Deputy Speaker and hon Deputy President, the DA fully supports the constitutional provisions for affirmative action and the objectives of the Employment Equity Act to promote redress and diversity in the South African labour market. The DA believes that it is desirable that individuals from diverse backgrounds should lead, participate in and form part of businesses and other organisations in South Africa and that corrective action should be taken to achieve such diversity.
However, while we support the general thrust of the Employment Equity Amendment Bill before this House today, we remain concerned about some provisions in the Bill. We believe some of these amendments could have far- reaching negative impacts on the labour market and consequently the economy of the country because of unintended consequences.
We always need to remind ourselves that employment equity and affirmative action have very strong inherent weaknesses because they are concerned only with those people who are in employment. These are people who are already "affirmed" in that they have a job, and they are being developed and assisted to move up the ladders of authority and salary in the economy. These necessary interventions say absolutely nothing and do absolutely nothing for the more than 7 million South Africans who cannot be affirmed because they are unemployed and remain outside the labour relations framework.
Herein lies the country's greatest challenge and potential threat to our economy and political stability. For instance, complaints of unfair discrimination on the basis of equal pay for work of equal value could prove to be complex. This could put even greater stress on the already stretched resources of the Commission for Conciliation, Mediation and Arbitration and therefore regulations in this regard need to be crafted very carefully.
We also believe that linking certain penalties for noncompliance to a company's annual turnover could be very risky because some vulnerable designated employers, particularly small and medium enterprises, may not be able to survive such fines and could be forced to shut down, at the cost of much-needed jobs.
In a perfect world all designated employers would comply with the law, but we are not there yet. Laws such as the Employment Equity Amendment Bill should therefore not be made for punitive reasons, driven by frustration and impatience. Such an approach merely increases the degree of inflexibility in our labour legislation regime. This raises the barriers to job creation and that cannot be good for employment and economic growth.
The Commission for Employment Equity was scathing in its latest report about the lack of progress in this area. Government, business and labour therefore need to engender a sense of common purpose and mutual trust with regard to employment equity if this country is to show significant improvement in the next employment equity report.
Employers should be encouraged to understand that employment equity and affirmative action are business and economic imperatives necessary for effective nation-building and to grow the country's tax base. This is necessary to provide the funds needed to service the ever-growing number of newly unemployed workers who survive on finite unemployment insurance benefits and the millions of South Africans who depend on social grants. Here we need to remind ourselves that the fact that millions of South African are on social grants is not to be celebrated. It simply means that millions of our people are poverty-stricken. Heavy penalties for the errant behaviour of those who provide employment and contribute to the growth of the economy could be counterproductive and should be resisted. Sometimes incentives can have a more positive effect than punishment. I thank you. [Applause.]