Chairperson, I also have a special relationship with the opposition. [Laughter.] [Interjections.] Yes, this is not a uniform. The Minister and I are wearing the same colours, but it is not a uniform. Hon Chairperson, Minister, Deputy Minister, hon guests and members of the House, good evening. I rise on behalf of the ANC in support of the budget for the Department of Public Enterprises. I would also like to congratulate the hon Minister Lynn Brown and her Deputy Minister on their appointment. As the ANC, we have hope and we believe that they will lead the department in order to implement the programme of the ruling party.
This morning, in a meeting with the chief executive officer of South African Airways, SAA, it came to our attention that an SAA flight bound for Hong Kong had hit serious turbulence and 25 people got injured. Fortunately, all the people aboard the aircraft reached their destination safely. All of them are receiving treatment in Hong Kong and they are recovering. We would like to take this opportunity to wish them a speedy recovery. We would also like to thank the pilot and the crew for their heroic action to make sure that everybody on board was safe.
In his recent state of the nation address, President Jacob Zuma outlined the following:
The economy takes centre stage in this programme. It remains our strong belief that the most effective weapon in the campaign against poverty is the creation of decent work, and that creating work requires faster economic growth.
The ANC's vision is of state-owned enterprises, SOEs, seeking to advance the key objectives of economic transformation and advancing the ANC's programme that is the New Growth Path. Therefore, the overall objective and the mandates of the SOEs are to advance the socioeconomic and political agenda of a developmental state, which promotes social cohesion, the creation of jobs and skills development. In this regard, the vision of the National Development Plan plays a critical role.
One of the most important conditions that must be addressed for us to build a developmental state is the strengthening ... Chair, let me use mine or I will soon have a black-out. [Laughter.] No, I think it is the battery. [Interjections.] One of the most important conditions that must be addressed for us to build a developmental state is the strengthening and enhancement of the capacity of the state to deliver to its people. We must make sure that we have a capable and effective state with the technical and political capacity to lead development and the transformation of the economy. One of the objectives of the ANC government in respect of these is to build an inclusive economy that creates jobs - what we call a radical shift.
The manifesto of the ruling party was very clear, namely that we will promote local procurement by directing the state to progressively buy at least 75% of its goods and services from South African producers and will support small enterprises, co-operatives and broad-based empowerment. State- owned enterprises have been playing a pivotal role in advancing economic inclusivity and transformation.
The department has a progressive tool, called the Competitive Supplier Development Programme, the CSDP. This programme has over the years seen Eskom and Transnet ensure that local industry is supported, value addition is promoted and broad-based empowerment is supported, with the emphasis on enterprises owned by young people, women and people with disabilities.
Let me briefly address some of the governance issues and related oversight responsibilities of our committee. The Presidential Review Committee has made recommendations with regard to the need for an overarching legislation and a long-term strategy for the SOEs in order to align them with the objectives of a developmental state. We would like to ask the Minister to consider introducing the Shareholder Management Bill. This is an urgent issue, which will empower and enhance the department's unique responsibility of shareholder management on behalf of government.
The task of the ANC government is to entrench a uniform strategy for state- owned commercial entities in the country that is effectively a response to the developmental state agenda and creates an enabling environment which, among other things, seeks to create a universal policy framework and legislation and to develop the state's capacity to effectively monitor and evaluate state-owned commercial entities in all spheres of government. The absence of this Bill would lead to conflicts of governance and a lack of clarity, in particular with the boards or among the boards.
Given the complexity of the multiplicity of legislation and policy frameworks of different departments in different spheres of government and their entities, the absence of an overarching strategy would mean that the SOEs would face the challenge of operating in the context of decentralised and multiple policy framework, legislation and oversight approaches.
The department has done extremely well under the capacity constraints in ensuring that state-owned companies deliver on the developmental objectives of government. It has ensured that the SOEs contribute immensely to job creation, skills development, the support of local industries and beneficiation.
We would like to see the department enhancing its monitoring mechanisms to ensure entities deliver on their performance targets within the agreed timeframe. We are pleased that the Minister has announced that they will sharpen this and will enter into agreements with these entities. The department should ensure that the SOEs also make a deliberate effort to visit rural communities. This will ensure that rural young people, women and people with disabilities benefit from the investment that will come with the industrialisation programme of government.
The department has a challenge in retaining highly specialised skills, which are sought after in the economy. The department has been unable to compete with the lucrative packages offered by the private sector. However, we are proud that it has been able to produce the skills required.
The department has performed very well in regard to its three programmes, namely Administration, Legal and Governance, and Portfolio Management and Strategic Partnerships. Under the heading of Administration, the department will continue to strengthen its financial management tool to return to a clean audit opinion. It continues to ensure the payment of invoices within 30 days. It has demonstrated progress in the strengthening of the human resource function in the department by ensuring that the vacancy rate is kept below 10%.
Regarding "Legal and Governance", we are happy that the department continues to provide legal services and facilitate the implementation of all transactions that are strategically important to the department and state-owned companies. We will continue to support the department in its role of advising the Minister regularly on the appointment of boards of directors, including the issue of remuneration, conducting annual reviews and ownership policies.
Regarding the Portfolio Management and Strategic Partnership programme, over the Medium-Term Expenditure Framework period we will continue to support the department in its intention to strengthen their oversight role of state-owned companies. We will continue to monitor the environment in which the department will contribute to the enhancement of the performance of state-owned companies. In this regard, maybe we can enter into agreements with entities and also with the Minister to make sure that we have measures in place to enable us when we do monitoring, so that we will know over what measures we are doing such monitoring.
We will continue to monitor the environment in which the department will contribute to the enhancement of the performance of state-owned companies, as I have said. In this regard, we will continue to support plans to ensure the security of the energy supply by Eskom. We will continue to support the long-term growth strategy for the financial stability of Denel. The committee will support the department in ensuring that SAA is transformed into a commercially successful national carrier that will contribute to the development of trade and tourism domestically, in Africa and in the rest of the world. We will ensure that the department provides oversight of Transnet's implementation of the market demand strategy, which the Minister alluded to earlier on, in order to ensure the optimisation of the economic impact of infrastructure investment in the economy.
The Department of Public Enterprises has a record of having received a clean audit report from the Auditor-General for eight consecutive years, ending with the 2011-12 financial year. It is a relatively small department with a small budget when compared to other departments, but it is successful in overseeing some of the largest state-owned enterprises in the country. We acknowledge the sterling job that is being done by the director- general in the department and by all other officials in continuously strengthening their oversight of our SOEs. [Applause.] [Time expired.]