Speaker, the weaker than expected GDP data during the first three months of this year was heavily influenced by a number of sporadic factors that impacted negatively on growth.
Weak economic activity was primarily due to output losses in the manufacturing sector, which subtracted 1,2 percentage points from growth in the first quarter as a result of various supply-side disruptions. Hon members are also aware of the disruptions in the mining sector. Added to this are global economic factors that are beyond our control. A more liberal approach to product markets would not have avoided these negative developments. Given the temporary nature of the disruptions, we may expect a rebound in manufacturing activity during the second quarter of this year. We are also working with labour and the mining sector to resolve problems in that sector. It is important to note that South Africa's product markets perform relatively well in international comparisons.
The World Economic Forum's Global Competitiveness Report for 2012-13 ranks South Africa 32nd out of 144 countries in terms of its goods market efficiency, performing well across a number of indicators. We rank sixth for the effectiveness of antimonopoly policy and in the top 40 in terms of the extent of market dominance. We rank 31st in the extent and effect of taxation, 29th in the number of procedures to start a business, 39th in the prevalence of trade barriers, and 32nd in buyer sophistication.
The National Development Plan highlights the importance of lowering the cost of doing business in order to improve competitiveness. This includes actions to reduce regulatory burdens and to promote entrepreneurship and small business.
Recently we have made progress with a range of measures that will influence product markets and competition. These include the following: the signing of section 6 of the Competition Amendment Act, Act 1 of 2009 with amendments that give the Competition Commission powers to conduct a market inquiry, search and seize powers, and powers to summon firms to present information; progress towards establishing special economic zones, which will include a range of incentives aimed at attracting investment, reducing red tape and increasing competitiveness; the SA Revenue Service customs modernisation programme, which has moved customs procedures from paper- based to electronic processes, a process that has enhanced the flow of goods, improved turnaround times, and reduced trading costs; and a more favourable tax environment for small businesses, as government has increased the R14 million turnover threshold for small business corporations to R20 million. These measures and others identified in the National Development Plan and other policy documents of government will help in creating a product market that is conducive to growth, investment, firm start-ups and expansion, and job creation.
Hon member, it is a misconception that our economic growth in the first quarter was heavily adversely affected by our country's labour regulations. The crisis in the agricultural sector emanated from unequal relationships between employers and employees and the high levels of poverty as opposed to our country's labour laws. The challenges in the mining sector, as we have explained before, are also not as a result of our labour regulations, and these are being attended to in discussions facilitated by government. I thank you, hon Speaker. [Applause.]
Hon Speaker, I thank the hon President for the response. In the question I did indicate that labour legislation was one of the factors, and not the only factor, that impacted on the low economic growth.
Mr President, during your reply to the debate on Budget Vote 1 - The Presidency, you focused largely upon unrest and labour issues in the mining sector and their impact on the economy. This was justifiable, and is still justifiable, given the vast contribution that the mining sector makes to our GDP. However, recent data that has been released in regard to small and medium enterprises suggests that these enterprises contribute about half of the total employment and more than 30% of the GDP.
Yet the Basic Conditions of Employment Act and the Labour Relations Act sometimes impose regulations that constrain the growth of our SMME sector. In today's edition of the Business Day newspaper we see data confirming that "the current slow economic growth is hurting job creation".
Government has a responsibility to ensure that everything should be done not to make the strong weaker but, importantly, to make the weak stronger. It is in this regard that my question to the President is: Do you not think, Your Excellency, that it is prudent to move swiftly to deregulate some of the existing labour constraints currently in place on small businesses and sole proprietorships? Thank you.
Speaker, I think the issue of small business has been discussed, and it continues to be discussed. This is because everyone agrees that in countries that have succeeded in addressing the question of economic growth, in the first instance, and also employment, small businesses have played a role.
However, I think it is important to look at the South African history, because that has a lot to do with it. We are not like other countries, because we are dealing with an economy that was racially based and we have to change that paradigm in the main and deal with the issues.
We are also dealing with the kind of labour relations that are related to the economy from that point of view. There are many things, therefore, that you need to address as you address that question. For example, there are complaints at times with regard to the recognition that democracy has given to farmworkers and domestic workers who in the past were not part of the labour force. We have to begin there and ask ourselves how we are going to address the issue of determining the basic salaries that must be paid to such people.
So, there have been a lot of issues where, if you do not look at them and consider the background - where we come from - you might look at them like you would at any other country and then wonder why South Africa is not doing what other countries are doing. It is not doing so, firstly, because you have to deracialise the economy - that has been one of the problems - whilst addressing other issues. If you look at labour, there were situations where certain workers were not recognised as workers!
So, I am saying that we have a complex kind of economy and a complex kind of society that we have to deal with. For example, as you have mentioned, you cannot say that for us to correct the economy we must make the strong weaker. It is the other way round - let us make the weak stronger. You cannot then say that because of the structure of the economy those who benefited from labour relations must relax the laws in order to accept the ones who were disadvantaged. I think that argument applies here again.
How then do we deal with this? This is a tough kind of challenge that we all face in regard to our economy. I think that relatively speaking we have done very well to address those unique challenges that other countries have never had. No country ever had an institutionalised racial policy which impacted very seriously on the poor, on the majority, including on education and everything else.
So, these are the issues we are dealing with and, taking that into consideration, we are making progress. We are all aware of these kinds of challenges. We are trying our level best to ensure that this economy grows and that it is inclusive. Thank you. [Applause.]
Mr Speaker, it is clear that labour unrest is a major cause of the breakdown in investor confidence in our economy and our poor GDP growth performance, which collapsed to 0,9% last month.
Because of lost productivity and continuing unrest, companies have been forced to shed thousands and thousands of jobs. Yesterday economists at Japan's Nomura Bank warned that up to 145 000 jobs and 60% of South Africa's platinum output could be at risk in the coming years amid labour unrest in the sector.
Our country needs decisive leadership at this time of economic hardship. We are in desperate need of policy stability and immediate reform in order to stimulate growth. Democratising the labour relations framework and, in particular, the requirement of balloting before a strike could go a long way towards solving the underlying causes of the labour crisis.
Mr Speaker, is the hon President aware that his own party in Parliament is working against his government's efforts to help resolve the labour crisis by rejecting the Department of Labour's proposal to conduct a ballot among workers before a strike? Does the hon President support the principle of the workers' right to take part in a ballot before a strike? Thank you.
Speaker, firstly, I think there is leadership in this country, very clear leadership. There is also certainty on policy. There is no uncertainty on economic policy, and I would not accept the fact that there is no certainty, as there is certainty. This does not deny people the right to have their own views on the economy, as economists will always have different views on matters. However, I think it is not correct to say that there is no certainty on policy; there is certainty on policy.
As far as the issue of labour is concerned, there are matters that affect labour relations, and there are things that had been agreed upon at the bargaining level, things that the workers are grappling with. Because of the issues on which the workers have not agreed, particularly with the emergence of new unions, with new kinds of situations developing, about which they feel very strongly, government has asked the Deputy President to interact with the workers as well as with the management of the mining sector to discuss these matters. I think they are moving very close to agreeing on the matters that have to be addressed in dealing with the problems at the mining level.
Certainly, workers must have the right to participate in the manner that has been agreed upon. There are agreements that were made a long time ago and people have acted according to them without any difficulty. I think the difficulty has come in the manner in which the recent problems in the mines have emerged. This has a lot of different elements in it which influence the manner in which the interaction has been going on. We are saying it is important that all players, all stakeholders, come together to discuss and agree on what it is best to do. I think they need to be given a chance.
Of course, in that process Parliament can debate matters in different ways and have different views on how they think the matter should be resolved. Those are parliamentary processes that are going on. I think in a lot of the processes people are participating in the actual things that need to be done, and not just debates. Our Deputy President has been doing very well in this respect, representing government. Thank you. [Applause.]
Mr Speaker, Mr President, we have seen headlines about the economy recently, and it does not make good reading. We do not have control over global economic conditions, so it is important to focus on the stuff we - and especially you - can influence. Perceptions investors have about us now come into play.
South Africa faces a host of its own issues, especially with its twin deficits. In April 2013 the deficit was R41 billion - about double the forecast. The April trade deficit was R15 billion, double that of March. Foreigners are now net sellers of our equities, making the currency volatile.
It is not your speeches, Mr President, but because of that, your behaviour will be closely watched. Do you not think that it is time to send a strong message that you are on the side of saving expenditure, and that in the next reshuffle of your Cabinet you will shrink it to the levels of your predecessors? With almost 60 Ministers and Deputy Ministers, you are harbouring one of the largest Cabinets in the world. If you do shrink it, investors will take you more seriously.
Speaker, the hon member is putting his own views on the matter - absolutely correct as an opposition member! For example, he is saying that some headlines do not read very well. Who are responsible for those headlines? Is it not the manner in which the opposition raise matters? [Interjections.] So there are many things involved, and I am saying that you can come at it from any angle.
I think we have done very well. I think we are dealing with matters very objectively and we are in a better position to explain whatever needs to be explained, whatever makes bad reading as a result of the statements that people make. We are able to indicate why our government is what it is and what it is doing. I can tell you that generally people are saying that we are doing very well. I have just come back from Japan. They are full of praise for South Africa, stating that South Africa is doing very well. These are key investors. [Applause.] So, the perception that is being thrown around, that those investors are worried, is not true at all. We meet with them all the time. [Interjections.]
All I am saying is that I would be very happy if all of us were conscious of the headlines and therefore know exactly what we have to say for the betterment of the country. Thank you. [Applause.]
Hon Speaker, Comrade President, the hon Singh's question presupposes that liberal labour and market policies are an effective tool for achieving higher economic growth rates, whereas we all know that those liberal policies precipitated the global economic crisis of 2008 and 2009.
Will the President share with the House why the 53rd National Conference of the governing party, the ANC, reaffirmed the creation of a mixed economy by a capable developmental state as the policy to attain higher economic growth rates and a better life for all? Will the President also reconfirm his government's commitment to labour rights as human rights, like all the property rights? Thank you. [Applause.]
Speaker, certainly the President will confirm those policies - there is no doubt about that!
The issue here is really, as I have said, that economies look at things from whatever angle they are at. The developmental state and policies talk to an approach where they deal with inclusive growth of the economy, and that would not be an economy that does not take responsibility for the poor. How do you deal with that issue? For example, you could grow the economy without dealing with the poor, and so on, but that would not solve the problem. You would remain with the problem.
Our policies are well balanced in regard to dealing with the economy of our country and with the challenges, some of which are historic. How do you correct them? These are policies that deal with that. Therefore, I confirm the policies of the ruling party as absolutely correct. No one could argue against them; whoever argues against them does not understand the South African setting. Thank you, hon Speaker. [Applause.]
Money allegedly deposited in South Africa on behalf of late Col M Gaddafi
12. Mr L Ramatlakane (Cope) asked the President of the Republic:
(1) Whether his office has had any (a) contact or (b) meeting with a representative of the Libyan government regarding substantive sums of money allegedly deposited on behalf of the late Col M Gaddafi and held by banking institutions in South Africa; if so, when, in each case;
(2) whether the representative of the Libyan government informed his office of these deposits and the banking institutions that are holding them with a view to transferring the monies back to Libya; if so, what are the relevant details;
(3) whether he will make a statement on the matter? NO1707E
Hon Speaker, yes, the Presidency was approached by officials from the Libyan government regarding reported sums of money allegedly deposited on behalf of the late Col Muammar Gaddafi and held by banking institutions in South Africa. They were referred to the Ministry of Finance.
On 4 June, Minister Pravin Gordhan met Mr Usama al Abid, the Minister in the Office of the Libyan Prime Minister. The two delegations agreed that the repatriation of Libyan funds and assets from South Africa would be handled in terms of United Nations resolutions and protocols. The decision was informed by the fact that the government of Libya established a single body in 2012 to co-ordinate the repatriation of assets to Libya, in line with United Nations protocols. I thank you, hon Speaker.
Speaker, I thank the President for his response. My follow-up question is in relation to the "yes" part. It is widely reported that about five meetings took place on this issue of assets that belonged to the late Col Gaddafi. What is not clear is this. There seem to be two factions. Some are saying these are assets that belonged to the late colonel, and the other view is that they did not belong to him, but to the state. Now perhaps you could shed some light on who they actually belong to.
The last point is related to reports that the head of security of the ANC party has been involved in this discussion about the recovery of money. What is not clear is the connection between the ANC party and the recovery of the money. Could you shed some light on that, because we believe it is a state-to-state issue.
Hon Speaker, with regard to the last part, I do not know. It has not come to my ears that some ANC head of security was involved. So, I do not know about it.
With regard to whether the money belonged to Col Gaddafi or the state, I do not know that either. I do not know how this money came here or who the owner of it is. The only thing I have answered is this - Libyan officials came here asking for what they knew was here, and apparently ... [Interjections.] Yes, it is, and therefore there was discussion of the arrangements for how it had to be taken back. [Interjections.] As to whether it belongs to an individual or the state, I do not know. Thank you.
I have on my list the following speakers: the hon C C September, N J J Koornhof and the hon M Hlengwa. There are only four speakers, not five. Four. Proceed, Mr President.
The question has not been asked as yet. [Laughter.]
Oh! Please do ask the question. [Laughter.]
Dankie, agb Speaker en agb President. Die ANC is trots daarop dat die ANC ... [Thank you, hon Speaker and hon President. The ANC is proud of the fact that the ANC ...]
Shall we give the President an opportunity to use his machine?
Absolutely. [Laughter.]
Umshini wam ... [Interjections.] [Laughter.] Die ANC is trots daarop dat die ANC-beheerde regering internasionale sake binne die bre raamwerk van multilaterale instansies aanpak. Die ANC is ook trots daarop ons dat in Suid-Afrika altyd by die integriteit van ons finansile regulasies en die reguleringsraamwerk hou. As daar 'n behoefte is aan of 'n vraag bestaan vir 'n ondersoek na die Libiese bates, sal die agb President die moontlikheid oorweeg dat die Parlement die uitslag van so 'n ondersoek ontvang as dit nodig is? Ek dank u. (Translation of Afrikaans paragraph follows.)
[The ANC is proud of the fact that the ANC-controlled government addresses international affairs within the broad framework of multilateral bodies. The ANC is also proud of the fact that in South Africa we always uphold the integrity of our financial regulations and the regulatory framework. If a need arises or there is a question concerning an investigation into the Libyan assets, will the hon President consider the possibility that Parliament could receive the result of such an investigation if necessary? I thank you.]
Hon Speaker, certainly our financial institutions are well regulated. That is the reason why no one can come and say there is money from their country here and we will not know where it is. Things have been properly regulated and I think we should be happy that South Africa cannot be abused in that way.
With regard to this specific case we are talking about - or any other case - I believe that once that government links up with ours, we will be able to discuss the matter and resolve it.
Let me refer to a situation where the matter is not resolvable. I am sure that if there is a need for Parliament to participate, we shall not even be certain if that is a thing we can start with. Even if Parliament participated, I do not think it could do better than the financial institutions. For example, the Treasury or the Minister of Finance or the Reserve Bank knows about every penny that moves. I think they are instruments that we could utilise as a country to find out anything about it and what happened, if it was a matter between one country and South Africa. It is a different matter if there are funds in the country where oversight and accountability need to be exercised. I think government has always agreed that Parliament must play a role and, in that case, Parliament will certainly play its role. Thank you, hon Speaker.
Mr Speaker, Mr President, we all remember that the late Col Gaddafi was upset at the way he was announced at your inauguration and he made a second entrance. Why is his money here? Then, on a lighter note, Mr President, was your name dropped in Libya? [Laughter.]
Well, hon Speaker, I do not know whether my name was dropped in Libya! I do not know. Secondly, I do not know why Gaddafi's money or Libyan money is here. I do not know. I was never involved in whatever caused that money to come here, so I do not know that either. Thank you, hon Speaker.
Hon Speaker, hon President, at the centre of this whole controversy is the name of a certain Bashir Saleh, who has been touted as the Gaddafi banker. What I am seeking from the President in connection with what has been reported is this. Is he willing to launch an investigation into this matter ... [Interjections.] ... as this gentleman has been spotted in South Africa - at the ANC centenary gala dinner and also at the Brics summit in Durban? What is of concern is that this gentleman is on Interpol's wanted list! With South Africa being a signatory to Interpol, how did he slip through the cracks in order to be in the country and move freely in and out? [Interjections.]
Is the President willing to launch an investigation into that particular aspect so that we can get to the bottom of how these monies actually got into the country? [Interjections.] I say that it is one thing for us to offer congratulations for the fact that the money has gone back. [Interjections.]
Order, hon members! Order!
But how did the money get here to begin with? [Time expired.]
Hon Speaker, I am not certain that South Africa has the resources, each time there is a mention of somebody or there are allegations that somebody is a criminal or is wanted, to take it upon itself to investigate. I do not think we can work like that. I do not think so.
Whether this man was a Gaddafi man or whether he was involved with the money, I do not know. However, I think it would be funny for South Africa, whenever there is a mention of someone that is wanted by the police internationally, to stop other things and investigate this person. We do not even know why he is wanted. [Interjections.] I do not know what type of government we would be. [Interjections.]
Order, hon members! Order!
If a country said there was somebody who was wanted, that he did x, y and z, that he was in South Africa and they were asking the South African authorities to help them deal with the matter, that would be a different matter. That is co-operation and there are bilateral agreements between the countries involved.
However, if it is just mentioned by the media or whoever that so-and-so who is going in and out of our country is alleged to be x, y and z, and you then stop everything to investigate, well, I do not think that governments work in that way. Thank you, hon Speaker. [Applause.]
I thank the hon President. Hon members, that concludes questions to the President. [Applause.] You will have noticed that we have exceeded the question time, but I was informed that parties had agreed to allow the President to finish answering all the questions. I would like to take this opportunity to thank you all and to wish you all a very good evening.
See also QUESTIONS AND REPLIES.