Chairperson, hon members, ladies and gentlemen, from time to time I work with people with different skills. Those who are with us today are statisticians. I also work with the economists. Economists make assumptions, and if there was a group of economists today, they would say, assume that the House is full this afternoon. [Laughter.] But unfortunately the statisticians physically have to count, and it's a bit of a contradiction.
Last year when we participated in the Budget Vote of Statistics SA, we thanked everyone in the country for having participated in Census 2011 the previous October. At that point we were still waiting for the results of the census. We released the Census 2011 results on 30 October 2012 in both the standard formats and the ground-breaking Ipad tablet format that some members have obviously seen because the Statistician-General wouldn't want anybody not to have them.
Whilst the purpose of the debate here today is to discuss Budget Vote No 13 of Statistics SA, it is crucial to ensure that the discussions here, very importantly, have context. So, the appeal to Parliament in the course of this debate is to ask a series of questions about the resources available to Statistics SA and about the quality of these and other outputs being published.
For the outputs of Statistics SA to have relevance for development, Parliament needs to advance the discussion about the manner in which available statistics are being utilised for evidence-based policy-making.
I want to emphasise that the responsibility of Stats SA is solely to ensure that the necessary statistics are available, verifiable and that they meet internationally set standards. Statistics SA, supported by the statistics council and the executive authority, must ensure that the manner in which the data is presented is above reproach. One of the significant breakthroughs from the publication of Census 2011 last year is the form and style of data availability. Last week, members of the Standing Committee on Finance were provided with a demonstration of the availability of detailed statistics at ward level, using the My Ward, My Councillor section of the Statistics SA tablet application.
We should point out that the availability of this huge wealth of data in this format is without precedent and places Statistics SA in a position where it is also globally without peer.
The same application is now being used for new releases, and so the quarterly gross domestic product, GDP, release; the mortality and causes of death information; last week, for the very first time, the quarterly labour force survey; and yesterday the mid-year estimates of population, were all released in this format.
We want to submit that in doing so, Statistics SA is discharging its obligation to ensure the timeous dissemination of statistics, as prescribed in section 3 of the Statistics Act, Act 6 of 1999.
However, despite the ease of use and the level of detail availing all of this data in this contemporary format, it appears insufficient to spark curiosity or interest from legislators, policy-makers or the general public. It is this that Parliament must take a view of because, once the data is available, it is no longer Statistics SA's responsibility, but it's the responsibility of all of us who care.
Before I get into the substance of this debate, it may be important for me to reiterate the explanation provided to the standing committee about the definition of employment used by the quarterly labour force survey, QLFS. It would appear that, despite our explanations at the meeting last week, there is still some misunderstanding about the information and figures that Statistics SA releases.
Statistics SA reinstated the expanded definition of unemployment when the decision was made to expand the labour force survey to a quarterly one in 2008. However, the headline figure that is released as the official figure is based on the International Labour Organisation definition where someone is considered unemployed if they meet the following criteria: firstly, without work, that is, were not in paid employment or self-employment as defined by the international definition of employment; secondly, seeking work, that is, have taken active steps in a specified recent period to seek paid employment or self-employment; and lastly, currently available for work.
This adherence to the International Labour Organisation, ILO, definition is to ensure that the current labour market situation is measured objectively and that the measurement can be used to assess South Africa in relation to other countries.
We need to bear in mind that this definition works well under circumstances where the working population engages in paid employment and where the channels for exchange of labour exist and are widely used.
However, the ILO recognises that the definition does not take into account instances where a large portion of the population is engaged in subsistence farming, the labour force is largely self-employed or the labour market is largely unorganised or of limited scope. Statistics SA recognises that there could be impediments to searching for employment for some sections of the population.
The cost of looking for a job is often so exorbitant, relatively speaking, resulting in increasing numbers of discouraged job seekers. Thus, it reports on both the strict unemployment rate and the relaxed, or expanded rate. If any member chooses to look at the information available either on the website or by using the application, they will have access to a complete breakdown of unemployment in terms of race, gender, geographical location, age group, industry, etc.
The notion of having more than one unemployment rate is not unique to South Africa. For example, the United States has six measures of unemployment, with only two being official numbers. We need to recognise that the two unemployment rates in South Africa are not in conflict but rather, they provide indicators for different components of the economy.
While it may seem that I have digressed somewhat from the Budget Vote under discussion today, it is imperative that we understand the importance of maintaining public trust in the outputs of Statistics SA.
If this budget is to be approved by Parliament, we must address not only the issue of resources, but also the quality of the outputs. I want to remind the House of the mandate of Statistics SA as outlined in the Statistics Act, specifically section 3(1), which states that:
The purpose of official statistics is to assist organs of state, businesses, other organisations or the public in -
a) planning; b) decision-making or other actions; c) monitoring or assessment of policies, decision-making or other actions.
The definitions used by Statistics SA therefore have wider implications for planning and assessing the state of our economy as a barometer within the country and internationally. While the quarterly labour force survey measures unemployment using a quarterly household survey of 30 000 households, it's not the only measure. Statistics SA releases quarterly employment statistics that measure the level of employment in all nonagricultural sectors.
It does so by undertaking quarterly surveys of about 20 208 enterprises that are registered for value added tax, VAT, and that are either public or private. In an ideal situation, the results of these two datasets should tend to be similar. That is why in the definitions or in the case of the quarterly labour force survey, QLFS, self-definition becomes a factor. The strategic focus of Statistics SA is to ensure that the work of these two areas is more closely integrated in future to provide for an improved understanding of employment.
In the current financial year, there will be a continued focus on improving the output of a range of equally important datasets that concentrate on the changing demographic profile and health of the population, poverty levels and income and expenditure trends. These are managed through the Poverty and Inequality Statistics, Health and Vital Statistics and Demographic Analysis subprogrammes.
In addition to these regular series relating to social statistics, both government and the private sector rely on key economic data published by Statistics SA.
During my speech last year I referred to the implementation of significant changes in economic statistics, notably in the form of a reweighted and rebased consumer price index, CPI. In line with its programme of continuous quality improvement, the CPI was updated to reflect more accurately changes of prices that affect the lives of households
The refinement assists in ensuring that the SA Reserve Bank has accurate information at its disposal when it makes interest rate decisions. In addition, the producer price index, PPI, was completely overhauled to align it with international benchmarks.
The new suite of five PPIS replaced the single index to allow analysts to provide a better understanding of the transmission of prices through the economy. The new 2012 base ensures that the PPI reflects the dynamics of the economy more accurately. In line with the announcement last year, Statistics SA implemented those changes three months ago, that is, in February 2013. In addition, other improvements on further releases such as improved seasonal adjustment techniques were implemented during the year. They will continue to monitor the impact of these changes to evaluate its efficacy.
For South African statistics to remain valid in a changing global context, the next challenge for economic statistics will depend on their ability to ensure that their classification systems remain relevant and current. In this regard, Statistics SA will continue to explore the implementation of two international standards during the course of the current financial year. The first is the 2008 system of national accounts, SNA. At present, South Africa's national accounts and its economic statistics are estimated according to the 1993 SNA, which still is largely the international framework.
The new SNA was developed by the International Monetary Fund, IMF, the Organisation for Economic Co-operation and Development, OECD, and the World Bank and was adopted by the United Nations Statistics Commission to ensure that economic statistics keep track of new economic phenomena that have become important in economies in the past 20 years. An example of this is the need to quantify the value of research and development and include it in estimates of value added in the economy.
The second set of international standards is called the International Standard Industrial Classification, Isic, used by statisticians to divide the economy into different industries such as agriculture, mining and transport according to an agreed standard. The Isic was updated to version four in order to identify and emphasise new aspects of economic activity that have become important, especially in the services sector.
Ideally, these two standards should be implemented simultaneously. Statistics SA is faced with the challenge to ensure that they continue to measure the dynamics of the economy accurately while ensuring that our ability to compare with our international counterparts in OECD, Brazil, Russia, India, China and South Africa, Brics, and other trading partners does not become compromised.
The responsibility of ensuring that official statistics are published in terms of distinct standards extends beyond those statistics compiled by Statistics SA. Section 14 of the Statistics Act provides the organisation with the responsibility of co-ordinating statistics among all organs of state. This includes advising departments about improving the quality of statistics, enhancing the comparability of statistics and minimising any possible overlapping or duplication with the collection or publication of statistics.
In the past, I have raised concerns in this House about the effect of our poor educational outcomes. The reality is that a scarcity of mathematics and science skills in this context must be understood in terms of its impact, not only on the human resource challenges faced by Statistics SA directly, but more significantly in terms of the impact on statistical collection and processing by other organs of state.
Ideally, the skills set would exist across departments with the system for managing the quality and standards being with Statistics SA. This unfortunate reality, however, does not absolve Statistics SA of its statutory responsibilities, and in this regard a more hands-on approach is often required. An example of such intervention is a census of schools in Limpopo and the Eastern Cape provinces being undertaken at the request of the Department of Basic Education and the National Treasury.
The objectives are to verify the total number of schools within these provinces, establish the number of school learners and educators per school, establish the education stream and subject offerings of educators and learners, and to establish the qualifications of teachers in relation to the subjects that they are teaching.
It is important that we understand that while Statistics SA is responsible for statistical co-ordination, the capacity to compile data and use statistics to influence policy actually rests with, in this case, the provincial Departments of Education. The challenge of a shortage of relevant skills and the importance of statistical training cannot be emphasised enough.
The approach to the lack of statistical skills cannot simply be a resigned, fatalistic one. In this regard, Statistics SA has established strategic partnerships with various universities including the University of Stellenbosch, the University of Cape Town and the University of KwaZulu- Natal.
Internally, Statistics SA has adopted an approach to addressing the skills shortage by implementing a talent management model that includes recruiting twice as many interns as required. Their skills are developed and fostered within Statistics SA for a period of two years, including providing them with workplace experience by placing the interns with mentors and direct supervisors.
Statistics SA piloted the internship programme during the 2005-06 financial year, when 15 graduates from different South African universities were recruited into the programme. In the current year, the programme has grown to 53 interns. This approach recognises that while the institution will ultimately not employ many of those being provided with these valuable skills, many will also be taken up by the private sector, where the skills are in demand.
Statistics SA remains committed to building statistical skills throughout our country by developing a statistical curriculum that has been incorporated into the mathematics curriculum at schools. In addition, they have implemented a programme that builds statistical capacity across government.
The value of developing skills in order for Statistics SA to meet its strategic mandate can only be measured in the quality of the datasets being published and the public trust placed in Statistics SA. It is precisely because of this focus on the issue of public trust and reliability of data that we need to raise the issue of the single number registration under the Business Register Reform process. This is an issue that has been raised by both the Standing Committee on Finance and the House over the past few years.
As mentioned on numerous occasions, the launch and management of such a system of registration requires co-ordination and correlation of three disparate systems of records managed by the SA Revenue Service, the Companies and Intellectual Properties Commission and Statistics SA respectively. Members of the House will also be aware that the CIPC has undergone several changes and challenges in recent times, including the implementation of new provisions of the Companies Act.
Notwithstanding these challenges, the first phase of the system of a single business register has been initiated with effect from 4 May this year. This phase deals with the registration of new businesses by the CIPC. The reregistration process for existing companies is expected to take place by October 2013, when companies will file details with both the SA Revenue Service, Sars, and the CIPC during the tax filing season.
The new forms have been formulated using Isic classification, which will provide Statistics SA with the basis to begin to verify classification and disaggregate multiple classifications where they exist. As the verification process takes place, Statistics SA will establish feedback loops to test the veracity of the information being captured.
In addition, the organisation intends running an Isic survey to act as a further test of accuracy. Taking into account these requirements to verify the precision of the system and the levels of classification, Statistics SA has indicated that they will require a period of 12 months to test whether the data being collected is fit for statistical use in terms of the SA Statistical Quality Assessment Framework. A comprehensive business register is imperative for quality economic statistics as it forms the sampling frame for all economic surveys.
While the Statistics Act clearly designates Statistics SA, and in particular, the Statistician-General, as responsible for the collection, production and dissemination of official and other statistics, it is important that we make the point about the necessity for other sources of information and the need for correlation.
In addition to the requirement that data produced by Statistics SA is accurate, verifiable and timeous, it is crucial that the data is internally verifiable as well. I have mentioned the correlation between the QLFS and the quarterly employment statistics in this regard.
Equally, if there is no functioning business register or system of reporting, the task of sampling is more challenging and the quarterly employment statistics, QES, will be constrained. When there are such conditions, it merely affords naysayers the opportunity to question the veracity of the data.
We must ask Parliament to join us in ensuring that the releases by Statistics SA become and remain the only reliable sources of official statistics in South Africa. They should not be the preferred, but the only reasonable, trusted and verifiable statistics. They must enable every South African to say, the South Africa I know, the home I understand.
While South Africa is the home we have to understand, we are part of a wider community on the continent and globally. Statistics SA has established partnerships with statistics institutions that are part of the African Union Commission, the United Nations Economic Commission for Africa, the African Development Bank and Regional Economic Communities. Statistics SA plays a leading role in initiatives such as the Africa Symposia on Statistical Development, ASSD, the Statistics Commission for Africa, the African Statistics Committee and the Africa Group on Statistical Harmonisation.
One of the significant strides on the continent has been the successful mobilisation of all African countries to undertake population censuses in the 2010 Round of Population and Housing Censuses. We can only assess development and growth on the continent if we have evidence to measure changes. It is crucial that as a continent, we have appropriate and trustworthy statistics based on the same standards. So, building international partnerships becomes important to ensure that there is adherence to benchmarks and that skills are exchanged.
Finally, Chairperson, allow me to comment very briefly on the negative audit outcomes of the 2011-12 budget - the budget of the census year. As the members of this House are aware, the qualified audit was largely on the basis of accruals due to nonpayment of service providers that then flowed into the following year.
While I am fully cognisant of the impending Standing Committee on Public Accounts, Scopa, process, I raise this issue principally in the context of any future planning. It is important to understand the reality of the magnitude of the payments that were being processed and the limits of the government Information and Communications Technology, ICT, systems to manage such numbers. Government systems are not designed to cope with such large numbers of invoices and are not integrated to account for intergovernmental transactions.
We call on members of this House to discuss these challenges with a view to future similar large surveys. This call is made particularly in light of recent appeals to Statistics SA to conduct a census every five years as required by the Statistics Act.
I would like to take this opportunity to thank the Standing Committee on Finance, ably chaired by the hon Thabadiawa Mufamadi, and all members of the committee for their keen engagement with the issues and for their unswerving support of the work of Statistics SA.
In addition, it is important that I take this opportunity to give a special thanks to the outgoing statistics council for the sterling work done of safeguarding the quality of our official statistics. [Applause.]
We need to recognise the significant role they played in steering Statistics SA through the immense task of conducting Census 2011, as well as the support they provided to address the challenges faced with the release and the verification of the data.
Against this backdrop, I place Budget Vote 13 - Statistics SA, before the House for consideration. Thank you. [Applause.]