TUESDAY, 19 SEPTEMBER 2000 __

          PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
                                ____

The Council met at 14:08.

The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

                          NOTICES OF MOTION

The CHAIRPERSON OF THE NCOP: Order! Hon members, could I please ask you to respond timeously to the bells. I really think it is inappropriate that we begin sitting as late as we have done this afternoon because we are waiting for members to come to the House. If members could respond timeously to the bells, it would help us to complete our business efficiently.

Mr L G LEVER: Chairperson, I hereby give notice that I shall move at the next sitting of the Council:

That the Council -

(1) censures the majority party for the standpoint it has adopted in relation to questions to the President;

(2) recognises that the combined opposition parties made every reasonable effort to reach a just and workable compromise;

(3) deplores the fact that the majority party has abrogated the right that it has in terms of section 92(2) as read with sections 42(1) and 91(1) of the Constitution, to hold all members of the executive accountable to it; and

(4) recognises that the President, as part of the executive, is accountable to Parliament and the NCOP is, in terms of the Constitution, an integral part of Parliament.

Mr P A MATTHEE: Chairperson, I hereby give notice that I shall move at the next sitting of the Council:

That, in the light of the recent unacceptable spate of violent crimes in South Africa, as reported by the media, and in the interests of transparency and accountability, the Council requests the Minister of Safety and Security immediately to lift the moratorium on the release of crime statistics in respect of those crimes and those provinces and police areas in respect of which there are no serious problems regarding the correctness of crime statistics.

Mnr A E VAN NIEKERK: Voorsitter, ek gee hiermee kennis dat ek by die volgende sitting van die Raad sal voorstel:

Dat die Raad -

(1) daarvan kennis neem en spesifieke handeling oorweeg om te help soek na ‘n teenvoeter vir die toenemende dwelmgebruik onder jong kinders;

(2) onder andere ook kennis neem van die Bevelvoerder van die Polisie in die Noord-Kaap se verslag daaroor en die feit dat daar die afgelope tyd in die Diamant-streek in Kimberley 25 leerlinge tussen 13 en 17 jaar aangekeer is vir die besit en gebruik van dwelms; en

(3) verder daarvan kennis neem dat dié toedoen in al die provinsies ernstige afmetings aanneem en dat elke lid van die Raad en die burgerlike samelewing ‘n verantwoordelikheid het om die dwelmhere aan te keer en uit die samelewing te laat verwyder deur die regeringsinstellings wat bestaan, te versterk. (Translation of Afrikaans notice of motion follows.)

[Mr A E VAN NIEKERK: Chairperson, I hereby give notice that at the next sitting of the Council I shall move:

That the Council -

(1) notes, and is considering specific action to help find a counter to, the increasing use of drugs among young children;

(2) also notes, inter alia, the report of the Chief of Police in the Northern Cape in this regard and the fact that in the recent past in Kimberley’s Diamond District 25 children between the ages of 13 and 17 have been apprehended for the abuse and possession of drugs; and

(3) further notes that this state of affairs is assuming serious proportions in all the provinces and that every member of this Council and civil society has a responsibility to apprehend the drug barons and have them removed from society by reinforcing the existing Government institutions.]

         OUTBREAK OF FOOT-AND-MOUTH DISEASE IN KWAZULU-NATAL

                         (Draft Resolution)

Mr K D S DURR: Madam Chair, I move without notice:

That the Council -

(1) calls upon the Government to -

   (a)  take and keep in place the most stringent measures to contain
       and eradicate the outbreak of foot-and-mouth disease in KwaZulu-
       Natal;
   (b)  take the necessary steps to reduce the risk of a repeat
       performance;


   (c)  urgently arrange for the compensation of farmers and other
       innocent victims of the outbreak; and


   (d)  prosecute anyone that has acted unlawfully that may have caused
       the outbreak; and

(2) thanks the Government for steps taken to date.

The CHAIRPERSON OF THE NCOP: Order! Is there any objection to the motion?

Mr A E VAN NIEKERK: Chairperson, I would like to amend the motion, if I may. I want to move that we add ``that the culprits who caused the feeding from abroad to be brought into this country be brought to … ‘’ What is the word?

HON MEMBERS: To book!

Mr A E VAN NIEKERK: Thank you, ``to book’’.

Mr K D S DURR: Madam Chair, I just want to say to my colleague that that is covered. My motion calls upon the Government to - … prosecute anyone that has acted unlawfully that may have caused the outbreak …

The CHAIRPERSON OF THE NCOP: Order! Prosecute'' is not necessarily bring to book’’, but it is an attempt. Is there any objection to the motion? There is none.

Motion agreed to in accordance with section 65 of the Constitution.

  RACISM IN SA NATIONAL DEFENCE FORCE AND REPORT ON TEMPE SHOOTING

                         (Draft Resolution)

Ms E N LUBIDLA: Chairperson, I move without notice:

That the Council -

(1) notes the release of a report on the ministerial inquiry into the Tempe military base shooting; (2) further notes that the report indicates that racism in the South African National Defence Force continues to manifest itself in various forms, including -

   (a)  the use of abusive language against members based on their
       cultural origin;


   (b)  the failure to empower members; and


   (c)  the use of insults, intimidation and harassment to prevent
       members from reporting cases to the police;

(3) expresses its concern over this disturbing trend of racism and intolerance in our National Defence Force; and

(4) supports the Minister of Defence in his endeavours to transform the SANDF.

Motion agreed to in accordance with section 65 of the Constitution.

             SOUTH AFRICA'S PERFORMANCE AT OLYMPIC GAMES
                         (Draft Resolution)

Mr N M RAJU: Madam Chair, I move without notice:

That the Council -

(1) notes with great delight the sparkling performances of our Olympic athletes in Sydney, especially our soccer team under the formidable captaincy of field marshall Matthew Booth in inflicting a sound and handsome defeat on the much-vaunted Brazil team (SA 3: Brazil 1!), thanks to our shooting stars Quinton Fortune, Siyabonga Nomvete and Steve Lekoelea;

(2) further notes the no less admirable performance of our water queen, Penny Heyns, who abdicated her throne to an uppity American Megan Quann - she was graceful in conceding defeat;

(3) is of the view that all our representatives have done us proud, and will continue to do so; and

(4) conveys its sincerest congratulations to all our compatriots battling it out in Sydney for more than gold: a nation’s pride!

Motion agreed to in accordance with section 65 of the Constitution.

      MOTOR VEHICLE ACCIDENT INVOLVING HON MEMBER MR B T TAABE

                         (Draft Resolution)

Mr B J MKHALIPHI: Madam Chairperson, I move without notice:

That the Council -

(1) notes that an ANC NCOP member, Mr B T Taabe, was involved in a car accident on Saturday, 9 September 2000;

(2) further notes that the accident occurred at Barberton in Mpumalanga only a kilometre away from his home;

(3) notes, with gratitude, that he is recovering well at his home; (4) expresses its deep concern over the incident and wishes Mr Taabe a speedy recovery;

(5) notes that the lawlessness on our roads is being addressed with vigour, determination and consistency; and

(6) reaffirms that the Department of Transport is going an extra mile to ensure that traffic offenders are accountable for their irresponsible behaviour.

Motion agreed to in accordance with section 65 of the Constitution.

                      HERITAGE DAY CELEBRATIONS

                         (Draft Resolution)

Mnr A E VAN NIEKERK: Voorsitter, ek stel voor sonder kennisgewing:

Dat die Raad daarvan kennis neem dat -

(1) dit eerskomende Sondag Erfenisdag is; (2) die tema gedurende die feesvieringe in Pietersburg ``Celebrating our Multilingualism’’ sal wees en dat die Minister van Kuns, Kultuur, Wetenskap en Tegnologie en die Adjunkpresident van Suid-Afrika aan die feesvieringe sal deelneem; en

(3) ‘n lid of lede van die Nasionale Raad van Provinsies daar verteenwoordig behoort te wees en dat die Raad se verbintenis tot die uitvoer van die grondwetlike voorskrifte oor veeltaligheid hierdeur geïllustreer sal word. (Translation of Afrikaans draft resolution follows.)

[Mr A E VAN NIEKERK: Chairperson, I move without notice:

That the Council notes that -

(1) this coming Sunday is Heritage Day;

(2) the theme for the festivities in Pietersburg will be ``Celebrating our Multilingualism’’ and that the Minister of Arts, Culture, Science and Technology and the Deputy President of South Africa will participate in the festivities; and (3) a member or members of the National Council of Provinces should be represented there and that the Council’s commitment to the execution of the constitutional prescriptions on multilingualism will be illustrated in this way.]

Motion agreed to in accordance with section 65 of the Constitution.

          CULTIVATION OF SWORDFISH INDUSTRY IN SOUTH AFRICA

                         (Draft Resolution)

Mev A M VERSVELD: Voorsitter, ek stel voor sonder kennisgewing:

Dat die Raad -

(1) met dank daarvan kennis neem dat die Direktoraat: Mariene en Visbestuur vir die eerste keer in 23 jaar ‘n stap geneem het om ‘n volwaardige swaardvis-industrie vir Suid-Afrika te bou deur middel van -

   (a)  die verlaging van permitvoorwaardes vir Suid-Afrikaners;


   (b)  die verlenging van die tydperk waarvoor permitte geldig is van
       twee maande na ses maande;


   (c)  die inisiëring van langtermynregte vir tunalanglyn; en


   (d)  die toestaan van 'n addisionele 1000 metrieke ton swaardvis as
       'n byvangs in die Indiese Oseaan; en

(2) ‘n beroep op die Regering doen -

   (a)  om alle buitelandse permitvoorwaardes te hersien, met spesifieke
       verwysing na Japan, om sodoende te verseker dat buitelandse bote
       onder dieselfde voorwaardes opereer as hul Suid-Afrikaanse
       eweknieë;


   (b)  om alle buitelandse bote te laat visvang onder die Suid-
       Afrikaanse vlag, wat sal meebring dat Suid-Afrika kan bou aan 'n
       bewese vangsrekord, wat nodig is vir die toekenning van 'n
       internasionale totale toelaatbare vangs deur Icat in November;
       en


   (c)  om daadwerklike stappe te neem in gevalle waar bote die
       internasionale ooreenkomste verbreek en om kennis te neem van en
       ondersteuning te gee aan die Verenigde State van Amerika in hul
       veldtog teen Japanese bote in Amerikaanse waters en die VSA se
       voornemens om ekonomiese sanksies teen Japan in te stel as
       gevolg van die verbreking van die internasionale beskerming van
       walvisse. (Translation of Afrikaans draft resolution follows.)

[Mrs A M VERSVELD: Chairperson, I move without notice:

That the Council -

(1) notes with gratitude that the Directorate: Marine and Fishing Management has, for the first time in 23 years, taken a step towards founding a fully fledged swordfish industry for South Africa by way of -

   (a)  the lowering of permit conditions for South Africans;
   (b)  the extension of the period for which permits are valid from two
       months to six months;


   (c)  the initiation of long-term rights for long-line tuna; and


   (d)  the allocation of a further 1000 metric tons of swordfish as an
       additional catch in the Indian Ocean; and

(2) appeals to the Government -

   (a)  to review all foreign permit conditions, with specific reference
       to Japan, so as to ensure that foreign boats operate under the
       same conditions as their South African counterparts;


   (b)  to cause all foreign boats to catch fish under the South African
       flag, which will enable South Africa to work on a proven catch
       record, as needed for the allocation of an international total
       allowable catch by Icat in November; and


   (c)  to take decisive steps in cases where boats violate
       international treaties and to take cognisance of and lend
       support to the United States of America in their campaign
       against Japanese fishing boats in American waters and the USA's
       resolve to impose economic sanctions against Japan consequent to
       the violation of the international protection of whales.]

The CHAIRPERSON OF THE NCOP: Order! Is there any objection to the motion?

Mr M L MUSHWANA: Yes, Chairperson.

The CHAIRPERSON OF THE NCOP: Order! There is an objection. The motion will therefore become notice of a motion.

            CONVICTION AND SENTENCING OF SERIAL MURDERER

                         (Draft Resolution)

Ms C NKUNA: Chairperson, I move without notice:

That the Council - (1) notes -

   (a)  that Mr Justice C J Claassen has sentenced Celaphe Ndlangandla
       to life imprisonment 20 times over and to a further 135 years;
       and


   (b)  that he was found guilty on 19 counts of murder, nine counts of
       attempted murder, six counts of robbery with aggravating
       circumstances and on other minor charges;

(2) reaffirms that our criminal justice system will not tolerate serial murderers that bring extreme fear and trauma to the community; and

(3) congratulates the 22-person investigating team of Piet Retief for their excellent detective work in tracking down this serial killer, as well as the prosecution team for their competent work.

Motion agreed to in accordance with section 65 of the Constitution.

 CONVICTION AND SENTENCING OF THOSE RESPONSIBLE FOR TERRORIST ATTACK

                         (Draft Resolution)

Mr Z S KOLWENI: Chairperson, I move without notice:

That the Council -

(1) welcomes the recent conviction and sentences of those responsible for the terrorist attack on a mosque in Rustenburg; and

(2) believes that the arrest and conviction were the result of excellent investigative and prosecutorial work and that this will serve as a warning to those responsible for the terror campaign in Cape Town that the criminal justice system will eventually catch up with them.

Motion agreed to in accordance with section 65 of the Constitution.

APPOINTMENT OF AD HOC COMMITTEE TO CONSIDER PROPOSED PAN-AFRICAN PARLIAMENT

                         (Draft Resolution)

The CHIEF WHIP OF THE COUNCIL: Chairperson, I move the draft resolution printed in my name on the Order Paper, as follows:

That the Council appoints an ad hoc committee to consider the proposed formation of a Pan-African Parliament, the committee -

 (1)    to consist of 9 members;


 (2)    to exercise those powers in Rule 160 that may assist it in
     carrying out its task;


 (3)    to have power to confer with a corresponding committee in the
     National Assembly; and


 (4)    to complete its task by 6 October 2000.

Motion agreed to in accordance with section 65 of the Constitution.

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON ECONOMIC AFFAIRS - SMME SECTOR

Mr M V MOOSA: Comrade Chair, thank you for the opportunity to speak in the debate. Hon Minister, members of the Banking Council - I think there are a few of them here - and other stakeholders, today the debate that we are having the culmination of a very exciting process that has begun in Parliament over the past few months.

Members will remember that around May this year, the NCOP select committee hosted a public hearing on the question of SMMEs and the state of SMMEs in our country. That public hearing was the result of a number of smaller public hearings that we had in the provinces in terms of which portfolio committees, which were involved in economic issues, called together development agencies, NGOs, stakeholders and SMMEs to speak to provinces about what the needs were of small businesses in our country.

At the public hearing here we had stakeholders from almost every sector that was involved in this particular matter. We had people from Government, the Department of Trade and Industry; the Minister was present. We had people from Khula, Ntsika, banks, private sector businesses; and we had private sector organisations such as Sacob, Business SA, Nafcoc, and so forth.

Arising out of that particular hearing, a number of issues emerged which have started the ball rolling, which I think everybody is grateful for. Firstly, what emerged there was that many of the findings that were made in the national enterprise survey, conducted by the President’s office, were being verified by stakeholders who came to speak. These were findings that suggested that small businesses were concerned about the fact that not enough services were being delivered to them in order to develop viable business strategies and viable businesses. The concern people raised was about the fact that Government and Government agencies were not popularising the initiatives they were undertaking in order to ensure that small businesses got to know about them, and so forth.

One of the most important issues that was raised at that particular public hearing was the financing of small businesses. Arising out of that public hearing, a decision was taken that the joint committees of Parliament would put together a public hearing with a banking institution in order to talk about the financing mechanisms that revolved around small businesses. I think this discussion is very important for all of us. Initially I had decided to prepare a speech and read it, but then I thought it might be better for us just to engage on a one-on-one basis on the issues that came out of this particular thing. I think it affects everybody in their constituencies. When members go to their constituency offices and meet with people there, the first thing that businesspeople come and tell them is that SMMEs are really suffering, and that they are not getting services, finance, and so forth.

We have had a very responsible Ministry and department in that their ears and eyes have been open. They have kept their ears close to the ground on all the issues in which we have been involved, to the extent that many of the recommendations we have made have been taken on and put into the works of the restructuring process.

However, let me just indicate the severity of this problem. We have had, over and over again, business organisations coming to this Parliament and telling us that they have been doing business for years and years. Some of them have been running very viable and successful businesses. One organisation that came to us represented black professionals, accountants, building contractors, etc, who have track records and can show that they have been running very viable businesses. Many of these organisations and businesspeople say to us that when they approach the banking industry they are not given the finance to grow.

All of us agree that if we are to create jobs in this country, if we are to make sure that we fire up the economy in this country, our primary industry cannot do it. We cannot expect our primary economy in this country, such as the gold and platinum industries, and so forth, who are vying for global competitiveness, to expand their operations to such an extent that they absorb the entire jobless community in this country. I think Government, stakeholders and everybody agree that the only way in which we can create jobs in this country is by firing up the secondary economy. We do this by making sure that we add value to the raw products that we produce from the bowels of the earth of our country, taking those raw products and adding value to them, and selling them as completed commodities on the international market. We can only do that through small businesses. We can only do that if the small businesses that begin this process in this country are black small businesses, because, in doing that and in ensuring that they are black businesses and that they have an economic empowerment strategy revolving around them, we ensure that we also target our objective of poverty alleviation.

These black businesses that are struggling and operating very legitimate and hard-working small businesses are coming to us and saying a number of things. They say that they are not getting sufficient services or managerial and other expertise as and when they require it and that they are not being mentored enough. Most of all, however, they say that when they secure a Government tender or a big contract from a big company and they need to expand their production line or buy raw materials in order to fulfil the requirements of that contract and then go to the local bank that they have been doing business with, sometimes for 10, 15 or 20 years, that bank says to them, ``Sorry, we cannot do business with you because you do not have collateral.’’ That situation is resulting in a very difficult process in our efforts to ensure that our secondary economy develops.

What are the reasons that the banks give? They say that they want to manage their risks; that any banking institution anywhere in the world that lends money must ensure that it balances the risk and the bank’s exposure to risk with profitability; and that they cannot do business with small businesses which do not manage to reduce that risk.

When one goes deeper into the question and tries to find out what they mean by this, they usually say that the criteria they follow require that small businesses must provide collateral.

Let us go deeper into the question of collateral. Let us say that I am a black small businessman operating in an area such as Alexandra, which is right next to Sandton, a big community with big business initiatives and a vibrant subeconomy. My business, however, is in the Alexandra region and I live in that township, where I own my house. I go to the bank, which asks me for collateral, and I say that I have a house in Alexandra and that they can have it as collateral. The bank immediately comes back to me and says that that is a redlined district. They do not say so in so many words, but they refuse to take such a client’s house as collateral.

When collateral in this country operates around apartheid barriers that were set up before 1994, we cannot possibly be expected by the banks not to attack them on the basis that they are engaging in practices that tend to be racist and that tend to be structurally designed in such a way that they exclude people from historically disadvantaged communities.

The examples that I am giving hon members are real examples. Just recently, last week, when the Black Economic Empowerment Commission had discussions with Comrades Cyril Ramaphosa and Job Ndlovu, we asked two simple questions of these captains of industry and business, who are also people who really understand black economic empowerment in this country. We asked them what, in their view, was the perception out there in respect of the financing of SMMEs. We asked them whether what people were saying was true, namely that banks are engaged in racist practices because they do not allow finance to get out to black SMMEs and black small businessmen. Both Cyril Ramaphosa and Job Ndlovu, without hesitation and with no doubt in their minds, said yes. The perception out there is that these are racist practices.

At the hearing a woman who owns a string of butcheries in KwaZulu-Natal called Awethu Butcheries, spoke. We invited her all the way from KwaZulu- Natal to come and speak to us because her written submission indicated that there were some problems in the way in which she was doing business in that province. She told us that she had been running butcheries in KwaZulu-Natal for the past 10 to 15 years and had been running cash accounts with the bank. She had never had a problem with regard to bounced cheques, with the credit bureaux, and so forth.

When this woman recently had a business opportunity to expand her butchery business and went to the bank to ask for a loan, they told her that they wanted collateral - after 10 to 15 years of doing business!

The CHAIRPERSON OF THE NCOP: Order! Hon member, your time has expired.

Mr M V MOOSA: I am sorry, I have not even come to the meat of the issue. [Laughter.] [Applause.]

Dr E A CONROY: Mevrou die Voorsitter, minister Erwin en kollegas, in die witskrif oor ‘n nasionale strategie vir die ontwikkeling en bevordering van klein sakeondernemings in Suid-Afrika, wat reeds in Maart 1995 verskyn het, word dit duidelik gestel dat, en ek haal aan:

… there is ample evidence that the labour absorptive capacity of the small business sector is high, the average capital cost per job created is usually lower than in big business …

… the small business sector is seen as an important force to generate employment and more equitable income distribution, to activate competition, exploit niche markets (both internally and internationally), enhance productivity and technical change, and through all of this stimulate economic development.

Bogenoemde is deur die Minister van Finansies - destyds van Handel en Nywerheid - in die voorwoord tot die witskrif in ‘n neutedop saamgevat met die stelling dat klein-, middelgroot- en mikro-ondernemings die voertuig is waarmee die uitdagings van werkskepping, ekonomiese groei en gelykberegtiging in Suid-Afrika aangepak kan word.

Oor die kritiese rol wat die kleinsakesektor in die ekonomiese, maatskaplike en welvaartontwikkeling van Suid-Afrika kan speel, hoef daar dus geen twyfel te bestaan nie. Ek sê met opset dat dit ‘n belangrike rol kán speel, want dit wil voorkom asof dit weens verskeie redes nog nie daarin kon slaag om werklik sy belangrike rol te begin speel nie, ten spyte van die feit dat die Departement van Handel en Nywerheid in die boekjaar 1999-2000 R106,7 miljoen van sy begroting vir die ontwikkeling van klein sakeondernemings beskikbaar gestel het. Een van die uitstaande en oorwegend belangrikste redes is die oënskynlike probleme wat met die verkryging van kapitaal en bedryfsfinansiering ondervind word. (Translation of Afrikaans paragraphs follows.)

[Dr E A CONROY: Madam Chair, Minister Erwin and colleagues, in the White Paper on a National Strategy for the Development and Promotion of Small Business in South Africa, that was published as long ago as March 1995, it is stated clearly that, and I quote: … there is ample evidence that the labour absorptive capacity of the small business sector is high, the average capital cost per job created is usually lower than in big business …

… the small business sector is seen as an important force to generate employment and more equitable income distribution, to activate competition, exploit niche markets (both internally and internationally), enhance productivity and technical change, and through all of this stimulate economic development.

The above was summarised by the Minister of Finance - at the time of Trade and Industry - in the foreword to the White Paper in the statement that small, medium and micro enterprises represented a vehicle to address the challenges of job creation, economic growth and equity in South Africa.

Therefore there need not be any doubt about the critical role the small business sector can play in the economic, social and welfare development of South Africa. I am deliberately saying it can play an important role, because it seems that, for several reasons, it has not yet been able to succeed in really beginning to play its important role, despite the fact that the Department of Trade and Industry made available R106,7 million of its budget in the 1999-2000 financial year for the development of small business enterprises. One of the outstanding and predominantly most important reasons is the problems apparently being experienced with acquiring capital and operating finance.]

In its submission, the DTI mentioned that these finance-related problems include an estimated failure rate of 80% amongst start-ups, and consequently this perception of risk of SMMEs, the lack of sufficient financial management support systems for SMMEs, the high cost of operating SMMEs, which is commonly inversely proportional to the size of the enterprise, and the perceived insufficiency of credit guarantees.

The DTI recognises the global constraints experienced by banks in South Africa and argues for an approach which balances the need for sound banking practice against the imperative to extend services to people excluded from financial services. The Banking Council also mentions the need to maintain a sound financial sector in line with international best practice.

The Department of Trade and Industry therefore concedes that it would be simplistic and potentially damaging to suggest that these problems can be solved simply by new rules for the banking sector, a view which is apparently supported by the SA Reserve Bank when it strongly argues that Government should not force banks to lend to SMMEs.

While the New NP supports the acceptance of the report, it might not be inappropriate at this juncture to refer to the DTI’s submission that it is becoming increasingly difficult to measure the extent of credit extension to SMMEs due to definitional difficulties. In other words, what exactly is a small enterprise, what is a medium enterprise and what is a micro enterprise? In some instances, reference is made to the very small sector. Is that an intermediate classification between small and micro?

In the 1995 White Paper it is mentioned that, from a broad strategy perspective, the most important distinction is between survivalist activities, micro enterprises, small enterprises and medium-sized enterprises. It is furthermore stated that, due to the similarity of some of the obstacles facing them, survivalist and micro enterprises are often lumped together. From the characteristics of the four categories enumerated in the White Paper, which should be formalised for defining and classification purposes, it becomes clear that the problems of each of these four categories need different policy approaches.

I would propose that the Department of Trade and Industry, as custodians of the small business community in South Africa, give serious consideration to the grouping together of survivalist, micro and very small enterprises, while small and medium enterprises should be treated on a completely different level.

In Denmark a small or medium-sized business operates on an average annual turnover of US $150 000, or slightly more than R1 million per employee. If those standards were applied to small and medium enterprises in South Africa, how could their financial requirements be compared with and treated on the same level as those of a survivalist enterprise whose lending requirements would possibly be in the region of, say, R2 000 as start-up capital?

The problems, expectations and requirements of the former group are worlds apart from those of the latter, and by lumping them together as SMMEs when conferences, workshops and important public hearings are held and reports are compiled, an unacceptable disservice is done to both groupings. That the micro, very small and survivalist enterprises do have and do experience particular problems, as has been pointed out in the report, is being recognised.

They therefore warrant special recognition and special treatment which requires less rigid approaches than those adopted by the majority of banks. This would most likely result in less emotional, though possibly warranted, submissions by those who represent the smallest of small enterprises at future public hearings and workshops on the subject.

Mrs J N VILAKAZI: Chairperson, hon Minister of Trade and Industry, Mr A Erwin, and hon colleagues, today’s small customers can easily be tomorrow’s big shots in the business sector. It is therefore important for banks to support emerging business talent. New loan seekers, like all loan seekers, are determined people who will not fail because they want to fail. Loan seekers, big or small, want to develop an idea and exploit a market which is there. Banks should give careful consideration to those who are willing to go where others will not dare to. Business cannot be confined to present business areas. New areas have to be opened up, if the gross domestic product is to be increased.

It is in the banks’ own interest to find new customers, to nurture and to train them so that such new customers understand cash flow, loan redemption and capital accumulation. Until the black African entrepreneur comes into his own, business will remain stagnant. The growth potential is within the emerging black sector, and therefore business dictates that banks should be preparing the fertile field for future harvesting.

Stability in our country was a goal which many people thought we would not achieve. These people were pessimists. Today, too, there are those pessimists who believe that our country is destined to fail. I wish to say to them and all other pessimists that South Africa is unique amongst the countries of Africa. We have more universities, more technikons and more technical colleges than any other African country. We are therefore poised to produce accountants, auditors, economists and business managers from the formerly marginalised communities. Within ten years, business opportunities will explode and today’s small and micro entrepreneurs will be tomorrow’s captains of industry and commerce. Let us therefore call on the banks to invest in this potential and to grow with the growth of the black business sector.

Kungaba yisu elibalulekile kakhulu uma osozimali kanye namabhange bengazama konke okusemandleni abo ukufukula labo abasephansi kwezohwebo. Abantu abanamakhono kodwa beswele imali yokuqala imisebenzi bayadinga ukusizwa. Abaqala kancane, kancane bayakwazi ukukhuphuka kancane, kancane baze badlondlobale babe ngongxiwankulu kwezohwebo.

Masakhane, sisizane futhi sifukulane. Siyoyinqoba indlala sinethezeke ezweni lethu lobabamkhulu. (Translation of Zulu paragraphs follows.)

[It could be an important plan if businesspeople and banks could empower small businesspeople. People with skills are in need of financial assistance in order to start their own businesses. Those who started from scratch are now able to grow gradually until they become big capitalists. Let us build, help and empower one another. We will conquer poverty and live comfortably in the land of our ancestors.]

Mr J L THERON: Hon Chairperson, hon Minister and colleagues, South Africa has a modern, efficient and adaptable banking industry that has been unblemished by overt political interference for the past 20 years. It has been left to finance the movement of goods and the provision of services, and, more lately, housing loans. It does so under prudential constraints that are appropriate to these markets, but not necessarily to others, where the judgment of risk is different and prudential constraints need to vary.

Not all banks are all things to all men. The financing of SMMEs falls into this latter category, where small loans tend to mean high administrative costs and the measurement of risks is unfamiliar. If the established banks are coerced into this direction, their commitment will be qualified, their risk measurement unsure and the consequences for depositors, borrowers and shareholders uncertain. Yet there is a demand for SMME finance and its satisfaction will create jobs. Why, therefore, have more appropriate institutions not endeavoured to satisfy this demand? The reason is that the costs of doing so and the risk involved are too high.

Dit blyk uit die verslag van die Portefeuljekomitee oor Handel en Nywerheid dat die verdere regulering van banke oorweeg word om te verseker dat meer finansiering beskikbaar gestel word aan swart klein, medium en mikro- ondernemings. Dit sal ‘n kwade dag wees indien daar groter regulering van die banksektor sal wees om hierdie doelstellings te bereik.

Daar is herhaaldelik by die openbare verhore gesê dat banke rassisties optree in hulle evaluering van lenings aan KMMO’s. Hierdie aantygings is nog hoegenaamd nie bewys nie en kan dus nie bloot vir die waarheid aanvaar word nie. Banke beoordeel lenings aan enige persoon of besigheid op grond van koste verbonde aan die lening en die risiko verbonde daaraan dat die geld terugbetaal kan word. Banke is immers in die mark om wins te maak op die kapitaal wat beskikbaar gestel word.

Indien die Regering meer lenings aan KMMO’s beskikbaar wil hê, is daar ten minste twee terreine waaraan aandag geskenk kan word. Ten eerste moet banke nie meer gereguleer word nie, maar moet die staat meer kollaterale fondse beskikbaar stel wat die banke se risiko in hierdie sektor sal beperk. Verder moet die staat meer doen vir die opleiding van klein en nuwe sakelui wat KMMO’s wil bedryf. Alleen wanneer hierdie nuwe sakelui oor die nodige vaardigheid en kennis beskik om ondernemings suksesvol te bedryf, sal banke bereid wees om meer geld aan hulle te leen. Die geskreeu oor rassisme teen die banke staan dus op baie wankelrige bene en daar moet eerder na die basiese sakebeginsels gekyk word om te sien waarom banke nie meer lenings aan KMMO’s toestaan nie. (Translation of Afrikaans paragraphs follows.)

[It is apparent from the report of the Portfolio Committee on Trade and Industry that further regulation of banks is being considered to ensure that more financing is made available to black small, medium and micro enterprises. It will be a bad day if there is to be greater regulation of the banking sector in order to achieve these objectives.

During the public hearings it was said repeatedly that banks act in a racist way in the evaluation of loans to SMMEs. These allegations have not been proved by any means and therefore cannot simply be accepted as the truth. Banks assess loans to any person or business on the basis of costs associated with the loan and the risk associated with the money being paid back. After all, banks are in the market to make a profit on the capital which is made available.

If the Government wants more loans to SMMEs to be made available, there are at least two areas which must receive attention. Firstly, banks should no longer be regulated, but the state should rather make more collateral funding available which will restrict the banks’ risk in this sector. Furthermore, the state must do more with regard to the training of small and emerging businesspeople who want to operate SMMEs. Only when these emerging businesspeople have the necessary expertise and knowledge to manage enterprises successfully will banks be prepared to lend them more money. The howling about racism against the banks is therefore on very shaky ground and one should rather look at basic business principles to see why banks do not grant more loans to SMMEs.]

What is also needed is a more modest legislative environment for people’s banks which are not subjected to onerous labour, equity and other political constraints and whose prudential requirements are appropriate to the risks of a particular community. Both the Reserve Bank and Absa Bank made suggestions on those lines, but the portfolio committee chose not to explore these.

Indien daar wetlike voorsiening gemaak word vir gemeenskapsgebaseerde finansiële instellings waaraan die staat groter kollaterale belegging verskaf wat die risiko aan banke sal verminder, kan daar ver gevorder word met meer lenings aan KMMO’s. Die onaanvaarbaar hoë vlakke van misdaad in sekere dele van Suid-Afrika is beslis nie die banke se skuld nie. Indien hulle die tegniek van redlining'' ofrooi lyne’’ gebruik om gebiede aan te toon waar die risiko vir lenings te hoog is, is dit die staat, die Polisie, die Weermag en Justisie se taak om die misdaad te beperk sodat normale handel kan plaasvind.

Enige buitelandse belegger of sakepersoon wat tans versigtig is om geld in die Wes-Kaap te belê waar die bomme so ontplof, kan begryp word. Hierdie misdaad- of terreursituasie moet eers opgelos word voordat verwag kan word dat normale besigheid sal plaasvind.

Daar kan ook nie nagelaat word om die Departement van Handel en Nywerheid hier in oënskou te neem nie. Hierdie departement transformeer nou al hóé lank. Die vraag wat met reg gevra kan word, is of ‘n ander woord vir niksdoen'' noutransformasie’’ is. Wat doen die Departement van Handel en Nywerheid om die ekonomie van Suid-Afrika vinniger te laat groei? Al wat ‘n mens hieroor kan sê, is: beslis nie genoeg nie! Hopelik sal die departement nou die een of ander tyd klaarkry met transformasie en begin om die Suid-Afrikaanse ekonomie te stimuleer vir groter groei en werkskepping.

Gisteraand is daar verslag gedoen oor Cosatu se kongres oor die SAUK-nuus. Cosatu het duidelik gevra dat die ekonomie gestimuleer word vir groter groei en werkskepping. Pres Thabo Mbeki het daarop gereageer met ‘n stelling dat die ekonomie getransformeer moet word. Transformasie is tog nie gelyk aan groeistimulering nie en ek dink dit is nou belangrik om groei te stimuleer. Dit is dus belangrik dat die Departement van Handel en Nywerheid hieromtrent iets sal doen. (Translation of Afrikaans paragraphs follows.)

[If legal provision is made for community-based financial institutions to which the state provides greater collateral investment which will reduce the risk of banks, greater progress can be made with loans to SMMEs. The unacceptably high levels of crime in certain parts of South Africa are certainly not the fault of the banks. If they use the technique of redlining to indicate areas where the risk with regard to loans is too high, it is the job of the state, the Police, the Defence Force and Justice to restrict crime so that normal trading can take place.

Any foreign investor or businessperson who is currently cautious about investing money in the Western Cape where bombs explode, can be understood. This situation of crime or terror must first be resolved before one can expect that normal business can take place.

One can also not neglect looking at the Department of Trade and Industry here as well. This department has been undergoing transformation for a very long time now. The question which can justifiably be asked is whether transformation'' is now another term fordoing nothing’’. What is the Department of Trade and Industry doing to allow the economy of South Africa to grow more rapidly? All one can say in this regard is: certainly not enough! One hopes at some or other stage the department will complete its transformation and begin stimulating the South African economy for greater growth and job creation.

Yesterday evening the SABC News reported on Cosatu’s congress. Cosatu clearly asked that the economy be stimulated for greater growth and job creation. President Thabo Mbeki responded to this with a statement that the economy has to be transformed. Transformation is certainly not the same as growth stimulation and I think it is now important to stimulate growth. It is therefore important that the Department of Trade and Industry do something about this matter.]

Mr K D S DURR: Madam Chair, I agree with the hon member who just sat down that we cannot reslice the economic cake, we have to bake a bigger cake with bigger slices for all.

I hope that when the Minister speaks he will tell us all the good things that have happened, because I miss that in this debate, particularly from the Government benches. I would have hoped that the chairman would have told us some of the good things which are happening, because it is not all bad news. There are some wonderful things happening. There is a lot being done and achieved. There is also a lot more planned by the Government, the Government’s agencies, and more particularly, by the banks themselves. Every day we read about the banks taking new initiatives, trying to reach down and to give access to everybody, from both the deposit taking and developmental points of view.

I welcome this initiative, provided the initiative is not followed by legislation and does not perpetuate racial division in our country. However, the fact of the matter is that this has been a good debate. It has not been acrimonious. The banks are willing to talk, the Government is willing to talk. The debate has been anything but acrimonious. It has been a debate of two sectors trying to find each other, and trying to find ways and means to promote access to the economy, at all levels of our society, for all of our people who are able to do that.

If one wants to have access to the economy, one has to have access to capital, and this applies even if one wants to mend lawnmowers and wants a thousand rand as a kickstart so that one can go and do it in a garage and join the service economy - which is a very underrated part of this whole debate. I think, when we talk about small, medium and micro, we are lifting our sights too high, because there is such a thing - I do not know what to call it - as a mini category of people in the service industry.

If hon members look at the US, the greatest growth has been in the service industry, and today’s very small entrepreneur who has been kickstarted with a few thousand rand is tomorrow’s bankable person. So access is the challenge.

When we talk, we must not talk as if nothing has been done. A lot has been done and is being done. The point is we all know that we want to do more. For me the wonderful thing is that everybody is willing, and everybody is attempting to use their resources to do more. What we must not do is skew the banking system, and that is to allow them to take nonprudential or undue risks.

We know how good the prudential status is of our banks in the sense that when we had the Southeast Asian crisis our banks stood firm when banks in Southeast Asia all quivered and shook. That was a very good thing for our country. We know that the fact that our banking movement withstood that crisis so well built and enhanced the financial reputation of our country. [Time expired.] Mr G A LUCAS: Hon Chairperson, hon Minister of Trade and Industry, hon delegates, permanent delegates and special delegates from KwaZulu-Natal, it is so difficult to speak after Mr Theron from the DP, because he spoiled the whole debate. It was flowing properly and he then came and lamented the crime and transformation, which have nothing to do with the nature of the debate that we are having today.

The debate is about whether the banks are playing their role in building the South Africa that we seek to build. Are the banks progressive enough to recognise that there have been inequalities in our country? It is important that we redress those inequalities. Mr Theron is way out of line when he speaks about the bombings in Cape Town and other things. He does not speak about the difficulties which small businesses are experiencing in accessing finance in our country. I think the mistake Mr Theron and the DP are making is that they always mistrust the debates taking place and make a noise about something which is not relevant.

The debate we are engaged in today in this august House is a very important one. It is important because it deals with issues of transformation in our country’s economy and how the banking sector responds to its challenges. Secondly, the debate is important, precisely because it focuses on the SMME sector and its appropriateness in addressing the broader socioeconomic issues affecting our society. Thirdly, the debate is important because through the SMME sector we can greatly contribute to the deracialisation of our country’s economy and society as a whole, and in this way also deal with the demon of racism which continues to bedevil our nation. That is why Mr Theron cannot argue otherwise.

Unemployment, poverty and underdevelopment are the realities which continue to face the majority of our people, especially the youth, the women and the rural masses. These are the masses that feel the brutality, the ignorance and the reluctance of the banking sector to support SMMEs. Honestly, Government alone cannot deal with the immense problems that face our nation. It would require the mobilisation of all our country’s resources to deal with these issues.

In line with the mobilisation of such resources is the critical role that our banking sector should play in promoting and supporting the SMME sector by ensuring access to finance and other essential requirements for the success of the sector. What came out clearly during the interactions we had with all the relevant stakeholders was that the banks were not doing enough to ensure access to finance for SMMEs, especially when it relates to those previously excluded from the mainstream of our economy. In fact, till today they are seen as high-risk clients whom one cannot trust.

The briefing that we also received on 13 September 2000 from the Black Economic Empowerment Commission also confirms the above. This report in front of us today also indicates that despite the Government’s commitment to taking progressive initiatives in the form of Khula and Ntsika, there is still reluctance or no response from our private banks, and this impacts negatively on our programme for the creation of a better life for all, in particular in ensuring the equal distribution of our country’s wealth.

The question we should all ask ourselves is: What more should we do for the banks to join us and be part of our transformative agenda? I am convinced that only the banks are able to answer this question. We, seated here today as representative of all our people, cannot answer this question, precisely because for the past six years we have done our best to satisfy and alleviate the fears of the banking sector, without much success. Even today, banks still feel that it is not yet safe to invest in South Africa, especially within the black community.

The Black Economic Empowerment Commission also confirmed that all banks were uneasy towards the SMME sector in particular, and that the major beneficiaries of this were white South Africans and that they got assistance through Khula. This is an indication that if, indeed, the Government guarantee scheme can be used appropriately, it can act as a catalyst for economic development and address the inequalities in our society. However, because the banks still think that black people in particular are not reliable clients to do business with, our initiatives do not bear the intended benefits of stimulating our economy.

Our province, which is the largest in terms of space, but smallest in terms of population, continues to feel the harsh realities of unemployment, poverty and underdevelopment which characterise the South Africa of today. This situation is worsened further by the reluctance of the banks to provide finance. They always penalise our people for their lack of collateral, unclear credit history, etc, forgetting it was only six years ago that the majority of South Africans were allowed to engage in economic activity without any law prohibiting them from doing so.

These are the excuses banks make in denying our people the right to engage in constructive and competitive economic activity, resulting in them being left on the periphery without hope for a better future. This leaves me with no option but to conclude that being poor and living in poverty is thought to be acceptable by our banking sector. They think: ``Let the poor fend for themselves. We, the South African banks, could not care less. As long as the rich get value for their money, why should we think about the poor.’’

Two branches of the First National Bank closed recently in our province, namely in Galeshewe and Carnarvon. Customers of those branches were left stranded and had great difficulty in accessing banking facilities. The situation was worse in Carnarvon as there is no other branch of FNB. Customers who, in the main, were black suffered the most as they had to transfer their accounts without any assistance from their original bank. That is a demonstration of how unimportant we are in the eyes of our banks, because we do not have the millions to be of importance to them. Galeshewe is the largest and most populated residential area in our province. The reason for the withdrawal of FNB is still a mystery to most of us. It cannot be argued that it was because of crime, as it was close to a police station and I cannot remember it ever being robbed. The argument that it was not productive does not hold water either, as most of us used their banking facilities.

At another level one would view the closure of the banks and their absence in the previously disadvantaged communities as an indication of lack of confidence in these communities, thus sending a clear message to all of us that the future for the development of the SMME sector looks bleak. In particular, access to finance from the banks will be extremely difficult.

Furthermore, the majority of the banks in the province do not have facilities to assist people who require information with regard to starting their own businesses, neither are they friendly to our people. Thus our people are not feeling the impact of Khula and other funding options provided by the state, as banks do not make such information accessible to our citizens. This is an affirmation of the fact that the banks care less about the poor. Let them get poorer,'' is their message to all of us. Ours is only about profit-making. We have no social responsibility to you South Africans.’’

Certain things need to and must be done to remedy the situation we find ourselves in. We might not, as this House, provide all the solutions, therefore it requires all other role-players to find answers to our problems. And I hope that the continuous engagement of the banks will be much more helpful in finding solutions.

Clearly we need, firstly, to get a commitment from the banking sector and all others to play a more proactive role in assisting the development of the SMME sector and to the development of our country’s economy. [Time expired.] [Applause.]

The CHAIRPERSON OF THE NCOP: Order! Hon Minister Erwin, welcome to the NCOP.

The MINISTER OF TRADE AND INDUSTRY: Madam Chair, thank you very much for this opportunity to respond to this debate on the tabling of the report of the select committee of the NCOP on this problem.

I think that a good parliament - and here I use it in the sense of both Houses of our Parliament - is a good parliament if it allows its citizens to express themselves on complex issues, and to that end, I think, we must congratulate Parliament on setting up these hearings and setting the conference we had here in the NCOP. Many matters of life and the economy are very complex indeed, and they are not dealt with in the ordinary electoral processes. No political party will put up a detailed and comprehensive account of how it is going to deal with specific problems.

So if problems exist, I think for this Parliament to allow people to express themselves is fundamentally correct and does a service to everybody. I think there is little mileage to be gained out of political point-scoring on these matters. The real mileage to be gained is to make people aware, in a forum of Parliament with some proper processes, of what the realities of the economy are in a particular area.

Now I think we all agree, everyone including the banks, that we have a major problem in the provision of finance for small enterprises and that, as every single study has shown, the problem is far more severe for black- owned enterprises. We would be, I think, unrealistic and naive not to have expected that, after decades of a government system where the banks did not lend to black business and where black businesses’ basic rights to wealth and collateral were restricted.

So what we should be doing, and what the NCOP’s hearings have done, is to hold up a mirror to everybody and say: ``Look, this is the system that was working. It is failing now, so what are we going to do about it?’’ The banks - and I think they are doing this - realise that any commercial organisation must listen to its clients. If one does not listen to one’s clients one is going to have problems, particularly the banks. The way they are seen by ordinary people is very important for their activities and business.

We have all been saying to the banks - I think they acknowledge it, and I have a statement issued by the Banking Council’s Bob Tucker - that there is a range of different types of problem. I am not going to go through them all in detail. Speakers here have outlined them and my department has outlined them at some length in the hearings. But certainly one of the problems - and there can be no walking away from this - is that in their managerial practices the banks must take the provision of small loans to everybody, particularly black persons, more seriously. They have to devise strategies to do this. They have to think through how they are doing it. And I agree with the hon member Durr that there are moves in this direction in some areas.

However, it is a big problem, and pressure from ordinary people and pressure from Parliament does make managers in the banking system, the chief executives of the banks, think about this issue, to try and move things forward. So the debate we are having is important and I think we should treat it in the measured way in which the majority of speakers here have treated it.

The hon member Theron and his party are making a mistake. They are making a mistake because they are confused as to which way they want to go, and we should not be confused on this matter because the issue is relatively simple. What is the nature of that confusion? It is that they say, as that party, that the market is fundamentally important. But when the market is not working, they say: No, the Government must do everything.'' We cannot have it both ways. The Government cannot provide loans to small businesses on the scale that the banking system can and must. One cannot say to the Government:When the banks do not want to do something, you must do it.’’ I think the hon Vilakazi was quite correct - and this is a point we have been making to the banking system - to say that this is a market failure. It is not the sort of market failure that must be replaced by the Government or the public sector. It is a market failure that emanates from the banks’ own decision- making processes. So they must reflect on those decision-making processes and they must correct them.

What they cannot say is: Just because there is a lot at risk, I am not prepared to support my future customers.'' That cannot be correct. Anyone developing their markets must give thought to how they develop those markets. Also, what we cannot accept is a bank saying:All right, we, the main bank, think that that is too risky a market, so what we are going to do is create a little separate entity that must handle all that risk.’’ That is just writing the story of failure. One cannot say that the most risky end of the market must be served by particular groups or empowerment groups, etc.

Because the market is risky, but because it also involves the banks’ future clients, it requires deep pockets to enter that market. It requires a strategy to enter it, it requires deep pockets. In the United States - we cannot attack them for their view on markets, etc - they realised that they had a structural problem. They realised that the poor were not being supported in their economic development, and all they said was: ``All right, to keep you continuously reminded of your responsibilities in these areas, you must report to us where you lend.’’ That is a perfectly sensible act, to correct market failure. So the notion that if we pass any legislation on this matter we are interfering in the banking system is nonsense.

Obviously the Government has made its views clear, and so has the Reserve Bank: One cannot say the banks must lend to somebody. No one is saying that, because then the responsibility for risk assessment moves from the bank to the Government. But to say that one cannot remind the banks of what their obligations are, through reporting provisions or community reinvestment acts, or something, is incorrect. This is, really, standard all over and for us to start getting excited about that is crazy. One has to keep reminding people that they have certain responsibilities and certain obligations.

To say that the Government must take everything is not possible. In fact, it is fundamentally contradictory, because what one is then saying is that the cost of capital is high, which it is. Why is the cost of capital high? It is because there is a perception that there is risk in this economic system. So one says: All right, to solve one problem, which is to help the small and medium enterprises, what you as the Government must do is take all the risk and increase the risk.'' This is completely contradictory. One cannot come to the Government and say:Yes, we need to lend money, but it is very risky. Will you lend it?’’ and at the same time complain about the high cost of finance.

This is a much more complex issue. One has to manage the cost of finance down, and that is not done by asking the Government to take unnecessary risks in the economic system.

So let us get a sense of perspective on this. Essentially this is about a partnership, it is about reminding the banks what they could and should do, and it is about providing support to that. Redlining is unacceptable. A bank, whose job it is to evaluate risk, which is the essential feature of a bank, and ameliorate the risk as far as it can, cannot say that it is not going to take any risk in a whole area - it does not matter who is in it. It is unacceptable and we cannot tolerate that in any form of commerce. It is an inverse of an anticompetitive practice. So redlining is unacceptable. The bank’s job is to take risk. That is exactly what we said to the microlenders. One cannot pretend to make a loan and then have no risk because government must take all the risk, ie the fact that we make automatic deduction for them. We are not prepared to do that. That is not banking, that is exploitation. If one wants to make a loan to somebody, one must assume the cost and the responsibility for evaluating the risk of whether that loan will be repaid. One cannot be like the mashonisas [microlenders] and go and say: ``Okay, we are giving you a loan. I do not care whether you are rich or poor or anything, as long as you sign a stop order for your salary to be deducted.’’ That, we are not accepting. That is not banking; that is exploitation.

So what we need to be clear on in our minds is that if we want a banking system, it must take risk - it cannot not take risk - it must be responsible for evaluating the risk, and it must assume the responsibility of growing its market. To grow its market, it must invest in the small and medium enterprises that will make up our future, and that should be the nature of our partnership. There are positives, and we here in this House can do a lot on these positives.

Recently in DTI we expanded the small manufacturing enterprise development programme to cover a range of sectors, including the IT sector that is doing so well. Therefore hon members, as members of Parliament and representatives of people, not parties, should know what these schemes are and should be helping their constituencies access these schemes. That is something we can do. These are cash payments. Why are they cash payments? They are cash payments so that we can reduce the cost of finance and so that we can deal with the problems of working capital and solvency for small businesses.

Our responsibility as leaders of our people is to build this economy, and we have it in our power to do it by getting out there and working with small businesses, explaining to them what it is that we have to offer, helping them to take advantage of that and giving them wise counsel. I think that is the challenge we all face. The banks face challenges, we in DTI face challenges, and each and every member faces a challenge to build this economy. [Applause.]

Debate concluded.

Report adopted in accordance with section 65 of the Constitution.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! I would like to take this opportunity to thank the hon the Minister for engaging this House in a lively debate. [Applause.] [Interjections.] I also welcome the hon the Minister for the Public Service and Administration in our midst.

 BATHO PELE: PROVINCIAL AND LOCAL GOVERNMENT PERSPECTIVES TOWARDS AN
               EFFICIENT AND EFFECTIVE PUBLIC SERVICE

                      (Subject for Discussion)

Mr M BHABHA: Chairperson, hon Minister, hon delegates, our role as the NCOP is to represent the interests of the provinces at the national policy- making and opinion-forming forum which is Parliament, and to ensure that provinces are not overwhelmed with unfunded mandates or required to implement impractical laws.

An important part of our role is to ensure that the central regulatory and policy-making national departments of government are taking steps and measures to support the provinces. We must scrutinise the policies and strategies of these national departments to ensure that they are a help and not a hindrance. For this reason, occasions such as the speech of the hon the Minister are most welcome. I would therefore like to thank the hon the Minister for addressing us this afternoon on the work of her Ministry. Since its establishment in 1995, the role of the Department of the Public Service and Administration has been a supportive one rather than a policing function, in particular since the promulgation of the Public Service Amendment Act as amended, and the public service regulations on 1 July

1. The DPSA has dedicated more resources to assisting departments with the implementation of the framework. The new regulatory framework has given rise to many challenges for provincial departments. The new framework affords greater flexibility to MECs, department heads and managers with regard to the running of their departments.

Where previously every aspect was regulated in the minutest detail, managers must now develop their own strategies and policies that are suited to their own unique circumstances. On the one hand, there is a temptation to blindly adhere to old rules: on the other, some departments have put very little in place to replace the outmoded rules. This is one of the challenges facing the DPSA in supporting public service departments.

It is clear that with additional power has come additional responsibility. To be made more self-sufficient in matters of planning, strategy and policy, amongst other things, departments require assistance from the DPSA and, in some instances, even from outside. The DPSA is therefore advising all those departments who request advice on customising their systems and procedure to ensure that flexibility produces the benefits that were intended. Nowadays all public service departments, including provincial departments, are the clients of the DPSA.

The DPSA is currently providing support to three provinces that I am aware of under the donor-funded interprovincial support programme. In my own province, that is Mpumalanga, if the Chairperson still remembers, we are currently negotiating to join this programme especially because of its emphasis on sharing experiences and best practices. There is no reason for each province to reinvent the wheel. We should learn from each other - our mistakes as well as our successes - so that the good may be replicated and the problems avoided.

Two of the main focus areas of the IPSP in the provinces where they are already under way are performance management and the implementation of the Batho Pele service delivery policy. These two areas are connected in that they both relate to accountability, that is accountability to the legislature for the performance of the department and accountability to the people - the users of public service - for the quality and quantity of services delivered.

Performance management and assessment must start at the top, and every head of department is required to enter into a performance agreement with her or his MEC and then with her or his senior management. I may just add that there has been a suggestion that even parliamentarians should sign performance contracts. In any event I do not know how many of us would survive. The IPSP support is geared mainly towards the system that must function effectively below this level. In departments such as Health and Education the system must cover many thousands of employees, so that it is clearly no straightforward matter to operationalise such a system.

There are, naturally, also labour relations issues which must be sensitively addressed in creating a set of procedures aimed at evaluating the performance of employers. Consistency and fairness are of paramount importance.

Batho Pele, the service delivery transformation policy, is one of three policies set out at national level that provinces must implement in our departments. I would like to deal with it in some detail, because I believe that it has been neglected by some departments and that it is the key to improvement in the quantity and quality of service delivery. Batho Pele is a straightforward and unpretentious policy. Its simplicity is deceptive, though. The changes it seeks to bring about are quite radical - quite literally, a transformation of the way in which Government departments interact with the public.

Batho Pele contains eight principles. Firstly, and most importantly, departments are required to consult service users about the services they will receive. This may sound obvious to you, Chairperson, but, if you ask yourself whether black people, poor people or people from rural areas were even considered, let alone consulted, in the past, you would agree that this principle is an important first step for most departments. Very few people can be complacent or argue that they already know exactly what they want. In this process it is important for departments to pay special attention to the needs of the previously disadvantaged, many of whom remain very much disadvantaged. The principle of equal access addresses this need by demanding equal access to services for all citizens.

After consultation, departments set standards of service. For example, if one applied for an identity book, one must know how long it should take to be issued. The Minister or MEC of a department is required, in terms of Batho Pele, to make a public commitment about the levels of service his or her department will provide. I would like to point out here that if this is happening in our provinces, it is happening very quietly. We, as provincial representatives, have a duty to empower our colleagues in the provincial legislatures to require this kind of information and undertaking from MECs.

The fourth principle requires that a service user should be treated with courtesy and consideration. That is obvious. I hear members say that one should remember that public servants are workers. They come to work and they have good days and bad days, too. It is necessary to sometimes remind them that an ethos of service must inform their every interaction with the public. We should also remember that we are still moving away from the position in which the Public Service was government’s agent of control rather than the government’s agent of delivery. Public servants must also apologise for poor service and provide redress, and willingly provide information about the services that the department provides. This requires, in some instances, a considerable shift in the mind-set from the old way of doing things. Batho Bele provides guidance.

We should also not forget the requirement of openness and transparency. This means that the public have a right to know how much the department gets in its annual budget and what services it renders with the money. Departments must demonstrate that they are providing value for money. This is a key performance area for the head of a department, both in terms of the Public Service Act and the Public Finance Management Act. The public should also be informed by notices, pamphlets or posters about who is in charge, such as who is in charge of the counter, the office or department and how they may be contacted. It is important that we as politicians and public servants as well, are occasionally reminded that we are elected or appointed to serve. The Public Service Commission has undertaken important work in benchmarking departments against the requirements of Batho Pele.

I am sure I am running out of time, but I just want to round off by saying that we sit here in Parliament and we also have constituency offices. We have got to find a way. We are also not insulated from these services, from bad or good service where it is given. We need to feed from our experiences in the constituency process in this institution. We have to find a way of getting information in assisting and complementing the work of the Department of Public Service and Administration so that we can assist it in its monitoring role. I think, in so doing, we will do justice to our constituency work also. [Applause.]

Mr N M RAJU: Hon Chair, hon Minister, hon special delegates from my kingdom of KwaZulu-Natal, hon colleagues, if a visitor from Mars were to survey the South African political scene, he or she would find a bleak terrain with skeletons of broken promises, a veritable wasteland of people’s expectations of a better life lying like potsherds around them. The Martian would be disturbed by the staccato cries of despair from the young, the not- so-young, the elderly and the aged, each of whom might well be crying: ``I fall upon the thorns of life. I bleed.’’

In commercial parlance, Batho Pele would approximate to meaning customer satisfaction. Customer satisfaction in the political sense can only mean putting the people first. Each and every department of Government’s Public Service must work within clearly defined parameters so as to maximise their efforts to bring about the expected post-apartheid dividends. The long- suffering peoples of South Africa need no less. Public servants must see their role not just as Government, Ministers or workers, but they must evince a vibrant sense of honesty and integrity and rise above personal aggrandisement.

The World Bank did not surprise the world when it stated recently that ineffective government and corruption in many societies was one of many impediments to poverty alleviation. Does each of our Public Service Ministries have an efficient bureaucracy dedicated to serving the nation with honesty and integrity? Does this bureaucracy operate on an achievable framework that prioritises poverty alleviation? Does the Government machinery run on pragmatic principles to bring dividends and satisfaction to the true beneficiaries - the people on the ground?

Because of time constraints, I will focus on just one Ministry, the Ministry of Welfare and Population Development. The beleaguered Minister, Zola Skweyiya, has just released a report which presents a very bleak picture of the delivery, or lack thereof, of social welfare services in the Republic. Some R3,8 million remains unspent. Who are the victims? It is the most vulnerable in our midst: children, the disabled, mothers and the aged. This is sheer indifference to efficient delivery by Public Service bureaucracy. I consider this to be an unforgivable example of Government’s betrayal of the legitimate hopes of the impoverished, the unemployed and the marginalised. [Interjections.]

In conclusion, lest I seem to be too critical of Government inadequacies, let me hasten to add that we welcome new plans by Government to cultivate an elite corps of senior Public Service managers.

I quote from yesterday’s editorial column of Business Day:

The idea of a highly trained, well-paid and motivated echelon with its own esprit de corps would serve as a role model for all public servants and make state service an attractive career option. As a mobile, trouble- shooting resource they would help ease Government’s chronic skills shortage.

By launching this new senior management service corps, Government easily acknowledges that the Public Service exists primarily to serve the public, not to pay wages and provide jobs. [Time expired.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! I now call upon the hon member J L Theron. Maybe we will hear more about the visitors from Mars.

Mr J L THERON: About what, Sir? Oh, about Jupiter, Chairman.

Omdat my tyd so beperk is, wil ek net kortliks konsentreer op die implementering van die Wet op Openbare Finansiële Bestuur - ons het almal die wetgewing gekry - en die belangrike rol wat dit kan speel om doeltreffender bestuur in die openbare sektor teweeg te bring. Daar is ‘n nuwe strategiese plan aangekondig om bestuur in die staatsdiens te verbeter.

Hierdie strategie kom ‘n jaar nadat die wet deur die Parlement goedgekeur is. Die nuwe strategie sal hopelik môre, Woensdag, 20 September 2000, deur die Kabinet goedgekeur word.

Volgens me Maria Ramos, Direkteur-generaal van Finansies, is die vertragings te wyte aan personeeltekorte, ‘n gebrek aan geskikte strukture om die wet in werking te stel en die ingewikkeldheid van die nuwe maatreëls. Maar met die nuwe strategie kan dit nou in werking gestel word. Volgens me Ramos sal die nuwe wet korrupsie, bedrog en wanbestuur aansienlik verminder. Dit sal ook openbare finansies deursigtiger maak en staatsamptenare verplig om groter rekenskap van hul optrede te gee.

Die nuwe wet gaan nie net staatsamptenare geld nie, maar ook alle provinsies en alle staatskorporasies. Elke departement moet ‘n kundige finansiële hoof en interne ouditkantoor kry om met die beheer van finansies te help.

Die nuwe strategie om die wet in werking te stel, stel ‘n tydskaal voor en maak ook voorsiening vir opleidingseminare vir alle betrokkenes. Die probleem is egter dat me Ramos volgens die Beeld van Donderdag, 14 September 2000 sê dat dit vyf tot sewe jaar sal duur om dié wet behoorlik in werking te stel. Ons wil graag ‘n beroep op me Ramos en die tesourie doen om die inwerkingstelling te versnel en so gou moontlik met opleiding te begin.

Vir die goeie bestuur van openbare finansies is dit kritiek dat bekwame, goed opgeleide amptenare hierdie fondse sal bestuur. Ons sien angstig uit na die spoedige inwerkingstelling van hierdie wetgewing en die nuwe strategie. (Translation of Afrikaans speech follows.)

[Because my time is so limited, I just want to concentrate briefly on the implementation of the Public Finance Management Act - we have all received the legislation - and the important role which it can play in bringing about more effective management in the public sector.

A new strategic plan has been announced to improve management in the Public Service. This strategy comes a year after the Act was passed by Parliament. The new strategy will hopefully be approved by the Cabinet tomorrow, Wednesday, 20 September 2000.

According to Ms Maria Ramos, Director-General of Finance, the delays are due to staff shortages, a lack of appropriate structures to implement the Act and the complexity of the new measures. However, with the new strategy it can now be implemented. According to Ms Ramos the new Act will considerably reduce corruption, fraud and mismanagement. It will also make public finance more transparent and will compel public servants to be more accountable for their performance.

The new Act will not only apply to public servants, but also to all provinces and all state corporations. Each department must have an expert financial head and an internal audit office to assist with the control of finances.

The new strategy to implement the Act proposes a timeframe and also makes provision for training seminars for all stakeholders. However, the problem is that according to Beeld of Thursday, 14 September 2000, Ms Ramos says that it will take five to seven years to implement this Act properly. We would like to appeal to Ms Ramos and the Treasury to expedite the implementation and to begin training as soon as possible. For the sound management of public finances it is critical that competent, well-trained officials manage these funds. We are anxiously looking forward to the speedy implementation of this legislation and the new strategy.]

Mrs J N VILAKAZI: Chairperson, hon Minister for the Public Service and Administration, Mrs G Fraser-Moleketi, hon members, if we could remove the suspicion that this is just another nice phrase, people’s hearts would fill with national pride. We are, after all, the Government of the people, chosen by the people to work for the people.

The people always expect a government chosen by them to put them first. However, we know that between government and the people lies the bureaucracy. It is here that our government urgently needs to find a new kind of management which practises ubuntu and which therefore is driven by a constant need to satisfy the citizens.

If ubuntu is to be attained, there has to be continuous improvement in all organisational processes within the Public Service. I wish to say to the Minister that ubuntu is attainable if Government harnesses appropriate information technology. People expect a faster, better and more professional service from a Public Service directed by a democratic, transparent Government.

To put people first means that the department has to train, train and train the personnel within the service. Only then will we have a Public Service where the ideals of Batho Pele will be realised. Otherwise we are feeding our people empty promises and nice-sounding phrases. The people do not want words, they want action. We all definitely want Batho Pele - there is no hon member here who does not want Batho Pele - but we all want Batho Pele in action and in no other form.

I want to say to the hon the Minister that she has a steep challenge inculcating Batho Pele within a service which has not understood the ideals of people first. In Africa, many countries won liberty, but lost it almost immediately because of the failure of and the corruption within the public service. We dare not fail, we must not fail. We owe our people the right to a good and professional service. In order to inculcate the spirit of Batho Pele within each civil servant, we need to honour and reward those who fulfil the sacred obligation to put people first.

The champions of Batho Pele within the civil service must be given the highest recognition, and from the ranks of such champions should come our directors, deputy directors, and directors-general. If qualification is important, then Batho Pele is more important, and therefore the criteria for selection for top positions in the service should give priority weighting in favour of those who demonstrate Batho Pele in action.

We, as the African people, must no longer pay lip service to ubuntu. For us, ubuntu is a central principle of existence. Without ubuntu there can be no society and without ubuntu the Government cannot claim to be a government of the people, by the people, for the people.

The IFP endorses the Batho Pele action and waits to see how soon and how extensively Batho Pele is demonstrated within the Public Service. Forward to Batho Pele! Forward to the people!

Ngiyabonga. Ke a legoga. [Thank you.] [Applause.]

Mr J HORNE: Chairperson, hon Minister and members of this House, Batho Pele is the name given to the Government’s initiative to improve the delivery of public services.

In Sesotho, Batho Pele means ``people first’’. The name was chosen to emphasise that it is the first and foremost duty of the Public Service to serve all the citizens of South Africa. We can ask: How will Batho Pele transform the service delivery of the Public Service?

The White Paper on Batho Pele lays down eight principles for the transformation of service delivery in the Public Service. It also lays down norms to ensure that the Public Service puts these principles into practice. The principles are as follows.

There must be consultation. Citizens should be consulted about the level and quality of the public service they receive and, wherever possible, should be given a choice from the services that are offered.

Regarding service standards, citizens should be told what level and quality of public service they will receive so that they are aware of what to expect. All citizens should have equal access to the services to which they are entitled.

Citizens should be treated with courtesy and consideration.

Citizens should be given full, accurate information about the public service they are entitled to.

Regarding redress, if the promised standard of service is not delivered, citizens should be offered an apology, a full explanation and a swift and effective remedy, and when complains are made, citizens must receive a sympathetic, positive response.

There must be value for money. Public services should be provided economically and efficiently in order to give citizens the best possible value for money.

Ter aanbeveling kan ons sê Batho Pele sal grootliks slaag as provinsies as middelman of voertuig tussen die nasionale en plaaslike regering optree. Provinsies moet ook opleiding aan die amptenary en plaaslike regering verskaf om sodoende die beginsels van Batho Pele beslag te laat kry en ook sodat die drie vlakke van regering as ‘n span funksioneer om die toepassing van die beginsels van Batho Pele te verseker.(Translation of Afrikaans paragraph follows.)

[In recommendation we can say that Batho Pele will largely succeed if provinces act as the middleman or vehicle between the national and the local government. Provinces must also provide training to the officials and local government, thus enabling the principles of Batho Pele to find expression and also so that the three tiers of government can function as a team to ensure the implementation of the principles of Batho Pele.]

Government should not hesitate to make use of the thousands of young, experienced and well-trained retired public servants on a contract basis, especially for training on the job, as this would promote an efficient and effective public service.

Batho Pele has the potential to bring about a major change in the way public services are delivered. The Batho Pele White Paper is the start of a continuous process of improvement which will, in time, lead to public services that the public has the right to expect and which the public servant is proud to provide.

Mr P D N MALOYI: Madam Chair … [Laughter.] Comrade Chair, every time I speak, the Chairperson is not here. I do not watch that chair, and that is why I called you ``Madam Chair’’. [Laughter.] I insisted upon being, and requested the Chief Whip to ensure that I was, the last speaker, and I will tell hon members why. I thought that members of the Democratic Alliance were going to misbehave. Unfortunately they disappointed me. They did not misbehave today.

In the few minutes at my disposal, I have one objective to accomplish, and that is to try to indicate what it is that my province, in particular, the North West, which is the model province, has put in place to try to achieve the most important principles of Batho Pele.

What guides that model province? Fortunately, today we have our former DG sitting up there, and I will come to them later. What guides our province is the eight key principles of Batho Pele, and that is consultation, service standards, access, courtesy, information, openness and transparency, redress and value for money. I think my chairperson in the select committee did explain all these concepts and I hope that everybody understands what we are talking about when we talk about these eight principles.

Batho Pele service-delivery innovation is an optimum mix of flexible service-delivery mechanisms and tools that can be strategically used to achieve government service-delivery objectives, either directly by us as Government or in collaboration with other sectors, such as the private sector or through nongovernmental organisations.

As I said earlier, I will try to concentrate on our province and ensure that I finish within the eight minutes given to me. In our endeavour to achieve the principles of Batho Pele, the provincial and national departments organised roadshows from 21 August to 31 September 2000. The purpose of these roadshows, amongst other things, was to achieve two important elements of Batho Pele, and that is to publicise the work of Government and to engage the public and seek their views on service delivery. I am happy to report, without any fear of contradiction, that the two objectives were achieved. Senior managers in both the provincial and national departments, including a number of MECs and members of Parliament, were able to interact with ordinary people on the ground.

All departments were able to distribute information brochures in all five regions of our province. Whilst people were generally not happy with our service, they were excited that for the first time in the history of this country, Government departments and politicians were now beginning to reach out to them.

Out of this experience, it is now proposed - and it is still being proposed

• that we should have similar roadshows at least four times a year in all provinces, where we will be able to interact with our people. When we talk about consultation, we are referring to those people on the ground - not consultation with a few people whom one could probably invite to Cape Town and who have money to pay for air tickets and all that, after which one would say that Batho Pele is good.

We are expecting the premier of our province, Comrade Popo Molefe, to present, at least by 24 September, a comprehensive report about these roadshows and about what it is that we have achieved, what the shortcomings were and what it is we need to improve on.

The province is reviewing the conditions of service of senior managers. It has started with the top management echelons. The process of signing performance contracts, as comrade Bhabha said earlier, which are aligned to an appropriate reward structure, is already in place in that province.

I think we all agree that Batho Pele cannot be achieved overnight. As a number of speakers in this House have said today, it is a dynamic and continuous task which, of course, will not take two or three days to achieve, but which is an objective that will take time. [Applause.]

The MINISTER FOR THE PUBLIC SERVICE AND ADMINISTRATION: Chairperson, I thank all the members of this House for this opportunity for us to join in this debate this afternoon. It is my first intervention in this House since my appointment to the portfolio of Minister for the Public Service and Administration. I would like to thank everyone, and in particular the chairperson of the select committee for his overview. I am certain I am allowed to speak on the issues that one of the members of this House, the hon Mr Maloyi, did not want to speak about, and this is about the Martians. I will start with Mars and then I will come back to issues that have been raised, and there are quite a number of issues that I would like to raise here today. With regard to the hon Raju’s comments, I am a bit disappointed that his Martians decided to come to South Africa in the year 2000 and behaved as though there was nothing that had happened before! If only his Martians had come to this wasteland of broken promises! I would sadly say that I wonder where these Martians were centuries and decades before. If these Martians had gone to the Free State in 1852, they would not see a wasteland there today. They actually would have been quite worried in 1852 about whether there would be any fertile ground for anything to grow that could be considered the beginning of any humanity, never mind Martians, being able to go anywhere.

Let us not pretend that the world started in the year 2000 and insult the inhabitants of this land by presenting a warped picture, because then one would not merely fall on the thorns of life, but one would actually fall on the thorns of one’s own conscience. I think one would actually be trying to suggest that this is not the alpha and the omega. I am not sure what term I would use. I am pretty disappointed. Let me explain why I am disappointed by these Martians he has chosen, because they clearly come in some tube that is crossing time. Mind you, it is information technology that is now being synchronised by a democratic government which is not based on empty promises. It is actually based on the commitment to a democracy that has been fought for and put in place and on the blood of the people of this country since 1994. We are about talking six years. When one is talking about six years one does not need to travel through time and be a Martian. One only needs to be a South African who is sixteen years old to tell someone what the harsh realities are of growing up in a country that, at one point, was a barren wasteland to some. Now, after six years, we need to create more fertile ground.

So what are we doing about that? We are trying to ensure that the nine provinces that employ 70% of public servants and which constitute the major capacity of Government to deliver social services are working efficiently. We are trying to ensure that we put in place a public service management framework that will improve both governance and our ability to deliver on the promise of a better life for all. There may be some of us in this House who grunt and grumble and pretend we come from nowhere. Shame on those who are not prepared to listen! But, so be it - let them do that.

The improvement of the delivery of services has been highlighted through Batho Pele. If any Martian woke up some of the members of this House and asked them all eight principles of Batho Pele I am sure they would state them by heart. However, I think it is not just important to know what the principles are, but also to say how do we work together to ensure that they are effected in order to ascertain that the major focus of our work does include the dimensions that will take that forward.

I will reflect on our efforts to improve the management capacity in Public Service, to look at opportunities for improving service delivery through information technology and to look at our continued support for provincial governments in order to improve their performance.

The thrust in reforming Public Service management, as mentioned by various other members earlier, has been legislative reform designed to devolve powers to executing authorities at national and provincial levels, to enhance the accountability of heads of departments, and to modernise inefficiency and misconduct procedures and enhance representivity. I am going to come back to that issue a little later. The legislative reform to the Public Service Act is supported by Public Service regulations, which is a comprehensive new management framework - I would like to emphasise that I mean new'' as inrecent’’ - that promotes service delivery, flexibility, performance and accountability through comprehensive capacity- building programmes.

What have been the achievements of the Public Service Act and the new regulations? They include management autonomy within departments and executing authorities, and these are the MECs in the provinces, Ministers, Premiers, the President and Deputy President. They have the power to decide on personnel practices and work organisation. They can delegate further and take responsibility for the performance management of managerial staff.

I think a second and important point is that the role of provincial directors-general - and this is important for the National Council of Provinces - and heads of provincial departments was redefined to make them more accountable for the management of their respective departments, for good labour relations conduct and for proper care of state property and resources.

The power of the provinces to arrange their departments and functions was enhanced in order to enable them to structure themselves according to their service-delivery needs as effectively and as efficiently as possible. The inefficiency and misconduct procedures of the Act were given the status of a collective agreement. As such, these procedures were streamlined, in collaboration with employee organisations, to ensure swift and corrective, but just, actions against nonperforming employees and those found guilty of misconduct.

If there is any head of department who says to any hon member here that we cannot fire people in the Public Service because there are no rules to that effect, please note that they simply do not want to do their jobs. If they are good managers, there is a framework to allow that to happen. We in the Public Service say we have dealt with mediocrity for too long, and we are not going to accept that any more. For that reason we have performance contracts that now place heads of departments on fixed contracts. Poor Mr Raju reads the papers late. He only read the Business Day yesterday. It actually carried a story last week about the fact that we are putting in place, or developing, a senior management service - a corps of public servants from the level of director upwards that will form part of the management team that will facilitate our no longer having the situation which we have now, where we see provinces being undermanaged and, as a result, not having the best at the level where 70% of 3 000 of the management corps are serving at this point in time.

We have hence said that through the senior management service process we will be able to distinguish between managers and professionals. We will look at rigorous recruitment and selection systems, competency profiling for all new and current senior executives in relation to their jobs, performance assessment systems and, of course, training and development regimes. What is more, we will put in place flexible remuneration systems.

Let us go to Gauteng for half a minute. If we look at the Chris Hani Baragwanath hospital, at this particular point in time, before the SMS was put into place and adopted by Cabinet, we could not recruit a manager to run that hospital at a level that was required. As a result somebody who needs to manage staff in numbers in certain instances that are larger than some national Government departments, or even runs a budget larger than those of some Government departments, was paid less than a director- general.

That is now coming to an end. We can ensure that we recruit appropriately, because we want to ensure that senior managers and high-level professionals concretise the Government’s vision of a better life for all through effective implementation strategies and the efficient utilisation of resources.

In this demanding environment, as I said before, we cannot and do not want to accept mediocrity or a lack of commitment. We want only the finest candidates to serve, those who are imbued with a spirit of selfless service to the community. Their talents should be carefully nurtured, and once developed …

Mrs A M VERSVELD: Chairperson, on a point of order: Is the Minister prepared to take a question?

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): That is not a point of order. You are asking a question. Is the Minister prepared to take a question?

The MINISTER: Chairperson, not at this stage. The hon member had an opportunity through her party, and clearly did not have the courage to speak to any of those issues, no. [Laughter.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): The Minister is not prepared to take a question. [Interjections.]

The MINISTER: Chairperson, I would actually want to go further and say that the senior management service will also allow a greater mobility to enable government to deploy individuals across departments at national and provincial levels. On performance management - and this is an issue that has been reflected upon - as has been stated before, all senior managers, from directors upward, are required to sign a performance contract. The monitoring of the implementation of performance management systems will allow for more rigorous appraisal of outputs, and thus improve the productivity of the Public Service. The Public Service Commission is playing quite a central role and will monitor performance management systems within the Public Service. They have also developed a framework to evaluate the heads of departments. This framework was approved by Cabinet, along with the senior management service, in August.

The areas of performance that are being monitored currently will reflect the goals of government, as well as organisational goals such as efficiency, employment equity and good management practices. The central intention is to ensure alignment of all aspects of government performance from macro to micro levels and thus focus the efforts of government in a very direct and deliberate manner. This is the kind of thing of which the hon member Vilakazi said that we do not just want to talk about those issues, we want to see them in practice.

However, in order to ensure that hon members are able to monitor what government has tied senior managers to, we need to talk about it in this Council today in order that we know exactly what monitoring needs to be done by the NCOP in supporting the areas that have been identified by the Public Service Commission. As hon members are aware, the Public Service Commission has been identified as the flag bearer of the anticorruption campaign. They have been involved in a comprehensive programme and process throughout the country where they have gone out to provinces. The comprehensive programmes they have been involved in include promoting public awareness campaigns, and also look at whistle-blowing mechanisms and hotlines.

This will also be complemented by strong anticorruption units within departments. Obviously the Government and Parliament as a whole need to look at those bits of legislation that need to be revised in order to ensure that they are suitable for the Public Service.

I just want to reflect a little bit on the management development programmes, and I am sure this is an area that we would like to look at today in order to determine whether, indeed, we are improving the Public Service in terms of capacity-building for senior managers. This challenge has been acted upon by the SA Management Development Institute, Samdi, and, again, even if one dreams about the days when Prof Job Mogoro was in the North West, he is now in charge of that very difficult task. When the hon member made a reference, I looked at the back here to see if the entire management team was in place. I see them all and none of them are up for redeployment. Let me just tell the NCOP that this is the team that is actually interfacing and ensuring that we have the right toolkit in place to transform the Public Service in the manner required.

Let me talk a little bit about what Samdi is doing.

Mrs A M VERSVELD: [Inaudible.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! You may continue, hon Minister.

The MINISTER: I am used to the peanut gallery and I notice more of it here than in other places, but we indulge that as well.

I want to say that the training programmes that we are dealing with at this point look at identifying, validating and prioritising customer and stakeholder training needs and expectations. We do not want a situation where Samdi just provides training, identified by it in isolation, on the needs of departments at both national and provincial levels. We are developing and delivering competency-based training programmes aligned to the SA Qualifications Authority and, of course, the National Qualification Framework in priority areas. Of course, we are also developing and phasing in support systems and processes in marketing, information technology and course administration.

There is also the issue that was raised around the Public Finance Management Act, and the hon Mr Horne indicated that he would encourage … No, that was on the Public Finance Management Act, but I have forgotten who it was. Sorry, it was Mr Theron. There was a sort of request that there should be more training in order to ensure greater readiness for the implementation of the Public Finance Management Act. Indeed, Samdi is also involved in the Public Finance Management Act, in line with our commitment to ensuring that we meet the needs and requirements identified by the Government.

Furthermore, in acknowledging the fact that it is going to take some time to fully implement the Public Finance Management Act, there is an implementation plan, which has been completed by Government departments. We are looking at the kind of transitional measures required for the Act to be operational as we move towards full implementation. I am not going to go into any other areas around training, except to say that there are flagship programmes, such as the Presidential Strategic Leadership and Development Programme.

Let me focus a little bit on information technology in Government. In terms of information, last month the Department of Public Service and Administration released the first Vulindlela report, which is aimed at addressing better quality information on and within the Public Service. Each department received this report, and it is customised for by each department’s use. All Ministers, all MECs, all heads of department and human resource management within each department can, based on the comparative data available in that report, benchmark their human resources against other levels of Government.

This report is designed to give these managers new insights on what the human resources situation is in Government. This is a first, and I think that should be acknowledged as one of the achievements. Maybe some will argue: ``Not enough’’, but I would say it is a great start.

On information technology, our IT policy is designed to address IT security, that is ensuring the confidentiality of personal data. It is also designed to influence measures geared towards incorporating IT in formal and informal education.

We are having an E-government seminar in October, which will prioritise major E-government projects, which include: electronic document management systems; a government-wide call centre; paperless government and government- on-line; and electronic procurement.

This is part of what is to be done by the State Information Technology Agency under the Department of Public Service and Administration which, at this particular point in time, is responsible for IT in Government. Hon members are aware that the Government purchases 60% of IT in the country at this point in time.

I would like to conclude at this point with the Integrated Provincial Support Programme supporting provinces. Here I would like to confirm that at the moment the three beneficiaries of the Integrated Implementation Programme are the Eastern Cape, KwaZulu-Natal and the Northern Province. These provinces are currrently being supported by means of this programme and the purpose of the programme is to strengthen the capacity of provincial administrations.

We expect to integrate Mpumalanga and the Free State before the end of the year. We are, through the design of the programme, trying to ensure that we provide the provinces with technical support in key areas such as performance management and service delivery.

I think that what I have dealt with today has been pretty technical. It has clearly been out of league for certain members, who have clearly reflected their boredom and have shown that they should not be here as public representatives and that they do not represent those constituencies that have elected them.

I think earlier somebody raised the point - I think it was the Chairperson

• that maybe there is a need for politicians to also have performance contracts. But I make the assumption that the performance contracts are drawn by the voters when they elect particular parties into power. They make the assumption that whoever comes here to represent them will have the ability to, at least, listen and try to internalise even those aspects that maybe considered technical.

I do want to say today that public administration may not always be easiest sounding, but if we do not get it right, then our commitment to a better life for all will never be achieved. [Applause.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! Thank you, hon Minister, for engaging us in this lively debate here. I deliberately allowed you to exceed your 30 minutes.

The CHIEF WHIP OF THE COUNCIL: Chairperson, could I perhaps take advantage of this opportunity and make an announcement on behalf of the Minister. She is extending an invitation to hon members to a cocktail party at the Old Assembly dining hall at 18:00, that is six o’clock, this evening. I thought it important to make this announcement in her presence.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! I am sure that includes Mrs Versveld.

The CHIEF WHIP OF THE COUNCIL: Yes, and the DA as well. [Laughter.] [Applause.]

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): Order! Thank you, hon Minister.

Debate concluded.

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON ECONOMIC AFFAIRS - UNECE 1958 AGREEMENT ON WHEELED VEHICLES

Order disposed of without debate.

Report adopted in accordance with section 65 of the Constitution (Western Cape abstaining).

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON ECONOMIC AFFAIRS - UNECE GLOBAL AGREEMENT ON WHEELED VEHICLES

Order disposed of without debate.

Report adopted in accordance with section 65 of the Constitution (Western Cape abstaining).

Mr M V MOOSA: Chairperson, on a point of order: The Western Cape delegation is not present, and somebody else abstained on their behalf.

The DEPUTY CHAIRPERSON OF THE NCOP (Mr M L Mushwana): No, it was Mrs Witbooi, Mohseen. [Interjections.] Order! There is noise in the House.

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON LAND AND ENVIRONMENTAL
      AFFAIRS - AFRICAN-EURASIAN MIGRATORY WATERBIRD AGREEMENT

Order disposed of without debate.

Report adopted in accordance with section 65 of the Constitution.

The Council adjourned at 16:14. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
                      FRIDAY, 15 SEPTEMBER 2000

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Communications:

 (1)    Report and Financial Statements of Sentech for 1998-99.


 (2)    Report and Financial Statements of Telkom South Africa Limited
     for 1999-2000.


 (3)    Report and Financial Statements of the Independent Broadcasting
     Authority for 1998-99, including Report of the Auditor-General on
     the Financial Statements for 1998-99.

                      MONDAY, 18 SEPTEMBER 2000

ANNOUNCEMENTS: National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Minister of Transport on 12 September 2000 submitted a draft
     of the South African Rail Commuter Corporation Limited Financial
     Arrangements Bill, 2000, as well as the memorandum explaining the
     objects of the proposed legislation, to the Speaker and the
     Chairperson in terms of Joint Rule 159. The draft has been
     referred to the Portfolio Committee on Transport and the Select
     Committee on Public Services, respectively, by the Speaker and the
     Chairperson in accordance with Joint Rule 159(2).

1. The Speaker and the Chairperson:

 (1)    The Joint Tagging Mechanism (JTM) on 15 September 2000 in terms
     of Joint Rule 160(4), classified the following Bill as a section
     76 Bill:


     (i)     Construction Industry Development Board Bill [B 59 - 2000]
          (National Council of Provinces - sec 76) - (Select Committee
          on Public Services - National Council of Provinces).
                     TUESDAY, 19 SEPTEMBER 2000

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Minister of Finance on 29 August 2000 submitted a draft of
     the South African Reserve Bank Amendment Bill, 2000, as well as
     the memorandum explaining the objects of the proposed legislation,
     to the Speaker and the Chairperson in terms of Joint Rule 159. The
     draft has been referred to the Portfolio Committee on Finance and
     the Select Committee on Finance, respectively, by the Speaker and
     the Chairperson in accordance with Joint Rule 159(2).


 (2)    The following papers have been tabled and are now referred to
     appropriate committees as mentioned below:


     (1)     The following papers are referred to the Portfolio
          Committee on Finance and to the Select Committee on Finance
          for consideration and report:


          (a) Second Adjustments Estimate of Expenditure to be defrayed
              from National Revenue Fund during the Financial Year
              ending 31 March 2000 [RP 5-2000].


          (b) Explanatory Memorandum to the Adjustments Estimate for
              1999-2000.


     (2)     The following paper is referred to the Portfolio Committee
          on Transport and to the Select Committee on Public Services.
          The Report of the Auditor-General contained in the report of
          the Road Accident Fund is referred to the Standing Committee
          on Public Accounts:


          Report and Financial Statements of the Road Accident Fund for
          1998-99, including the Report of the Auditor-General on the
          Financial Statements for 1998-99.
     (3)     The following papers are referred to the Portfolio
          Committee on Communications and to the Select Committee on
          Labour and Public Enterprises:


          (a) Report and Financial Statements of Sentech for 1998-99.


          (b) Report and Financial Statements of Telkom South Africa
              Limited for 1999-2000.


     (4)     The following paper is referred to the Portfolio Committee
          on Communications and to the Select Committee on Labour and
          Public Enterprises. The Report of the Auditor-General
          contained in the report of the Independent Broadcasting
          Authority is referred to the Standing Committee on Public
          Accounts:


          Report and Financial Statements of the Independent
          Broadcasting Authority for 1998-99, including Report of the
          Auditor-General on the Financial Statements for 1998-99.