Hon Chairperson, hon Ministers, hon Deputy Ministers, and hon members, allow me first and foremost to congratulate Professor Levin on his appointment as the new Director-General, DG, of the Department of Economic Development. I want to wish him well and good luck in his new position.
The Department of Economic Development was established in 2009. At present, it is unclear who will dictate macroeconomic policy: will it be the Treasury, the Department of Planning, or the Department of Economic Development? The DA is the largest opposition party and as such we believe that tough questions regarding these particular briefs must be asked.
Another question we need to answer is whether we need a new department, considering the capacity of Treasury, the Department of Trade and Industry, and the new Department of Planning.
The Department of Economic Development will also be responsible for oversight of the Industrial Development Corporation, IDC, Khula Enterprise Finance, the South African Micro Apex Fund, the Competition Commission and the Tribunal, and the International Trade Administration Commission. These are key institutions - especially the IDC, which is a state-owned corporation with a balance sheet of more than R80 billion.
In his submission to the Portfolio Committee, the hon Minister of Economic Development submitted a strategic plan that cuts across a number of departments in government which, in time, will overlap in a significant way with the work of other departments. The hon Minister mentioned in his submission to the parliamentary portfolio committee that overlapping is a benefit, not a problem. But, hon Minister, it is important that duplication of any kind be reduced to a minimum. The question remains: how will we be able to reduce the high number of parallel activities currently taking place to achieve the required economic outcome?
The budget of R1,4 billion for the next three years is a vast amount of money. In order to create sustainable jobs and accepted economic growth, a number of ANC spokespersons have referred to the so-called developmental state. The main initial argument was put forward by the hon Minister Manuel in 2004 in a speech titled 'Budgeting challenges in the developmental state', where he said, "Expanding economic opportunities and fighting social deprivation is critical and providing public facilities to the poor is paramount". The DA has no problem with that. What is a problem, however, is that a number of spokespersons of the ruling ANC has reworded what Mr Manuel said. In essence, what they are saying is that instead of defining development in terms of the extent to which the state expands opportunities and equips citizens with the tools they need to take advantage of those opportunities to direct their own lives, the ANC has come to identify economic development with state intervention and centralised control. This version of the developmental state puts the state, not the citizenry, at the centre of policy and, in doing so, retards the very development that is required.
The legacy of apartheid contradicted all the rules of sound economic development and proper pro-active steps must be taken to rectify the injustices of the past. The DA appeals for the New Growth Path Document, which will be submitted to Cabinet for consultation in June, to include the following:
Firstly, the politicisation of the public service and cadre deployment will be stopped and merit taken into account regarding vacancies in all three spheres of government.
Secondly, the regular and substantial bale-out of state-owned entities and the huge wage bonuses of chief executive officers, CEOs, will be stopped and greater public-private partnerships regarding management of these institutions will be instituted.
Thirdly, poor service delivery and the reasons for it will be addressed.
Fourth, that set outcomes be given to all state departments.
Fifth, the abuse of public money for personal gain, corruption and nepotism will be stopped.
Lastly, the present system regarding the procurement of government tenders should be revised in order to allow wider accessibility to tender.
In his address to the Portfolio Committee the hon Minister stressed the importance of decent, sustainable jobs - and we agree with him entirely. Hon Minister, you mentioned the sad reality that 900 000 South Africans lost their jobs during the past economic recession. The government has taken a number of positive steps to encourage business confidence and the DA gives them credit for retaining inflation targeting, retaining the floating exchange rate, and curbing the budget deficit.
Economic development and the role of the state is an extremely complex issue and no consensus exists about how poverty can be addressed in a developing country such as South Africa. For all practical purposes, the present South Africa can be classified as a quasi-welfare state because 14 million South Africans receive some form of a grant from the state, while only 12 million South Africans are permanently employed and only 5, 3 million are registered taxpayers. This is unacceptable and drastic action is urgently required.
The DA believes that creating an open opportunity society based on the rule of law, which separates the state and the ruling party, will create a society in which every person will be given the opportunity to improve his or her own circumstances. In the open opportunity society, those who take responsibility for their lives and use their chances flourish and understand that taking control of their own lives is infinitely preferable to a lifeline of dependency on the state.
Hon Minister, in your submission to the Portfolio Committee, you mentioned a number of strategic goals that relate to policy development, economic planning and co-ordination. The Department of Economic Development is an integral part of the public service. Allow me to mention that development depends on a delivery-focused public service with the right people, with the right skills, in the right positions. Whether we need an entire new department is questionable, especially with our present decline in state revenue. I think money is one of those inhibiting factors in the civil service and this must always be taken into account.
In an excellent, unpublished paper by C Boissiac, titled "A South African Developmental State" and submitted in June 2009, it is mentioned that apart from the absence of skilled bureaucrats and public servants, the following statistics paint a very gloomy picture of corruption in our public sector. Again, I think the private sector can be excluded from corruption but, at the moment, we are confining ourselves to the public sector. I think the following must be emphasised:
As far back as 2002, 400 officials were charged with financial misconduct. In 2003 the Road Accident Fund lost at least R1 billion. In 2004, the Minister of Social Welfare indicated that grant scams were costing the state R2 billion per year. The Public Service Commission revealed that between 2006 and 2007 there had been a 46% increase in cases of corruption reported to the National Anti-Corruption Hotline. A reply to a DA member of Parliament revealed that the number of cases of corruption in the Department of Home Affairs increased by 415% between 2006 and 2008, from 82 to 422 cases.
An investigation by the Auditor-General, Terence Nombembe, into government officials who moonlight as business executives, made public in May 2009, found that more than 2 000 were involved in tender-rigging and corruption worth more than R610 million. The same report found that a total of 49 state employees were directors or members of companies that did business with national departments. Only 4% had permission to do this. For the period between August 2007 and July 2008, a total amount R35 million was paid to these companies. This state of affairs is untenable and not conducive to economic development. The DA will do everything in its power to stop corruption so that we can beat this particular cancer, which is inhibiting growth.
My colleague, Dr George, will elaborate on the DA's position regarding pension funds. I thank you, Madam Chair.