Chairperson and hon members of the NCOP, it is a great pleasure to participate in the Department of Trade and Industry's first budget policy debate here in the NCOP. The current administration has now passed its midterm and I want to use this occasion to reflect on our work over the past three years or so.
As hon members know, this administration adopted an outcomes-based monitoring and evaluation approach. Twelve key outcomes were identified and while the DTI contributes to the realisation of several of these, together with the Department of Economic Development and the National Treasury, we are responsible for the co-ordination of Outcome 4: Decent employment through inclusive economic growth. This commits us to contributing to the New Growth Path's target of creating 5 million decent jobs by 2020, while simultaneously raising the growth rate and reducing inequality.
In terms of the various job drivers identified in the New Growth Path, the main focus area for the DTI is the area of promoting manufacturing growth. Manufacturing, as we have argued repeatedly, is not just a sector, like any other. Manufacturing development is at the forefront of transforming the products of nature into higher value-added products. All countries that have made the transition from developing to developed, or from poor to rich, did this through manufacturing development and therefore manufacturing remains critical to the New Growth Path.
When we took office three years ago, we did so in the context of the South African economy's plunging into a recession, declining by 1,3% in 2009 and losing close to a million jobs. Nearly 200 000 of these jobs were lost in the already fragile manufacturing sector. Given that manufacturing contributes about 14% of GDP, this meant that the job losses in manufacturing were more than proportional. Given this environment and these circumstances, we had no choice but to commit ourselves to a significant sharpening of our interventions to support industrialisation in order to withstand the threat of de-industrialisation, while at the same time diversifying our export market for South African products, keeping in mind the vast and rapid changes in the economic geography of the world economy taking place at the time.
Three years ago I argued in this Council that scaling up industrial policy would require greater co-ordination of actions within government departments operating in the different spheres of government and therefore across the different spheres of government to create a more strategic and smart alignment of various programmes and activities around the overarching objectives and priorities of industrial policy. We acted on this commitment to move beyond policy to action and produced, not a vision document on industrialisation, but a rolling Industrial Policy Action Plan, which we call Ipap 2, which was a three-year rolling document. The first one was issued in 2010.
A fundamental proposition put forward in Ipap 2 was that we needed to make structural changes in our economy if we were to place it on a new, more labour-absorbing growth path. This, we argued, needed to place value-added productive activities at the fore and bring about a major shift from the consumption-driven and import-intensive growth path we had been on in the years before the great recession.
Ipap 2 is operated as a three-year rolling programme seeking progressively to raise the impact of action plans undertaken to support manufacturing. Ipap 2 is still a work in progress, taking place in an environment of global economic crisis. However, to date it has involved the implementation of a number of important new crosscutting initiatives. These include changes to the Preferential Procurement Policy Framework Act regulations to allow the designation of industries for domestic production where procurement is conducted by public entities. The first round of sectors designated in December 2011 was buses; railway rolling stock; power pylons; canned vegetables; and clothing, textile, leather and footwear products. Last month we added oral solid dosage products in the pharmaceutical sector. These designations require all procurement officers in the public sector across all spheres of government and in parastatals to procure from local producers according to specifications in each case.
At the same time we are doing work on reference pricing to ensure that the prices charged are not an exorbitant additional charge and an unfair "rent- seeking" against government.
In addition to this we have sought to increase the quantum of finance available to support industrial development. Much of this work is going on in the framework of the restructuring of the Industrial Development Corporation, which is led by my colleague, the Minister of Economic Development.
This year we added an additional dimension, which was the Manufacturing Competitiveness Enhancement Programme. An amount of R5,75 billion was made available over the current Medium-Term Expenditure Framework to support competitiveness-raising activities by manufacturers. Earlier this week we launched the programme and gave a number of details. However, the central message is that we believe that our manufacturing sector needs to continue - despite the overall climate - to make investments, raise productivity and raise competitiveness. As government we have indicated that we will come to this party and support manufacturers in doing exactly that. Applications are now coming in and we intend to start disbursements in the middle of next month.
We also proceeded with a number of sector-focused programmes. Work is now complete for the transition from the Motor Industry Development Programme, which expires next year, to the Automotive Production and Development Programme, APDP, which will take over from it. Certain aspects of the new APDP, notably the Automotive Investment Scheme, were fast-tracked and this led in recent times R15 billion in investment commitments from both assemblers and component manufacturers. These include investments by Ford, Volkswagen and Mercedes Benz. We have already seen significant increases in motor assembly volumes and localisation of components over time. I was pleased to see a report today which stated that in the last quarter there had been an increase of over 500 jobs in this particular sector. We are also aiming to complete work on the inclusion in the APDP of medium and heavy commercial vehicles.
The challenges that have characterised the clothing, textile, leather and footwear sectors are well known. We recognised earlier on that the Duty Credit Certificate Scheme which was then being enforced was not working. Consequently, in 2009 we replaced it with an industry upgrading incentive known as the Clothing and Textile Competitiveness Programme, or CTCP.
The CTCP has resulted in significant competitiveness improvements and has brought manufacturers and retailers closer together to take advantage of the proximity, quality and flexibility that domestic manufacturers can offer over competitors. It is worth noting that the implementation of the CTCP overlapped with the global economic crisis, which placed further pressure on that sector. Nevertheless, this intervention not only stalled employment losses, but in some cases we saw firms that took up the incentive programmes offered actually increase employment last year. The lesson we took from this is that if we can do it in this sector, we can do it across manufacturing. Another sector with potential for job growth is business process services, which has been steadily increasing in size and importance to the economy. To date, 23 applications for the incentive scheme have been approved, potentially leading to investment worth R4,1 billion and creating 15 000 jobs over three years. Close to 3 400 young trainees were trained under the second phase of the Monyetla Work Readiness Programme. Of these, 70% were placed directly in employment.
At the commencement of this administration, I indicated to this Council that we needed to improve our co-operation across the different spheres of government in order to promote geographically specific industrial investment, so bringing about a greater degree of industry decentralisation. The Industrial Development Zone Programme, which we have had in place for some years, has had some success in achieving its objectives. But I believe that the conclusion that many of us have reached is that it has the potential to reach much higher levels of activity.
We looked intensively at this programme and some of the shortcomings, and after extensive research and consultation we introduced a new piece of legislation, on which there is currently consultation: the Special Economic Zones, or SEZ, Bill. Based on our learning from past experience, the SEZ Bill recognises the need and potential of a broader category of regionally specific SEZs and the existing industrial development zones, IDZs, operating as they are under the Manufacturing Development Act. IDZs will still be part of our tool box, but the SEZ Bill will allow us to develop a wider range of potential special zones to meet different needs in different areas. At the same time the Bill is looking to improve the governance of the SEZs and also to try to create an environment in which we can provide a higher level of incentives and support programmes for this programme.
Moving forward, in addition to processing this Bill, which will of course eventually come to Parliament and this Council, we are engaged in the work of identifying potential SEZs that can be proclaimed in each province. This work has steadily advanced and we will be discussing this further in a Minmec meeting that will be held tomorrow afternoon.
We are also far advanced in making a determination on the promulgation of the proposed Saldanha IDZ. In rolling out the SEZ programme, there will be capacity-building programmes to enable the various teams across SEZ value chains at national, provincial and local levels to develop the skills for the successful implementation of this initiative.
At the start of this administration we indicated the importance of the development of co-operatives and the co-operative movement. This we have long seen as a major opportunity to provide sustainable livelihoods for many of our people, particularly those in rural areas. A new Bill on co- operatives is currently very close to being tabled in Parliament. This will provide for greater targeted support programmes for the co-operative movement. In the meanwhile we have been doing a lot of promotional work among co-operatives in South Africa. Deputy Minister Thabethe will speak about this issue in greater detail.
Throughout the economy small enterprises form an important pillar of our growth strategy to promote a culture of entrepreneurship. Based on our research and international experience, we have seen incubation programmes be among the most successful small business support initiatives. We therefore set ourselves the target of scaling up this initiative. The programme already has a national footprint, with about 30 incubators in the country, but our conclusion is that these are on far too small a scale. Our team in the Small Business Unit, as well as in the Small Enterprise Development Agency, are setting out to double these in the next few years.
Moving from the national to the global scene, the economic crisis has created an imperative for us to strengthen South-South trade and co- operation, as well as to advance regional integration. Our fellow Brics countries, namely Brazil, Russia, India and China, have emerged as the most dynamic economies in the world today. They are leading a structural shift in the global economy in which developing countries are gaining a growing share of world trade at a significant rate.
Our entry into Brics was a major milestone for South Africa. It was particularly significant that it came at a time when we could influence the emerging programme of intra-Brics co-operation. We have indicated that we hope that the hosting of the Brics summit here in South Africa next year will see the launch of the Brics-led development bank.
However, building our trade investment relations with these new centres of global economic growth will require purposeful engagement. In particular, what we need to develop is trade that is based more on value-added products and particularly on value-added exports by South Africa. It is significant that China has agreed in our comprehensive strategic partnership agreement to co-operate with us in promoting more value-added exports to their country, as well as to invest in the beneficiation of mineral products in our country. Last year we led a successful trade mission to China, where we indicated 10 potential products that we believed we could export to them.
With respect to African integration, what we have seen and noted is that as the world economy is unfolding and as the crisis takes its current form, it is no longer possible for countries to grow and develop at the speed that some of our fellow Brics countries have done based on exports to the rich countries of the world. Countries such as China and India are all turning to their large domestic markets as the basis of their next phase of growth and development.
The problem we have in Africa is that colonialism divided us into 54 countries. However, as a continent, or as significant parts of the continent, we are starting to have the kinds of populations and economic strengths that sustain a successful industrialisation effort. African industrialisation is increasingly being widely recognised as the name of the game. We need to turn the current growth spirit that Africa is experiencing into a sustained developmental and industrialisation effort.
Accordingly, South Africa has strongly supported the Tripartite Free Trade Agreement initiative between SADC, the East African Community and the Common Market for Eastern and Southern Africa, or Comesa. This was launched in South Africa last year. A key feature of this Tripartite FTA is that it is an initiative based on the concept of development integration. This includes a market integration component and the establishment of a free trade area. However, it also recognises that infrastructure development, as well as co-operation to promote industrialisation and real economic development, is critical if we are to achieve the objectives of building intra-African trade.
Our efforts to date to promote foreign direct investment have been proceeding positively. In 2009 we set a target of attracting foreign direct investment worth R115 billion by the end of the 2012-13 financial year. I am able to report that the investment pipeline thus far indicates that we have attracted R65 billion's worth of committed and potential investment projects.
According to Sars figures we are witnessing a shift in the composition of capital inflows into South Africa from portfolio investment to foreign direct investment, FDI. The new investment initiatives that have contributed to this trend include greenfield manufacturing plants, which have been established by a number of manufacturers, including Unilever, Procter & Gamble, Kimberly-Clark, Nestl, FAW Motors, Kiran Global Silica and LG, among others. The Unilever plant in KwaZulu-Natal, an agro- processing plant, stands out as a world-class facility and its design standard is setting the norm for all future Unilever plants globally, especially in regard to environmental impact standards.
In closing, I believe we are on a path of continuing to consolidate the progress we have made in stabilising and growing the manufacturing sector and in diversifying our trade and investment relations so that we can take account of the change in global architecture.
I have also sought to indicate that, as we move forward, we see it as imperative that we strengthen our partnerships with provincial governments and municipalities. We have a number of areas, in addition to the ones I have mentioned, where we need to co-operate. These include statutory requirements around policy council meetings in the areas of liquor and gambling. I am pleased to report that recently we had a highly successful meeting of both the National Liquor Policy Council and the National Gambling Policy Council. The National Assembly has already produced a report on the Gambling Commission, which we put in place a few years ago. I do hope the NCOP will also take up the challenge to engage with this particular report and that it will recognise - as I think all of us have recognised so far - that we need a new framework around which to understand gambling roll-out, rather than taking an ad hoc approach to particular individual requests.
The challenge of liquor regulation remains a profound one. We all know that liquor abuse is a very serious problem in our country and that the existing framework is not achieving adequate results. The liquor regulators at both national and provincial level have produced a first draft - which has been sent away for some improvements to be made - of a potential programme for improved liquor regulation.
This has been a summary of some of the areas where we have been co- operating. I believe we need to strengthen our co-operation. I look forward to that happening and I sincerely hope that this Council will support the Budget Vote of the DTI.
Chairperson, Minister Davies and Deputy Ministers Thabethe and Tobias-Pokolo, MECs Jonas, Mahlangu, Winde and Mokoena, the chairperson of the Select Committee on Economic Development, the hon Freddie Adams, and hon members, it's my pleasure to be part of this policy debate today.
Eighteen months ago government adopted the New Growth Path as the framework for our economic policies. It places employment and decent work at the centre of our efforts to rebuild productive sectors of our economy. It identifies the means by which we will move away from an unsustainable, consumption-led growth trajectory.
Today I will reflect, through a provincial lens, on the Department of Economic Development, DED, and the work that we do with development finance institutions and economic regulatory bodies. I hope to complement the excellent industrial overview given by my colleague, Minister Davies.
First, let us look at the state of the labour market. Statistics SA recently released its first-quarter results for 2012 in the Quarterly Labour Force Survey, a comprehensive report of labour market trends. The value of the survey is precisely the annual trends to date, updated every three months, undistorted by seasonal factors that show up in quarter-to- quarter figures. So, what does it show? Over the last 12 months, 305 000 net new jobs were created. We have now experienced five quarters of year-on- year job growth. In October 2010, when the New Growth Path was adopted, total employment was 12,9 million South Africans. By 31 March this year, it was 13,4 million South Africans. So, 447 000 new jobs have been created in the past 18 months, compared to a loss of 660 000 jobs in the 18 months prior to October 2010. A total of 53 000 new jobs have been created in agriculture in the past 12 months - a growth of almost 9%.
On the downside, manufacturing and construction lost a large number of jobs over the last year. A total of 81 000 manufacturing jobs were lost, partly as a result of contracted demand in the eurozone. Manufacturing is a critical driver of long-term economic welfare and we should therefore be concerned about this trend. It will be crucial to increase local and regional demand for these key sectors to offset the global downward trends.
I now turn briefly to provincial performance on jobs. Six provinces saw job growth over the past 12 months, while three had job losses. In the top spot in growing jobs was Gauteng with 141 000 new jobs, followed by KwaZulu- Natal in second place with 90 000 new jobs and, in third place, the Western Cape with 63 000 new jobs. Gauteng's job performance was excellent, accounting for 46% of all new jobs created nationally, which is almost one in every two new jobs created, and double the rate of the Western Cape. The provinces with the largest job losses in the past year were the Eastern Cape and the Free State, both with quite significant employment losses.
Let me return to the work of the DED. What do we seek to do? Our work is primarily about integrating efforts across government with those of public agencies and social partners - which include business, labour and communities - towards better economic outcomes. Today, I wish to share with hon members how we bridge the gap and co-ordinate the effort at the provincial level by giving you a snapshot of the work that we do, working closely with sister departments like the DTI and agencies such as the Industrial Development Corporation and International Trade Administration Commission of South Africa, Itac, how we leverage our policy instruments to facilitate high-impact opportunities; and, most importantly, how we promote structural change and efficiency gains towards our vision of a vibrant, competitive and inclusive economy.
In 2011 customs data revealed that South Africa imported 330 000 tons of chicken a year. This is 400% more than we imported a decade ago. In the Free State, the IDC is now partnering with the Vrystaat Koperasie Beperk to finance development of the fifth largest chicken broiler co-operative in the country. An amount of R80 million of loan finance under the Unemployment Insurance Fund scheme and black economic empowerment finance will ensure that this 2 200-member co-op will boost the Free State agribusiness sector, creating 1 328 jobs in the first phase and progressively replacing 40% of national poultry imports.
With the support of provisional antidumping protection through Itac, announced on 13 February 2012, we are looking to repatriate many of the 7 800 local jobs currently being exported to the poultry industries in Brazil, Argentina and the European Union. So, in this example, we identified a problem from the trade data and we responded to that problem with an investment strategy.
In KwaZulu-Natal we have seen an example of success with a component of the green economy, namely solar water heating installations. The DED collaborated with the IDC on industrial funding, with Itac on a tariff investigation, with the DTI on localisation, with the Department of Public Enterprises on Eskom's role, with the Department of Energy on policy issues, with the SA Bureau of Standards on approval of an 8 000-unit factory, and with National Treasury on the establishment of a R4,7 billion, three-year funding mechanism. Bring together all these different elements and what is the result? More than 262 000 solar water heaters have now been installed countrywide, of which about 51 000 are in KwaZulu-Natal.
Government is focused on creating jobs and boosting industrial development by unlocking the mineral wealth in the Kalahari basin of the Northern Cape. In February this year, President Zuma announced the National Infrastructure Plan, containing details of rail capacity improvements in order to transport manganese from the Northern Cape, with an IDC-backed manganese sinter plant in the province, to a ferromanganese alloy smelter and manganese terminal in the port of Coega in the Eastern Cape. Looking forward, we must consider the further beneficiation of manganese as an input in local steel manufacturing for local, regional and international markets.
In Bronkhorstspruit, Gauteng, we are ensuring rural economic development and job creation through a focus on import replacement and enhancing the agriculture value chain. The IDC-funded RussellStone soybean crushing plant will be the first commercial-scale facility of its kind in the country. It will replace 240 000 tons of imported soya cake every year, creating 48 permanent jobs and the potential for a further 1 040 agricultural jobs.
Hon members, you may not have heard of Vektronix in the Eastern Cape, but it is an example of our work in integrating investment within the framework of Ipap 2, the manufacturing driver of the New Growth Path. Minister Davies is leading our work on Ipap 2. Established in 1974, this East London-based company was the first television manufacturing plant established in South Africa. It remains one of the most flexible, cost-effective consumer electronics contract manufacturers in the country. Since 2009 Vektronix has had a revolving R123 million credit facility with the IDC, which has allowed the company to gear up capacity for contract assembly of a range of Samsung flat-panel models. Local company Tubular Technical Construction Projects in Mpumalanga is an example of the integration of industrial and infrastructure development to promote localisation and job creation by leveraging off the infrastructure plan. Funding will now enable the company to execute a contract for the supply, fabrication and erection of an air-cooled condenser system for Eskom's Kusile Power Station. A total of 687 new jobs will be created - an example of localisation spurred by the infrastructure plan. Localisation will be deepened by our partnership with Proudly South Africa in the running of a "Buy Local" campaign.
In the North West, we can see integration across rural development and the mining value chain for effective outcomes of broad-based black economic empowerment and job creation. The African Queen Newco project will allow the mining of a continuous platinum ore body as a mega mine, placing the project among the top five platinum producers in South Africa. The local community will own 27% of the consolidated mine. A total of 9 000 jobs will be created in full production and during the construction phase.
In Limpopo, a major infrastructure programme, announced through the Presidential Infrastructure Co-ordinating Commission, PICC will unlock vast quantities of chromium, coal, platinum and palladium and stimulate the emergence of South Africa's first postapartheid city, in the Waterberg area. Transnet's investment in rail and the laying of water pipelines by the Department of Water Affairs, together with Eskom's energy-generation and transmission infrastructure and the IDC's industrial investment, will unlock industrial development in the northern mineral belt. It also holds opportunities to expand African development through infrastructure and links with neighbouring countries.
Finally, the Western Cape demonstrates the growing innovation in our support to small, medium and micro enterprises as a means of securing equity for communities in the economy. Last year, the Khula project approved R63 million for land reform beneficiaries to plant vineyards and citrus orchards in the Citrusdal community. These two projects will create employment and ownership opportunities for about 565 workers.
This year, Khula, the SA Micro-Finance Apex Fund and the IDC's small business lending book were amalgamated into a single agency, the Small Enterprise Finance Agency, Sefa. Through operational efficiencies and leveraging a R2 billion funding envelope over the next three years, Sefa will enhance funding support to small business at provincial level. This will be done through initiatives such as the roll-out of a direct lending facility, which we piloted in Cape Town last year. It complements the activities of the Small Enterprise Development Agency, which provides technical and other support to small businesses. Tomorrow we will share details of this with MECs at the Minmec meeting.
The sustainability of our SMME interventions doesn't rest on finance alone. It also requires operational support and enhancing the ease of doing business. We have an agreement with the SA Institute of Chartered Accountants to train 100 accountants to provide support to small businesses. This year, the DED will roll out employment impact capacity- building workshops in the nine provinces. This will enable provincial departments to understand factors driving employment creation and how they can use their policies, regulations, programmes and activities to collectively intensify employment creation. We will provide further capacity-building support to provinces, including deepening the training on economic development and planning for officials. Last year, we sponsored a training course at Wits University for 90 provincial public sector officials. A total of 100 officials from nine municipalities will be trained this year.
More broadly, government has announced a bold infrastructure plan to shape economic and social development. As the location of the PICC's secretariat, the DED provides technical and co-ordination services to support the planning and preparation of 17 strategic integrated projects. The PICC integrates the plans, budgets and investment pipelines of national, provincial and local government, as well as state-owned enterprises and government agencies.
As demonstrated with the IDC, we are realigning our development finance institutions for greater operational efficiency and to support New Growth Path outcomes. Over the last year, the IDC saw a significant increase in its approvals, totalling R13,5 billion in finance approved, with an 18% increase in deal flow. The turnaround time for processing applications has now been reduced from 82 to 50 days.
Similarly, Itac follows a developmental approach to trade policy and tariff setting to boost competitiveness, support industrialisation and promote jobs. Last year, Itac improved its turnaround time for roughly 20 000 permits issued annually to three days.
I would like to conclude with the words of Nobel Laureate Amartya Sen: "Freedoms are not only the primary ends of development, they are also among its principal means." These words describe government's work over the last year and the road ahead in the fostering of a dynamic, just and competitive South African economy, an economy growing on the energy of our citizens who are enabled to exercise their economic freedom. There is no silver bullet to get us on our new trajectory. Our primary mandate of co-ordination requires managing efforts and smart policy implementation. It requires tactical initiatives with multiplier impact, which will ensure the structural shifts and efficiency gains we need to build a dynamic and inclusive economy. Most of all, it requires perseverance and a focus on quality outcomes. [Applause.]
Chairperson, hon Ministers and Deputy Ministers, MECs from Gauteng, the Minister from the Western Cape and members, I would like to quote President Jacob Zuma:
"Meaningful economic activity in townships and rural villages and towns is needed to fight poverty, unemployment and inequality."
President Zuma was speaking at the Soweto International Conference on Entrepreneurship and Small Business Development at the University of Johannesburg's Soweto campus on 15 May 2012.
In the spirit of redressing the inequalities of the past, we need to brace ourselves and find systems to correct them, allowing all South Africans to benefit from the wealth of our beloved country, South Africa. The Department of Trade and Industry needs to create open opportunities for clothing, textile, footwear and leather workers to be employed locally and to manufacture "Proudly South African" products.
In Programme 3 of the Empowerment and Enterprise Development Division, there is an opportunity for development and growth in small, medium and micro enterprises, as well as co-operative enterprises. An amount of R438,6 million is allocated, of which 90% is transferred for payment to the Small Enterprise Development Agency.
However, SMMEs and co-operatives do not receive the necessary support and mentorship required for them to be sustainable and to contribute to alleviating poverty in South Africa. SMMEs and co-operatives must be aligned with a mentor for at least one year to allow them to develop and learn from an experienced person, one who has already gone through the process of running a successful business. A successful mentorship programme can only benefit the SMMEs and co-operatives.
Scheduled to visit two co-operatives in Mpumalanga, I was very excited to be told that we would be visiting a dairy project and an agriculture project. To my dismay, when we arrived at the dairy project we were greeted by mostly senior citizens. They were happy to meet us, but unfortunately had not received any formal training or any business skills to run this co- operative successfully. The project had cost a little over R1 million, and I was very disappointed that the expensive equipment purchased to run this project was not even stored in an enclosed area but was rusted and ruined outside. The same applied to the agriculture co-operative. An irrigation system had been installed but not even one seedling had been planted. These are but two of the projects the department has sponsored that are not sustainable and from which the beneficiaries are unfortunately not benefiting because of poor planning and training.
We need to empower and train more people to get involved in the South African economy to allow higher incomes, higher investments, higher savings and higher tax revenues. This will in turn allow us to have more resources with which to make sure that our communities are successful and are assisted at every possible opportunity to be responsible for their own lives and for making the co-operatives a success.
Regarding the industrial development zones, and specifically the O R Tambo International Airport programme, proper consultation must be done broadly in the Gauteng province to allow as many people as possible to participate in the job opportunities that this project holds.
More jobs need to be created for the people of South Africa, especially the youth. We need experienced people to mentor our youth. Skills development programmes must take place throughout all sectors to allow our youth to be developed. The youth wage subsidy must be implemented to allow our youth to gain valuable experience in the workplace. The longer the youth wage subsidy is delayed, the longer our youth will be unemployed.
Subprogramme 4 contains an allocation of R487,8 million. This programme has a staff complement of 49 and is responsible for industrial competiveness in developing policies. Part of the function of this programme is to strengthen the manufacturing sector in the creation of decent jobs and to increase competiveness in domestic and export markets.
The department must explore how to use the old buildings in downtown Johannesburg and many other buildings in South Africa that used to be utilised for manufacturing clothing, textiles, footwear and leather. If we did this we could restore and maintain our beautiful old buildings and the department would save millions that would have been spent on the construction of new buildings.
One of the department's objectives is to contribute to the direct and indirect creation of decent jobs. We must not compromise on standards and quality assurance in the creation of jobs. I am pleased that the department will focus on production incentive schemes, in terms of which clothing, textiles, footwear and leather will be priority industries, benefiting from R2,1 billion over the MTEF period.
The National Development Plan can work if properly implemented, allowing more people to be employed and live a better life. When people are employed, they can improve their living conditions and live a healthier life.
In conclusion, I would like to quote Minister Trevor Manuel:
To make meaningful, rapid and sustained progress in reducing poverty and inequality over the next two decades, South Africa needs to write a new story.
Now is the time to write that story. Siyabonga. [Thank you.]
Chairperson, firstly, as a start, the committee supports the budget. Secondly, let me congratulate the department for being recognised as one of the best in regard to information and communications technology. This proves the huge investment that was made in ICT is bearing fruit. Keep it up!
The department aims to lead and facilitate access to sustainable economic activity and employment for all South Africans. It also aims to catalyse economic transformation and development. That is why we said in 2007 in Polokwane that this department - both these departments - must act as agents in the transformation of the economic sector. The critical question is how far we have come in achieving that, especially since the aim was accelerated economic growth, employment creation and equity by 2014, and now 2014 is just around the corner.
Globally, the department and the country as a whole have left some footprints. We are now a member of Brics - and we hope to see the fruits of that very soon - and Ibsa, among other international bodies. We appreciate this. However, locally is where we still need more to face the "triple challenge". We still need to do better and improve in helping SMMEs to establish businesses and to develop them. We still have to make available more resources to assist rural SMMEs. In fact, we have said this before and we want to stress it. We want to see the budget speaking to backlogs. In most developing countries SMMEs contribute more to the gross domestic product and we want to see that happening.
In the NCOP our biggest interests are in the provinces. In one province in particular, a province that was mentioned by both Ministers, namely the Eastern Cape, there are rural communities who are trying to engage in business but cannot get financial support. They deal in leather, wool and canned fruit. The department has pumped millions into the Eastern Cape to support companies, even those that were in distress. However, some SMMEs have not benefited. The very same Eastern Cape has two very big IDZs, which have been supported heavily by the department. Sectors like the automobile sector, which has been mentioned, have been supported with billions. But when all is said and done, the Eastern Cape remains one of the poorest provinces. A minute or two after you have left the IDZ, you see 100% poverty. We need to reconcile the two and see where the gap is.
I am happy that the Minister will soon be presenting the amendments to the Co-operatives Act. We believe that co-operatives are key drivers of economic employment and development. As has been mentioned, KwaZulu-Natal is the best province in promoting co-operatives and it is waiting for this Bill to be presented because it wants to concentrate on manufacturing. The small towns of Ladysmith, Estcourt, Mandeni and Newcastle, which used to be hives of manufacturing, need to be revived.
We need to look at the turnaround time of the development finance institutions and cut the red tape and bureaucracy. I won't talk much about other topics because my colleagues will deal with them.
Recent indicators for 2012-15, taken from the last survey, show that growth in imports will increase but real GDP growth will also increase, from 3,6% and 4,3% to 4,4%. The scary part is that the growth in domestic expenditure will also increase, from 4,4 and 5,1 to 5,3. This is a situation one does not want to see.
Hon Ministers and Deputy Ministers, I wish to make a special plea from this committee: We need to revisit the issue of blacklisted people. In fact, we ask for a full amnesty. This, we believe, can and will change the lives of many people. The commitment by government to helping people own houses - those who earn between R7 000 and R15 000 - will not yield results because most of those people are blacklisted. We have seen prisoners getting remissions on their sentences and years ago we saw quite a number of people getting amnesty for firearms, cars and the like. Let us get amnesty for people who are blacklisted.
The other issue is the programme of the department that is taking the DTI to the people. This programme is bearing fruit and the department needs to increase its spread and activities to each and every corner of South Africa.
Regarding other issues of economic development, the department has done well so far, since its establishment in 2009. It now has a greater and more serious responsibility for infrastructure. It has identified areas with potential for new jobs and decent work, such as infrastructure development, the green economy, the manufacturing sector, agroprocessing the continental and regional economy, and many more.
Another challenge for the department is that it must be accessible on the ground. It must be known by the people and vice versa. It must turn around the perception that communities had of the Industrial Development Corporation - "cooler in summer". Now that there is a new agency, it must hit the ground running.
Good work has been done by the Competition Commission, despite the fact that some of the cases had to be settled through the courts.
One of the important elements of the New Growth Path is the green economy. The job potential for the green economy is significant, from green manufacturing operations to ecotourism and waste management. However, we also need to identify opportunities in the deep rural areas and to support small business funding in the green economy.
Because the department is new, it needs to be strong on research and development. I know that this was a decision that was taken when the department was established, but now that we are going to be concentrating on the green economy, more research needs to be done.
Lastly, the people of South Africa have the hope that these departments will deliver jobs - decent jobs - and that the people will hold on to them. This committee will monitor the departments to make sure that these things happen. [Applause.]
Chairperson, hon Ministers of the DED and DTI, hon Deputy Ministers, hon members and fellow MECs, it is very encouraging that the broad strategic thrust of the New Growth Path is now being given detailed policy instruments and budgets by the DTI and DED, as well as by other departments, provinces and municipalities. Efforts are definitely being made on a broad front, including industrial policy, economic infrastructure and skilling.
I must also say upfront that, from the provinces' perspective, we really appreciate the increasing efforts by both the DTI and the DED to align and integrate their activities and to improve co-ordination between provinces and the two departments, as well as municipalities. However, we also note upfront that although rural development is a pillar of the New Growth Path, and correctly so, it receives less attention than the three areas mentioned above.
Moving forward, both the DTI and DED could perhaps integrate productive rural development more fully into their intervention programmes. This is crucial for the Eastern Cape, where more than two thirds of our population live in rural areas.
On the industrial policy front, we welcome the key initiatives recently announced. These are the Manufacturing Competitive Enhancement Programme, MCEP, the new SEZ policy, increased funding for IDZs, growth in funding for the Industrial Development Corporation, the formation of the Small Enterprise Finance Agency, Ipap, a local procurement accord and many others. In particular, we note the flexibility of the MCEP to support sector-specific competitiveness measures and the need to increase confidence among manufacturers to invest now in order to see them through the current period of global economic uncertainty. We look forward to seeing provincialised data on the performance of these programmes and the performance of IDC learning programmes, as well as the increased impact of Ipap at the provincial level. With regard to the SEZ, we are very keen that the two departments finalise their negotiations with National Treasury around the incentives, which are so critical for the attraction of new investment. The investment pipelines of the two Eastern Cape IDZs are healthy and the value of the Coega pipeline is some 20 times greater than the existing investment. With competitive entry-level incentives, far more could be achieved.
We are also pleased about the transition from the Motor Industry Development Programme, IDP, to the Automotive Production and Development Programme, because this creates a new space for our auto industry to continue to develop and grow for the next decade. As a province we recently launched an automotive cluster and from our deliberations in this regard it became clear that there was a broad appreciation of these efforts by the national department.
Regarding economic infrastructure, we welcome the formation of the infrastructure co-ordinating commission and the 17 strategic infrastructure projects.
In the Eastern Cape, we are seeing progress with regard to the Ngqura transshipment hub, the manganese corridor and terminal, and Transnet's commitment to increasing its investment in upgrading the East London harbour. We are looking forward to other developments on the ground, such as the N2 highway and the Wild Coast Meander road, as well as the Umzimvubu water project. Regarding skilling, we note the various initiatives by the DED and the Department of Higher Education and Training: the skills and basic education accords, planning of skills for infrastructure delivery, expansion and improvement of postschool training opportunities such as artisan development, and the upgrading of further education and training colleges, etc.
New national initiatives in industrial development, infrastructure, skilling and rural development must be made to work at provincial levels. In the Eastern Cape we will shortly be launching our own Provincial Jobs Strategy and implementation plan, which outlines comprehensively how the government's activities are being ramped up in order to achieve some of the job targets that we set for ourselves at national level and provincially. The plan in this regard is to create 150 000 jobs over the next three years. This target is aligned with the NGP job targets.
With the strengthened interventions by the DTI and DED we are confident that more can be achieved. We really appreciate the emerging, common and unified vision on economic development nationally.
Chair, hon Ministers and Deputy Ministers, and hon colleagues, it is good to stand here once again to debate economic development.
When we campaign, we all promise the people everything, but this government said - and I quote its slogans - "A better life for all" and "Working together we can do more". [Interjections.] When I go to the Northern Cape, specifically to my constituency, it is heartbreaking to see the unemployed youth as well as skilled and unskilled labourers. This department, with its New Growth Path, has a massive role to play in realising the vision and dream of empowering our youth for the future of our country.
The reality is that the poor can only share in economic growth and improve their lives, firstly, when growth is fast enough to create large numbers of decent, sustainable jobs and, secondly, if incomes grow in relation to the basic costs of living. That is when people will have more money to invest in their children's education and to take ownership of their own future.
The Freedom Charter says: "The people shall share in the country's wealth", but how can our people share if the inequality is still widening? If you look around South Africa, you can see the inequalities. You do not need to have a degree to see the inequalities in this country. You can easily see them! [Interjections.]
The hon Minister's vision is great. We hope its implementation will be monitored and evaluated. It is no good to have a dream and a vision that you put on the table and then you do not monitor or evaluate it. You need to do that in order to see for yourself and to answer this question: Have I been successful in implementing my vision and plan? [Interjections.]
How do we as South Africans benefit from the Brics partnership? When we were in India and in China specifically, there were memorandums of understanding which this very government signed with those countries. How does South Africa really benefit? Are we just labourers or are we becoming owners in terms of those partnerships? How effective and efficient are the memorandums of understanding that were signed with those countries? [Interjections.]
Have you read them?
Hon Minister, it is time that we really go to grass-roots level to make this vision - "A better life for all" and "Working together we can do more" - a reality. In your budget speech you do not mention specifically how much money will be spent in each province. I am interested to see the Department of Economic Development's spend in the Northern Cape. I am a public representative and need to be able to monitor this and see whether the things the Minister has said are going to take place in the Northern Cape are indeed happening.
Agb Minister, die opkomende boere in die benede-Oranje-gebied het nie net finansile hulp nodig nie. Hulle het ook leiding nodig om hulle onafhanklik te kan maak van die staat. Daar is opkomende boere in die benede-Oranje wat genoeg ervaring het - as hulle leiding en finansile hulp kry. Moet nie net vir hulle geld gee en hulle dan net so los nie. Geld gaan nie die probleem oplos nie. (Translation of Afrikaans paragraph follows.)
[Hon Minister, emerging farmers in the Lower Orange River area do not need only financial assistance. They also need guidance in order to become independent of the state. There are emerging farmers in the Lower Orange River area who have enough experience - if they are guided and assisted financially. Do not just give them money and then leave them to their own devices. Money is not going to solve the problem.]
You have to see them through. You have to lead them and guide them in order for them to look after themselves, create jobs for other people, be sustainable and build the economy, as well as in order to make them part of the mainstream economy.
Dit het tyd geword dat die gemeenskap op grondvlak in ons vertroue kan neem. Daar moet in klein besighede bel word, om sodoende werk te skep en om hulle ekonomies te bemagtig. [Tyd verstreke.] (Translation of Afrikaans paragraph follows.)
[The time has come for the community at grass-roots level to put their trust in us. Investment in small businesses is needed in order to create jobs and to empower them economically. [Time expired.]]
Chairperson, hon Ministers, hon Deputy Minister, hon members, director-general and staff of the Ministry, and distinguished guests in the gallery, poverty, inequality and joblessness are the consequences of centuries of underdevelopment and exploitation consciously perpetrated on the majority of the population. This has had its most destructive and enduring impact on rural South Africa. Consequently, the structural faults that characterised the apartheid rural economy remain with us today.
Interventions have resulted in significant progress. Social grants are making a huge contribution to pushing back the frontiers of rural poverty, fighting hunger and improving the potential for economic growth in rural areas. However, in the struggle to build a better life for all, grants are no substitute for a broader strategy of rural economic development and employment creation. The rural economy and its development are a central pillar of our struggle against unemployment, poverty and inequality.
Gender equality is a critical ingredient and important outcome of all our programmes in building rural economic development, together with land reform and agrarian change. Correcting the injustices of the past requires that women increasingly become the beneficiaries and decision-makers in respect of strategies to overcome poverty in rural areas.
The developmental state has a central role to play in service delivery to the rural poor, in that it leads and sustains rural economic development and land reform. The mobilisation of communities is central to all of these objectives.
Rural development, linked to land reform and food security, is one of government's five key priorities for the year. This is in line with government's strategic objective to halve unemployment and poverty by 2014, as reflected in the Medium-Term Strategic Framework. The majority of the poor in the country are in rural areas. Therefore the aim of rural economic development is to enable the rural poor to take charge of their destiny, creating sustainable rural livelihoods through the optimal use and management of natural resources.
Rural economic development needs to go beyond land and agrarian reform. It must include affordable financing to promote economic development; support programmes and training in assisting co-operatives and small enterprises; public sector ventures; and strategies to develop appropriate industries, including light manufacturing, handicrafts, services and tourism. This also requires the putting in place of the necessary economic infrastructure, including IT services, roads and rail. To address these challenges, the ANC-led government has adopted an approach of infrastructure-building and industrialisation for a more equitable growth path. These must ultimately result in changes in the structure and patterns of our economy.
The ANC vision, as defined in our policies, is that of:
... a mixed economy, where the state, private capital, co-operative and other forms of social ownership complement each other in an integrated way to eliminate poverty and foster shared economic growth.
For us to achieve a new and equitable economic growth path, its content must include sustainability and green-economy principles. We have stated, further, that our vision of the future includes a sustainable economy where all South Africans, including present and future generations, realise the right to an environment that is not harmful to their health or wellbeing.
It is imperative that this vision guides all our policies, strategies and plans for the New Economic Growth Path, as exemplified by the inclusion of the promotion of a green economy in Ipap.
Let me speak to practical examples of progress. To broaden the economic development capacities of municipalities across the country, the Department of Economic Development entered into an agreement with the University of the Witwatersrand, and a municipal capacity-building course in economic development for 90 participants from all the provinces took place. This year, the programme has been extended to over 100 local government officials responsible for economic development and planning in five municipalities, namely Johannesburg, eThekwini, Mogale City, Govan Mbeki and Pixley ka Seme. The central objective of the week-long programme is to build economic development policy-making and planning capacity.
We are a major producer of fresh tomatoes. However, the downstream canning industry experienced a steep decline in demand due to low-priced imports from China. This led to local factories' tomato canning production lines lying idle or not being fully utilised, including a 2008 entrant into the industry in the Coega Industrial Development Zone in the Eastern Cape and a major producer in Limpopo province. In its investigation, the International Trade Administration Commission found adequate justification for an increase in the duty on tomato paste from 15% to 37% to enhance the price- competitive position of the industry in the face of fierce low-priced competition. The support will enable domestic producers to utilise existing production capacity and achieve economies of scale. This increase in duties is expected to be introduced in the next few weeks.
The rural economy link for Trade and Industry is through agro-processing. This is most important for women, especially in the small-scale milling project that will provide significant opportunities for small entrepreneurs. The built-in support for women is particularly true also for the Presidential Infrastructure Co-ordinating Commission's efforts to improve household water and energy through solar water projects.
In dealing with the rights of women in the rural areas, we are guided by both constitutional and policy imperatives to redress gender inequalities. The starting point is to measure the impact of programmes on opportunities for women, young people, children and persons living with disabilities in the rural areas. As public representatives, our role is to practise oversight over these programmes.
In conclusion, across provinces women's co-operatives are producing and selling produce. The assessment of this bears testimony to success stories in work production and ownership patterns. In addition, in the focus area of arts and crafts over 55 women's co-operatives have been established and registered, with a membership of 450 women in Mpumalanga, Limpopo, the Eastern Cape and KwaZulu-Natal. These women are now producing and selling their art and craft products locally and internationally and they have secured contracts. All this brings about the sustainable livelihoods we seek to secure in the rural areas. This is in line with the 52nd national conference of the ANC resolution on supporting the self-organisation of rural people.
The ANC supports Budget Votes 36 and 28. [Applause.]
Voorsitter, miskien moet ons eers vir die agb Gunda s daar is nege provinsies in Suid- Afrika. Ons kan nie net op 'n klein dorpie in die benede-Oranjerivier- gebied konsentreer nie. U moes geluister het toe Minister Patel ges het dat ons koperasies in die Vrystaat gebou het. (Translation of Afrikaans paragraph follows.)
[The DEPUTY MINISTER OF TRADE AND INDUSTRY (Mrs T V Tobias): Chairperson, perhaps we should first inform the hon Gunda that there are nine provinces in South Africa. We cannot concentrate exclusively on a small town situated in the Lower Orange River area. You should have listened to Minister Patel when he said that we had built co-operatives in the Free State.]
Good afternoon, Chairperson and hon members. This budget debate takes place in the fifth month of the centenary celebrations of the ruling party, the ANC. What an achievement! The ANC is the only party - and I repeat, it is the only party - to celebrate 100 years of existence. Even the mighty Communist Party of China is a decade younger than the ANC. I also take this opportunity to pay homage to all the comrades of the ANC who fell this year. To them I say, "Hambani kahle, maqabane." [Go well, comrades.] You served our movement with diligence. We who remain will continue the fight to realise the strategic objective of building a nonracial, nonsexist, democratic and prosperous South Africa.
We also celebrate these 100 years with the stark reminder that we still experience racial tension, fuelled by opportunists who don't want to accept defeat and majority rule. I am referring to the latest statements by Helen Zille, who referred to black South African children as "refugees", and F W de Klerk, who wanted to own white South Africans by referring to them as "his people". Let me take this opportunity to remind those two delusional individuals that the Freedom Charter says that South Africa belongs to all, black and white. Indeed, it is only the ANC that espouses this belief, and this idea is key in its strategic objectives.
Having said that, let me say that if you look at the economy from a global perspective, economic uncertainty exists, leaving countries with no choice but to show resilience. Over and above this, we are still expected to build a vibrant economy by improving on innovation and competitiveness.
We as the Department of Trade and Industry will continue to invest our resources in such a way as to improve the growth of domestic suppliers for import substitution and self-sufficiency. We are also continuing to expand and diversify our industrial base to avoid activities with diminishing returns. We will also continue to invest in capital goods, as outlined in the infrastructure development plan. The DTI will continue to play a major role in the clothing and textile, and automobile sectors respectively. We have also supported sectors like the entertainment industry, but equally devised strategies for the African continent. These strategies will see more trade relations among African countries. We also looked again at our national funding model, through the National Lottery Distribution Trust Fund established in terms of the Lotteries Act.
Having said this, let me say we will invest in human capital by providing particular skills to young people in order for them to participate in the economy. We will also continue to consult with our people through izimbizo to refresh our thinking. Young people stand a good chance to benefit from our programmes. Our newly established youth directorate has partnered with the National Youth Development Agency to implement the youth strategy.
Our focus will also be mainly on promoting local trade and local content. We will build strong trading posts within the South African borders, with the intention of building a strong exporter collective.
We have also realised that many South Africans don't understand how to access government services. We will therefore communicate with them in the languages they understand and reach out to them. We will also hold forums with the private sector to gain their confidence in government support and to pursue public-private partnerships.
We have met with the banking associations and they showed preparedness to collaborate with government for economic growth. Our priority will remain that of building a financially stable country that protects its consumers and ensures that ordinary South Africans have access to financial services. We have also combated financial crime by dealing with illicit trade. Our Consumer and Corporate Regulation Division, CCRD, unit has been hard at work.
While we are focusing our energies on capitalising on increased trade and investment, the supply and demand curve remains a competing phenomenon. Therefore, we will always look at our incentive models to attract more investment. We will fight inflation by maintaining growth.
We have also been faced with a lot of challenges in regard to consumer rights. Much has been done and we congratulate the National Consumer Commission on its achievements. However, as indicated earlier, many people don't know how to access government services. Therefore we will go to them on these issues. I agree with the hon member about taking the DTI to the people, so we will expand our activities to the remaining provinces to make sure that our people understand the opportunities that exist in the DTI.
The economy continues to experience structural changes. Labour absorption challenges have seen the rise of opportunism in debates and conduct in the public discourse. We cannot afford to gamble with sensitive matters like unemployment. We need to inspire confidence. The state has carried the heavy burden of creating jobs. Therefore we will engage the private sector about coming on board, but we should always remember that it is very important to work in the national interest.
We have also experienced a boom in one of the job growers, namely agriculture. Therefore we will change plans to create a boom in manufacturing. We have started to run the Proudly South African campaign. This campaign will encourage preference for locally produced commodities. If Leslie Sedibe is somewhere, he will be very happy to hear this. However, we need more funding for the Proudly South African campaign.
The National Consumer Commission is our priority too. We have also determined the role of South African companies in relation to the Competition Commission, as we have already identified the weaknesses, for instance, in the maritime industry. Therefore attention will be paid to South African waters, to make sure that we develop the maritime industry.
Hon Deputy Minister, your speaking time has expired. I will allow you two minutes to wrap up.
MOTLATSI WA LETONA LA KGWEBISANO LE INDASETERI (Mof T V Tobias): Ha ke phethela puo yaka Modulasetulo ke ipiletsa ho Maafrika Borwa ohle ho hlompha ditokelo tsa botho, ho amahana le ho tlama maqhama le mmuso wa Afrika Borwa o etelletsweng pele ke Mokgatlo wa ANC, ho theha mesebetsi le ho lwantsha bofuma. Re tshwanela ho ikopanya ka bongata ho etsa dikgwebopotlana, e le hore bongata ba rona bo tle bo fumantshwe dithuso tsa ditjhelete ke mmuso wa rona.
Re ipiletsa ho setjhaba ka kakaretso hore se se phahamise maikutlo ka taba ya tshotleho hoo se ka sebediswang ke batho ditabeng tse tshwanang le ntho e etsahetseng matsatsing a fetileng. Ka bokgutshwanyane ke re ha re tshwaraneng setjhaba sa rantsho re se ke ra kgutlela morao. Pele e ya pele! Pula! [Mahofi.] (Translation of Sesotho paragraphs follows.)
[The DEPUTY MINISTER OF TRADE AND INDUSTRY (Mrs T V Tobias): I would like to conclude my speech, Chairperson, by appealing to all South Africans to respect human rights, to forge relations with the South African government which is led by the ANC, to create jobs and to fight poverty. We need to come together in big numbers to form small businesses so that more people can be provided with financial assistance by our government.
We appeal to the community in general not to overreact about the suffering, and not to be used by some people in matters similar to what has happened in the past few days. I would briefly like to say that we should stand together as a nation, and not go back. We are moving forward! Blessings! [Applause.]]
Chairperson, Ministers present, members of the NCOP, MECs, heads of departments, officials of the DTI and the Council of Trade and Industry Institutions, led by Director-General Lionel October and the Acting Director-General Saleem Mowzer, and ladies and gentlemen, good afternoon.
The ANC-led government is increasing its efforts to support the small, medium and micro enterprises sector, as we believe that the SMME sector is critical in stimulating economic development. It is also a pivotal area in terms of innovation, skills development, entrepreneurship, labour absorption and job creation.
We also believe that the SMMEs are critical vehicles in ensuring inclusive growth and benefits, so as to deal with the challenge of displaced economic centres and industrial areas in our townships and former homelands. I am sure that we all agree that as a government we are resolute in our quest to revitalise displaced economic centres and industrial areas in our rural and peri-urban areas and townships. We believe this will ensure inclusivity and broad-based participation in the economic mainstream of South Africa.
Also, the creation of value chains across sectors is critical, because it connects the SMMEs to big corporations in the production of a plethora of goods and services.
The department's partnership with agencies such as the National Youth Development Agency seeks to ensure that we stimulate the entrepreneurial spirit of our youth, in particular the Gauteng chapter under the leadership of its visionary chairperson, Mr Simon Molefe, and the Eastern Cape chapter under the leadership of its activist chairperson, Mr Ayanda Matiti. We have undertaken a number of youth-focused "Taking the DTI to the people" activities with them, because we also intend to strengthen our relations by making sure that the hon chairperson of the select committee, Mr Gamede, will be able to strengthen this programme and expand it - within our limited budget, of course.
We also wish to make sure that we launch a lot of co-operatives. I'm sure we all know that the UN declared 2012 the International Year of Co- operatives. As such, hon Abrahams, you must also look at co-operatives that are working well. We are looking at the Co-operatives Act and trying to deal with the proposed academy and all the other training opportunities we have. We must understand that some of the people who have been in the co- operatives are still the products of Jan Van Riebeeck and De Drommedaris, De Reiger and De Goede Hoop. It is not the ANC-led government that led to that. We are trying to make sure that we change them into entrepreneurs and businesspeople, and that is a process.
Look at the positive side as well, because we do have co-operatives that are working very well. For your information, in the gallery this afternoon we have a young entrepreneur, Zibuko Mchunu, from the successful SmartXchange incubation programme. As the Minister indicated, we are going to roll that out. At present it is in KwaZulu-Natal and it is working very well. Look at the positives too, instead of focusing only on the negatives. He is in the gallery as our guest because we believe in our youth. We like those who are entrepreneurs like him, because they are not job seekers but job creators. The Small Enterprise Development Agency is doing a good job and we hope we'll see much more of that.
Also showcasing our resoluteness is the fact that the DTI has beefed up its capacity to focus specifically on informal trading in townships and peri- urban areas. We would also like to take these co-operatives and small businesses to international markets. Hon Abrahams, for your information, in our attempt to expose these SMMEs to international markets we've been part of a number of international trade fairs, including in countries like Cameroon in January. Again, in our gallery today one of our guests is sculptor Mr Robert Tshimungwa, who was named Best Foreign Exhibitor in Cameroon in January this year. If we were getting it wrong as a country, he would not have won at that exhibition. We also received a gold award for the best overall foreign stand in India, showcasing 20 entrepreneurs from rural areas. It was a collaborative effort. The contestants were divided into two teams of 10, equalling 20, and we won the gold award. Of course, this is under the leadership of Minister Rob Davies. [Applause.] We are doing a good job because he is driving the department in the right direction. Don't underestimate his leadership.
Just three weeks ago we had the Zimbabwe International Trade Fair, ZITF, to which we took about 32 companies - small businesses and rural co- operatives. They exhibited there, and we again won a gold award as the best foreign exhibitor overall. [Applause.]
That shows you that we in this department are not just talking, but acting and working. We would not have succeeded had it not been for the leadership of Dr Davies, who is driving us and making sure that we do the work. At that ZITF exhibition the company Unica Plastic Moulders secured a deal to supply 133 stores with orders. What does that tell you? It tells you that job creation is going forward. They had to increase their capacity. Some of those who attended and struck deals are here. The department has implemented a lot of practical things. So, please, go back and do your research, and then come back and talk about the positives. I am not saying you must be the DTI's imbongi [praise singer] but you must learn to criticise in a positive manner.
As the Minister has indicated, in our endeavour to promote the development and growth of cooperatives we are going to bring the Co-operatives Act of 2005 back to Parliament. We want to make sure that it is in line with the broader strategy, the regulatory burden and all the issues that I've just mentioned, because we believe this is the right way to do things. Yes, indeed, we want our people to know and understand the concept of co- operatives but this will not take four or five years, especially with the budget the department is given.
As the DTI, we have been utilising vehicles such as the SA Women Entrepreneurs' Network, the Isivande Women's Fund and Bavumile Institute for Training to buttress our intent to make strategic interventions in women's economic empowerment. Some members of these bodies are in the gallery, including the acting president and board members.
The Technology for Women in Business programme is another one that we support as a department. This year, or even early next year, we will make sure that we deal with the strategy for the economic empowerment of women to get a better strategy that will take us somewhere. We must also recognise its sister programme, Techno-Girls - some of these girls are in the gallery or in S12A. We are nurturing these young girls while they are doing Grade 10, 11 and 12. They are students today, but they might well be good businesspeople in the future, or achieve in other sectors. They might become entrepreneurs. They innovate and come up with very good proposals. Later on, at the dinner, you'll listen to them and hear what we are trying to do. These are all things we are doing under the leadership of our Minister, and we hope to expand on them.
We all know that due to the apartheid spatial economy our development as a country remains locked in centralised economic activities. However, through these programmes, and similar ones that will strengthen them, we can make sure that we reach our desired goal of decreasing unemployment. Also, we will ensure that we get more entrepreneurs, in other words more "job creators" instead of "job seekers". We'll achieve this through the programmes we have, but also with your partnership. As members, you assist us in your constituencies by enabling us to reach out ... [Time expired.]
Chairperson, hon Ministers Patel and Davies, Deputy Ministers, my fellow MECs and colleagues in this esteemed House, it is an honour to be part of this budget policy debate today. Thank you very much.
I agree with the Minister regarding Outcome 4. For us in the provincial government of the Western Cape, our Strategic Objective 1 is aligned to Outcome 4, which is, in short, about growth and jobs. I should perhaps expand by saying that our goal is to create a Western Cape that is a better place for all in which to invest, make a profit, do business, get a job and earn a living. I also want to agree with much of what was said by the Deputy Minister who spoke before me. However, I want to say that when we talk about tackling unemployment we need to set ourselves some really big and hairy targets - if I may put it that way. We need to set ourselves targets that drive what we do every single day. When we wake up in the morning, those targets must be what we are after.
I will tell you what we have set ourselves as a target in regard to unemployment in the Western Cape. We have said we want to reduce our unemployment rate by 2% each year over the next three years. That is a very progressive target. It is not going to be an easy target to reach and we will have to work day and night to achieve it, but I promise you that that is when we start to make a difference to the people of our province.
Today I will highlight some of the areas where we specifically worked very well with both the departments and the Ministers, but I will also take the opportunity to highlight some of the areas we need to look at. Perhaps we should call them "risk areas".
First of all, and following on from what the Minister said about the amount of investment coming into South Africa, I think that is what we really have to work on. Regarding our provincial investment target, we are very happy with the R8,71 billion we managed to attract, some of it with your help, Ministers. That "help" refers to the incentives that we receive via the DTI and also to business process outsourcing, BPO, which the Minister spoke about. That is one of the areas where we are seeing great growth in regard to our provincial targets. In fact, we have seen growth of 1 200 percentage points. We set ourselves a target of R250 million inward investment last year, and our latest figures show investment worth just over R1 billion. As you know, that then talks to many, many jobs in that sector. I think you mentioned some of the names - the likes of Bloomberg and Amazon. That really helps to create a platform that we can brag about and helps us to attract further investment. The Minister also spoke about Kimberly-Clark, which brings us to manufacturing jobs, and I agree with that too.
Then we have the Saudi Basic Industries Corporation, or Sabic, and the Qatar Petrochemical Company opening offices here, so we are also looking at how we are projecting ourselves in regard to oil and gas. All of this translates into thousands of jobs and we are very grateful for the support that we get through the departments. I thank you very much.
I want to get to the IDZs, which have been mentioned. There is good collaboration here between local, provincial and national government. I want to use this platform to thank the department for working with us on this programme and for cofunding this programme so far. I give you my word that we are working as hard as we can to finish our process. I have already seen the draft Cabinet submission that has to come to us by 31 May so that we can keep to our agreement of making sure that the process gets handed back to the department in time for the Minister to get it through to the national Cabinet by the end of the year. We will stick to those targets.
However, Minister, I must also say that in this space there are one or two areas of risk and I must highlight them. We all know about the Universal Africa Lines project. I am very grateful for the speed with which it was addressed and for the processes that have led up to the attempts to resurrect this investment. However, my question is about the message we give when we - in this case, specifically Transnet - seem to be a bit slow in supporting these investments coming from outside the country. Before we even get the IDZs or SEZs in place, we are giving negative messages. It really does not help us to try to crowd in further investment. But enough said on that project, because I think a lot of work is being done to try to fix it.
Another point of risk is water and electricity. I think we have a good plan for water but I would like to ask for further help regarding electricity. We need to look specifically at offshore gas. We recently saw the buy-out of the Ibhubesi gas field. I think that is a very positive move because, especially in this region, we need to use these buy-outs and these companies' positioning themselves to help us balance our renewable energy, like wind and solar. Gas is the perfect balancing medium. I think I have mentioned before that we already have a gas turbine at Atlantis. However, when Eskom needs that power, it uses up to R750 million's worth of diesel a week. That is at about R7,87 or R7,90 per kilowatt hour, which is really expensive electricity, especially if it has to run for a whole day at a time. We can bring that down to about 90c per kilowatt hour if we get gas running the turbine. Right there is the first lever to help us with gas. Gas will then help us to crowd in further investment, specifically into Saldanha Bay. Gas can also offer us huge advantages with beneficiation because we know that beneficiation will draw a lot of electricity.
I want to move on to another area that we are busy working on in the province, namely skills. I think this is a national problem that we need to work very hard on. If we want to grow our economy, we need to make sure that we have the right skills to allow for such investment. I would like to highlight one or two projects. One that my department is working on is called the Premier's Advancement of Youth project, known as the Pay project. This project focuses on 1 000 matriculants who left school last year and have not managed to find work. We have pulled them in across all departments in a learnership capacity and we have them working for the next year. We have already assigned 747 students to these posts. Also, crosscutting Strategic Objective 1: Creating Opportunities for Growth and Jobs, we have already processed 174 000 people through the Expanded Public Works Programme project. I want to highlight two other projects that we are working on. One is called CapaCITi 1 000. You have seen the Adcorp numbers that talk about 650 000 graduates in South Africa who cannot find work and 850 000 posts, both in government and the private sector, which we cannot fill because we have a mismatch of skills. We started the programme called CapaCITi 1 000 because we found that in the finance sector in this region companies were importing business analyst services from India. We found a gap and partnered with one of our universities, with the businesses concerned and with the department. We advertised a trial run of 30 graduates that we would take and realign as business analysts. One year ago, these students were unemployed. One year later, with and through this partnership of realigning these graduates, they are earning an average of R16 700 a month as a starting salary. We think that is a really great project and are looking at how we can ramp it up and roll it out in other areas where there are demands for specific key graduate posts. We want to align our universities in this region with these specific demands.
The next project is a work and skills project. We call it Work and Skills for 100 000 but it really is a youth wage subsidy. We have been running it for two years now and have assigned R30 million to the budget. We have put 2 370 young people through the programme. We give a stipend of R1 000 a month, and the companies we partner with have agreed in a memorandum of understanding to make these young people employable at the end of the period. That is in the MOU, but we would also like to see retention.
We understand the problem Cosatu has with the youth wage subsidy. It cannot be seen as a displacement mechanism. I absolutely agree with that. However, what we have proven in the process of this pilot project with the 2 000-odd young people is that in excess of 70% are retained within the companies that offered them those skills benefits. We see the numbers advertised by the national project, where we are talking about a possible 423 000 jobs at a cost of R28 000 a job. However, our youth wage skills project has managed to come in at R15 000 a job.
Hon MEC, your time is up.
I would like to end by saying that we are more than happy to share that experience and we are very happy that the President has come out in support of this project. [Applause.]
Next time the staff must not mislead us. The provinces have MECs, not Ministers. In South Africa there is only one Minister of Economic Development. [Interjections.] Sit down, hon member - hon De Beer was first. Please don't tell me what to do. I am here to preside. Hon De Beer?
De Villiers.
I am sorry. I meant to say De Villiers.
Hon Chairperson, in our province the MECs are called "Ministers". We have a constitution and that tells us the MEC is a Minister. I put this as a point of order. Thank you.
Hon Chairperson, on a point of order: You are here to preside over the meeting, and not to make comments, as you did when you discredited a member from the Western Cape. Furthermore, we have two Ministers from Cabinet present as well. May I also remind you that the Western Cape constitution was approved before the DA won the province. So, it was not a DA invention. It was an invention of the ANC that backfired on you! [Interjections.]
Hon member, I have ruled that there is only one Minister. It must be "provincial Minister'', and not "the Minister". That is all.
Hon Chairperson, hon Ministers Patel and Davies, hon Deputy Ministers, hon members, directors-general, staff and distinguished guests, after what has just been said I am tempted to quote Martin Luther King, whose words were repeated by one of the former leaders of the ANC, Mr O R Tambo, when he addressed progressive South Africans in 1985:
Every (person) must decide whether he (or she) will walk in the light of creative altruism or in the darkness of destructive selfishness. This is the judgment. Life's most persistent and urgent question is: What are you doing for others?
The ANC has always viewed young people as the most important stratum in society. As such, it has sought to ensure that they are fully integrated into society as agents of change. That is why young people are regarded as being critical within the motive forces of the national democratic revolution, NDR, in the thorough and ongoing process of resolving the contradictions that have been created by the system of colonialism and apartheid. This means that young people have an objective interest in driving the NDR towards its logical conclusion. As active agents of change and social transformation, they stand to benefit from the fundamental transformation of society.
Following the capturing of political power in 1994, the ANC started operationalising its policy commitments through the setting up of institutions for youth development. Currently, the ANC remains committed to ensuring that South Africans have the best institutional vehicle for integrated youth development to ensure the effective implementation of youth development policies and programmes.
While it emphasises its commitment to the youth and youth development, the ANC's policy paradigm on youth development also places obligations on young people. In particular, it requires young people to work for reconciliation and promote a common South African identity; to participate actively in the political, social and economic life of the country; to combat discrimination and racism; to promote democratic values; to acquire skills; and to play a productive role in the economic reconstruction and development of the economy.
The New Growth Path calls on the state to provide a bold, imaginative and effective strategy and to create the millions of new jobs that the South African economy needs. This requires a combination of initiatives of direct state involvement, private sector partnership and mobilisation of civil society to take a proactive interest in addressing the problems presented by unemployment.
Policy options to support youth employment will provide an additional lever for government to create jobs and will not be limited to any particular sector. In certain sectors the New Growth Path already identifies opportunities for youth. These include identifying employment and entrepreneurial opportunities for the youth.
Our economy can create employment through large-scale expansion in infrastructure, mining, agriculture, construction, rural development and African regional development, as well as in the "new economy" areas, such as the green economy and knowledge-based sectors, and through the social economy and the public sector. The state, private capital, co-operatives and other forms of social ownership can and must complement each other in an integrated way to direct and transform economic growth in order to bring about greater equity, based above all on drawing the unemployed youth into the economic mainstream.
The ANC-led government and our social partners recently signed the National Skills Accord as one of the first outcomes of social dialogue on the New Growth Path. The parties involved have identified eight commitments and key areas from which the youth can benefit as far as their employability is concerned. I will mention a few: setting annual targets for training in state-owned enterprises; expanding the level of training, using existing facilities more fully; and improving the role and performance of further education and training colleges.
Training programmes are intended to alleviate skills shortages in the economy. They are aimed at enhancing the productivity and employability of participants and enhancing human capital through improving skills - in this case, for young job seekers - while simultaneously fulfilling the needs demanded by the economy.
Young people with high levels of education - graduates - accounted for only 3% of the unemployed. However, despite the low unemployment rate of those with higher levels of education, there are indications that this group's unemployment rate is increasing very fast. It is also important to state that the output from institutions of higher education is biased towards the areas of study that do not prepare graduates for professional jobs. As a result they have low labour market prospects. Trends in the labour market for graduates indicate that those who have qualifications that prepare them for professional jobs, like engineering and medicine, have good labour market prospects. They find employment quickly and in high numbers. This is in contrast to those qualifications that are general, as in the humanities and arts, where, for a significant majority, the unemployment experience tends to be longer.
The youth must be mainstreamed in all existing core strategies, policies and programmes in the three spheres of government and agencies. However, in this process young people should be considered as beneficiaries and agents of economic change, and not as passive recipients of government services.
We must endorse the sentiments of the former president of the ANC, Oliver Tambo: "A nation that does not take care of its youth has no future and does not deserve one." In the spirit of recognising the sacrifices by the young people of our country and of the role played by our youth in establishing a South Africa that is politically liberated and democratic, we can and must create the circumstances and an enabling environment in which the lives, work and prosperity of young people are placed at the centre of the country's growth and development.
Our vision should be a South Africa that has an economically empowered and well-developed youth that is supported by all stakeholders and is operating in all sectors of our economy. It must have young people who contribute to economic growth, poverty reduction and employment creation, as well as assisting in bringing about economic transformation and an equitable society.
The creative energies of young South Africans can be turned into one of the country's greatest assets and a source of growth and prosperity. The ANC supports Budget Votes 36 and 28. [Applause.]
Hon Chairperson, hon Ministers and Deputy Ministers present, hon members and all distinguished guests, let me indicate that the New Growth Path is a dynamic vision to collectively achieve a more developed, democratic, cohesive and equitable economy for South Africa. It highlights critical markets for employment creation and growth, and identifies where viable changes in the structure and character of production can ensure an inclusive and greener economy.
The New Growth Path also aims to improve communication between the different spheres of government, relative to their developmental responsibilities. More specifically, all spheres of government will have to identify opportunities that arise by taking cognisance of their specific conditions. In this context, a spatial economic strategy will determine how the job drivers impact on different provinces, municipalities and rural areas, thereby linking it to the local integrated development plans, and spatial plans to industrial policies. Metropolitan areas, for example, are the engines of economic growth. There is a need to strengthen the capacity of municipalities, in general, to ensure the efficient provision of planning, services and development aligned with the New Growth Path.
I will restrict my comments to the key focus areas highlighted in the 2012- 13 budget speech on Economic Development. These are as follows.
First, regarding the roll-out of the infrastructure plan of government, which is focused on implementation and consensus building, Salga welcomes the focused approach to public investment in infrastructure. We also welcome the investment in new bulk construction of water and sanitation infrastructure, technology services, and transport and housing, as well as the maintenance of existing infrastructure. It will go a long way in addressing the backlog in basic services, stimulating the local economy, driving job creation and improving the local environment for business and other economic efficiencies.
At the department's recent infrastructure and development conference on the implementation of the government's R845 billion infrastructure programme, Prof Stiglitz pointed out that investment in infrastructure is important, but citizens themselves must also benefit. Its impact must therefore also include wellbeing, decent work and long-term sustainable development. Hence, while the Presidential Infrastructure Co-ordinating Commission recently announced the 17 strategic integrated projects, including three spatial strategic integrated projects, Sips, the reality is that the infrastructure investment in all 17 Sips will take place within or across a local municipality.
From a municipal perspective, Salga wishes to emphasise the need to find the right balance and integration between top-down and bottom-up planning; to ensure a common understanding with municipalities of what we mean by "local" as in the use of "local" labour, "local" supplier, "local" beneficiation, etc; to ensure that there are platforms, political will and ability on the part of all the local, regional and national stakeholders to engage and participate in the Sip process; and to ensure labour-intensive construction, including skills development and also longer-term sustainability, with the capacity and enterprise development.
Secondly, the Minister announced steps to improve small business performance, including through the roll-out of the Small Enterprise Finance Agency, Sefa, across the country, so increasing the disbursement to small business and working to lower the cost of bureaucracy and overheads. We applaud the launch of the new streamlined model of Sefa and hopefully the much-needed acceleration of small businesses in accessing funds to start or to sustain their businesses.
As the association representing all municipalities, Salga understands the challenge in getting the right type of information and level of support to the people, especially at grass-roots level in the rural areas where most of the previously disadvantaged communities reside. We therefore make a plea to the Minister to make a recognisable effort to use Salga, municipalities and other channels to bridge the gap, and inform and provide small business support in the most neglected areas of our country.
In support of both national and local developmental efforts, Salga would like to motivate its view that every local municipality must have access to promoting and/or facilitating access to the services of Sefa. While enterprise development is not a competency of local government, Salga would like to emphasise that entrepreneurship is the single most important activity in our economy. This needs to be facilitated at the coalface, where communities engage government. It is the only activity that enables enterprising South Africans to apply their minds to creating new value, new wealth, new money and new jobs. So, Sefa needs to be more than a name change with the same levels of bureaucracy and poor delivery of services. Rather, Sefa needs to change the formula and level of professional support that will encourage entrepreneurship to unprecedented levels.
Thirdly, regarding working with the Department of Trade and Industry to determine further support for co-operatives, Salga welcomes the focus on co- operatives, especially given that 2012 is the International Year of Co- operatives. As part of Salga's annual performance plan, we continue to advocate municipal developmental strategies that support the social economy. We would like to propose a partnership between Salga, the Department of Economic Development and the Department of Trade and Industry for a nationwide campaign in support of the International Year of Co- operatives, in order to be in alignment with the United Nations.
Municipalities face a number of challenges in developing and implementing policy that creates an enabling environment for the informal economy. Salga recently developed and shared guidelines for municipalities in respect of adopting a more developmental approach towards the informal economy and encourages the Ministers and the departments to support and encourage greater developmental thinking in this area. The informal economy should be an important part of government's strategies to address unemployment, support livelihood creation and reduce vulnerability. National departments and agencies should support the efforts of local government to develop and implement a more developmental approach towards the informal economy.
Fourthly, in regard to strengthening the links with provinces and local government, including via the Minmecs and the PICC, Salga wishes to congratulate the Minister for his leadership and vision in the formation of the PICC, which brings together half of Cabinet, the nine premiers, metro mayors and Salga. Having a single structure where all economic decision- makers in the public sector sit together to drive implementation is long overdue.
In addition, Salga notes that 200 local government officials are to be trained in economic development capacity. We would like to encourage the Minister and department to also engage with and complement Salga's capacity- building programme around local economic development, LED. Sound LED practices can facilitate an appropriate environment for economic growth, impacting positively on an enabling environment, job creation opportunities and poverty reduction. This should result in quality economic development planning and facilitation, and the development of good LED practices and sound, pragmatic LED initiatives, as well as improved local economic and job creation performance. Finally, we have two crosscutting items for the attention of the NCOP. It is agreed that spending across the three spheres of government can impact on small business and affect economic development positively or negatively. Therefore, preferential procurement is an important strategy for the government to extend opportunities to the previously disadvantaged groups. Most municipal supply chain management policies encourage procurement from within a local municipal environment. This is to ensure that the municipality itself supports companies and small, medium and micro enterprises from their local community, where possible. The imperative of promoting local small enterprise development is constantly reinforced at local izimbizo and IDP consultation processes.
In conclusion, Salga is excited to support the new strong partnerships between national, provincial and local government around economic development, especially the implementation of the infrastructure investment programmes stemming from the PICC. To be successful, the department will need to work in partnership with key stakeholders, particularly local government. [Applause.]
Hon Chairperson, hon members of this august House, hon Ministers present, Minister Davies and Minister Patel and their Deputy Ministers, hon MECs present, Cllr Mafefe, DGs and HODs of various departments, distinguished delegates, and ladies and gentlemen, I rise to confirm not only the correctness of the two Budget Vote speeches but also their relevance and, more importantly, their ability to respond to the socioeconomic challenges faced by our province and similar, predominantly rural, provinces. We therefore want to heartily thank hon Ministers Patel and Davies respectively, as well as the entire collective, for steering the macro and micro policies of this country in the right direction.
Our considered view is that we have to take the changing international conditions into account, particularly the ongoing global financial crisis and the reality of a new global economic recession. Their impact on our domestic economy, through a slowdown in production, potential job losses and rising prices, cannot be ignored.
Both the Economic Development and the Trade and Industry Budget Vote speeches raise a number of obligations which rest on all three spheres of government and their social partners. Allow me to single out a few economic directives and how we as a province are responding to them.
The Mpumalanga provincial government has customised the national New Growth Path framework for the province. That process resulted in the crafting and subsequent adoption of the Mpumalanga Economic Growth and Development Path by the provincial executive in November 2011, after a laborious and tedious process of stakeholder consultation.
Our growth path focuses on five strategic sectors, namely the agriculture and forestry value chain; mining and mineral beneficiation; manufacturing and value-added activities; tourism and cultural industries; and the two emerging sectors of information and communications technology, and the green economy.
Over the last six months we have been focusing on developing a comprehensive programme of action for the implementation of our growth path, which spells out our implementation priorities and guides stakeholders in working together.
Regarding employment, the provincial economy did reverse the trend of job losses. In the fourth quarter of 2009-10, the province experienced a net loss of 34 000 jobs. However, in the fourth quarter of 2010-11 the province experienced a net gain of 47 000 jobs, which translates to just over 3 900 jobs gained every month. This represents a 5,4% increase in the number of people employed from the previous year. This represents the highest rise in employment over the past year of all the nine provinces in percentage terms, although not in absolute terms. The Minister provided the absolute ranking figures earlier.
The official statistics show that Mpumalanga's regional gross domestic product grew by 2,5% in 2010, reversing the negative performance of 2009, when it shrank by 1,7%. Independent projections by IHS Global Insight predict stronger growth, to the level of 2,8%, in 2012. This comes in the wake of the modest recovery by the global economy, as well as the slowdown in growth in China and most Organisation for Economic Co-operation and Development countries.
We need to appreciate Mpumalanga's heavy dependence on the international economic environment. The major sectors of our economy that contribute to gross domestic product per region, GDPR, for example mining and manufacturing, are primarily dependent on global consumption by the developed nations in industries that are linked to metals, energy and petrochemicals. It is in this light that Mpumalanga's economy is even more vulnerable to global turbulence when compared to other provinces. For these reasons we are focusing on value-added beneficiation and industrialisation.
Regarding critical milestones towards job creation, as I said, we will be finalising our Mpumalanga Economic Growth and Development Path, MEGDP, programme of action in due course. The intention is to develop a business case for each proposed project, for purposes of mobilising the necessary resources from across the board. Secondly, we are engaging with the municipalities to ensure better integration and better alignment with the LED plan, containing the IDP, to enhance alignment with the provincial growth path.
In 2010, we merged three of our economic state-owned enterprises and the mandates of these agencies were reconfigured to focus on the implementation of the growth path in regard to skills transfer, training and mentoring of co-operatives and small enterprises. We are convinced that the SMMEs and co- operatives in Mpumalanga constitute the bedrock of our provincial economic growth.
We appreciate the launch of the ambitious infrastructure plan by Cabinet. It couldn't have come at a better time. As a province we will complete our provincial infrastructure master plan this year. The plan will most certainly be aligned with the National Infrastructure Plan. We hope our plan will transform the economic landscape of our province and the country, create a significant number of new jobs, strengthen the delivery of basic services and support regional and subregional economies.
For us in Mpumalanga, if we are to contribute to the national effort, we will need to invest heavily in rail and road connectivity, and in optic fibre and ICT infrastructure. We will also need water and skills on our doorstep to do business more cheaply and efficiently.
Last year the province conducted two outbound missions, namely to Indonesia and Oman, and follow-up engagements are in progress in relation to a number of projects that we wish to package for investment commitment and roll-out. A feasibility study is currently being undertaken for the establishment of a fresh produce market in the province. This is intended, among others, to serve as a gateway to the Middle East market and to support the development of both small-scale and large-scale commercial farmers in the Mpumalanga, Limpopo, Swaziland and Mozambique nexus.
I must also hasten to add that on the tourism front we have already signed a trilateral agreement with Mozambique and Swaziland, aimed at ensuring that these countries become tourism destinations of choice in Africa and the diaspora. What remains critical in the successful integration of our province with our neighbours is a spatial development plan that works, which connects us with Mozambique via rail, pipeline and optic fibre, and even through the human elements of cultural and educational exchange and interaction.
We have adopted a comprehensive rural development programme. This is the province's flagship programme for responding to the plight of the rural poor masses in seven of our marginal municipalities. We will do so by focusing on development and support of co-operatives and SMMEs. We will use this programme to unlock the economic potential of these rural areas and hope to connect these rural and second economies to the first economy.
Notwithstanding what other members have said here before me, practical assistance has been given to 184 co-operatives in agriculture, manufacturing, construction, and so forth. As a result, during the last financial year we created 13 000 jobs in the seven marginal municipalities and youth have been skilled in various trades in these CRDP areas. We did not stop at only encouraging the formation of cooperatives, but we also facilitated their access to markets. The provincial government was the first customer for all these co-operatives. In the previous financial year we spent R1,7 billion in these seven municipalities. In this financial year we are hoping to ramp this up to over R2 billion. To this end the province has developed a provincial procurement policy for government, aimed at giving further meaning to localised procurement when sourcing goods and services.
The province has had a close working relationship with Seda and has until recently contributed to its funding on an annual basis. We have had close working ties with the SA Micro-Finance Apex Fund, Khula and the IDC, as well as with some of their agencies in the province, and we have invited them to our planning session.
Once again, we welcome the formation of Sefa. We hope its formation will give impetus to our ability to reduce duplication. Hopefully we will improve efficiencies in servicing the business community at local and provincial level. At the centre of our SMME development and support in the province is the creation of one-stop centres for business support all around.
In the green economy space, it is very true indeed that one of the greatest challenges of our time is climate change. If unmitigated, it has the potential to undo or undermine positive advances made in our socioeconomic landscape. This will make the transition from carbon-intensive industrial development to a low-carbon economy a key precondition for the sustained rolling out of the growth path.
For starters, in the run-up to the 17th Conference of the Parties last year, the province hosted its environment and climate change summit, which served as a build-up to the main event in Durban. At our summit we identified the potential of the green economy within the context of sustainable development. For us, the green economy means an integrated cargo and freight plan that balances road, rail and airlift transportation. The green economy also means coal-fired power stations that are mitigated by small-scale hydro energy and solar energy for communities off the national grid. The green economy means making money out of waste products and by simply igniting the recycling revolution. The green economy also means continuously finding the means to achieve sustainable consumption and targets that yield more growth with fewer natural resources.
In conclusion, in addition to these big ideas, we have continued with our awareness programmes, such as our unique provincial Climate Change Literacy Manual for schools. The last time I checked, it was the only one in the country!
In line with what President Zuma articulated, as a province we commit ourselves to managing the provincial economy in a manner that ensures that South Africa continues to grow, that all our people benefit from growth, and that we create decent jobs and decent work for the unemployed, workers, young persons, women and the rural poor.
We want to thank the NCOP for making this debate possible. More importantly, we thank Minister Patel and Minister Davies for the support and guidance provided to the provinces. [Applause.]
Hon Chairperson, hon Ministers, hon Deputy Ministers, MECs and colleagues, economic growth in South Africa is too slow and the most inhibiting factors are caused by the very institutions responsible for creating an environment for economic growth.
The budget allocation for the 2012-13 financial year amounts to R672 million, with transfers of R523 million to agencies and institutions, leaving the Department of Economic Development with a budget of R149 million for the operational budget, the Ministry and capital expenditure.
Minister Patel, thank you for presenting the budget for the first time in a provincial sense. It's very much appreciated. That's what the NCOP is here for.
I read the same Statistics SA report and what concerns me is the figures of the last quarter in 2011 and the first quarter in 2012. These figures show that five of the nine provinces lost a lot of jobs, with the Eastern Cape leading with 46 000 jobs lost, KwaZulu-Natal with 43 000 and the Free State with 16 000.
We are very concerned that the New Growth Path looks as if it is one of the many plans that indicate a lack of unity in Cabinet's vision of economic development. The operational silo syndrome among all departments explains why there is all policy, plan, regulation and red tape and no implementation. Let us concentrate on the National Development Plan and the DA's 8% growth policy.
Hon Minister Patel, your department sits on a huge Jobs Fund. The DA in the Western Cape is driving the model for a wage subsidy, similar to National Treasury's, to create sustainable jobs for the youth. It is clear that the President and Cosatu are at loggerheads over the youth wage subsidy. [Interjections.] Let me tell you, this is evidence of the extent Cosatu will go to to stop the wage subsidy, which is a disgrace. [Interjections.]
Order, hon members!
I am warning you, do not water down the project model.
Chairperson, on a point of order: I just want to check if it is parliamentary to bring stones into this House.
Thank you, hon Gamede, for raising that. Hon Van Lingen, you should respect the dignity of this House. Do not bring in stones.
Chairperson, is the hon member prepared to take a question?
Are you, hon member?
Chairperson, they are eating into my time. I'm not prepared to take a question. You must just give my stone back - it's a special one! [Interjections.] I've been robbed of my evidence for a court case!
The HOUSE CHAIRPERSON (Mrs N W Magadla) Are you ready to take a question?
Chairperson, I refuse, thank you. Now let's get back to the wage subsidy. We cannot afford to water down the project model. Do not listen to Cosatu. Don't turn your backs on the promises we made to the youth. Don't let the youth become victims of Mangaung. [Interjections.]
The HOUSE CHAIRPERSON (Mrs N W Magadla) Order, hon members!
Chairperson, on a point of order: I would like to find out whether that is the only stone the hon member was carrying. [Laughter.]
She has more in her bag!
Hon member, you may continue.
Chairperson, there is another point of order.
According to Rule 36, I have warned you not to bring stones here.
But I do not have a stone!
Chairperson, on a point of order: I just wanted to check whether the hon Van Lingen brought a stone from the Western Cape or was she in Johannesburg?
Hon member, are you ready to respond to that question? [Interjections.]
Minister Patel, it is vitally important that we look at making the R800 million you have leveraged for the Sefa loan fund - which is fantastic - available to youth entrepreneurs and that it is available at an affordable rate. Our problem is that the biggest killer of business in South Africa is government - all three spheres of government, including state entities. [Interjections.] There is a sick culture which ignores all legislation stipulating that accounts be paid within 30 days. Once the first 30-day limit has been ignored, the virus soon spreads to 90 and 120 days. Not every David - small business - wants to or can afford to fight Goliath - the government - in court. There is no opportunity for redress while this culture of nonpayment is allowed to continue. Small businesses need all the possible encouragement, mentoring, financial stability and opportunities they can get to survive beyond the first three years. Eliminate the virus! Apply the relevant Acts and hold officials accountable!
We need an economic development plan, which we have, and the National Development Plan to create jobs for poverty relief and a decrease in the income gap. South Africans deserve to and must upgrade from economic struggle to economic freedom.
I want to thank the Ministers for the way in which they presented their budgets today and I want to confirm that they have honoured the status of the NCOP. We appreciate it. Thank you very much. We have had a fantastic debate and we want to say that this House is no longer a rubber stamp. [Time expired.]
Hon Chair, I threw enough stones in the 1980s. So, I do not have time for stones! [Interjections.]
Chairperson, hon Ministers Patel and Davies, hon Deputy Ministers present, members of this august House, comrades and friends, it is a great pleasure to be back and to talk to you once again.
I would like to say that in our Cabinet we have a standing item that deals with the payment of service providers within 30 days. MEC Nkomfe tables that report frequently. I know that the President expects Ministers to do the same at the national level. So, I am not sure if what the member is talking about is history or current practice.
The strategic role of the Gauteng economy in the economic landscape of South Africa cannot be overemphasised. We know very well that we carry a heavy responsibility on behalf of the country. So, if Gauteng does not pull its weight in ensuring that we grow the economy and create jobs, the rest of the country will not pull effectively.
For this reason the executive council has approved a number of strategies, such as the information and communications technology strategy, the green economy strategy, the freight and logistics strategy, and the youth and employment strategy. Because of time, I will not delve into these too deeply. I just want to say that for these strategies to be implemented, we need state capacity capable of ensuring that when we talk to private sector companies, abroad and locally, we have men and women who have the requisite skills to engage with them. Some of these companies are very big multinationals seeking investment opportunities and locations in South Africa. Therefore we are realigning the Gauteng Economic Development Agency, Geda, and Blue IQ Investment Holdings (Pty) Ltd so that they become one agency. That process has already started. From 1 June 2012, there will be one agency, called the Gauteng Growth and Development Agency, to ensure that the strategies I have referred to are implemented.
The ICT strategy is very important and at the economic centre of the province. We are working with the DTI in declaring the Gauteng Smart City an SEZ. We have done work with Dubai Holding to make sure that we crowd in the right investors. The estimated investment value from the Gauteng Smart City alone is about R20 billion. We are very excited that, once the SEZ status has been clarified, we should be in the position to make sure that the Smart City initiative is implemented.
The Smart City initiative is also linked to the Gauteng Innovation Hub, which is located next to the University of Pretoria and next to the Council for Scientific and Industrial Research. We are working with the national Minister of Science and Technology to make sure there is a science agenda and to ensure that young people participate in mobile technology by participating in the development of applications for it. So, the role of the Innovation Hub and working with the different science communities is embedded in the work we do. Both Smart City and the Innovation Hub are going to help us drive the agenda in this area.
The second area I want to talk about is the green economy. I was encouraged by President Obama who, when tabling his state of the union address in Washington at the beginning of the year, said that American companies with manufacturing capacity in the US would be incentivised. With the localisation of the Preferential Procurement Policy Framework Act, which has been amended, government is trying to do that. What will be central to this, I think, is that when hon members do their oversight work, they must ask those who are in government - government officials - whether they are buying locally manufactured goods or whether they are still supporting those who masquerade as manufacturers by simply assembling things from China and making sure that they get money.
We need to make every attempt to ensure that localisation is supported, not only going for solar geysers but also making sure that those solar geysers are manufactured here. We know there are companies in Springs - Kwikot and many others in the province - that have the capacity to produce solar geysers. I'm told that Kwikot can produce about five solar geysers every three minutes. We need to look into the kinds of companies that are operating here. Also from the renewable energy point of view, we need to make sure that we relieve the grid of the challenges. We need to ensure that those processes are streamlined and investors are not frustrated unnecessarily. Some of these issues were raised by the hon Winde when he spoke earlier.
It is also important to say that, in respect of the green economy and many other things, we procure in the province. The Gauteng budget is R67 billion or so. Close to R40 billion of that is spent on goods and services, apart from personnel. We went to the executive council and then tabled what we called a "strategic procurement strategy". This simply asks: When you buy school textbooks, where do you buy them? Where are they manufactured? If you buy iPads instead of buying textbooks, who made those iPads?
I am happy to announce to the House that last year we embarked on the very laborious process of talking to investors all over the world. Some of them are in the process of finding sites or premises for their manufacturing operations in Gauteng. So, the strategic procurement agenda that Gauteng has approved is indeed being given life by the investors we spoke to when we were travelling all over the world.
It is also important to note what the national government has announced in regard to the infrastructure programme. We hope those things will also be implemented according to the local procurement strategy. After all, we have bus manufacturing companies, for example. Some of them are located in Gauteng; some are elsewhere in the country. We want these ideas to be translated into reality. Regarding the recapitalisation of the railway industry's rolling stock, again, we have Union Carriage & Wagon and many others located in the province. We are hoping these companies will be given preference because they are operating locally. We have to give effect to our ideas.
Regarding foreign direct investment, we embark on a process of travelling overseas to talk to investors from time to time. We are very encouraged that investors and companies in many parts of the world, including Europe, want to be located in South Africa.
What is going to be key going forward is trying to identify niche markets. I think the national Ministers will be able to help us. A niche market must be identified for each province, because we all talk to more or less the same investors or the same sectors. I think we need to find a way of making sure that each province has a particular niche market. We all talk about ICT, we all talk about the green economy, we all talk about mineral beneficiation, but which province is strategically placed for which economic activity? On that basis we should be in a position to make sure that the country benefits. We compete constructively, but without necessarily achieving the objectives that the country has set for itself.
We also have the youth employment strategy, which has a number of pillars. One of them is a youth placement programme, for which the DTI has given us money. We place young people in a particular company. After three months the company is compensated for x and y and z and q, and after six months the same happens. National Treasury and the DTI are working on a pilot of that programme. We are hoping that, based on the lessons learnt, we will be in a position to roll it out throughout the province.
We are also focusing on young entrepreneurs. Not only have we been indentifying young entrepreneurs through a programme called Youth and Graduate Entrepreneurship, or Y-Age, but we have signed a memorandum of understanding with the Consumer Goods Council of South Africa. Companies like Pick 'n Pay, Shoprite and Edgars are members of those goods councils. So, these young entrepreneurs are linked directly to the market. This is good because one of the challenges that young entrepreneurs are faced with is a lack of access to the market. They may have products, the things they manufacture, but the market is still dominated by those who are part of the process.
Before I conclude - Chair, I know I have one minute and forty-nine seconds left - I want to talk about two issues. Regarding mineral beneficiation, the Ministers know that we are progressing well. We are about to appoint a company to construct the Jewellery Manufacturing Precinct, JMP, at the airport. However, at the centre of this is the gold loan scheme. We are currently busy playing around with the idea of what is best. There is a platinum loan scheme, which is led by the private sector. However, we still seem to have challenges with the gold loan scheme. I am really encouraged by the DTI officials we are working with. We are trying to look at a number of interventions, but we have got to decide because everything relating to the JMP depends on this gold loan scheme.
Freight and logistics are central to the Gauteng economy. Whether goods arrive in KwaZulu-Natal, the Western Cape or the Eastern Cape, they are largely destined for the Gauteng market. How do we make sure that the province is linked to the rest of the country? That is the work we are doing at a bilateral level with the other MECs, and with the support of Ministers at the national level this is going to work.
Lastly, concerning skills, no economy can grow without investment in skills. We have indentified particular skills: jewellery, ICT, foundry, tooling, aerospace and aviation. Concerning tooling, we have a programme which the DTI is supporting. As we speak, they and members of the private sector are travelling overseas to make sure that we improve in that regard. We are working with the FET colleges and the national Minister of Higher Education and Training to improve the work that we are doing with FET colleges and with implementing the approved Gauteng Master Skills Plan. [Applause.]
Hon Chairperson, Ministers, Deputy Ministers and members, the institutional architecture and systems which define the organisational structure of the department have been established. I want to congratulate the Minister on the sterling work done in terms of the New Growth Path document, which guides much of the policy direction of the department. Similar initiatives around the green economy, in regard to stimulating debate and policy directives on how to promote development in this sector, are evident.
What I am not seeing as forthcoming is credible and successful interventions around the second economy. A substantial body of knowledge exists around the second economy, but what is needed are clear economic linkages in regard to economic overflows between the two.
While inclusive, labour-absorptive growth is a policy objective, this will be difficult to achieve in the context of the current international economic environment, given the recessionary environment and the eurozone debt crisis. However, from a South African perspective, this is essential for the government's infrastructure build programme.
Minister, from a spatial investment perspective, we need to get an idea of future economic growth nodes and what type of industrial activity can be located there. In this regard, the advent of SEZs will encourage development in appropriate investment locations. I want to thank the previous head of the Competition Commission, Mr David Lewis, for the outstanding job done at the commission by way of landmark rulings and the eventual professional handling of the Walmart case. I hope the professional skills base established at the commission will remain in place and continue to probe anticompetitive practice. However, having said that, we must not politicise the rulings of the commission or want to plan outcomes driven by ulterior motives, as happened in the Walmart case.
The Industrial Development Corporation continues to play a catalytic role in stimulating economic development and in the provision of finance in support of Ipap. With its experience, acquired in various sectors of the economy, it should play a more valuable role in sector development plans. Despite the current volatile economic environment, the IDC continues to make strategic investments and is not too risk averse, compared to the commercial banking sector.
Another innovative project is the series of economic dialogues hosted nationally by the Minister. It is important to gain some national consensus on economic policy and what types of interventions are required. These discussions should continue with various role-players so that eventually we have a social accord in regard to economic policy development.
There are many accords that have been developed for various interventions, ranging from basic education and the National Skills Accord to the Local Procurement Accord, etc. There needs to be oversight over commitments made in these accords. The select committee will hold the Ministry accountable for these accords and ensure that real tangibles are delivered. They may not be empty commitments made by various role-players.
The National Planning Commission's Diagnostic Document and Elements of the Draft Vision Statement for 2030 report gives insight into the economic challenges facing the country. It is important that the Department of Economic Development factors into its planning an analysis of this ... [Time expired.] [Applause.]
Hon Chairperson, hon Minister Patel and hon Minister Davies, hon Deputy Minister Thandi Tobias-Pokolo and hon Deputy Minister Elizabeth Thabethe, hon members, Director-General Lionel October, Acting Director- General Mowzer, staff of the Ministry and distinguished guests in the gallery, in dealing with the Budget Vote on Economic Development we are tasked as the NCOP with dealing with the debate, firstly, as one of policy and, secondly, considering the impact it has on provinces and local government. This is where our oversight is located and we need to examine the Vote in this context.
Historically, our approach to economic transformation has been guided by the following pillars: creating decent employment for all South Africans; eliminating poverty and dealing decisively with the extreme inequalities in our society; democratising ownership and control of the economy by empowering the historically oppressed to play a leading role in economic decision-making; restructuring the economy so that it meets the basic needs of all South Africans and the people of Southern Africa, especially the poor; and ensuring equitable and mutually beneficial regional development in Southern Africa, thereby fostering the progressive integration of the region.
This is where the ANC began with their economic policy when they were preparing for political power in the early 1990s. In addition, an important part of the vision was to build an economy in which the state, private capital and cooperative and other forms of social ownership complemented each other in an integrated way to eliminate poverty and foster economic growth. When we reflect on this today, we can trace an uninterrupted development of ANC economic policy from that time to today. True, the emphasis has shifted, but that is the nature of dealing with the complexities of an economy such as ours.
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. We reaffirm our 52nd national conference understanding of a developmental state as being one that is: ... located at the centre of a mixed economy. It is a state which leads and guides that economy and which intervenes in the interest of the people as a whole.
Our collective and common point of departure in this debate must therefore be that the voting of funds must result in the creation of decent work through inclusive growth and development in our provinces and at local government level.
From the perspective of my province, the Western Cape, I have to report that the facts and figures are not as rosy as some may present them. No, it is an image that is not improving much for far too many people of the Western Cape. When one removes the layer of paint that is the present hostile regime's mask, one sees a very different underlying depiction. Strip off the DA's spin, lies, smoke and mirrors and you are left with only the ash of the DA's promises, pretence and deceit.
You have heard talk of the Western Cape's being the land of milk and honey. I have previously dealt with the DA's propaganda of superiority versus the proclaimed "inferior areas" where the ANC governs. This is the basis of warped racism. In this bizarre land the DA is projected as being a saviour and the ANC as everything that is evil!
But the truth is, hon Van Lingen - through you, Chair - that the DA has added very little, if any, value to the Western Cape. In the past, when the ANC governed, the Western Cape outperformed all other provinces, but since the DA took over the economic growth rate has declined, hon Joseph - through you, Chairperson. Cape Town and the Western Cape are no longer the leading service providers in the country. They have slipped back in assessments.
This backward trend is also observed in others matters. To be specific, if it were not for President Jacob Zuma and the ANC-led government, very little would have been going on in this province, the Western Cape. [Interjections.] [Applause.] Is it not the national government, led by President Zuma, that built the Clanwilliam Dam, brought exciting redevelopment to Saldanha and was the driving force behind the new undersea data cable to the Cape, which expands bandwidth? Yet the DA piggybacks on the national government and brags about what it is doing to bring broadband to the Cape! How disingenuous can one be? That was far from the truth, hon Van Lingen.
The Western Cape provincial government is almost entirely dependent on national government. The bulk of its income is derived from what the national government supplies and very little initiative comes from the Western Cape. It has very little insight, few initiatives and little own investment in any development. Instead it concentrates on big business. It wants to leverage possible development in the City Bowl of Cape Town, using government property, of all things! [Interjections.]
Order, hon Adams! Yes, hon Joseph?
Chairperson, I just wanted to check if the hon member had stones in his pockets. Given the way he speaks, we can expect stones to come flying at any time. He is taking a very aggressive approach. [Interjections.]
Hon member, I cannot hear you. Please repeat what you were saying. You are talking too fast, so slow down. [Interjections.]
I asked if the member ... [Interjections.] ... had stones in his pockets. He speaks aggressively, as if he were going to throw stones at any minute. I am asking him if he has stones in his pockets. [Interjections.]
Order! I could not hear what the hon member was saying. Continue, hon Adams.
Chairperson, hon Joseph threw stones on Tuesday and now he thinks everybody must throw stones! [Laughter.] We have finished with throwing stones. We are governing now. We are not throwing stones and marching. We are governing. The ANC is governing, and not throwing stones, marching or being disrespectful to the highest House in the land by bringing stones into Parliament! What does that say about the people who are supposed to be looking after the interests of the people? It is skandelik [disgraceful]! What a shameful thing for a Member of Parliament to stand at the podium in the House of Parliament and throw stones! [Laughter.] It is shameful for a Member of Parliament to come and talk about throwing stones in Parliament. What do you take the people of South Africa for? This shows the DA's mentality in dealing with the poor and with unemployment. They have no respect for human life or for the poor, no respect at all! [Interjections.] [Laughter.]
The so-called ... [Interjections.] ... development nodes are merely existing projects that are being expanded or face-lifted. These areas are far from where the workers live and they will still have to spend a large portion of their earnings on travelling expenses. The Western Cape, under the DA, is not friendly to poor people, as has been shown in this House today by members of the "Disrespectful Alliance". It does not care about the small, medium and micro enterprises. [Laughter.] It is biased towards big business.
The business environment that the DA is creating is one of political instability, as was shown on Tuesday, when they marched. This is where the DA rules: Where it can divide people along racial lines, have frequent high- handed raids on small businesses and have people shot in the streets. The DA has become known for the trail of blood it leaves as it acts against poor residents. We can see its war against the poor from Hangberg to Eerste River and from Dunoon to Makhaza. Now there is also blood on the streets of Johannesburg as the conflict-seeking DA and its abrasive leaders aggressively and defiantly break up social cohesion for cheap political gains and cheap political point scoring. That is what the DA is.
(Mr S S Mazosiwe) Order, hon Adams. Can I ask you, hon Joseph, to please talk slowly so that we are able to hear?
Hon Chair, on a point of order: I would like to ask the hon member this. Who threw the stones in Johannesburg and who caused the shedding of blood? Thank you. [Laughter.] [Interjections.]
Order, hon members! The hon member should have asked whether the member was prepared to take a question. Continue, hon Adams.
Do you see, Chair, the disrespectfulness of the DA members towards this House and Parliament? We should really send the DA members on a course to learn respect for other people and how to treat other people with respect.
Instead of getting more traders into the market, we see that trading opportunities are being reduced. The majority of the existing trade is still run by a few small minority monopolies and a few DA praise singers. No wonder the dissatisfaction levels under the DA have grown alarmingly in both the city and the province. It is only the wealthy and leafy suburbs that record higher approval levels.
Is it because the DA regularly cuts infrastructure budgets and cannot spend its money in underserviced townships where it is much needed? In fact, under the DA we have seen no real development. More manufacturing and call- centre losses were recorded.
It is simply riding the surf of the groundwork done by the ANC on the new stadium, the new township hospitals, the new bus service and bringing services to the people's doorstep.
This bus service was hijacked and redirected to affluent Blouberg, and the poor in townships like Mitchells Plain and Khayelitsha have to subsidise a system that still runs at far below capacity. Thus, the most congested and overcrowded public transport routes to these townships on the Cape Flats are neglected by the DA-led government.
Clearly, the DA does not care for poor and ordinary people. It only uses them as cannon fodder, as voting cows and, ultimately, for political expediency. [Interjections.] The DA is closing down development and marketing agencies and redirecting its money and efforts towards DA supporters. We saw this in the manner in which the successful Cape Town Routes Unlimited was closed down - MEC Winde, through you, Chair - in favour of the badly run Wesgro.
Perhaps Minister Patel should consider establishing in the Western Cape a properly consultative development agency reporting directly to national government to look after the interests and aims of national government, instead of just donating money to the DA government to utilise for their party-political objectives.
This is becoming more urgent as we see the DA brand of governance being laid bare by the Public Protector as one of maladministration. And then they want to take the Public Protector to court when she gives her findings! Yes, this happened in the case of the Midvaal Local Municipality and it may soon also happen in the Western Cape provincial government. [Interjections.]
The MEC for economic development and tourism would rather hunt down small business than assist it. The DA-run administration closed down the Red Door advice outlets, reduced its spend on SMMEs, and cut funding to nonprofit organisations that served start-up and entry-level enterprises, as well as advice offices. Yes, it destroyed the mandatory consultative Western Cape Provincial Development Council and substituted it for a voluntary club where you have to pay your way to get in. To the DA, it is all about using a lot of words but doing as little as possible about issues. I see I still have a couple of minutes. [Interjections.] It is clearly reflected in the programme of the Budget Vote that this Vote does reflect 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 voting of funds.
I want to thank Ministers Patel and Davies, and the Deputy Ministers, as well as Directors-General October and Mowzer and their staff for the support they have given this committee and for the wonderful outreach work that we can do as a committee.
I also want to say that the hon Makhubela is not part of the committee, yet he wants to instruct the committee on what to do. He does not sit in on our debates or our briefings. Therefore I don't think the hon Makhubela should follow the route of the DA. He should come home to the ANC, where he will get the wisdom that he still needs in these last days. The ANC supports the Budget Vote. [Applause.] [Interjections.]
Chairperson, may I start by saying thank you for a number of contributions that have significantly enriched the debate on economic development and the issues that we need to respond to in the 12 months ahead.
I particularly appreciate the way in which a number of speakers have begun to take on the framework of the New Growth Path. They are seeing how we are provincialising it. They are also seeing in the infrastructure plan an opportunity to lay the basis for long-term sustainable growth.
Cllr Mafefe from Salga raised the issue of partnership. Local government is a critical partner in what we do and we will certainly be working very closely with you.
To respond to the content of the debate, I will start with an observation made by the hon Van Lingen on job numbers. It is perhaps worth explaining that the Quarterly Labour Force Survey publishes information every three months. The information can be compared to either the previous quarter or to the same period one year earlier. Quarter 1 of every year causes difficulties from a statistical point of view because companies, retailers and factories tool up for the Christmas period and they tool down immediately thereafter. That is called a seasonal problem. So, what we need to look at is this: What is the trend line on a like-for-like comparison? So, we compare Quarter 1 last year with Quarter 1 this year, to see what the trend line is and to take out the distortion of seasonal changes. On that trend line, the economy grew about 300 000 new jobs for the year. We now need to build on that, strengthen it and also improve it.
I would like to refer to the comments made by MEC Mokoena, who noted the global context and the more difficult environment we face. What happens in Europe or Greece matters to us. It can have a very deep and profound impact on the demand for South African cars, fruit, electronics and minerals. Therefore, the lesson to take from the global uncertainty and the fragile state of the global economy is that we have to discover a stronger basis for growth in our own economy and on the African continent. Minister Davies devoted some time in his introductory comments specifically to the importance of African development. In that context, more can and needs to be done in South Africa. I want to refer to a few things that we have done and continue to do.
Let's start with rural development. Hon Gamede raised the issue of rural development and the green economy. MEC Jonas talked about the importance of deepening the agroprocessing value chain as a means of lifting rural communities out of poverty. They are right, because it is in rural development where there are some of the biggest opportunities to create new jobs. When you compare Brazil's industrial structure with that of South Africa, you see one of the most significant differences is the greater success Brazil has had in absorbing people into agriculture and agroprocessing. We have to focus on that.
So, what are we doing? We are now using a range of tools, such as trade. Hon Dikgale pointed to what Itac had done regarding tomato paste, namely creating a demand for South African tomatoes and the processing of those tomatoes into tomato paste. I gave the example earlier of chickens and of how Itac added on an antidumping duty. The IDC then moved in and aggressively supported an expansion of chicken broiler activities and the jobs that can come from that.
We are doing work using competition tools. Pioneer is a good example of where we have worked on one of the big problems. Farmers cannot always have access to competitive markets because you can have a competitive industry upstream but downstream you may find controls, price-fixing and collusion. So, our work in the Competition Commission is intended precisely to open that up.
One of the hon members referred to the example of Walmart. What is critical for us regarding Walmart is this. We know we will be able to shop at Walmart. The question is where the goods will be made. Will we basically be creating jobs elsewhere in the world by buying greater and greater levels of imported products or can we have a commitment from the retail sector to purchase more South African-made goods and put them on the shelves?
However, this is not just an act of will. It also means addressing the competitiveness challenges of local industry - skills development, improvements in technology, better factory layout and a broader improvement of productivity. That means partnership, and that brings me to the issue that has come up regarding youth employment.
Let us start with the facts. The level of youth unemployment is extraordinarily high. It is a feature we have seen in many countries. If we look at the example of Spain, we see it has now become very similar to South Africa. We cannot simply sit back and accept this high level of youth unemployment. We need a youth-centred set of employment programmes - there is no question about it.
But how do you implement it? Do you implement it by creating a war zone between old workers and new workers? Do you create it by a zero-sum game, in which some must give up their jobs to bring in others? Or do we now aggressively - aggressively - increase the number of jobs in the economy and introduce programmes that can bring young people into jobs?
For example, at the skills level, at the moment we have shortages of people in the economy who can be employed. There are people out there who are ready to work, and there are employers wishing to employ, but there is a mismatch in skills. As was said by hon Nyambi, the National Skills Accord that we concluded is one effort to better connect the skills of young people and the employment opportunities in the workplace. It is about internships. It is about exposure to work experience and placement. It is about creating a ratio of trainees to artisans. It is about incentivising companies to bring more people into the training pipeline. But it goes beyond skills - it also means opportunity. So, how do we create that opportunity? In the infrastructure programme we will be setting very clear youth targets to ensure that we bring young people into areas in the green economy where there are no employment opportunities currently. An infrastructure programme is being launched and we will then disproportionately draw in young people to give them work exposure. It means, for example, in Public Works, that we are now setting targets regarding the number of jobs.
Hon Minister, please wrap up.
Thank you. Finally, it means commitments from the private sector. So, in my opinion the choice we face on youth employment is that you can either turn it into a political football or you can have real partnership - a partnership that embraces the business community, organised labour and government, all working together.
In conclusion, I would like to express my appreciation of the suggestions that have been made. I hope that when we come here next year there will be an opportunity to report on how much further we have been able to go with the suggestions and proposals that hon members have made and the ideas they have raised. [Applause.]
Thanks to hon members for their contributions. I have very little time. I will just go through a couple of questions point by point.
First of all, regarding SMMEs and 30-day payments, I should indicate, as the hon MEC Mahlangu was starting to do, that this is in fact contrary to Treasury rules. If you do not pay in 30 days, you can get the attention of the Auditor-General.
However, our department, through one of its agencies - the Small Enterprise Development Agency - has been acting proactively on this. Seda has been operating a call centre to deal with this matter. As of 12 February 2012, 25 000 calls have been taken by this call centre and we have facilitated payments to SMMEs in excess of R280 million. If hon members want to be serious about this matter, instead of just trying to pontificate on platforms, they should mention that the number concerned is 0860 766 3729.
Regarding the SEZ incentives issue that was raised, we are engaged with National Treasury on this. We are advancing in putting together a package of incentives, which will specifically include tax incentives as well. That is a work in progress and it is something we very much want to take up.
I hear the hon Gamede, the chairperson of the Select Committee on Trade and International Relations, and the call for an amnesty for people who are blacklisted. Blacklisting is done, of course, by credit bureaus, which are not government departments but private entities, although they do operate under the regulatory oversight of the National Credit Regulator. What we will do is contact the National Credit Regulator and find a way of once more engaging with the select committee to see how we can address that particular proposal.
I am pleased that the hon Winde acknowledged the work of the DTI in resuscitating the Universal Africa Lines investment in Saldanha Bay. Let me say that one of the reasons we escalated the oil and gas servicing programme to being a national programme under Ipap was precisely because we needed to have a focused engagement with ports authorities. It is not unique to South Africa that ports authorities do not automatically realise that activities in ports are critical job creators. I think we have been able to create a considerable new momentum in this regard. I personally had a conversation with the CEO of Transnet, who is well aware of the significance of these kinds of programmes.
Cllr Mafefe of Salga called on us to partner with them in various programmes around the UN International Year of Co-operatives. Let's just say that the department already has a number of programmes to commemorate international co-operatives year. We can engage with Salga to see how we can work with them as well.
Finally, I want to reinforce the point MEC Mahlangu made about how we should all act to multiply the designations on localisation with actions and decisions of our own. The hon Abrahams said the DTI must work to create opportunities for clothing workers to produce Proudly South African products. I can only say, "Amen!" to that, but it is not only us. This is an activity for all of us. It is precisely for that reason that we took up the question of localisation in the form of an agreement, through the social dialogue process, under the New Growth Path. Government, business and organised labour agreed that they would be making decisions on localisation. I would suggest that there are others who might want to follow suit. So, if there are those around who, for some reason, want to deck people out in blue T-shirts and send them into the streets, let's at least make sure the blue T-shirts are made in South Africa! [Applause.]
Debate concluded.