with unemployment and poverty, and can this be traced in the Vote? Finally, are the directives of the Medium-Term Budget Policy Statement of 2011 met in this Budget Vote? These are the key questions that we need to ask in this debate, instead of becoming sidetracked by political expediency. I shall return to these questions in my concluding remarks.
Looking at the global outlook, the 2011 World Economic Forum in Davos, Switzerland was seized by a global economic crisis. Established economic theories were put to this sort of debate. Historical notions of the underpinning principles of capitalism as a global economic system were seriously questioned and seeking alternatives were the order of the day. The delegation from South Africa was at the cutting edge of this debate as the implications of global recession had already caused the loss of millions of jobs worldwide. In South Africa, in the space of 12 months, we had lost 1,3 million jobs in 2010, following the sub-prime crisis in the US, which triggered a collapse and financial crisis one year after the other.
Certain economic analysts have tried to explain the problem as being one of sovereign debt in the European Union. It is far more complex than that. Sovereign debt is a manifestation of a bigger problem. So, what is the essence of the problem? We believe that the global economic environment is characterised by a global economic crisis that began late in 2007 and matured in 2008. Essentially, it is a crisis of ideology and of the systems of global capitalism.
Until then, globalisation had provided the locomotives for the global dominance of capitalism through the proliferation of technologies and new sciences; the growth in global trade and investment; and the integration of the processes of production and consumption. At the same time, though, globalisation reproduced and cemented socioeconomic inequality; perpetuated global poverty; promoted class materialism and excessive consumption; prompted greed and exploitative economic processes; and promoted underdevelopment in many parts of the world, especially in Africa.
The crisis, with its epicentre the advanced capitalist economies of North America and Europe, so shocked the dominant world that there were great prospects for new thinking and approaches to global economic governance. For a time in 2008, world powers seemed open to alternative economic responses, including huge social investment to boost social justice and solidarity. Affirming the critical role of government in the economy, there was a widespread push for the stronger regulation of economies, the nationalisation of essential parts of economies and other examples of post- Washington consensus.
As the ANC strategy and tactics of 2007 states and we think this remains correct:
South Africa's interests in a complex and unpredictable global environment necessitates the building of capacity for strategic as well as rapid responses to change in our region, in Africa and in the world.
Such responses should be anchored in the development of Africa and the developing world. Out of this era of many contradictions and fluidity in the international environment, both Africa and the global South have greater opportunities to see progress and extricate themselves from the shackles of global apartheid. The essence of the global financial crisis has its roots in three interrelated dysfunctions of global economies - if I had more time I would have explained them in greater detail. Firstly, we think we have a cyclical problem globally; secondly, we have a structural problem; and lastly, we have an unstable trajectory.
We know the role that is played by Brics, and we know the role that we play in Southern Africa. As South Africa, we want to also indicate that our capitalism developed on the basis of migrant labour drawn from the regional economy. We also want to stress that what drives migration in the region is mostly the levels of poverty and economic underdevelopment that exist in our neighbouring countries. We want to congratulate and commend government's Presidential Infrastructure Co-ordinating Commission's plan, which looks at not only the developing socioeconomic infrastructure of our country but also at investing a lot of resources in the region and continent of Africa. We appreciate this move mainly because it will help in fostering closer economic integration on issues such as water, energy, roads, ports and airlinks, etc, on the continent, especially in the neighbouring Southern region.
The committee had the opportunity to interact with the department on its strategic plans and its entities on their budget allocation proposals. As I indicated earlier on, I will be returning to the main issues. In replying to the questions that were asked, the conceptual outlook of what the mandate of economic development was set up to achieve is of critical importance. It needs to inform the mandate, which is the mandate derived from the ANC, and it informs its structures and functions. These are critical when considering any Budget Vote and they are applicable to this year's Vote as well.
We certainly believe that with progress there are new challenges and with challenges arise the opportunities for growth and development. The Budget Vote clearly reflects the funding of policy priorities. These priorities are largely but not exclusively reflected in the New Growth Path policy document and can be traced in the line items of the vote of funds. Over last year's Budget Vote, there is an increase of approximately 6,42% in real terms. Notwithstanding that, there is progression.
The central question remains whether the Vote is adequate, given the huge mandate that this department has been given within the finite resources. The answer to this can only arise from the needs, mandate, structure and function analysis that I have referred to. Simplistically calling for increased funding without doing this analysis is unscientific and anything that is unscientific is ill informed. The thrust of the Budget Vote speaks to dealing with matters of unemployment and poverty eradication. Certainly, as the portfolio committee, we think the link between the 2011 Medium-Term Budget Policy Statement and this Budget Vote can be made.
Having answered this question, let me say in conclusion that the ANC supports Budget Vote No 28 on Economic Development and we want to thank all who participated. [Applause.]
Hon Chairperson and hon Minister, the Minister of Higher Education stated that South Africa's banks were sitting on a time bomb about to explode, as in the subprime crisis. This begs the question: Do we really have a firm financial basis for economic development in South Africa? How can Minister Gigaba say that government is talking with one voice on business and investment? We believe that there is clearly no cohesion.
Since no one in government has contradicted the Minister of Higher Education in his mega claim, why should anyone invest in our country when the whole financial system is about to blow up, according to the Minister?
When Mr Reuel Khoza gave his critical analysis of government, he was savagely attacked. Instead of making a virtue of criticism and welcoming his criticism as an affirmation of our democracy and the triumph of our Constitution, our leaders lost the plot.
What was needed from government was a clear and unambiguous declaration that it will always uphold the Constitution and faithfully and implicitly abide by the rule of law. That never happened and a golden opportunity was missed. The real point of the criticism went unanswered and in its place the country witnessed hot-headed tantrums on the side of government. Government ridiculed the man, but remained silent on the salient point he made. Its silence was deafening.
With investors and bankers now quaking in their boots rather than feeling confident, government undermined both the Constitution and economic development. The right of open criticism of the economy at present is accorded only to other members of the tripartite alliance. The Minister of Higher Education can freely shake the economy to its very foundation by making a mind-blowing prediction when he puts on his SACP cap. Others, like Reuel Khoza, who voiced valid criticism become the "ideological third force" that supposedly fears black rule. This is delusional thinking on the part of the Minister, who is clearly living in a time warp.
All stakeholders in our democracy, business included, have the constitutional right to criticise any deviation from the Constitution and the rule of law. That is what constitutional democracy is about. Is it any wonder that South African corporate companies have deposits that exceed R520 billion at present? Business never misses an opportunity and there are many opportunities in South Africa that are going begging. What, then, is the reason for this mountain of cash remaining uninvested in the real economy? Clearly it is a lack of clarity in policy, philosophy and predictability that is unnerving investors.
The department's strategic plan to transform the economy therefore has to begin with a clear declaration by government to defend our democratic gains and to faithfully uphold the Constitution. The freedom of speech must therefore be implicit. To achieve a pro-employment growth path that addresses the structural constrains will require a restoration of belief in the government.
Firstly, the government's policy of engagement must arise from mutuality. It must not be one-sided and it should truly create space for a balanced engagement. This is fundamental. The growth path also has to be the constitutional path.
The second problem also stems from a serious failure of government. Deputy President Kgalema Motlanthe identified this on Friday, 13 April, when he stressed that more needed to be done faster by addressing capacity constraints in the state and promoting wider partnerships in society and improving co-ordination.
The third problem, similarly, is one that can also be put at the door of government. At the infrastructure conference held on 13 April, Minister Patel raised the recurring problem of resolving regulation and administrative bottlenecks. He suggested that uniform standards be introduced and a comprehensive business plan be put in place and that procurement should result in economies of scale being realised. We agree with the Minister on this.
Minister Nkwinti concedes that a lack of money is not the real problem in South Africa, but rather that an institutional problem is the real problem. Minister Fikile Mbalula likewise hit the nail on the head when he asserted that the sins of incumbency had now become a serious problem in the ranks of the government.
These are objective criticisms coming from government and not from any imaginary "ideological third force". Therefore, the observation by Mr Khoza, that our political leadership's moral quotient is degenerating and that we are fast losing the checks and balances that are necessary to prevent a recurrence of the past, is a criticism that no aggression of government will ever silence.
The key to economic development is to revitalise the railway system to connect South Africa's rural areas and to give impetus to our agricultural output. In India the second-largest expenditure of the state, after defence, is on the railways. The rail system in that country continues to expand and with it the economy grows.
The e-tolling saga demonstrates quite clearly the need for an affordable rail transport system to ferry workers and carry goods. This will stimulate economic development.
Education in our country is in a crisis and the standards have fallen. Canada and Australia, among others, have had virtual education for decades. South Africa, unbelievably, has no policy on virtual education. This should be prioritised.
The inflexibility of labour laws is another matter that needs to be resolved in a win-win manner. Rigidity means that employers are not recruiting and the jobless have no hope. With the impasse that prevails, government remains the main employer. It is also the only employer forced to remunerate above the inflation rate. This has been putting enormous pressure on the fiscus of government, of course.
South Africa's population cannot wait for structures systems and processes to be put into place, as the department is suggesting. It also cannot wait for the department to undertake research and analysis to determine the most appropriate growth path for economic development and decent work. We do not wish to be overtaken by a variation of the Arab Spring.
In conclusion, the challenge facing South Africa is a lack of cohesion. [Time expired.] Thank you. [Applause.]
Chairperson, hon Minister, our responsibility as members of this committee and members sitting in this Extended Public Committee is to consider the budget allocated to the Department of Economic Development. To that end, as the IFP, I would like to say that we fully support the budget that has been allocated to the Department of Economic Development, save that there are areas, for example, in human resources and staff, where there is a bit of underspending. However, our view is that we should rather have less staff, but capable staff, instead of trying to create the impression to Parliament and to the outside world that you have spent all your money on human resources. So, you should rather err on the side of caution instead of spending all your money.
The hon Minister referred to the Competition Commission and the 472 cases that the Competition Commission looked at, particularly in the construction industry. To this end, Mr Minister, what we would like to see the Competition Commission do is to look particularly at the school infrastructure programme and possible collusion within the construction of schools. I say this advisedly, because I sit on another Committee on Appropriations and we were informed by the Director-General of Basic Education that the cost of building schools in the past years has risen exorbitantly. When one looks at the cost at which the private sector can build a school or organisations, like the Devine Life Society and others the cost of a classroom would probably be R100 000. When you go out to tender, it's about R500 000 to R600 000. I am just using these as examples, but I think one needs to look at this very carefully, particularly in the Eastern Cape.
I want to congratulate the Minister for hosting the second annual economic development infrastructure conference in Johannesburg. What was noteworthy is the fact that you brought together business, labour and other social partners. An area that is lacking within government itself is co-ordination between the national department, the provincial departments and municipalities. Municipalities have "local economic developments" and fancy wish lists, but when one assesses what they do at the end of a financial year, one finds that much of what they have indicated as programmes and projects are not completed at the end of the year. So, what I would like to see from our side is greater co-ordination in that regard.
When it comes to job creation, we know that we are facing external challenges, but what we need to do is to consider the youth very, very carefully in our country. The lack of employment among the youth is a ticking time bomb. We need to focus a lot of our energies as government departments collectively on ensuring that the youth of today are employed for tomorrow. They are the people who are going to be around in future. We will peter out because of old age and other reasons and go on retirement, but the youth needs to ensure that there is sustainable employment for them. I think that is an area that one should look at.
With regard to the solar water heating systems, it is commendable that there is a lot of investment in solar water heating, but here again I think that many small and medium enterprises are not being given opportunities to enter that particular market. I do hope that the department will look into that very, very seriously because a lot of money has been allocated and at the moment it is only the bigger firms that are benefiting from erecting solar water heaters at many places.
When it comes to what happened at the conference, one has a sense of dj vu when one considers the work that is being done by the National Planning Commission. Last week, Members of Parliament were exposed to three days of in-depth discussions in different clusters. When I look at what you presented at Birchwood Estate in Johannesburg the other day and compare it to what the National Planning Commission is doing, I think there needs to be a lot more co-ordination in terms of what you are doing. From what the Economic Development is doing, there seems to be action and implementation. The National Planning Commission is still more medium to long-term, but I think there can be greater synergy between the National Planning Commission and the department.
Lastly, when we talk about economic development and growth, growth is numbers and figures, rather than output However, we need to develop our community. Development is about improving the quality of life of people in South Africa. We have heard the term "economic emancipation" a lot, and unless our people are economically emancipated, any kind of economic growth is going to be meaningless for the future. Thank you. [Time expired.] [Applause.]
Hon Chairperson, hon Minister, hon members, South Africans are crying out for more jobs. Year after year, election after election and plan after plan, government promises more jobs. When I go out to my constituency in Durban, people confront me around every corner with the same demands. They ask, "when will our lives change?" "When will there be more jobs?"
I have listened to stories of young people sitting around unemployed. I have listened to stories about young people who are losing all sense of dignity and respect. I have listened to young people who have been driven to criminality out of sheer desperation. Even though we live in a country where we have a shortage of skills, I have heard terrible stories of qualified people unable to find jobs for months on end.
Parents often spend their life savings on their children's education in the hope that it will secure their children job opportunities, yet I have heard stories of educated young people who have never worked and who have lost all hope of finding a job. I have heard stories of parents who go to bed at night with no hope of meeting the demands of the school debt collectors for their children's outstanding school fees. These are just some of the stories of our people, almost 20 years into freedom. Our people are hurting. They are crying out for the vision of a future where there are opportunities for all of us, where there is enough wealth for all to share in, and where their children will know that if they work hard, do their part and look for opportunity, they will find it.
The Department of Economic Development surely has a massive role to play in crafting this vision for the future of our people. Indeed, Minister Patel has crafted this department's contribution to that future vision with his New Growth Path. But what has become of the New Growth Path and its proposals in the year since its announcement? Let us take stock and aggregate the value of the New Growth Path contribution to our country's economic policy. When studying the document released by Minister Patel in 2010, one finds numerous goals and objectives. Most famously, the New Growth Path aims to create 5 million jobs by 2020. I spent some time looking for actual substantive proposals on how to achieve these objectives in this document and I could find only a few.
On the macroeconomic side, Minister Patel proposed a loose monetary policy aimed at achieving lower interest rates. In simple language, Minister Patel wants lower interest rates at the SA Reserve Bank. This has all been ignored by the Reserve Bank Governor, Gill Marcus. On the microeconomic side, Minister Patel proposed a series of interesting interventions, very few of which have been taken seriously by any government department or stakeholder. Suggestions in the New Growth Path on strengthening the competition authorities, which we wholeheartedly support, seem laughable now in the context of the way in which Minister Patel, together with Ministers Joemat- Pettersson and Davies, undermined the competition authorities with their challenge of the Walmart and Massmart merger.
It is astonishing that a Minister of state could lead an appeal against foreign investment in our economy. The millions spent on appealing that case is not only a wasteful use of resources but is, frankly, an embarrassment to South Africa in the eyes of foreign investors. We need to be open and honest to foreign investors. It is seriously flawed logic that concludes that foreign competition in our retail market is bad for South Africa. More competition will lower prices for South Africans struggling with rapid increases in the cost of living. In addition, every foreign entrant into our market is an opportunity and not a threat. South Africans will have immense opportunity to benefit from these particular investors, since they will likely use South Africa as a base to expand into Africa, giving our producers potential access to African markets.
However, when one looks into the other key proposals in the New Growth Path, one finds new areas that are actually being taken seriously by government. Minister Patel's proposals on salary, wage and bonus caps have been ignored by all, and unions have refused to even consider the wage moderation model proposed by Minister Patel. [Interjections.] However, some of the proposals in the New Growth Path have been taken up, for example, the review of our broad-based black economic empowerment, BBBEE, legislation and the review of our labour policies to protect contract workers from abuse, but there is little evidence to suggest that these reforms would not have occurred in any event without the publication of the New Growth Path.
Studying the department's actions from last year, it seems that the only real outcomes emanating from the NGP are some stakeholder accords that the Minister had signed. These included accords on the green economy, the local procurement of goods and an accord on national skills development. These accords are nonbinding in nature. It remains to be seen whether any real impact will be felt by their signing, since there is little information available on the monitoring of the agreements reached. To what extent has the accord on the procurement of local goods added value to our society? To what extent has this accord increased employment on the ground, where each and every one of us works?
The government has already indicated that it would not be following the accord on local procurement with the ongoing infrastructure build programme. So, one has to wonder how much credibility these accords carry with their various signatories. So, after looking at the New Growth Path one year after its launch, one can draw a few important conclusions: Firstly, almost every aspect of the Department of Economic Development and the NGP could be covered by the Industrial Policy Action Plan at the Department of Trade and Industry, the rolling budget process at Treasury and the National Development Plan being rolled-out by the National Planning Commission. Secondly, the inception of the Department of Economic Development and the NGP has only served to muddle our economic policy- making process, contributing to the economic policy paralysis of this government. Finally, Minister Patel's actions and proposals systematically favour the trade union movement above the general wellbeing of our citizens and economy at large. [Interjections.]
The great tragedy is that there are so many constructive proposals from civil society and the opposition benches that any Department of Economic Development that actually lives up to its name would implement without a moment's notice: the youth wage subsidy; reforming the labour market to become more labour absorptive; improving our education system to produce the skills needed for growth; changing government's stance to be more open to foreign investment; giving the competition authorities the tools and space to root out anticompetitive behaviour that actually causes damage to our economy; containing the cost of living by examining government's impact on the poor through administered prices; reviewing our special economic zones to provide much stronger incentives for growth, investment and so much more.
Hon members, the success of our economic policy can best be measured by the experience of our people on the ground where we work. Look, for example, to the life of the average machinist working in a textile factory. On average, she would earn roughly R2 100 per month. Yet, in the recent past, her cost of living would have increased dramatically as food, fuel and electricity prices have gone through the roof. How does she sustain her standard of living if the cost of basic living increases to the tune of hundreds of rand, while her income remains stagnant?
The reality is that the poor can only share in our economic growth to improve their lives when growth is, firstly, fast enough to create large numbers of jobs and, secondly, if incomes are growing relative to the cost of basic living conditions. That way people would have more money to invest in their children's education and take ownership of their own future. That is the vision of the future that our people are crying out for - a vision that puts them first, above political considerations or ideologies, and a vision of single-minded determination to create opportunity and improve the lives of our people. I thank you. [Applause.]
Hon Chairperson, hon Minister of Economic Development and other Ministers present, hon Members of Parliament, captains of industry, comrades and friends, I greet you all. As we debate this Budget Vote today, it marks 57 years of the Freedom Charter, which envisioned that there shall be security and comfort and that people shall share in the wealth of the country.
Since the beginning of the economic recovery, the country has done very well to put systems in place to weather the remains of the storm of the last recession and rehabilitate the economic driving forces to create a better South Africa for all. It is for this reason that the New Growth Path has set out new, clear goals and targets to create job opportunities for millions of South Africans in order to improve household income and better livelihoods.
We acknowledged the steps taken by our government and social partners to formulate their commitment in the area of skills development by negotiating and concluding the National Skills Accord, which is Accord 1 of the New Growth Path. Our responsibility today for a better future tomorrow is to share strategies of giving and to achieve meaningful implementation of all the systems in order to ensure the sustainability of all the job opportunities that have been created. We also need to give and present statistics of labour absorption in each economic sector, which will give us an idea of what progress other sectors make.
We can safely say that the expected performance and outcomes in the key priority areas are being achieved, because we have seen a huge increase of employment opportunities in all areas in the economy that are led by our government. In defining the New Growth Path, four challenges stand out: Firstly, as the National Development Plan points out, sectors that are necessary for long-term growth and economic diversification are often not able to generate employment on a larger scale. In particular, advanced manufacturing is critical for long-term development but does not directly create much employment. We need more decisive action to identify which sectors we will support and ensure that, taken together, our interventions to diversify the economy will indeed achieve our aims for both growth and employment creation.
Secondly, since 1994, our economy has been characterised by large-scale short-run capital inflows into equity and bond markets. These inflows are larger relative to GDP in South Africa than in any other middle-income economy. They have made it easier and cheaper for government and state- owned enterprises to borrow money for investment, especially in infrastructure. They have reduced the price of imports, which holds down inflation, but they have also strengthened the value of the rand, which in turn makes it harder for South African producers to export and compete with imports. Moreover, many of the imports have been relative luxuries, since the very rich dominate consumption, because incomes are so unequal. The question becomes whether or how we can manage the situation better.
Thirdly, we need to restructure the economy without undermining its current strengths. This involves difficult choices. For instance, should we invest more in core economic infrastructure such as roads and rail from the coast to Gauteng, or maintain roads and electricity in the metros, or should we invest to improve living standards in the former Bantustans? Should we look for new investors in mining in order to open new opportunities for black entrepreneurs, or should we go with the experienced existing companies? Should we cut down on pollution even when it means closing companies? All too often, this kind of decision has been made without clearly understanding the consequences.
Fourthly, past inequalities in education, training and experience continue to dog decisions into the future. While improving education and training will certainly support employment creation and equality, they are not sufficient in themselves and, in any case, will not deliver soon enough for most of our people.
We rather need to find ways to improve economic opportunities for the labour force that we have. Most workers today have a sound secondary education, although relatively few have university degrees. We need to expand production that can use their skills, even as we develop systems to ensure that all South Africans have opportunities for life-long learning.
We will be guided by an industrial strategy and a corresponding programme that continually identifies and addresses constraints to investment. This will help to build an economy that is characterised by high levels of manufacturing activity, modern services, expanding trade, cutting-edge technology and a vibrant small business sector - all designed towards a labour-absorbing economy.
To ensure that benefits of growth are shared by all, the focus on creating decent jobs and ensuring an improved quality of life for workers will be central. These include skills development; specific attention to industries that lend themselves to involvement by marginalised communities; access to microcredit and small business assistance; land reform; public works projects; and promotion of sustainable livelihoods at community and household levels.
Comrade Smuts Ngonyama, I am very disappointed, Xhamela, that during these few years away from the organisation, you have become a pessimist. [Laughter.] When we talk about an engagement, you say it's an attack. [Laughter.]
I was not expecting that. I know who said, "huh-uh". [Interjections.] [Laughter.] Of course, he does not understand how the ANC works. The ANC will always protect the interests of the public when it comes to the Walmart issue. I believe the other problem is because you did not attend the strategic planning session where we discussed all these issues.
Hon member, your time has expired. [Laughter.] [Interjections.]
Okay, Chairperson. The ANC supports Vote 28. [Applause.]
Chairperson, Minister, we congratulate you on your department's achievements, but we also wish to present a warning. I'm sure that you are aware of the drama currently playing itself out in Europe and the renewed systemic stresses brought to bear on the European Union. France's anti-EU election rhetoric and the fall of the Dutch government are clear indications that the global recession and its fallout still haunt the world. This includes South Africa, as the EU is our dominant trading partner. This also brings to the fore our own fiscal policies and their appropriateness, in light of a possible implosion of the international house of cards due to systemic contagion.
The question that we - and especially government - have to sincerely ask ourselves is if we are ready to weather any further financial storms. If we analyse South Africa's current fiscal status and policies, it is becoming eminently clear that the ANC government has already progressed well in writing a narrative that can be classified as approximating the genre of the Greek tragedy.
Last year, government economic activity accounted for the creation of most jobs, with the private sector lagging far behind. Government debt is escalating at alarming levels. Government is increasingly participating in the free market and competing with private business such as mining. In the meantime, private industry is struggling on and government is bowing to the pressure of the unions to increase the salaries of state employees above the inflation rate.
Die Keynesiese beleid van teensikliese infrastruktuurbesteding deur die regering in tye van ekonomiese nood is duidelik geinspireer deur die advies van ekonome soos Joseph Stiglitz. Daar is weliswaar meriete in teensikliese noodmaatrels soos hierdie. Suid-Afrika het die nuwe infrastruktuur wat gebou gaan word, nodig, maar dan moet die program op 'n gebalanseerde wyse toegepas word.
Hierdie program moet eerder as uiteindelike uitkoms voorsiening maak vir 'n vrye mark wat veral klein besighede bevry van verswarende administrasie en belasting, sodat die ekonomie kan groei en werk geskep kan word. (Translation of Afrikaans paragraphs follows.)
[The Keynesian policy of countercyclical infrastructure spending by the government in times of economic need is clearly inspired by the advice of economists such as Joseph Stiglitz. There is indeed merit in countercyclical emergency measures like these. South Africa does need the new infrastructure that will be built, but the program has to be implemented through a balanced approach.
This program should ultimately rather make provision for a free market that, in particular, frees small businesses, from cumbersome administration and tax, so that the economy can grow and jobs can be created.] Minister, what South Africa needs, together with the medicine of public works stimulus, is a good dose of libertarian logic, especially for small businesses, which should be free of the ties of racial discrimination, high taxes and burdensome red tape.
Your department's aim is to promote economic development through participatory, coherent and co-ordinated economic policy and planning for the benefit of all South Africans. As such it is incumbent upon this department to ensure that all other departments are co-ordinated to achieve this result.
Therefore we implore you to look at the tax base that is being eroded at the moment. If the tax base continues to be eroded, as is happening at the moment, we will be stuck with a Ponzi scheme in South Africa that will eventually fall apart like a house of cards, and we will not see a very bright future for ourselves.
The Financial Times recently had the following to say about a member country of the EU:
The French know that their cherished social model has been built upon an unsustainable mountain of debt.
We are saying that many South Africans think that we are moving in the same direction. Therefore, whatever you do, support small business creation, support entrepreneurs without discrimination, and thus ensure growth and job creation. Thank you.
Chairperson, let me say at the outset that the ANC supports Budget Vote 28, the budget for Economic Development. I wish to turn to the issue raised by Minister Nzimande regarding his comments on the financial institutions.
A few weeks ago, we were in this very room when the National Credit Regulator alerted us to the fact that there is an alarming, unsafe credit extension. This issue is a subject for discussion in the next few weeks, in this very Parliament. Minister Nzimande referred to that issue. Any responsible government would be worried about an unsafe extension of credit, which might plunge this country into a financial crisis that we are so desperately trying to get out of.
The global economic crisis that began in the USA in 2007 and the current eurozone sovereign debt crisis have demonstrated that the belief in the Washington Consensus - explained as a free, efficient, self-regulating and self-correcting market - is a false hypothesis.
The ANC government now has the ability to seize the moment to turn these global economic crises into an opportunity to move our country in a new direction. Examples of this ability is found in, for instance, the New Growth Path, the Industrial Policy Action Plan, the National Development Plan: Vision 2030, the massive infrastructure programme - to mention but a few - and the budget that is attached to these policies and programmes.
The impact of the global economic crisis on our economy has strengthened the ANC's resolve that the state must play a key and central role in developing and growing the economy in order to decisively reduce the high rate of unemployment, to eradicate poverty and inequality and to improve the social conditions of our people.
We have set ourselves the challenging goal of building a 21st-century democratic developmental state in which there must be inclusive and equitable growth.
Kufanele sibe nokuqonda nokwazi okulinganayo kokuthi intuthuko enjani esihlose ukufinyelela kuyo, sazi nebanga esisazolihamba ukuze sifinyelele kuyo. Futhi kufanele sibe nesineke, sisebenze ngokubambisana nangokuzikhandla ukuze sihlomule sonke ngokulinganayo. (Translation of isiZulu paragraph follows.) [We must have a common understanding of what kind of development we need to reach and the distance we need to walk to reach it. We also need to be patient, work together and be committed so that we can all benefit equally.]
The ANC is alert to the fact that one-size-fits-all policies and programmes for constructing a democratic developmental state do not exist. Therefore our policies, programmes and institutions for development, growth and improvement of the socioeconomic conditions of our people must be specific to context. They must be reflexive and adaptable to the changing material conditions.
To address the challenge of weak and fragmented implementation, we are designing and strengthening institutions that are developmental in their orientation and are capable of acting coherently and collectively. To this end the ANC must and will continue to reflect on and eliminate factors that undermine the capacity of government to implement policies and programmes aimed at building a 21st-century democratic developmental state.
Government needs competent officials who are able to manage large systems and complex projects. Equally, the private sector requires a skilled and productive work force. It is for this reason that the Department of Economic Development and the Department of Higher Education have signed the National Skills Accord to address the capabilities and competences needed in the Public Service and the skills required in the economy in general.
In this context as well, improving the health of our people by minimising the burden of HIV and TB, and focusing our attention on the growing importance of the knowledge economy are both key goals of economic development. Many development and growth strategies have in the past carried with them the destruction of the environment and the threat of ecological collapse. The 21st-century developmental state must have a light ecological footprint and grow the green economy. On this front, the ANC government is on course and that is why we signed the Green Economy Accord.
One of the necessary conditions that must be met if our country is to enjoy sustained levels of development and growth is more effective and efficient mobilisation and deployment of our own resources to finance investment. There is a sizeable amount of financial capital in the country, estimated to be more than R2,3 trillion, not to mention the capital assets, estimated to be more than double this amount. These financial resources can be invested in manufacturing and infrastructure.
What we need is a very serious and constructive conversation at the National Economic Development and Labour Council, Nedlac, about bold and innovative ways of investing in labour-intensive and productive sectors of our economy. It would be a very patriotic way of contributing to building a 21st-century democratic developmental state.
The capture by market fundamentalism is one of the biggest challenges in the construction of a 21st-century democratic developmental state. Linked to this challenge would be creating the capability of the state and then neglecting the role of the input of and engagement with our constituencies. Such neglect arises from the comfort of technocrats and those deputised to public office in dealing with managers rather than consulting community leaders on issues of development.
The successful implementation of our policies and the massive infrastructure programme announced by His Excellency the President in the state of the nation address, shall be measured by the extent to which we shall have brought the black majority into the mainstream of economic activity, not only as wage-earning workers but also as wealth creators themselves.
When we count 5 million jobs in 2020 and 11 million jobs in 2030, we must also count the number of sustainable and successful black-owned small, medium and micro enterprises and co-operatives. When we count these millions of jobs, we must also count the number of truly knowledgeable, skilled and competent persons in our population. When we count the number of roads, bridges, railway lines, ports and dams we shall have constructed and the number of locomotives and buses we shall have manufactured, we must also count the number of successful black-owned companies. When we count the number of hectares of productive land we shall have transferred to rural women, men and the youth, we shall also count the number of successful black farmers who will have emerged. The ANC supports Budget Vote No 28. I thank you. [Applause.]
Mutshamaxitulu Tatana Mdakane, Holobye Patel, N'wa-Kotane, Manana Mahlangu na wena mufana wa hina Lethu, vuyeni byo xiximeka, swirho swa Palemende na vanakulorhi va ANC, xiphemu lexikulu xa Mpimanyeto wa 2012 i xiyenge xo kongoma eka Nkunguhato wa Ikhonomi ni Vuhlanganisi. Swi teka 84% hinkwayo hikokwalaho ka ku va nongonoko lowu wu langutisanile na ku hundzisela kun'wana, ku katsa na swiavo swo kongoma eka Swivandla swa Nhluvukiso wa swa Timali, DFIs, xikan'we na minongonoko yin' wana leyi pfunaka mavandla na mimfumo yo karhi.
Makulele ya Nkunguhato wa Ikhonomi na Vuhlanganisi ya kombisa mpimanyeto lowu wu kulaka hi 6,35%. Hikokwalaho ka ku va xiphemu lexikulu xa mpimanyeto xi nga langutisana na ku hundzisela kun'wana, kutani swivutiso hileswaku vaamukeri va xuma xo tirha hi ndlela leyi va fanele ku rhangeriwa hi ndlela leyinene va tlhela va chivirika. Komiti yi fanele ku kongomisa leswaku milawu ya mfumo ya hlayiseka. Yi fanele ku kambisisa ni leswaku hinkwaswo swi famba hi ndlela leyinene. Mi nge hi endzela switsongo eka ririmi ra Xinghezi. (Translation of Xitsonga paragraphs follows.)
[Mr X MABASA: Chairperson Mr Mdakane, Minister Patel, Miss Koyane, Madam Mahlangu and our younger brother, Lethu, honoured guests, Members of Parliament and friends of the ANC, the biggest part of the 2012 Budget is the section that deals with economic planning and coordination. It takes the entire 84% because this programme is faced with the conveyance of among others, direct allocations to development financial institutions, as well as other programmes that help other institutions and departments.
The budget for economic planning and coordination shows an increase of 6, 35%. Because the biggest part of the budget has to be transferred to other sectors, the question is whether the people who are responsible for it have the necessary expertise. The committee should ensure that government legislation is preserved. They should also interrogate whether everything goes according to order. Let me change to the English language for a while.]
The ANC's policy perspective on issues of governance of development financial institutions is central to evaluating the impact of allocations made to various institutions. For economic development to sustain itself, the developmental state must use the strength of DFIs to support and direct private-sector investments in the productive sector of the economy so as to stimulate manufacturing and promote entrepreneurship.
The creation of new firms and industries is key to BBBEE as opposed to tender dependence upon the state. Development finance institutions must therefore play an underpinning role in the state in directing national economic development through the mobilisation of domestic and foreign capital and other social capital formations and partnerships to achieve stated policy objectives.
The key objective is to ensure that development finance institutions remain powerful instruments for economic transformation and the developmental state should guide the desired outputs and outcomes of the state investment in these institutions.
Evolving policy towards DFIs must seek to advance the key objectives of economic transformation and strive to advance the ANC government programme as outlined in the New Growth Path. I emphasise "the ANC". [Laughter.]
There is a need to ensure that these institutions, as well as nonfinancial institutions like the Small Enterprise Development Agency, are accessible to our people and are able to effectively channel financial and institutional capacity towards a variety of economic transformation objectives, including industrial diversification and development; small business and co-operative; small scale agriculture microenterprises; local, regional and economic development; and the empowerment of youth, women and people with disabilities. Therefore the overall objective and mandate of DFIs is to advance the socioeconomic and political agenda of a developmental state, promote social cohesion and create decent jobs, skills and training development.
The complexity of conflicting objectives and the multiplicity of legislation and policy frameworks of different departments at different spheres of government and their entities require a clear strategy. The challenges of political mandates and expectations have in the past years led to serious misunderstanding between the political authority and the boards of these institutions. In some instances the conflict is as a result of the Public Finance Management Act and now the new Companies Act, which determines how these organisations should work to comply with their respective pieces of legislation. Improving the governance of DFIs means that government has to clearly define mandates and to set measurable objectives for each DFI and create a common framework in shareholder management.
Oversight is required by us as parliamentarians to ensure that the efforts of DFIs are optimally aligned with the state's development agenda. Two main mechanisms are required, namely the preparation of overarching DFI policy and legislation, including governance issues such as defining and standardising the relationship between the executive authority, shareholders and the DFI across government.
Co-ordination of the DFI mandates at institutional level requires that shareholder departments are co-ordinated. We certainly must see, as part of the process, the establishment of a DFI council as a means to strengthen co- ordination.
Eka DA, vusiwana byi susa ntsena hi idiyoloji ya manyunyu yo fana na leyi ya ANC. Ti-idiyoloji tin'wana ku fana na ya "neoliberalism" [neyoliberalizimi] ti nga ka ti nga pfuni munhu eAfrika-Dzonga.
Tatana Hoosen, swi lava leswaku mi hamba mi ya etihlengeletanini. Loko kuri na nhlengeletani tekani bege mi ya. Mi ta kota ku yingisela na ku twa leswi vulavuriwaka. Loko mi hlamula mi ta kota ku hlamula leswi nga swona. Swa antswa mi sungula mi kula mi nga si nyikiwa ndhwalo lowu nga ta mi tika. Vukulu bya wona byi ta hundza makatla ya n'wina wu mi tika. Ndzi hetisa hi ku vula leswaku ... (Translation of Xitsonga paragraphs follows.)
[To the DA, poverty is alleviated by a proud ideology, like that of the ANC. Other ideologies such as "neoliberalism" cannot help anybody in South Africa.
Mr Hoosen, you should attend meetings regularly. If there is a meeting, take your bag and attend. Then will be able to understand what is being discussed. When you respond, you will respond appropriately. You should be mature before you are given a heavy load or its heaviness will surpass your shoulders and be too heavy. I conclude by saying ...]
... the boards of DFIs require competencies and a public sector ethos to affect the developmental mandates efficiently. The roles, functions, memberships and relationships need to be enhanced. The operational authority of boards must give effect to policy directives of the shareholder. What is critical to officials of the department is to hold the poor in your hands as you push them up the ladder of economic development. Walk them through the journey and trust them and they shall not falter. Thank you. [Applause.]
Chairperson, hon Minister, hon members, distinguished guests, ladies and gentlemen,the Department of Economic Development is in government's cluster of economic departments whose task and mandate is to co-ordinate the country's focus on employment creation. In this regard, your department, hon Minister, is a champion of government's economic framework, known as the New Growth Path. This plan identifies a number of key drivers as stimuli for the creation of employment opportunities for the millions of South Africans who are battling to find decent work.
According to the Financial and Fiscal Commission, South Africa currently faces major economic challenges. These include the high unemployment rate, poverty, inequality, a lack of development in small businesses, particularly in the informal sector, and also a lack of infrastructure.
However, I think that the most serious crisis this country is facing is the scourge of youth unemployment. It is estimated that 71% of all the unemployed are under the age of 34. This is a time bomb that is waiting to explode at any time unless something drastic is done to address this crisis. The DA has over and over again called for the implementation of a youth wage subsidy, which President Zuma formally announced in his 2010 state of the nation address. You will also recall that this was floated for the first time in October 2009, during the Medium-Term Budget Policy Statement. At that time, most opposition parties and the Federation of Unions of South Africa all supported this National Treasury policy. However, this process has been stalled because of Cosatu's stubborn and loud opposition to the policy, mainly on spurious grounds. While Cosatu claims on the one hand that it supports the fight against unemployment, it opposes this progressive policy on the other.
According to the National Treasury, if this subsidy had been implemented, the policy would have benefited over 400 000 young job seekers over a period of three years, at a cost of R5 billion. If this policy had been implemented, say by 1 April 2010, it would already have benefited almost 200 000 young people and created more than 800 000 jobs. What hypocrisy, therefore, on the part of Cosatu! The onus now rests on President Zuma to take decisive action in the interest of our young people who are suffering because of unemployment.
The government's massive infrastructure drive of 645 projects to be scattered across the country is said to be the answer to the problem of unemployment in the country. One of the prominent international figures who you referred to who has praised this government's infrastructure programme is Professor Joseph Stiglitz. He has said that the programme will create both huge supply and demand in the country. He said that on the demand side the programme would create jobs, and at the same time the improved infrastructure would create production capacity in the economy.
Minister Patel is also on record as having said that infrastructure development is a jobs driver. This is a welcome development. However, the Minister has also identified and been quoted as having identified a number of problems that result from a gigantic programme such as this one, which includes: weak implementation capacity and poor project planning; projects that are not strategic or aligned to the government's priorities; and poor co-ordination that can contribute to slowing the pace of project implementation.
Chairperson, there is another major challenge, which the Minister has not spoken about. It has to do with the colossal amount of corruption that goes along with projects of this magnitude. I am aware that government has set up the Presidential Infrastructure Coordination Committee to provide a central monitoring mechanism. However, hon Chairperson, the Arms Deal is still very fresh in our minds and has taught us bitter lessons that we all have to learn from.
It is no secret that the enormity of this infrastructure development programme can create fertile ground for tenderpreneurs and other shady characters to amass huge amounts of ill-gotten wealth at the expense of those who are supposed to benefit from the projects.
What is required therefore, Minister, is the creation of stringent and strict mechanisms of transparency and openness in the awarding of tenders. Finance Minister Pravin Gordhan stated that the success of any job-creation programme depended on a number of factors, including the strength of the economy, its ability to absorb the unemployed, the extent of investment in key sectors with the potential to generate new jobs and the supply of skills.
Private and public partnership is also very important in the realisation of infrastructure development and in job creation in general in any country. The government alone cannot implement such programmes if the private sector does not come to the party. It is therefore very important Chairperson that relations between the ruling party and government on one hand and the private sector on the other are sound and healthy.
In recent weeks, the flurry of attacks that were heaped on Dr Reuel Khoza, the chairperson of Nedbank, by both the ruling party and government point to the deeply rooted intolerance to criticism by both the government and the ruling party by the citizens of this country. Instead of tackling the issues raised by Dr Khoza and considering these issues for possible future dialogue with the business sector, what we saw was a concerted and serious personal attack on the man. In this regard, the ANC and government were prepared to play the man and not the ball.
Foreign direct investment such as the Walmart injection of R16,5 billion in our economy is welcomed as a positive development that would, in the end, translate into the creation of up to 15 000 jobs. However, last year, Minister, along with two of your colleagues, you launched an application to appeal the approval of that Walmart-Massmart merger. This appeal against the investment was, in my view, unwarranted. We know that the initial decision by the Competition Commission had attached conditions to this merger. These included a requirement for Walmart to follow all South Africa's labour regulations and to set up a fund to support local South African producers. These were appropriate and sufficient.
However, it would appear that this appeal on your part, hon Minister, was nothing but an irresponsible manipulation of the competition authorities to further your own agenda. In reply to a DA parliamentary question, Minister Patel, you admitted that the appeal cost this country R41 million, which was to be shared between the three departments. That is a waste of the taxpayer's money.
The DA would like to advise you, hon Minister, to please focus on creating an enabling environment for job creation and economic development as this would create opportunities for South Africans to enter into gainful employment to root out poverty and to improve the lives of the people on a sustainable basis. [Interjections.]
Members, can we hear the speaker, please? Keep your voices down. Thank you.
I'm making sense, but they don't get it.
Finally, the 2010-12 Budget for the Department of Economic Development shows that a total of ... [Time expired.] I thank you.
Hon Chairperson, hon members and our distinguished guests, today I'm going to speak about the role of the state in economic transformation. The state is the structure whose responsibility it is to nurture our being as South Africans and our adopted brothers and sisters from all corners of the continent and other countries.
Transformation must be understood as a process of restructuring. Before 1994, the socioeconomic structure and conditions were broken into small, shabby and unpleasant pieces and the ANC-led government, in all humility, put together the pieces and gave them a better shape, which is pleasant to look at. Here is one example of something good and pleasant to look at: As we speak, we have in our midst Miss Fikile Zikhali, who is the marketing manager of Ujima Bakwena workers, a co-operative that manufactures shoes - not just shoes, but shoes of quality, as we have seen on those who are wearing them today. [Applause.]
This co-operative was funded by the Department of Economic Development. This government walks the talk. Ms Zikhali is not the only one. The list is endless. This co-operative has employed about 100 people and plans to add 50 more workers in the near future. Government has created a conducive environment for economic transformation by creating policies such as preferential procurement and the above is one of the outcomes thereof.
My humble appeal goes to all those who ridicule this ANC-led government, saying it moves at a snail's pace. The reality is that the government, which is only 18 years old, is cleaning a mess that is over 50 years old and, as you calculate the years, add "resistance" in capital letters. Hypocrites shout for change while they put obstacles in your way, thus inhibiting your movements. These are the people who get fed up when we talk about the past so that others can understand the challenges faced by government in transformation processes, economic transformation in particular.
Member Hoosen, we need your support. Criticise but also contribute to change the past of your party.
Re a tseba hore mmuso wa kgethollo le kgatello o busitse ho feta dilemo tse lekgolo, jwale ba shebelletse hore mmuso wa rona o lokise mamphemphe le manyala ka ho panya ha leihlo. Baheso, re a iponela hore leha mmuso o leka ba etsa kahohlehohle ho sitisa puso. (Translation of Sesotho paragraph follows.)
[We know that racist and oppressive governments ruled for hundreds of years, yet they expect government to fix the mess and malfeasance in the blink of an eye. Good people, we can all see that even though the government is trying, they are trying by all means to interfere with the government].
Mr Hoosen, separate development was the order of the day during your reign. If you don't want us to remind you of how you embraced discrimination, do away with it and address challenges genuinely as a born - again South African. This government doesn't hold grudges, hence its inclusiveness - one nation, one Constitution and the Bill of Rights protecting all the citizens.
The government has created development finance institutions, state-owned enterprises to support small, medium and micro enterprises, and mentors them for efficiency. We have the Industrial Development Corporation, Khula and Samaf, who have just merged to amplify capacity for the benefit of SMMEs. The state must ensure that officials deployed to manage SOEs and DFIs have the required attitude to implement their mandate as far as economic development is concerned a change of attitude, Mr Hoosen. We also have the New Growth Path, Industrial Action Plan and, now recently, the Presidential Infrastructure Co-ordination Commission to accelerate economic development processes and job creation.
Mr Hoosen, the green economy carries the dual role of decreasing the carbon emissions of economic activity, which in turn improves the quality of life in the communities, thus availing to the industries a healthy workforce. The role of the state is also to ensure that the private sector participates and contributes to economic development. The promotion of social dialogue is another crucial area of economic transformation.
Progress is not as anticipated because of the greedy groups and individuals who abuse every opportunity for the previously disadvantaged through fronting. We read from time to time in the media about bosses who let their workers sign forms as directors of companies they know nothing about. We know who those people are.
Development finance institutions and SOEs and other structures, such as Brics-Ibsa, exist as a result of economic policies that created a conducive environment for all interested parties to participate in. Not very long ago, in 2008, manufacturing industries were affected by the economic recession. This economic situation called for retrenchment and, obviously, increases poverty levels. It is through state intervention that jobs were saved. The government bailed out industries and contributed to the further training of workers, thus increasing the number of skilled workers.
As we sing songs of praise in appreciation of socioeconomic development post 1994, we must also talk about corruption as a threat to development. You are right, Mr Mubu, we need to increase our capacity regarding risk management and enforce compliance on accountability. We need tight control measures to sustain our investment. Constant and effective oversight reduces fruitless expenditure because economic threats are identified on time.
In addition to fronting, we have companies colluding with one another and monopolising certain industries. This practice burdens poor consumers, because they are the ones to pay the ultimate price. The state intervenes through the Competition Commission, thus protecting the public. We are proud of this entity.
What is development without land? State intervention has met with the highest level of resistance in this area from those who dispossessed land from the indigenous people of South Africa. The willing-buyer, unwilling- seller principle does not yield results.
I am trying to skip to other information before my time is up. The Freedom Charter is clear on people-centred and people-driven transformation. We are therefore all equally responsible for making South Africa a country of choice, regardless of our political affiliation. As a people-centred government, no matter how much people try to resist change, we shall always embrace those who have seen the light. Yes, we acknowledge that change is pain, but be careful not to be forgotten by history and to become a billabong. A billabong is a branch of a river that comes to a dead end. I quote from one of the ANC documents on economic transformation:
An important part of our vision is to build an economy in which the state, private capital, corporative and other forms of social ownership complements each other in an integrated way to eliminate poverty and to force economic growth. In order to simultaneously grow and transform the economy, we require an effective, democratic and developmental state that is able to lead in the definition of a common national agenda, mobilise society to take part in the implementation of that agenda and direct resources towards realising these objectives.
This is the role of the state in economic transformation. A number of accords were signed as state interventions to transform the economy. In these accords, graduates with no working experience will be absorbed as interns, that is learnerships, which entails further training. The local procurement accord will promote Proudly South African, thus promoting local business, because charity begins at home. Member Singh, this also goes for young people who are unemployed. The booklet on the skills accord shows the improvement in co-ordination.
Mr Hoosen, you have missed valuable information on how the accords have brought change in employment through skills development. If you can improve your attendance of meetings, you will be amazed by the wealth of information provided by the department. [Interjections.] You must also ask yourself why the majority continues to vote for the ANC. Your ignorance does not befit your age. [Laughter.]
Mr Alberts, unions are there to ensure that workers are paid a living wage by a company. I am not sure if you are aware that workers are the makers of this economy, which made you and me what we are today and also what made South Africa what it is today. I am one of the people who support the slogan, "Workers of the world, unite! You have nothing to lose but your chains." [Applause.]
Mr Mubu, if you can read the ANC documents on strategy and tractics, you will realise that the ANC has all the strategies to defuse the time bomb. It is the reason that it can celebrate 100 years of existence. When the ANC sneezes, South Africa catches a cold. [Applause.]
The small, medium and micro enterprises contributed to economic growth. A member has referred to this, so I will rush through it because of a lack of time.
As we sing songs of praise and appreciation, we also have to deal with corruption. Constant and effective oversight reduces fruitless expenditure because economic stress is identified in time. The President said in the state of the nation address that the process was slow and tedious, and we know of deliberate efforts by some people to make sure that we move very slowly. Then they go to the papers and make statements that are uninformed.
Products of Bantu education, like me, will remember the book that we used to read, A Midsummer Night's Dream.
Toro ya bosiu bo boholo hlabula ... [A Midsummer Night's Dream.] When people dream of governing South Africa in 2014 or 2019, maybe the resistance to giving back the land to the rightful owners is a strategy to buy time in the hope that, come 2014, the restitution of land will be history. How can you govern the country when things fall apart in the one province that you are in control of? I won't go into the details of the fragmentation in the Western Cape, but I will do so another time. Be cautioned, the people's patience is getting thinner and thinner.
Ma-Afrika, a re tloheleng ho lwantshana, re tshwaraneng ka matsoho hore lefatshe le utswitsweng le kgutlele ho beng ba lona. [Africans, let's stop fighting one another and work together so that the land stolen from us is returned to its rightful owners.]
The divide-and-rule strategy, which was used effectively by the apartheid regime, seems to be back in full force and in a new cycle. The state must ensure that the budget is utilised prudently and for what it is intended. [Time expired.] [Applause.] Thank you.
Chairperson, I think that parts of the debate were of real value in fleshing out some of the challenges that we face. Government has adopted a New Growth Path, which we try to use as the basis to inspire action across the society. So, a debate like this can help to enrich that.
When the hon Singh talks about local government capacity, we agree with him. We have now ensured that we make money available through Wits University to train 200 local government officials, initially in five municipalities: Mogale City, Govan Mbeki, Pixley ka Seme, Ethekwini and Johannesburg. When the hon Alberts says that small business support is important and we need greater focus from government's side, we agree with him. We now have launched the Small Enterprise Finance Agency. When the hon Ntuli talks about opportunities for the labour force that we have and says that we should have people who have a mix of skills, not all of which are of an engineering type, we agree. We are now making sure that the technical specifications in the infrastructure programme and elsewhere create those opportunities.
When the hon Mabasa talks about development finance institution mandates that need to be developmental, the Industrial Development Corporation is testimony to this large ship changing course and embracing the national agenda very actively in the lending programmes.
Chairperson, hope springs eternal in the human breast. When the opposition changed their spokesperson on economic development, we hoped that the level of debate would be lifted. Having listened today to the hon Hoosen, I must confess that that hope was sadly and badly mistaken. Last year, we decided to ignore the somewhat intemperate comments that emanated from parts of the opposition. We did so because Parliament is a process where robust debate is part of how we ensure that the best ideas survive, but facts matter. I would encourage the hon Hoosen to become a little bit more familiar with the facts than he demonstrated today.
Let me take two examples and, firstly, look at Walmart. When government receives a report from economists, a study that says each 1% rise in the level of imports by Walmart will lead to 4000 job losses; when evidence is presented to the Competition Tribunal, and later reviewed by the Competition Appeal Court, and both find that there is a credible basis to be concerned about the impact of Walmart's entry; when the Act itself mandates us to look at, among others, employment considerations and the impact on supplier industries; and when all of that is before us, what must we do as the executive authority? Must we worry that we will be embarrassed in the eyes of foreign investors, as hon Hoosen asks us to do, or should we be much more concerned about not being embarrassed in the eyes of our own people, the eyes of the jobless, the eyes of those who may lose their jobs and the eyes of those who may have their labour rights trampled upon? [Applause.] That is what government is about - the courage to do the right thing even if it is an unpopular thing.
Let's say the position of the 8 million unemployed would be made significantly worse if large numbers of jobs were lost in manufacturing as a result of increased imports into South Africa. That is the fundamental issue we need to focus on.
Then the hon Hoosen asked where the jobs are in the New Growth Path. Let us look very carefully at the facts again - they matter. As one enters into a debate, arm yourself with facts. You need to arm yourself with facts. Opinions are easy.
Let us look at the facts. Four weeks before the adoption of the new economic growth path, what were the employment numbers in South Africa? The numbers, hon Hoosen, were 12,9 million employed people. By December last year, 13,49 million people were employed. That is about less than 18 months later - a rise of more than half a million new jobs. [Applause.]
We achieved all this in the context of slow economic growth, the collapse of traditional markets, particularly in Europe, on which we relied for many of our exports in the past, and strong currency on monetary policy measures by countries such as China, the United States of America and Brazil. In that context, we achieved some job growth. Was it enough? Absolutely not. Do we need to do more? Yes, we do. How do we do that? We lay the foundation of long-term growth through the investment in infrastructure, skills and industrialisation.
Hon Hoosen asked about what happened with the Local Procurement Accord. "You have signed this accord, what has happened?" There is something desperate in the tone. We signed the accord in October last year. The question is: What have we done in the last six months? We have designated the following sectors where every public entity, national department, province, local authority, Eskom, Transnet and all the public agencies will have to buy from South African manufacturers: bus bodies, power pylons, rolling stock, canned vegetables, clothing, textiles, footwear, set-top boxes, and oral solid pharmaceuticals. Each of these took work to be able to bring them to the point where they could be designated for this purpose.
What more did we do? In the infrastructure plan, unlike the information that the opposition relies on, the Presidential Infrastructure Co- ordinating Commission made a decision that the infrastructure plan needed to be driven by a localisation programme, and President Zuma has made that public. Across the various components of infrastructure, we are now identifying opportunities for local procurement.
What else have we done? Sincethen, the big companies that signed the Local Procurement Accord have been reviewing their supply chains to see where the opportunities to buy locally are.
In conclusion, I am reminded of people who come to work in raincoats but find that the sun is shining. Instead of taking off the raincoats, they pull them even tighter around them. It does not make sense. We recognise that prepared speeches were given, but sometimes the facts do matter. [Applause.] We encourage the opposition to have a more positive agenda. Don't feel sad when government succeeds. Be proud of our achievements, because we are also your government. I would like to thank everybody for the contributions they have made. I would like to recognise the presence of Mr John Anson, who gave many years of service to our people in the public sector and in civil society. I would also like to invite everybody to join us for some snacks and the opportunity to continue this debate over some South African-produced fruit juice or Grapetiser. Thank you very much. [Applause.]
Debate concluded.