Hon House Chair, hon Deputy President and hon members. In the recent past, our economy recorded higher growth accompanied by shedding jobs; this is a reality. This was a result of financialisation of our economy, which means engaging in speculative investment as opposed to investment in productive activity.
The ANC is not a reckless government [Interjections.] [Applause.] On the contrary, we are a caring government. We make an admission that our economy is not performing, it is in dire strain; that is an admission that each and every one of us here has to make. We will come back to this later but most importantly, is that we acknowledge the weakness but we do not end there. We have a duty to come with solutions and support the President's exploratory direction.
Hon Chair, let me remind hon Hill-Lewis because he doesn't walk the distance as he raises the issue of the apartheid era laws. [Interjections.] Intentionally, it's very useful ... it's useless because you're there. The issue prescribed assets is not a new issue in our country. You are right hon member. The Pension Funds Act of 1956 held prescribed assets levels to 75% for the Public Investment Corporation, PIC, and 33% for long- term insurers. These prescribed assets were to be invested in the debt of state- owned companies and government bonds.
At the height of the apartheid regime between 1956 and 1989, when South Africa was economically cut off from global financial markets, the regime put on the prescribed assets policy in order to stimulate domestic investment and, therefore, economic growth.
The industrialization and employment creation drive of the apartheid regime in the 1950s, 1960s and so on, spawned many enterprises to play an important role in the South African economy.
Your railways, harbours, Denel, Armscor, SA Airways, SAA, even the now disbanded nuclear programme. These enterprises did not only support the economy and provide jobs, but also provided generous benefits such as training, subsidised housing and employee benefits like pensions, health, disability and death benefits. These projects together with job reservation were instrumental in ending the white, especially Afrikaner, unemployment and poverty. The majority of the oppressed, however, remained uncatered for at the time. They provided a cadre of trained artisans and professionals for industry and the economy as a whole as well as entrepreneurs on whom the country still relied on. The question then is: Didn't these and other similar initiatives make prescribed assets worthwhile even if the investment return was constrained only to a few privileged?
Perhaps we should as well highlight some of the achievements of the Government Employee Pension Fund, GEPF, through its investment wing the, PIC, to illustrate how investments by state institutions in the productive sectors can contribute to economic growth.
The GEPF report of 2018 record that investment grew by 8,3% during 2017-18 financial year. This was largely driven by allocations into domestic assets, particularly domestic bonds and equities.
The PIC on behalf of GEPF is investing in strategic sectors which will create jobs and economy growth. These investments include the Liquefied Petroleum GAS, LPG, import terminal in Saldanha Bay. This project presents an attractive investment for the GEPF, while also enabling the pension fund to play a role in job creation.
The PIC board - I will repeat this again - is now inclusive of the trade union movement because the government of the ANC is learning from past mistakes. [Interjections.]
During the reporting period, the pension fund's investments supported 538 small and medium-sized enterprises, SMEs, in sectors such as housing, energy, health, tourism and agriculture.
The GEPF invests in affordable housing infrastructure to contribute to the realization of the goals of the National Development Plan, NDP, while ensuring sustainable financial returns from its investments. Through its investments, the pension fund has also allocated 664 housing projects and 34 000 housing units.
Now, the ANC sponsors a developmental approach to transform our economy in which strategic state-owned enterprises should play a role in economic growth.
This debate by the DA raises a number of questions. One of the questions is: Whether this debate is an ideological debate in which the DA intends to convince us of its neo-liberal ideological stance which is not relevant to the South African economic challenges? [Interjections.] [Applause.]
The other question is: Whether the DA seeks to subject us to scarecrow tactics of sensationalizing what government is suggesting in our policy?
Given that the DA has not done so well in the recent elections, it will be expected that it will try all tactics in the book to gain lost ground. [Interjections.] [Laughter.]
To illustrate this scarecrow tactics of the DA, perhaps we should quote what Mr Hill-Lewis said on our policy proposal: "Asset prescription is an irresponsible and unacceptable policy proposal. It should be rejected by all South Africans." [Applause.]
It is perfectly obvious that our policy on prescribed assets will not be rejected by every South African because not every South African voted for you, hon Hill-Lewis. [Interjections.] The overwhelming South Africans have voted for the ANC while we proposed this policy to them.
Our conference resolution says that our government should introduce measures to ensure adequate financial resources are directed to developmental purposes. The resolution goes further to say that a new prescribed asset requirement should be investigated to ensure that a portion of all financial
institutions' funds be invested in public infrastructure, skills development and job creation.
In response to the question on the same subject of prescribed asset asked by Mr Maimane. The President responded by saying the issue of prescribed assets has been discussed over and over again, and in the end, we are going to pursue policies that are going to advance the interests of the majority of the people of South Africa. [Applause.] They have been oppressed for too long. We are going to advance the interests of pension fund holders, the very workers of this country who are members of trade unions.
For the first time I hear hon Hill-Lewis representing trade unions; it's laughable. [Interjections.]
Both the conference resolution and the response by the President are consistent with the character of the ANC, which is about the application of evidence-based policy implementation which requires that we should be guided by the realities on the ground
[Time expired.] We are turning the corner in favour of the people. [Applause.]