Chairperson, I would like to start by congratulating the hon Minister on his appointment. He did sterling work in Sars and I'm sure he will continue to do so in the Treasury. We are looking forward to a good working relationship with the Minister and we wish him every success in the difficult task ahead. To Deputy Minister Nene, congratulations on your appointment, I was most impressed with the contents of your speech this afternoon. We also congratulate our new chairperson, Mr Mufamadi.
In his state of the nation address, the hon State President said, inter alia, and I quote:
The fight against poverty remains the cornerstone of our government's focus ...
He continued -
... for as long as there are workers who struggle to feed their families and who battle to find work; we shall not rest and we dare not falter in our drive to eradicate poverty.
Later in his speech, when he highlighted the key elements of the government's programme of action, the hon President stated and stressed that the creation of decent work will be at the centre of government's economic policies and will influence their decisions in respect of the attraction of investments and job creation initiatives.
The DA supports the principle of job creation and we agree with the government's realisation that the attraction of investments to achieve this goal is of paramount importance. This will be particularly true of investments in the manufacturing industry and small businesses where jobs are of a more sustainable nature compared to the EPWP of government, which by its very nature is less sustainable and where little training and skills transfer takes place.
Investments in the JSE are welcomed as they assist in the reduction of the current account deficit, but such investments are much more volatile and they do not necessarily contribute directly to job creation. We have seen recently that investors in the stock exchange are more likely to withdraw investments if they lose confidence in the company or country of investment, or if they merely wish to revert to foreign cash holdings.
In the current recessionary economic climate in South Africa with a negative growth rate and where we have a high current account deficit, falling employment rates, exports dropping by 55% in the first quarter of the financial year and a sharp decline in private investments, the achievement of the goal of attracting more investments to South Africa, particularly for the manufacturing industry, will be difficult.
Over and above this, overseas investors will be loath to invest in long- term manufacturing projects and small businesses in South Africa due to the stringent industrial legislation in this country; the major red tape obstacles to doing business; the difficulty and expense involved in obtaining work permits in South Africa; the poor education systems; the high incidence of corruption; low productivity; high crime levels and the tendency of government to move more and more towards centralisation; the undermining of the judiciary; threats of expropriation of assets and property without applying the willing buyer, willing seller principle; a lack of clear distinction between party and state; and the undermining of the Constitution. Who feels safe in a business environment where the country's solitary electricity supplier can hit you with a sudden 31,3% increase in tariffs!
The DA believes that the matters I have highlighted need urgent attention so as to achieve a reversal of our economic fortunes, the procurement of investments and the consequent creation of jobs.
We must provide tax incentives for new investments in the manufacturing industry, particularly in rural areas; abolish Setas; introduce training incentives for businesses; reconsider the unworkable and expensive BEE and affirmative action policies as is currently being applied, where the main aim appears to be to create jobs for pals; and introduce opportunity vouchers for school leavers. More encouragement should also be forthcoming from government for the formation of small businesses, as they have an equally important role to play in job creation.
The tendency of our government to want to get involved in the business of business has shown without doubt that governments are incapable of running businesses successfully. In South Africa we need only look at entities such as SAA, Alexkor, Eskom, the SABC, Denel and the Land Bank to prove the point. We are pleased to hear about the turnaround strategy of the Land Bank but, unfortunately, Mr Minister, it comes at a cost to the taxpayer. Equally, the large number of qualified audit reports of government departments bear testimony to this statement.
We agree that job creation is of the utmost importance, as is the procurement of investment towards that end. The government's responsibility is to ensure an enabling, open opportunity environment where business can be done freely and with minimum interference and where individuals can be trained to achieve to the best of their abilities. Focus on the procurement of investments must, however, always lean heavily towards the manufacturing and small business sectors.
In the final analysis - I'm sorry that the hon Prof Turrok has left because I would have liked to suggest to him that he attends an upcoming lecture on economics and finance, which I believe is going to be presented by Julius Malema. [Laughter.]