Mr Chairman, this department was established in 2009 and received wide coverage regarding the announced New Growth Path, which aims to create five million new jobs by 2020. The DA welcomes any attempt by the private or the public sector to create new sustainable jobs, given that a million South Africans became unemployed during the past year and that 42% of the age group between 18 and 29 is currently unemployed and lack basic skills to effectively participate in a growing emerging economy.
Our present economic growth rate is 2,8% - and I'm quoting the hon Minister of Finance - and a characteristic is that, since 2000, we have experienced jobless growth, a phenomenon which is not confined to our economy, which in essence means that the primary, secondary and tertiary sectors shed jobs with severe social consequences for our society.
Currently, only eight million South Africans pay taxes, which in relative terms can be defined as a very narrow tax base. In contrast, 15 million South Africans depend upon some form of social grant. Our economy by world standards is carbon intensive. The price of energy and, in particular, electricity has gone up by 27% in the past year, and the continual rise in the price of crude oil is bound to influence food inflation, personal debt to disposable income, etc.
This department has an important role to play regarding the reduction of unemployment and the alleviation of poverty. However, we'll have to address the following issues. Our parastatals are not well run by international standards if productivity is taken as the norm.
The DA has stated in the past, and I will say it again, that the sooner we privatise these parastatals and allow ordinary South Africans, irrespective of race or creed, to become shareholders in these entities, the better. One of the main reasons why black economic empowerment, BEE, has not attained the necessary results is that a small minority with close political connections monopolise the majority of the so-called empowerment deals.
The DA says that the income gap at present is not acceptable. It is in the general interest that we create an open and equal society that provides access and opportunity to all.
The New Growth Path mentions specifically that communication and co- ordination with local and provincial spheres of government will have to improve in future. The sooner this happens, the better. In the Government Gazette of 4 April 2011, the hon Minister of Finance announced that R2,4 billion budgeted for eight provinces will be withdrawn from them owing to underspending. The only province which has spent its entire budget is the Western Cape, which incidentally is run by the DA.
This is a sad state of affairs. Our predominately rural provinces such as the Eastern Cape, KwaZulu-Natal, Limpopo, the Northern Cape and North West, had funds withdrawn because of improper planning. The money withdrawn was budgeted for community libraries, the renovation of hospitals and other much-needed infrastructure projects.
The Department of Economic Development and the following entities briefed the portfolio committee, namely the Competition Tribunal, the Industrial Development Corporation, Khula Enterprise Finance, the SA Micro-Finance Apex Fund, the International Trade Administration Commission and the Competition Commission. Allow me to congratulate all the entities. Their submissions were empirical and listed their strengths and weaknesses.
Members of the portfolio committee, however, raised a number of relevant issues during our hearings. The following concerns were expressed. One, how will the R1,2 billion allocated to the National Youth Development Agency create jobs? Two, at present there is an absence of quantifiable targets or outcomes to measure performance against. Three, are there adequate incentives in place to incentivise the R9 billion Jobs Fund over the next three years and the R10 billion administered by the Industrial Development Corporation? Four, are there necessary proactive steps planned to address the spatial dimensions of the economy with reference to the former Bantustans?
Also, an issue which I am not sure we have clarity about was raised by the DA in 2009 and 2010, namely that the activities of the Economic Development department may lead to duplication in relation to the National Treasury, the Department of Trade and Industry and the National Planning Commission. And I am perfectly aware that this is a young department, but members from all parties in the portfolio committee agreed that there is little evidence of what this department has achieved in the growth of GDP, job creation and the reduction of poverty.
The DA believes that it is essential to create an environment where there is rule of law, an independent judiciary, zero tolerance of crime, a functional educational system based upon merit, transparent acceptable business practices, no price fixing, no collusion or market manipulation or corruption. We can only achieve this if we implement the core principles of the equal-opportunity society, which are bound to cause sustained economic growth.
I represent a predominately rural constituency, but if the retail sector is taken as an example, we find that it is dominated by four large companies listed on the Johannesburg Stock Exchange. Small entrepreneurs in the second economy lack critical volumes, access to credit and an economy of scale.
What is not generally known is that the small business sector is particularly vulnerable, and I take the health sector as an example. Retail pharmacies in my constituencies provide credit, deliver after hours - things which are not done by South African pharmacies or listed conglomerates.
My appeal to the hon Minister is to level the playing fields in these spheres of government and to allow the small private entrepreneurs to fill a very vital market niche in their respective communities. I thank you, Mr Chairman. [Applause.]