THURSDAY, 1 MARCH 2007 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:03.

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

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000.

        PRECEDENCE GIVEN TO ORDER NO 1 UNDER FURTHER BUSINESS

                         (Draft Resolution)

The ACTING CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:

That after Member’s Statements, precedence be given to Order No 1 under Further Business.

Agreed to.

        FILLING OF VACANCIES ON COMMISSION ON GENDER EQUALITY

                         (Draft Resolution)

The ACTING CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move the draft resolution printed in my name on the Order Paper, as follows:

That the House –

(1) notes that –

   (a)  the Ad Hoc Committee on Nominations on Filling of Vacancies on
       the Commission on Gender Equality, which was established on 2
       November 2005, had been given the mandate to take into account
       the statutory requirement that the terms of office of full-time
       Commissioners should not expire simultaneously; and


   (b)  the report of the Ad Hoc Committee did not address the question
       of staggering of the appointment of full-time Commissioners; and

(2) resolves that the Ad Hoc Committee be reconvened specifically to consider and make recommendations to the President, through the Office of the Speaker, on the staggering of terms of office of the full-time Commissioners. Agreed to.

             COLLISION OF TWO BUSES IN MAKHADO, LIMPOPO

                        (Member’s Statement)

Mufumakadzi T J TSHIVHASE (ANC): Ndi a livhuwa Mulangadzulo, ho do vha na makhaulambilu kha vundu la Limpopo. Ndi nga mbilu vhutungu u divhadza Nndu iyi nga ha khombo makhaulambilu ye ya bvelela badani vhukati ha bisi mbili Limpopo, tshitirikini tsha Vhembe kha Masipala wa Makhado. Vhanameli vha 19 vho do ri sia kha khombo iyi. Huna vhane vha kha di vha vhuongeloni. Khombo iyi yo bvelela nga la 19 Luhuhi 2007.

Khombo iyi yo kwama na u kwasha mbilu dza vhanzhi shangoni lothe. Ri livhuwa Masipala wa Makhado, vhoramabindu vha dzingu vhane vha do thusa kha u vhulunga avho vhathu ngauri vha do ita uri mbulungo i leluwe.

Vhembe Association vho bvisa kholomo thanu, mabogisi, matombo na saga dza 40 dza mugayo, na vha mimotshari vho thusa nga maanda. Ri lila na mita yo zhakiwaho nga ndozwo iyi. Nga vhe Mudzimu a tshi vha fha mulalo na nungo musi vha tshi ya u awedza vhafu vhavho nga Swondaha. Ri na vho dzithabeloni, zwihulu kha vhane vha vha na khuvhabvu vhuongeloni. Ndi a livhuwa. Malambilu aya a ri kwasha. (Translation of Tshivenda member’s statement follows.)

[Mrs T J TSHIVHASE (ANC): Thank you, Chairperson. There has been a tragedy in the Limpopo province. It is with a broken heart that I inform this House about the accident which happened on the road, between two buses in Limpopo, in the Vhembe District under Makhado, Municipality. Nineteen passengers passed away in this accident. There are some who are still in the hospital. This accident happened on 19 February 2007.

This accident has touched and saddened many people throughout the country. We thank the Makhado Municipality and the businesspeople in the region who will help with the burial of the deceased because they will make the burial easy.

The Vhembe association has provided five beasts, coffins, tombstones and 40 bags of mealie-meal. Funeral undertakers have also helped a lot. We sympathise with the bereaved families for this loss. May God shower them with peace and strength as they lay their loved ones to rest on Sunday. We are with them in prayers, especially those whose loved ones are still in hospital. I thank you. We are totally devastated by this tragedy.]

      DRAG RACING AND ITS CONSEQUENCES FOR WEST RAND COMMUNITY

                        (Member’s Statement)

Mr A C STEYN (DA): Madam Speaker, there is a community within my constituency in a suburb called Davidsonville, on the West Rand, Gauteng, that lives in fear and that is unable to enjoy the public spaces within its suburb freely.

This is partly due to an illegal practice called “drag racing” which has been taking place most weekends for many years now, but particularly on weekends closer to the end of the month. For those members who are not familiar with the term “drag racing”, it is a form of car racing that takes place on public roads using ordinary commercial vehicles that are often modified. They also carry out other antics like car spinning, referred to as “making doughnuts”.

About two years ago, a female resident from this community was killed when an out-of-control vehicle smashed into her and pinned her to a wire mesh fence. Notwithstanding this tragedy, the drag racing – and, in this instance, the associated drunken behaviour - continue to this day.

I have approached the Johannesburg Metro Police and the SA Police Service at the Roodepoort Police Station, together with local residents and other public representatives, for a solution to what is clearly a simple law- enforcement problem.

Imagine, therefore, my surprise when, after months of interaction with the SA Police Service and one or two arrests, the residents are simply told, “There is nothing we can do”, and the harassment of this community continues.

Certainly, we cannot erase that which is ugly and repulsive and claim the happiness that comes with freedom if communities live in fear, closeted behind walls and barbed wire, ever anxious in their houses, on the streets and on their roads, unable freely to enjoy our public spaces. Obviously, we must continue and further intensify the struggle against crime.

That is a quotation from the President’s state of the nation address. To the community from Davidsonville, it must sound very hollow indeed. How can we fight the war against crime if we cannot win one small battle in the fight against crime? I thank you.

         IRAN AND COMPROMISE IN URANIUM ENRICHMENT PROGRAMME

                        (Member’s Statement)

Mr M B SKOSANA (IFP): Madam Speaker, hon Ministers and members, considering that the Iraq-Iran question threatens to feature prominently in the run-up to the US presidential election in 2008, Washington is likely to amend the Bush doctrine on punitive diplomacy. At the same time, it is highly improbable that Washington will at any stage make radical changes to a core traditional foreign policy on international power, peace and security.

It is therefore opportune for South Africa, through a rotating presidency of the UN Security Council, to encourage Security Council member states and, above all, the United States to appraise as a creative and constructive compromise Moscow’s proposal to establish international centres for the enrichment of uranium - in the words of President Putin “a democratic multipolar world”.

Moscow’s compromise initiative has the potential to introduce fresh mandates for the enrichment of uranium, an avoidance of the possibility of a renewed international arms race. The prospect of the US engaging Syria, Turkey and others in discussing the uranium enrichment programme with Iran should be welcomed and encouraged. I thank you.

    APPREHENSION OF SUSPECTS WHO STEAL BOREHOLES AND WATER PIPES

                        (Member’s Statement)

Mufumakadzana T E LISHIVHA (ANC): Mulangadzulo, ANC i fhululedza mihasho na zwiimiswa zwitevhelaho, Tshititshi tsha Mapholisa tsha Tshilwavhusiku na tsha Makhado, Muhasho wa Madi na Madaka, mahosi, vhaimeleli vha mivhuso yapo, community policing forum (foramu ya tshumisano vhukati ha mapholisa na tshitshavha), Eskom na vhadzulapo vhothe vha fhasi ha Masipala wa Makhado kha mushumo we vha u ita nga duvha la vhufumi na vhuvhili nwedzi wa u thoma nwaha wa gidi mbili sumbe, musi vha tshi bva fulo la u lwa na u tshinyadzwa ha milonga ya madi na u tswiwa ha dzikhebulu dza mitshini ya madi.

Vho do kona u fara vhathu vhatanu na vhararu vhe khavho munwe ndi khotsi na nwana wawe wa muthannga. Vhadzulapo vhothe vha Afurika Tshipembe kha ri ime nga milenzhe ri lwe na vhuada vhufanaho na u tshinyadzwa ha ndaka. Muhaso wa Tsireledzo na Vhutsireledzi na wa Madi na Madaka vho lwa nndwa uri vhadzulapo vha Makhado vha wane madi, ngauri thambo a dzi tsha tswiwa mapholisa vha a fara. Ndo livhuwa. [U vhanda zwanda.] (Translation of Tshivenda member’s statement follows.)

[Ms T E LISHIVHA (ANC): Madam Speaker, the ANC would like to congratulate the following departments and institutions: the Makhado and Tshilwavhusiku police stations, the Department of Water Affairs and Forestry, Chiefs, representatives of local governments, the Community Policing Forum, Eskom and all the residents of Makhado Municipality for the excellent job they did on 12 February 2007, when they embarked on a campaign to fight against borehole vandalism and the theft of cables which support the water machinery.

They were able to apprehend three people, two of whom were a father and son. South Africans, let us stand firm and fight against corruption which has to do with the vandalism of property. The Department of Safety and Security and the Department of Water Affairs and Forestry have fought hard to ensure that residents of Makhado Municipality have water. Cable theft has stopped as a result of police arrests. I thank you. [Applause.]]

                PROMOTION OF HOMOSEXUALITY IN SCHOOLS


                        (Member’s Statement)

Mrs C DUDLEY (ACDP): Madam Speaker, the ACDP views the project by the department in conjunction with gay and lesbian organisations, aimed at facilitating acceptance of homosexuality in schools, as another dangerous experiment on children which serves only to advance the homosexual agenda.

According to the Director-General of Education, the national department was approached by gay and lesbian organisations with the proposed programme, which has been referred to provinces. Gauteng is the first province to run the programme and is said to be trying it out in a few schools as a first phase. I have requested information on which schools are involved, what age groups are targeted and access to the content of the programme but I have not had any response yet.

The ACDP has raised this issue as an urgent warning to parents, communities and provinces. It is no secret that gay and lesbian organisations like OUT and the Gay and Lesbian Archive promote homosexual lifestyles as normal and subscribe to a broader homosexual agenda. An example of this, contained in the Gay Liberation Front Manifesto reads:

The long-term goal is to rid society of the gender role system, which is at the root of our oppression. This can only be achieved by the abolition of the family as the unit in which children are brought up.

The ACDP makes no apology for the fact that it stands for family values and the strengthening of the family unit, which is the basic building block of strong healthy communities and a strong healthy nation. Homosexual behaviour is abnormal sexual behaviour and is addictive. It is not genetic but learnt behaviour. Those entrapped in it deserve to know the truth in order to access the best possible help. Claims of scientific proof of homosexuality being biological have been soundly and scientifically discredited, yet the campaign is spread and this misinformation flourishes.

It is indeed outrageous for people to use the education system to label certain children as homosexual. Sensitive children, emotionally confused or abused children and even those exhibiting learnt behaviour out of sync with accepted norms are not homosexual; they are children. People have different temperaments and different ways of expressing themselves. Yes, it is necessary to teach young people to respect each other and to accept each other’s differences and no child should be bullied or harassed in any way, but it is not okay to label children as homosexual, and it is not okay to teach acceptance of a homosexual lifestyle. [Time expired.]

                     RESIGNATION OF JOHN PERLMAN


                        (Member’s Statement)

Mrs P DE LILLE (ID): Madam Speaker, for nearly a decade, I woke up each morning to the voice of SAfm journalist, John Perlman. Together with brilliant co-presenters like Nikiwe Bikitsha, John woke South Africa to be optimistic but critical and he kept government and opposition on their toes. As a journalist who puts the ethics of his profession before all else, John has at times been a thorn in the flesh of many of us.

I know millions of South Africans will agree with me that John Perlman has grown as a journalist as our new democracy has grown. Those of us who thought that, as a public representative, we would breeze through an early morning interview with John, found ourselves waking up earlier and earlier to prepare. But there is no aggression in John’s voice - only a polite, yet undying urge to run after the truth and hold all of us to account. Not even President Mbeki was spared his sharp and penetrating questions. As a member of the Fourth Estate, John set an example for other members of his crucial profession.

But the circumstances under which John resigned will remain a blemish on the reputation of the SABC. During the blacklisting saga, John showed that his faithfulness to the truth and journalism ethics was unshakable. Sadly, instead of rewarding the journalist who spoke out against the blacklisting, in a show of contempt for the freedom of the press the SABC got rid of the whistle-blowers. John’s resignation represents not only an act of principle, but a sad day for the SABC. Ultimately, it is our people who have lost the most. I wish John and Nikiwe all the best for their future. [Applause.]

           COMMUNITY POLICING FORUMS PLAY MEANINGFUL ROLE


                        (Member’s Statement)

Mr M P SIBANDE(ANC): The ANC is committed to working tirelessly with the community policing forums and to empowering them to play a more meaningful part in the safety and security of communities. This co-operation is yielding positive results in that communities now have trust in the police, unlike what we used to have before 1994.

Recently, the community of Extension 22 in eMZinoni, Bethal, in Mpumalanga, handed over a suspect to the police who was wanted for murder. The man was accused of shooting and killing his friend with whom he was drinking.

The ANC applauds the action taken by this community of Bethal and urges other communities across the country to emulate this shining example. Phambili nge-CPF, phambili! [Forward with the CPF, forward!]

HON MEMBERS: Phambili! [Forward!] [Applause.]

             AFFIRMATIVE ACTION NOT SERVING ITS PURPOSE


                        (Member’s Statement)

Mr S SIMMONS (UPSA): Madam Speaker, with reference to the headline article in the Cape Times this morning, it would appear that there is a growing realisation that affirmative action in its current form does not serve its intended objective of equality in the workplace. I have over the past year, on numerous occasions, attempted to bring to the government’s attention that affirmative action is doing more harm than good.

UPSA calls for a complete redesign of affirmative action as it is currently worsening the problem of capacity and polarisation. We believe that a new affirmative action policy should encompass the following principles: Firstly, it should redefine the concept of designated groups to include the youth. Secondly, it should clearly demand equal treatment among the categories within designated groups and thirdly, it should include a sunset clause.

This is the only way in which we can ensure that our country’s problems with capacity and the ever-increasing polarisation are countered. [Applause.]

                  SOUTH AFRICA’S BORDERS ARE POROUS

                        (Member’s Statement)

Mr M SWART (DA): Madam Speaker, the footage dubbed “Border Jump”, shown on SABC 3’s Special Assignment on 27 February 2007, drove the message home regarding the failure of the government’s measures to deal effectively with the influx of illegal immigrants into South Africa, especially those from Southern Africa.

While there are no reliable statistics on the number of immigrants who enter the country clandestinely, a study conducted by the Human Sciences Research Council in 1996 estimated that between 2,5 million and 4,1 million persons reside in South Africa illegally, and this figure would have increased considerably right now. The influx could eventually have a serious impact on our social grants.

Exact figures aside, some drastic steps need to be taken in order to improve our control measures. Chief amongst these is the porous state of our borders. Moreover, corruption needs to be ruthlessly rooted out so that the illicit assistance of illegal immigrants is eradicated.

Those who are involved in this malpractice should be severely punished by law. If no innovative ways are found to turn back the tide of illegal immigrants, South Africa is destined to be a haven for human traffickers.

The TV documentary, Border Jump, should serve as an eye-opener and a wake- up call to South Africa.

                LEGISLATION ON TRUSTEES NEEDS REVIEW

                        (Member’s Statement)

Mr Y S BHAMJEE (ANC): Madam Speaker, the ANC notes with concern the recent report by the Financial Services Board on Fidentia companies, which highlighted serious irregularities on the part of trustees and asset managers with regard to their fiduciary duties.

The report didn’t emphasise the plight of all the beneficiaries, in particular, the widows and orphans of the mineworkers who died in service, who may lose their only source of meagre income. The ANC further notes that the custodial responsibility entrusted to trustees and asset managers has been seriously neglected. As such, the ANC believes that such a serious disregard for fiduciary responsibilities reduces the quality of life of such beneficiaries to extreme poverty, particularly the most vulnerable people in our country.

We believe that urgent steps should be taken to review all legislation and regulations related to the role of trustees in asset management companies so that such people are not allowed to use technical or legal loopholes to abdicate their fiduciary responsibilities. I thank you. [Applause.]

           MOB JUSTICE NOT TO BE TOLERATED IN THIS COUNTRY

                        (Member’s Statement)

Mr E J LUCAS (IFP): Madam Speaker, three people have recently been killed in two separate incidents as a result of vigilante behaviour. Fifteen women were arrested in Nongoma, KwaZulu-Natal, over the past weekend in connection with the murder of a 49-year-old man who they believed had raped a 29-year-old woman. The man was stoned to death last week.

In the other incident two men were beaten and then burnt to death in Diepsloot, after being accused of robbing a woman of two cellphones this past weekend. We are a civilised society where the rule of law should be obeyed.

Although we do encourage communities to assist the police in identifying criminals, mob justice is totally unacceptable and shall not be tolerated. If people continue taking the law into their own hands and dishing out their own brand of justice, anarchy will prevail.

It is, therefore, imperative that the relevant authorities take action to put an immediate stop to this unlawful behaviour, as well as to do their utmost to gain the confidence of the people.

             TOURISM AN IMPORTANT SECTOR OF OUR ECONOMY

                        (Member’s Statement)

Mr D K MALULEKE (ANC): Madam Speaker, the ANC acknowledges that tourism is an important sector of our economy that needs to be prioritised and adequately supported to enhance its performance and job-creation capacity within the economy. The ANC-led government’s efforts to promote tourism in our country and internationally are now paying dividends. This is supported by records that indicate that the first nine months of 2006 saw a phenomenal growth of 14% in tourism in our country. All indications are that we will surpass the national record set last year. The ANC urges all those South Africans involved in the tourism industry to continue with the good job they are doing and to ensure that women and the disabled, in particular, share in the fruits of our freedom. I thank you. [Applause.]

                    BOXING SA IN FINANCIAL CRISIS

                        (Member’s Statement)

Mr T D LEE: Madam Speaker, Boxing SA has been in financial turmoil for the past four years. Scopa has threatened to close the entity down if it does not improve its financial situation.

In 2006, Boxing SA received a disclaimer order from the Auditor-General for gross financial maladministration. This is the responsibility of the chief financial officer, who should be fired for incompetence. Furthermore, in light of this, the entire financial management team should have their jobs reviewed.

Boxing SA was without CEO for two years as a result of the failure by the Minister of Sport and Recreation to appoint one. Dali Mpofu, Group CEO for SABC, was appointed as chairperson of Boxing SA. Scopa found this to constitute a conflict of interest as Mr Mpofu has other responsibilities at SABC. A dedicated chairperson must be found for Boxing SA.

Boxing is a sport that South Africans excel at. We must not allow South Africans, both boxers and nonboxers, to suffer any longer because of the incompetence of Boxing SA’s management. I thank you. [Applause.]

         VULNERABLE CHILDREN SHOULD BE REGISTERED FOR GRANTS

                        (Member’s Statement)

Mnu N B FIHLA (ANC): Somlomo, umbutho wesizwe i-ANC, ubambisene namahlakani awo, amadlelandawonye eli loMzantsi Afrika, i-SACP kunye nemanyano yabasebenzi i-Cosatu, kubandakanywa nombutho wabahlali i-Sanco, usebenzela ukubuyisa isidima sabantu bakuthi.

Namhlanje ndimi phambi kwamalungu ndizaliswe yimincili ngenxa yento entle eyenziwe nguNkskz Nontsikelelo Mgquba, othe yena akubona intsokolo ejongene neenkedama ezimbini, uZikhona noMandisa, wasikwa yinimba. Sithetha nje ntsuku zonke aba bantwana, ukusukela oko badibana noSisi Nontsikelelo, abalali bengatyanga, kwaye banayo impahla yokunxiba esikolweni.

Isenzo esenziwe nguNontsikelelo sithi ngeliphandle: Ubomi bomntu ngamnye apha emhlabeni buyalingana. Ixabiso labo liyafana.

UNkskz Nontsikelelo Mgquba wenze isibheno kwabanye abazali ukuba bakhawulelane norhulumente kwiinzame zokunceda abantwana ngokuthi babhalise abantwana abakwimeko efana nale, ukuze bakwazi ukuzuza iinkonzo zikarhulumente ezilungiselelwe bona. Ndiyabulela. [Kwaqhwatywa.] (Translation of isiXhosa member’s statement follows.)

[Mr N B FIHLA (ANC): Madam Speaker, the ANC, together with its alliance partners, the SACP, the labour movement Cosatu, as well as the civic organisation Sanco, is fighting to bring back human dignity.

Today I’m standing in front of members filled with excitement because of a wonderful thing that Mrs Nontsikelelo Mgquba has done and who after she witnessed the suffering of two girls, Zikhona and Mandisa, felt sympathetic. As we speak now, ever since they met Nontsikelelo, they do not go to bed on empty stomachs and they also have school uniforms.

The initiative took by Nontsikelelo simply means that each person’s life here on earth is the same as that of another one, they are worth the same. Mrs Nontsikelelo Mgquba has made an appeal to other parents that they must meet the government halfway in its endeavours to register children who have the same problem, in order that they could be able to benefit from government services that are being provided for them. [Applause.]]

       INTRODUCTION OF A COMPREHENSIVE SOCIAL SECURITY SYSTEM

                        (Member’s Statement)

Ms L S CHIKUNGA (ANC): Madam Speaker and hon members, the ANC resolved at the 2002 Stellenbosch national conference that the government should continue to work towards a comprehensive social security system and the introduction of a national health insurance through strengthening and progressively expanding the social wage.

Today it is estimated that more than half of those who contribute to retirement funds reach retirement age with a pension that is less than 28% of their final wage or salary. Over two thirds of people are dependent on the state old age pension.

The ANC welcomes the announcement made by the Minister of Finance, on behalf of the ANC-led government, that mandatory earnings related to the social security system will be introduced to provide improved unemployment insurance, disability and death benefits. Ngiyabonga. [Thank you.] [Applause.]

The SPEAKER: That concludes Members’ Statements. Are there any ministerial responses? The first is hon Hendrickse, followed by hon Shabangu.

COMMUNITIES SHOULD GUARD THEIR INFRASTUCTURE AGAINST VANDALISM AND THEFT

                        (Minister’s Response)

The MINISTER OF WATER AFFAIRS AND FORESTRY: Thank you, hon Speaker, and it is Hendricks.

The SPEAKER: Hendricks. Sorry about that.

The MINISTER OF WATER AFFAIRS AND FORESTRY: I would like to thank the hon member, hon Lishivha, who has called on all of us to lend a hand in the fight against crime, particularly crime directed at vandalism of our infrastructure that we have put in place to provide basic services to our people.

The issues that she talks about have been going on since December where cables are being stolen in Makhado by people from the community, the result of which is that the boreholes that supply water to the people are not functioning. In one case 24 500 were affected when these cables were stolen and the meter box destroyed.

I think the important message that she is giving to us is that with the co- operation, particularly with regard to the work of the community, of the community policing forum, and working with the traditional leaders, they were able to identify these thieves. The thieves have been arrested and in one case we have had successful prosecution.

It is very important that the community should itself protect the infrastructure which government has put there in order to serve the community. So, we thank them very much, the police, the municipality, traditional leaders, as well as the community policing forum of Makhado. They must continue to be vigilant because the latest cases are as early as 14 February, when again there was a theft.

The Department of Water Affairs and Forestry must go in and spend money which was not intended for that purpose to keep on putting back these cables on the ground.

So, we would really like to call on the community to assist us in this regard, and commend those who have taken up the fight against the criminals. I thank you. [Applause.]

          COMMUNITIES SHOULD PLAY A ROLE IN FIGHTING CRIME

                        (Minister’s Response)

The DEPUTY MINISTER OF SAFETY AND SECURITY: Hon Speaker, I would like to take this opportunity also to thank the hon member from Makhado for bringing this matter to the attention of the House, showing the role played by the various departments, together with the communities, in fighting crime successfully. Furthermore, delivery can only happen when there is participation of the community in jealously guarding any infrastructure put in place on their behalf.

I also thank the community of eMzinoni. May I also indicate that this is a reflection that where communities are involved in fighting crime, there is always success. If we see crime in this country being fought in a way that takes us forward, it is for everybody to stand up and join hands in fighting crime.

That also goes for the hon member of the DA, who had indicated that in his community there is drag racing. May I also take this moment to say that we are going to investigate this because there need to be prosecution in this regard. Maybe what you need to do is to give us the information so that we are able to make a follow-up. But, may I indicate to you, wire and barbed fences are not going to assist in fighting crime. We don’t want to create cages amongst ourselves in our communities because you said that in your community you put up high fences and all that to protect yourselves.

We need to leave no space for criminals in our country. Communities must claim their streets. We must take over our space, and we cannot allow a few individuals to take away our freedom. So, I will urge the hon member, together with your community, make sure that you create strong community police forums. Every member of the community must come out to fight against criminals in your area.

But we also have to involve the various security companies which we normally try to get to assist us in fighting crime or creating a safer environment for us. No one can create a safer environment except us.

Hon Lucas, may I indicate to you that I agree with you fully. In this country there is no place for mob justice. We have the Constitution and it applies to everybody. We also have laws and we will make sure that when these things happen, the police leave no stone unturned, because we cannot afford that people take the law into their own hands. We would highly appreciate it if you could give us these incidents so that we may be able to make a follow-up and make sure that proper steps are taken against individuals who take the law into their own hands. [Applause.]

        SOUTH AFRICA’S POSITION ON THE ENRICHMENT OF URANIUM

                        (Minister’s Response)

The DEPUTY MINISTER OF FOREIGN AFFAIRS (Ms S C van der Merwe): Madam Speaker, I would like to respond to the hon Skosana and say that South Africa’s position on the enrichment of uranium has been and continues to be that all countries should be bound by the rules of the International Atomic Energy Agency and the Nonproliferation Treaty that any enrichment of the uranium should be used in peace and development, and for such purposes only as medical and energy purposes.

In this regard we defend the right of all countries who adhere to this internationally and accepted and agreed upon standards and we believe that what applies to one country should apply to all. We also welcome any initiatives to resolve problems and disputes thorough diplomatic means including discussions with Iran and other countries with the capacity for enrichment.

South Africa will use her position as a nonpermanent member of the United Nations Security Council to promote these views. Thank you very much. [Applause.]

          TOURISM THE FASTEST GROWING SECTOR OF THE ECONOMY

                        (Minister’s Response)

The MINISTER OF ENVIRONMENTAL AFFAIRS AND TOURISM: Madam Speaker, I would like to thank the hon member for the motion with regard to tourism and he is absolutely correct in stating that it is the fastest growing sector of our economy at the moment. We have just released the figures for the first three quarters of last year compared to the previous year, and there is a growth of 14,5%. If we analyse these figures a very interesting picture emerges. With regard to Africa, it is the fastest growing continent. Tourism in our country shows 18,3% growth, but the American market is also doing extremely well, and it is growing at just under 10%. It is more than just the recovery of the pre-9/11 market. There is a huge growth arising from that market at the present moment.

But even our traditional markets are growing well from Europe, just under 5%, and we see a broadening and the deepening of those markets as well, with many of the other new European countries from the East also becoming part of those markets. The reasons, inter alia, we believe are that we have increased the marketing budget quite substantially, but we have a much more focused, more concrete and better marketing strategy, and also a hard-nosed approach with regard to the markets we invest in.

We must see a return on our investments and there is a limit to the role that sentiments play in our decisions. But Minister Erwin is here. Last year Cabinet decided on the new airlift strategy. We have seen a number of airlines announcing new flights to South Africa and also new airlines coming in, but SAA is also involved in a very aggressive, and I must say a very exciting, creative process of looking at the new markets.

Obviously, markets like China and India are very important to us. Last year the growth from the Indian market was quite good, but we are not satisfied with the growth from the Chinese market. Our objective is to have 10 million international visitors in 2010 and the way that we are going now, I believe we will definitely achieve that target. Thank you very much. [Applause.]

        FIDENTIA TEACHING VALUES IN SCHOOLS EMPLOYMENT EQUITY

                        (Minister’s Response)

The MINISTER OF FINANCE: Madam Speaker, let me just express my appreciation for the comments on social security. It’s something we will deal with a bit further.

I would like to comment on three of the member’s statements. The first issue I would like to comment on is the statement by the hon Bhamjee on the matter relating to Fidentia. I agree with his concerns. Legislative and regulatory reforms are part of it but I think we must also be committed to strengthening the administrative oversight. The Financial Services Board looks after 13 500 pension funds, there are more that 400 collective investment schemes, over 500 investment managers, of which Fidentia was one, and over 13 800 financial service providers. So, it is an enormous load with an organisation with limited capacity. We will have to deal with this issue and so legislation will be part of it.

But, the other side of it, I think, includes a larger investment in the training of trustees of all manner of pension funds and trusts. I think that as we proceed from here, the lesson that Fidentia provides for us, hopefully the process of curatorship, will throw up a series of lessons. It would be one set of issues.

The other thing is that we must ensure that South Africans actually develop a better sense of numbers. People come along and offer all kinds of things about the returns that they can generate from investments. There was one leader of a political party who even believed that Miracle 2000 is real. These are the kinds of things we must prevent, and I think that part of what we have to do is to ensure that all South Africans develop a better sense. Even these numbers that are generated about losses from power outages and so on, you have to develop a better sense of them. But, I think we need to collaborate on these issues.

The second issue I would like to respond to is the matter raised by the hon Dudley. Of course, we are going to disagree about many things in society. One of the things we must have a debate about is how we teach South Africans basic values and how we teach South Africans to take decisions for themselves. People decide that at birth you are this or that religion. People decide at birth that you are this or that. Rather, we should encourage a wider discourse and teach our children values and allow them to decide when they are old enough to do so. But, that’s a discourse we must have rather than indoctrinate the young and claim them for particular causes at the time of their birth. We can have that debate happily.

In respect of the issues raised by the hon Simmons, I would like to draw his attention to the Employment Equity Act. The Act is there. In its practice it is frequently very poorly used. It is sadly abused, but it is there and the intent of the Act is abundantly clear. Thank you very much. [Applause.]

                           SA AIRWAYS BILL

                       (Second Reading debate)

The MINISTER OF PUBLIC ENTERPRISES: Madam Speaker, hon members of Parliament, ladies and gentlemen, the tabling of the SA Airways Bill for your deliberation marks significant progress in the process of separating SAA from Transnet Limited. You’ll recall that our intention is to focus Transnet on the movement of freight by rail, through the ports and in the petroleum pipelines.

SAA is a major enterprise in its own right and operates in an industry that has markedly different conditions to those of the rail and port freight systems. Accordingly, to ensure that there is full focus by the boards and management on these differing domains, it has been decided to take SAA off Transnet’s balance sheet and move its shareholding to the Department of Public Enterprises.

The draft Bill gives legal effect to the decision to separate SAA from Transnet which was set out in an agreement between Transnet, SAA and me, acting in my capacity as a representative of government. As part of the conditions of that transaction, we are bringing this Bill before Parliament. Although the Bill is largely a simple enabling piece of legislation with little fanfare, the vigorous discussions within the portfolio committee raised some very important issues.

The portfolio committee raised the entirely valid point that if SAA is strategically so important that it is brought before this Parliament, then surely any change in its future status must also be important - and if this were the case, what role would Parliament play? As we develop and stabilise the role of the state-owned enterprises, it is questions such as this that have to be addressed. I’m very pleased that the portfolio committee raised the issue.

The precise matter that precipitated this discussion was a provision that allowed for the conversion of SAA from a private company, as it is now, to a public company. The majority of the state-owned enterprises that are major public entities under the Public Finance Management Act, such as Eskom and Transnet, are also public companies. This status allows these public entities to rely primarily on their balance sheets for purposes of funding their respective operations and reduces the extent of reliance on government guarantees. This is something that we also wish to encourage for SAA. The ability to fund off a balance sheet essentially distinguishes state enterprises from government agencies and utility companies.

However, as I indicated, this issue raised an even more basic issue with regard to the role of Parliament in any change of status of a state-owned enterprise. It so happens that within the Department of Public Enterprises, and along with the work in the Department of Public Service and Administration and the National Treasury, similar issues were under consideration. We support a process where major changes in the future will allow for a role for Parliament.

We are working on the body of legislation that will deal with the overall strategic shareholder management of the state-owned enterprises. Accordingly, I’m happy to report that we managed to reach an agreement with the portfolio committee that this issue will be thoroughly dealt with in the proposed legislation which is scheduled to come to the portfolio committee in the second half of this year.

A departure from the enabling legislation of the other public entities is the insertion of a preamble to contextualise and specify the significance of SAA as a strategic asset to this state. This is something we agreed upon with the portfolio committee and it is a precursor to the overall approach to the shareholder management of the SOE in the draft legislation just referred to.

I did give an indication of government’s thinking on the ownership of SAA when the draft Bill was tabled. The preamble gives the basic strategic reasons for retaining ownership. The state ownership of SAA will retain strategic control of the decision-making in SAA and therefore help us to promote air links with our main business trading and tourism markets within the African continent and internationally.

As members may be aware, to contribute to the rapid growth of this continent, we need a strong aviation platform. South Africa and the continent are the third-fastest-growing markets in the global airline industry. The continent cannot grow faster without a strong aviation platform and air transport is the only real form of transport on the African continent, given the underdeveloped transport infrastructure, geographic landscape and the very vast distances on our continent.

Through this separation and direct government shareholding, we, as government, would be able to have direct access to and clearly distinguish and separate the risk between SAA and Transnet. We have already established a clear policy on oversight into SAA. The separation will also refocus Transnet Management on turning Transnet around and establishing it as an efficient freight company. Thus, the indirect hedging of SAA through Transnet, which adversely affected Transnet’s balance sheet, will be removed through separating SAA from Transnet and bringing it directly under government ownership and control.

We will then be able to ensure that these two long-term strategic balance sheets do not contaminate each other adversely. The task of returning SAA to profitability is a difficult one, given the highly competitive nature of the airline industry. However, whilst we are seeking and negotiating a capital injection, I am happy that we are moving in the right direction and value the hard work and commitment of the board, management and the excellent employees of SAA.

In conclusion, I would like to thank the chairperson of the portfolio committee and his members, Peter Hendricks in particular, for assisting us in getting the Bill processed at such short notice. I appreciate the extra work that they have done to achieve this and thank them for their understanding. I hope that this House will support the Bill. Thank you. [Applause.]

Mr Y I CARRIM: Comrade Speaker, comrades and friends, the committee is acutely aware of the financial and other strategic challenges confronting SAA and the need, therefore, for this Bill. The Bill was processed expeditiously and our report on it was carried in this morning’s ATC. Basically I will take us through our report and other members will deal with other aspects thereof.

Consistent with the government’s new emerging shareholder management model and the committee’s view on this, the committee decided to effect amendments to the Bill that would provide for, firstly, a preamble to convey the sense of SAA as a national carrier and strategic asset; secondly, the strategic role that SAA plays; and thirdly, the need for the Minister to account to Parliament for any major changes in SAA’s role and decisions about converting SAA into a public company.

We are not naïve social democrats. We are excruciatingly aware of SAA’s needs for funds and that this cannot come from the national fiscus alone. We are just as aware of the need for SAA to attract investors. The committee’s proposed amendments, we believe, would not discourage potential investors or unduly bind the Minister.

The Minister’s response was to stress that he agrees with the amendments proposed, as he just said, but explain that it would be more appropriate to provide for them in the forthcoming Shareholder Management Bill. A key reason for this is that the provisions that the committee wants in regard to SAA apply to state-owned entities generally, and in a letter to the committee the Minister said:

With respect to the recommendation to involve Parliament in the decision to convert SAA into a public company, the department is in the process of drafting legislation to regulate state-owned enterprises such as SAA. This SOE legislation will facilitate a role for Parliament in the formation and change in the status of any SOE. I believe this will accommodate the important point made by the committee that if an enterprise is strategic enough that we bring the matter to Parliament, then surely Parliament should have some role if that status is changed. Our intention is to bring this piece of legislation to the committee in the second half of this year.

Of course, I am sure the Minister agrees that the recommendation that he refers to is a proposed amendment, but the committee recognised the value of what the Minister proposed and accepted it. However, we did insert a preamble that provides a very broad, general overall sense of the strategic value of SAA. The Minister told us, as I think he said earlier, that the Shareholder Management Bill will provide for each SOE - perhaps he didn’t say this but he said it at least in his letter or in the discussion he had with us - to have a charter that sets out its strategic role. Any major change to this charter would be brought to Parliament. We think it is a very welcome offer by the Minister. In fact, to some extent it goes beyond what we sought, but on reflection it is exactly what we think should be done.

The Minister has, of course, just explained his intentions. I think I will skip that, having heard what he said, and save you the time. May I go on to say that finally we agreed that the SAA Bill amendments we had in mind would be better addressed in the Shareholder Management Bill and, of course, that Bill will come before our committee and we will process it accordingly.

Just in case - since the chair of the committee looks like Fidel Castro with glasses and since Ncumisa Kondlo would say I can talk for just as long

• there is any misunderstanding … [Interjections.] You aren’t invited to say that! It must be stressed that we do not have some romantic, idealistic notion that SAA is as precious as water and must somehow, in principle, be 100% state-owned at all times.

Most of us in our committee believe that water, electricity, education, health and basic transport like trains should be mainly in state hands. We would like SAA to also remain mainly in state hands, but the case for this, it seems to us, is not as strong as for these other basic services and our views on SAA certainly do not flow from some abstract principle. However, for the reasons set out many times by the Minister before our committee and in public I think, and in the broad sense conveyed by the preamble to the Bill, we feel that SAA is a strategic asset and should for now be retained as a national carrier owned by the state.

While air travel has traditionally been for the well-to-do, it is slowly becoming more of a mass service with the introduction of low-cost carriers, not least SAA’s own Mango, with fares that are affordable by the lower middle classes and even sections of the working class. SAA can certainly contribute to some of these broader economic and developmental goals of the country. One that comes to mind, though I didn’t have time to think more carefully about it and it may not be the best, but it came to mind five minutes before I came into the House at 2 o’clock, is that by making air travel more accessible the development of SMMEs could be advanced. Maybe Peter Hendrickse, who will speak after me, would think of better examples.

Of course, the committee recognises the volatility of the airline industry and SAA’s vulnerabilities and the government may need to act swiftly, but the committee believes that any major changes to SAA relating to the issues dealt with in this Bill should ideally take place after the Shareholder Management Bill is passed. If this is not possible, the Minister should inform Parliament of major decisions taken in terms of the SAA Bill.

Finally, it must be said that as a committee we are not exercising our oversight role of SAA effectively and we simply have to do better. Of course, we desperately need an aviation expert and we are seeking such assistance, but in the meanwhile we simply have to manage more effectively.

In conclusion, I am signalling that we would certainly have to do so. May I finally thank the department’s officials who processed the Bill with us, particularly the two officials who are here, Ursula and Litha and also Reneva, who is the parliamentary liaison officer, and the Minister and the Ministry generally for their co-operation. I should point out to this House, in particular, to hold the Speaker to account. I have clipped off one minute and forty-two seconds of my time and presumably in terms of the new Rules it will be carried over to my next debate. Thank you. [Applause.]

Dr S M VAN DYK: Madam Speaker, on 26 July 2006, Cabinet endorsed the separation of SAA (Pty) Limited from Transnet Limited as part of Transnet’s new four-point turnaround strategy.

In other words SAA would be transferred from Transnet to government and be regulated similarly to all other state-owned enterprises.

It was decided at that stage that SAA should be a stand-alone state- owned enterprise reporting directly to the Minister of Public Enterprises.

In June 2006, the Minister and Transnet agreed to transfer Transnet’s entire shareholding, including claims, to SAA in terms of a share sale agreement.

In terms of clause 4 of the above-mentioned Bill, the Minister of Public Enterprises may convert SAA (Pty) Ltd into a public company after the company has been transferred to the state.

The intention is that SAA should be an entity reporting directly to the Minister, but in documents to the parliamentary committee and the memorandum on the objects of the Bill the reason for the transfer of SAA is referred to as being the volatility of the airline industry and the need to assist with SAA strengthening its balance sheet.

Another reason was to align SAA as a major public entity and to create flexibility for funding and private sector involvement. It differs, though, from the preamble to the Bill, which refers only to the promotion of air links with the Republic’s main business, trading and tourism markets within the African continent and internationally.

Having a national airline to fulfil this role is not unique to South Africa

• witness, for instance, countries such as Australia, New Zealand, Malaysia, Singapore and China.

However, in relation to the management and financial management with respect to which such airlines are operated, not all of these airlines have been as reliant on top-ups from the fiscus as SAA has been.

In terms of the proposed statute, the financial implications for the state pertain particularly to the provision of guarantees to various third-party lenders and entities such as the International Licensing Council. The state will thus substitute Transnet as its guarantor, thus becoming a direct responsibility for the taxpayer.

In terms of the SAA risks profile, I want to refer to the national carrier’s involvement in the low-cost carrier, Mango. Mango, so it is argued, was established to promote competition to low-cost air transport.

But there are various questions that surround SAA’s entry into this market sector and how competitive this relationship between SAA, with its possible access to the fiscus, and Mango actually is.

Mango was begun by SAA through a R100 million shareholder loan by the latter to the new low-cost entrant. In the face of refusals by the therefore taxpayer-owned Mango to divulge the terms of its agreements with SAA pertaining to the aircraft being sublet to it, the media has put the monthly cost of the aircraft leases at between R16 million and R24 million.

The question now is: Having being started with a mere R100 million capital loan from SAA, how long will it be before the taxpayer will have to bail out SAA and, by extension, Mango again?

It is hoped that such a situation will be averted when SAA is separated from Transnet.

As it will then be licensed as a public entity, as per schedule 2 of the Public Finance Management Act, or PFMA, and specific clause 54, taking into account the national carrier’s borrowing powers, it will be subject to the same requirements of all public entities, which entail that the lease agreement with Mango should be opened to public scrutiny.

The DA will make full use of this opportunity to ensure that the taxpayer does not have to continuously bail SAA out. The DA supports the Bill. [Applause.]

Mr M J BHENGU: Madam Speaker, the Bill is of great importance for the future and the profitability of SAA. The retention of the SAA as a strategic asset, we believe, would enable the state to preserve its ability to contribute to key air linkages in supporting our economic growth.

The main aim of this Bill before us today, are to transfer SAA’s share and interests from Transnet to the state, convert SAA into a public company with share capital and list SAA as a major public entity.

These measures are being taken, according to the background of the Bill, due to the volatile airline industry and the need to assist SAA in strengthening its balance sheet.

It has been noted that the airline industry is volatile and that various factors, such as unpredictable oil prices and increased competition, have contributed to this volatile situation and SAA’s current position. It is, however, obvious that SAA is not coping in the competitive airline industry and desperately needs assistance.

In 2004, Transnet ploughed in R6 billion to clear the SAA’s huge book losses. Towards the end of last year, it also announced that 8% of their workforce was actually going to be fired. This, coupled the fact that SAA’s profit fell by 90% in 2005-06 is a clear indication that our national carrier is in a state of uncertainty.

It is imperative that SAA is eventually self sufficient and able to stand on its own two feet and compete against its competitors, both local and international, without needing government to bail it out. This will not only lead to a more efficient allocation of the department’s resources but will also eventually make SAA more attractive to potential investors and will likely increase any chances of success.

During the committee’s deliberations, we proposed amendments and recommendations, which we believed would strengthen the Bill. Included amongst these was the need for the Minister to account to Parliament regarding the major changes in SAA’s strategic role as well as decisions regarding its conversion into a public company.

We were assured that these issues would be dealt with in the forthcoming shareholder management Bill. We hope that this Bill will have the desired effect and provide the impetus needed to assist SAA in strengthening its balance sheet and in eventually attracting private sector involvement. The IFP supports the Bill.

Mr H B CUPIDO: Madam Speaker, the ACDP states its support for the SA Airways Bill. Measures that made it easier for Transnet to concentrate on its core business would make a significant contribution to the efficiency and productivity of Transnet and to the country as a whole.

The core activities of Transnet, which are rail, ports and pipelines, form a vital component of the infrastructure on which many of our industries depend, and which is so essential for the growth of our country.

SAA would focus solely on that which pertains to the airline industry, which in reality differs a lot from the responsibilities of Transnet.

We further welcome the proposal that SAA be converted into a public company, which will create the opportunity for private sector investment in the future. We trust that this move would enhance the profitability of SAA.

Mr P A C HENDRICKSE: Madam Speaker, during the First Reading debate we raised certain questions and concerns. This was followed up with discussions within the committee. Let me remind the House about some of them. There was a concern about foreign ownership. We were told that Australia and the United States of America, for example, do have laws that limit foreign ownership. The question is, was it necessary to have a law or were there any other effective mechanisms that could be used? We were also concerned about the control of the state. If a foreign bank or another airline were to purchase SAA, would we have any control over it?

In the committee, we had discussions and outside input with regard to the differences between a private company and a public company and about other modules such as 100% state-owned, majority-owned and minority-owned.

We believe also that it was important that we maintain the strategic role of SAA. SAA is the biggest airline in South Africa. It is important to 2010, internally and internationally, and also has a crucial role to play in our trade with the rest of the African continent. It is the biggest in Africa and it must contribute to the growth of our continent. The important point is that whatever form future ownership takes, it is essential that the state maintains effective control of SAA by setting its objectives and goals, some of which we expressed in the preamble.

The committee was also unanimous in its view that Parliament should have an effective role if the role and ownership of SOEs are fundamentally changed. It was felt that before an SOE could be sold off, parliamentary approval should be a requirement. The Minister also referred to this in his input.

To a lesser extent this should also be the position of the committee when it comes to public or private partnerships. These state-owned enterprises belong to the state. The government exercises control over them on behalf of the people, and Parliament represents the people. Surely, therefore, Parliament should have a say if there are major changes to the ownership and roles of SOEs. If an SOE is going to be privatised, does it not make sense that the Minister account to Parliament? By saying this we are not trying to bind the executive but rather to strengthen it.

The committee feels strongly that the state should not lose its ability to use the resources to drive the developmental programme of government. This could be by means of a majority shareholding, or the so-called “golden share”, or other effective mechanisms. I keep referring to effective mechanisms because we need to learn from our mistakes.

While in Telkom, we do have a golden share, it was told to roll out infrastructure in terms of government’s goals and it was given certain targets to meet. But we also made the provision that if they do not meet those goals and targets, a fine could be imposed. The problem is that it is cheaper for Telkom to pay the fine than to meet the more expensive goals and targets.

Last week in this very House, Parliament was required to agree to the excision of land from the national park - a requirement of the relevant legislation that whenever land is excised from a national park it should be approved by Parliament. We had originally thought of something similar, namely that before the Minister approaches the Registrar of Companies to register SAA as a public company, Parliament should agree by resolution.

After talks with the department, and in a letter addressed to the chairperson and the committee, the Minister gave certain undertakings that were aimed at addressing the concerns of the committee and that the committee found acceptable. The Minister agreed with many of the concerns raised and stressed that these were also applicable to other state-owned enterprises.

It is thus envisaged that the proposed Shareholder Management Bill that is due to be tabled later this year will address the concerns much more. The Minister and Comrade Yunus Carrim have already addressed the position of this Shareholder Management Bill. We have also inserted a preamble in the Bill as a means of conveying Parliament’s approach towards SAA, and the Minister did refer to one or two points in this regard. One paragraph in the preamble states:

And since the state has a developmental orientation and regards South African Airways as a national carrier and strategic asset that would enable the state to preserve its ability to contribute to key domestic, intraregional and international air linkages, the state intends to retain it as a national carrier.

Having said all this, and as stated by the chairperson, we are not oblivious to the state of SAA as conveyed to us. Unfortunately, in the 13th year of our democracy Parliament is still either incapable or unwilling to provide committees with the necessary resources to do their work. We are not experts! I am in no position to efficiently and effectively do proper oversight. We do not have the financial or, in this case, aviation experts to assist us. To this extent the committee, a few weeks ago, engaged the services of an expert on Eskom to assist us in our engagement with Eskom regarding the latest blackouts, those of 18 January 2007. It was most useful and educative having him there.

Parliament, however, requires that one has to get three quotes before one can engage such an expert. Now while one shares the need for transparency and the need to combat corruption, there does not seem to be a provision that acquiring such expertise is a matter of choice, and not price. This is not like purchasing cups or other equipment. The committee has decided that we shall engage an expert to assist us when SAA next comes to Parliament. It is important that we too, and not just the board and the Minister, be satisfied that SAA is being managed efficiently.

In conclusion, I wish to express our appreciation to the Minister and the department for the way in which they interacted with the committee. We support the Bill. [Applause.]

The MINISTER FOR PUBLIC ENTERPRISES: Madam Speaker, I thank the parties for their support. A few issues were raised which I would like to comment on. Let me begin by saying that when we speak of SAA we are talking about the second-oldest commercial airline in the world. This is quite an important point and obviously, I think for the country and for ourselves it would be a sad day if we were not to maintain this very proud brand and its reputation.

I think we should also stress - and I’d like to really make this point strongly - that SAA’s reputation in regard to safety, technical oversight, pilots and efficiency is really outstanding. It ranks as one of the top airlines in the world in this regard. [Applause.]

We can feel proud of that as South Africans. We need to improve that. We can always have scope to improve, but I make these points because the value of this asset needs to be understood. This is a well-known, well-renowned airline with an excellent reputation for its safety and operational efficiency. We are very determined to ensure that it does improve its performance and that we return it to profitability.

The hon Van Dyk pointed out that airlines have been topped up. There are far more of them that have that that haven’t. This is an exceptionally difficult industry. I think there are probably very few airlines in the world today that haven’t, either now or at some point in the recent past, received state support. This is such a big industry with so many complications.

Our objective is, obviously, to reduce that and make sure that it is more sustainable and return it to profitability. We do have to lower that – and other speakers have raised this. This is something that the board, the Chief Executive Officer and I have said. In order for SAA to be returned to profitability we do have to make it operate more efficiently. We have to lower its basic cost structure, and this is across the board. It is not just focusing only on employees, but it is also focusing on a whole range of activities, and the board are seized with this matter, just as we are seized with it.

One of the problems that we explained at the time was that in order for us to compete with a very viable, very vibrant low-cost market, SAA had to give discount on so many fares on its higher-cost airline that the effect on the total airline was negative. So, we’ve done what Comair, British Airways and everyone else has done. We’ve extracted that dimension of the market to serve a different kind of clientele and establish it as Mango. That’s a stand-alone company and it is a subsidiary with its own balance sheet. It must make its own way, and I think it will be successful. But we are certainly not looking, as I’ve indicated time and time again, to support the airline industry at all costs. It has to operate efficiently. It has to be more competitive.

The hon Hendrickse raised a few points which I would like to comment on very briefly, since these matters did come up. The issue of foreign ownership is an important question. What should be the position? We did canvass with the committee on a number of different situations that do exist, but what is definitely the case in South Africa, not only within aviation law and those areas, is that the question of the ownership of the airline is a matter that is regulated by law, and essentially, if SAA is going to be a national carrier of any type, it would have to be majority- owned by South Africans. That gives it the position of being in any way a national carrier.

We also agree that it is important that with SAA we now have direct oversight. We will have to improve both our own capacity for oversight and its capacity to comply with the Public Finance Management Act and the other issues, which previously it did through Transnet. So, there is a lot to learn and deal with. The airline industry, as I have indicated, is volatile. We are, and I have said this time and time again, in a process of planning the new capital injection. We have to do that, and we need to complete it very soon. But I must say, as I have said before, that the process of returning SAA to profitability is, in our view, on track. There is work to be done, but we are moving very clearly and definitely in the right direction. I thank the House for its support. This is a very important step for us in clarifying the position of SAA and clarifying the position of Transnet. I thank the House. [Applause.]

Debate concluded.

Bill read a second time.

CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES – ANNUAL REPORTS OF THE DEPARTMENT OF PUBLIC ENTERPRISES AND STATE-OWNED ENTERPRISES (ALEXKOR, DENEL, ESKOM, SOUTH AFRICAN AIRWAYS, SOUTH AFRICAN FORESTRY COMPANY LTD AND TRANSNET)

Mr Y I CARRIM: Madam Chairperson, comrades and friends. Madam Chair, you were not here when I spoke earlier …

The HOUSE CHAIRPERSON (Ms C-S Botha): I was here, sir, and you cannot have the extra minute. [Laughter.]

Mr Y I CARRIM: All right. We will negotiate that outside this meeting, if we may.

The debate on this report is essentially on the report that was carried in the ATC of 20 November. What I’m going to read is very easy. It’s just to go through aspects of the report. I’m going to provide an overview of the tentative observations and conclusions of the committee on the state of the Department of Public Enterprises (DPE) and the state-owned enterprises. I will deal in particular with the SOEs, because DPE is dealt with in budget reports that also get published in the ATCs. I will take you through an overview, and other members will deal with different aspects of the report.

Our overall assessment, as we note in the report, is that DPE and SOEs are generally far more focused, directed and driven now compared to, let’s say two years ago. We’ve seen this. It’s quite a significant advance. It’s not just a movement forward, in our view.

Obviously, different SOEs face different challenges, and they are at different stages of their re-engineering and restructuring processes, but overall, to differing degrees, state-owned enterprises – we call them SOEs for short, although the Minister calls them in the department ``SOE’’, but that’s another debate we can have – are more actively fulfilling government’s mandate, and performing better now than in the past two years. That, at least, is how we see it.

In a nutshell, our conclusions for now about the SOEs are that, firstly, until the land claims dispute is finally settled, and government is clearer about what it wants to do with Alexkor, it is difficult for the committee to have a clear enough sense of how Alexkor is performing. It seems, to us at least, that Alexkor is very challenged. We feel, though, that Alexkor could do significantly better, even in the current circumstances.

Since the report was published, we have read in the public domain, in the media, that Alexkor has entered into a partnership with De Beers, and it seems that progress in other respects, too, is unfurling.

Despite its many complex challenges, Denel’s new strategy overall is sound, and progress in the first year of its implementation is good. It will be a long haul. It is too early to say whether the turnaround strategy will succeed, but it is promising. Denel’s leaders are certainly firmly committed to fulfilling that promise.

In respect of Eskom, we say that the power outages exposed both Eskom’s weaknesses and strengths. Despite the challenges of the power outages and its capital infrastructure programme, Eskom is doing well, and its financial performance remains impressive. On SA Airways, we say that SAA operates in a very difficult – as you heard earlier – volatile and unpredictable industry, with many factors largely beyond its control, especially fuel prices. It is difficult for the committee to tell how much of SAA’s difficulties flow respectively from factors beyond its control, legacy issues and weaknesses of the present management. We believe SAA can do better, and its managers certainly have the potential to ensure this.

In regard to Safcol, we say that with Safcol being retained in state hands – although that, too, is being negotiated through Cabinet – it will have to adjust from its privatisation mindset, if that’s the direction government finally decides it should take.

The committee waits to see what precisely the new mandate is that government will provide. I understand that will come very shortly. The committee will then be better able to assess Safcol’s performance. For now, that means in November last year, notwithstanding internal transformation challenges, Safcol seems to be doing well.

Transnet’s recovery, we say, over the past two years, is remarkable. There is still a long way to go to ensure sustainable progress, but a solid foundation for this has been created. Major challenges persist, but if there is any leadership that can, over time, triumph over these, it is the current one. I refer here in particular to Transnet because it overlaps to some extent with some of the subterranean debates that occurred in the earlier debate.

We say in 9.28 on page 40 of our report:

While the committee was somewhat cautious in welcoming Transnet’s progress last year, this year we are clear …

That is, 2006-

… that Transnet has made major commendable progress that is sustainable.

Of course, we have limited technical expertise, but it seems to us that while huge challenges persist, and there is still a long way to go, the progress achieved is a very solid foundation on which to build further.

Clearly, the current leaders of Transnet have done a remarkable job, and their performance suggests that with an effective and driven board and management, operating within the clear mandate from government – this must be stressed – SOEs can be successful. Their performance, in other words, reinforces the case to keep enterprises involved in key sectors of the economy in state hands, rather than privatising them.

Without being glib about this, it seems to us that where there is a will, there is often a way. Notwithstanding their excellent progress in the eyes of the committee, note what the CEO has to say, though she and her management team have done so well, under 9.41.

Transnet’s performance during the year under review, we say, was very impressive. In her review, Ms Ramos said, and I quote:

“More and better results are achievable.” Good, we say. We look forward to that.

I don’t think one can translate the experiences of Transnet literally into other SOEs or even at all times, but it is a remarkable case of a turnaround strategy, notwithstanding the many, many challenges that remain.

We said in our report also that we look forward to the shareholder compacts the Minister concludes with the SOEs being presented to the committee early in this year. It will significantly contribute to ensuring that we are more focused, rigorous and effective in our oversight role.

It will also contribute to the SOEs being more specific and focused in their briefings to the committee on their annual reports. In this regard, we would like all SOEs to be more concrete about progress on specific targets that are set out in the shareholder compacts.

We also note that Eskom’s and Transnet’s capital infrastructure programmes are taking place at the same time as the 2010 World Cup, municipal infrastructure and other capital investment programmes. The committee would like to be briefed within the next six months on the strategy to meet the following needs: One, the massive demand for cement, steel and other material necessary to build an infrastructure plan by the SOEs; two, the major skills requirements; and three, the challenges of our environmental impact assessments.

The performance of the SOEs seems to be significantly influenced by the political direction provided by the government, and the quality of leadership of the SOEs. It is crucially important that the SOEs have effective succession plans in place. There needs to be greater stability and continuity within the SOEs that is not undermined by each change in their leadership. Eskom seems to be adopting a good approach to the replacement of its chief executive. We want to be briefed on succession plans by DPE and the other SOEs.

On the department, we stressed that we welcome the much more direct, focused report given by DPE. It’s a significant advance on the previous year. We say that it has set out its targets much more clearly, as well as how the budgets are allocated to programmes where those targets were used, and what progress has been achieved in meeting those targets.

Overall, it seems to us that DPE made effective progress in achieving its targets for 2005-06. Of course, some of the targets and achievements, we say, were too general, so it was difficult for us to evaluate progress effectively, but we insist that they are doing extremely well. We think that the Minister’s got a very good department, potentially, and in practice. It’s a young department, but a very dynamic department. We congratulate him and the department on the progress they have achieved, though together with them, we hope to see better progress. Thank you very much. [Applause.]

The HOUSE CHAIRPERSON (Ms C-S Botha): Thank you, hon Carrim. If we adjourn at the end of the day, everybody is going to be thankful that I didn’t give you an extra one minute and 42 seconds. [Laughter.]

Dr S M VAN DYK: Madam Chair, arising from the report under discussion here today, there are two issues that I would like to address in the time allocated. As the committee’s report indicates, it heard last year from the Department of Public Enterprises that the department was engaging Eskom on what should be the appropriate margin for surplus electricity in South Africa.

The DA believes that, as government’s shareholder manager department, the Department of Public Enterprises may well have some vested interests with respect to the security and regulation of electricity supply in South Africa, but that the Department of Mineral and Energy Affairs should be leading the charge in this regard.

In short, we believe that the business of electricity supply should be dealt with separately from ensuring the security and regulation of electricity supply. We believe that the confusion that has prevailed on various occasions with respect to power outages and appropriate surplus supply margins over the past 18 months has resulted mostly from government’s refusal to separate these roles.

The Minister of Public Enterprises, in particular, has lost credibility in the eyes of the public as a result of having succumbed to the inherent conflict between the interests of government as the business shareholder on the one hand and government as the service deliverer on the other.

Of course, we now know what the situation is, thanks to the recent release by the department of the so-called confidential report on the state of electricity supply in South Africa.

However, it is a sad day for democracy when a government fails to make its citizens privy to the truth, especially on matters with respect to which the truth should be deemed vital, or considers it an extraordinary step to do so, as was the case with the release of this report.

With respect to the troubled Alexkor, I would like to register the DA’s dissatisfaction with the reigning situation as well. Currently government funds this nonperforming state-owned enterprise from the fiscus. It recently received R80 million from Treasury and seems to justify this partly by holding Alexkor responsible for performing services that should long have been taken over by the relevant provincial and local governments. If the provincial and local governments responsible for service delivery in those locations cannot deliver the relevant services in the necessary fashion, they should be capacitated to the required extent and held accountable, rather than government pouring more taxpayer funds into the bottomless pit that Alexkor seems to be.

In any event, given the government’s intentions with respect to the issue of downstream beneficiation, with the state now setting up a diamond trader itself, the necessity for Alexkor to remain in the state fold seems diminished. We believe the time has come for government to cut its losses and sell Alexkor off. Thank you.

Mr M J BHENGU: Thank you, Madam Chair. The annual reports of the Department of Public Enterprises and the different state-owned enterprises were considered by the portfolio committee during October-November last year. The report that we in the portfolio committee have adopted is very detailed and thorough, as has been the case in previous years.

I would like to congratulate the chairperson as well as the committee’s support staff for all the hard work in preparing such a comprehensive and detailed report. We look forward to assisting our chair in monitoring the progress of the department as well as the various state-owned enterprises. We agree with this report. I thank you.

Mr Y WANG: Thank you, Chairperson. Today I would like to focus and report to the House on Denel’s annual report. The committee continues to find Denel one of the most technically challenging state-owned enterprises to deal with. I personally feel it is because of our own lack of capacity from Parliament’s side. I mean, it is already impossible to find a super- researcher that can understand the technical aspects of all the state-owned enterprises within our portfolio, never mind the fact that our committee was running for a long time without a researcher.

Despite that, we feel that Denel’s broad direction and strategy generally are sound, given the challenging and unpredictable environment in which it operates. As the chairperson pointed out earlier, the leaders of Denel are also very determined to see Denel succeed. The CEO also made the same statement with confidence. The CEO further pointed out that 12 months after the turnaround strategy Denel is very comfortable with the process and performance evident in a number of indicators such as staff behaviour, revenue lines and cost reductions, amongst others.

In the 2005-06 financial year, Denel suffered a net loss of R1,3 billion against R1,5 billion. Revenue is down from R3,6 billion to R2,7 billion. Overall capital and reserves improved from a negative R16 million to a positive R607 million, making Denel solvent.

Denel’s improvement or lifesaving strategy is based on six pillars, the first being transformation and people. A major survey among 45% of its workforce revealed that staff were very negative in how they saw management, career opportunities, remuneration and transformation. Therefore it is important for Denel to transform its personnel into a motivated and empowered workforce with a commercial and performance-based mindset, within a truly representative and diverse environment.

The second pillar is about engaging with state agencies such as the Department of Public Enterprises, the Department of Defence and Armscor in areas of industry structure, acquisition policy and industrial participation. This is to ensure the full buy-in of all stakeholders to synchronise the participation level.

The third pillar is to secure local markets of defence acquisition, such as Denel’s competitors overseas are enjoying as a privilege in their respective countries. Where 70% to 85% seems to be the norm in Nato countries, and I think, if I am correct, 95% in the US market, only 30% of Denel’s revenue comes from the South African local market. It is suggested that at least 70% of South Africa’s acquisition should be procured from the local industries, including Denel.

The fourth pillar of the strategy is commercial viability. The re- engineering of Denel in the year reported brought about cost reduction, improved business process and business viability, with product offering investigated. The disposal of the noncore assets and the restructuring of Denel into 8 to 12 independent business units allowed more focus on its core business and more accountable management by each line business. If you think of the holding company, Denel as a chicken farm, it is now easier to evaluate which chicken is doomed with bird flu and which chicken has healthy financial aspects.

The fifth pillar is to identify potential partners, equity transactions and strategic alliances to increase market share. Two important ones include Denel’s aerostructure partnership with SAAB, and Optronics with Carl Zeiss.

The sixth and last pillar is to raise capabilities and productivity to world standards. A radical change to the remuneration policy will take into account the performance of individuals to incentivise them and encourage the workforce to strive and conform to world standards.

To conclude on Denel, the committee will pursue further the above issues, and in addition also focus on Denel’s compliance with the Public Finance Management Act, its broad-based BEE procurement - which will be outlined later - and also the role of the Defence Evaluation and Research Institute. I thank you.

Mr H B CUPIDO: Madam Chairperson, the ACDP welcomes the strong stand taken by the portfolio committee on the absence of board chairpersons from the annual report briefings. Being the chairperson of a state-owned enterprise is a huge responsibility which cannot be taken lightly. South African citizens and some neighbouring countries depend hugely on the services rendered by state-owned enterprises.

The ACDP would like to congratulate the Department of Public Enterprises on yet again receiving an unqualified report from the Auditor-General. It has been proven that where a good reporting system is in place problem areas can be identified and rectified at an early stage.

With reference to Alexkor, the ACDP urges all those involved in outstanding land claims to resolve these cases more swiftly. We also commend the settlement reached on the land claims dispute, which will surely enhance the performance of Alexkor. The ACDP supports the report.

Mr L M GREEN: Deputy Chairperson, the FD welcomes the report on state-owned enterprises - SOEs. The perception of the general public on the performance of government institutions is a one way to assess the normative output which government, with its number of state organs, has with regard to the lives of ordinary citizens.

A classic case is the performance of Eskom over the last number of months. Besides the millions lost by business through the disruption of power supplies in the Western Cape, the enterprise has caused great insecurity in the lives of the normal citizens who once had faith in the sustainable capacity of electricity supply to their households.

Although it is purported that we are the world’s lowest producer of electricity, it does not please the public if we do not have the management capacity to sustain supply of electricity. It creates uncertainty in communities, let alone uncertainty in our economic growth prospects.

Eskom must not be allowed to get away with a simple apology. It has let us down as a nation and still has not been able to confidently assure us that it has capacity to maintain efficiency and that it is able to do an excellent job. The FD supports the report.

Mr S E KHOLWANE: Chairperson, hon Minister, colleagues, ladies and gentlemen, in 2002 we, as the ANC, resolved that many households still lacked electricity, whilst some of those that were linked up to the grid had been cut off for failure to meet payments, and resolved that the process of rationalising electricity distribution should continue, ensuring viable and affordable electricity supply for all regions as well as progressive achievement of universal and affordable access.

With regard to the foundation of a minimum free basic electricity service to all households, we indeed view Eskom as a very important player. According to clause 6(9) of the report, Eskom has managed to electrify a lot of houses. We note that the pace at which Eskom is going is very slow, so much so that we might miss our target.

However, we are not confused. We know very well that this issue of electricity distribution lies squarely with the Department of Minerals and Energy. That is why, as a committee, we have resolved that we will engage the Department of Minerals and Energy so that we understand exactly what the problems are with their accounting in order to achieve this goal.

It is in this respect that when the hon Van Dyk was here and said that the Minister had lost credibility, one would say it is not true. Maybe the problem is that Dr van Dyk has attended only one meeting of the committee. So, I think he has not yet been properly briefed on what we have been doing as a committee. Sometimes to read and then interpret and give a meaning is different from understanding exactly what was discussed in a meeting. So, I will request him to attend the meetings more frequently, rather than just coming here and saying something unacceptable, like saying the Minister has lost credibility, because that is entirely not true.

Dr S M VAN DYK: Can you prove me wrong?

Mr S E KHOLWANE: I will prove you wrong.

Furthermore, in 2002 we resolved that government must intensify its support for small, medium and micro-enterprises as a critical component of black economic empowerment - BEE - and ensure that such support reached them, and so it was included. In the current year of the Annual Report, which we are debating today, Eskom has spent R11 billion through BEE entities, of which R1,3 billion was spent through black women-owned enterprises, 24% of the total spent was spent through SMEs, whilst in Denel the BEE procurement has declined from 22% to 18,6%. This reduction can be attributed to the verification process that revealed that several companies defined as BEE were actually fronts for whites’ businesses, and a drop in IT procurement which drew in several BEE companies.

We have also noticed with concern as the committee that there are no BEE strategies in SAA and also in Safcol. However, this has been noted by the SOEs themselves. As a result, they will be tabling their BEE plans in the coming financial year.

As a committee, we welcome the discussion between Transnet and Eskom, in particular in relation to the angle of job creation, where Eskom is engaging Transnet in terms of how we can ensure that we minimise the trucks on our roads. Transnet and Eskom will have a deal. Eskom will be able to find some railway lines and Transnet will be able to operate those lines, with the proviso that we will ensure that those poor communities who are living nearby those power stations will receive an opportunity to be trained so that they can form part of this particular strategy. I think it is a progressive strategy which will assist us and will also assist Transnet. If you have read the report of Transnet, you will have seen that Transnet have said that they want to reduce the number of trucks on our roads through ensuring that we have efficient and effective railway lines.

As I have mentioned, this project will also take care of the issue of BEE. If we look at the BEE procurement in particular in Transnet, as much as they are doing very well, we as the committee feel that there is still much room for improvement. Hence, we emphasise that when they come back we must have that particular plan. After all, we acknowledge the difficulties and challenges which Eskom has had in term of the power outages. However, we are saying that out of that Eskom has emerged stronger because Eskom has managed to table its plan according to how it is going to add the megawatts which are so needed for the next 20 years. This will reassure us as a nation and as a country, so that no one is going to be worried, no one is going to have any mistrust. In that way, when we host the 2010 World Cup, we will not have this problem of outages.

I would appeal to the leader of the opposition, in particular the DA, to please brief their member about what we are doing in the committee and also invite Mr Green and Mr Cupido to attend the portfolio committee meetings; we need their contribution.

Debate concluded.

The Acting Chief Whip of the Majority Party moved: That the Report be adopted.

Agreed to.

DEBATE ON JOB CREATION AND EMPLOYMENT SECURITY IN THE ERA OF GLOBALISATION (IPU TOPIC)

Mrs B M NTULI: Chairperson and colleagues, job creation and employment scarcity in the era of globalisation is a reality. Since 1994 the South African economy has performed very well and has consistently had a positive economic growth.

South Africa has a greater number of international investors, a substantial growth in the manufacturing sector and has become more globally competitive compared to when the economy was protected prior to 1994. But South Africa still has a high unemployment rate, which is about 28%-38%. Government has to put in place policies and a clear programme of intervention, particularly on small business development and on agriculture and land reform projects. We need more domestic investment.

The government has embarked on a comprehensive strategy to provide support for SMMEs to enable them to create jobs and economic wealth. The improvement of agriculture is at the heart of government’s improvement strategy. Economic development and growth play a role in poverty alleviation and the absorption of the surplus labour in rural and poor urban areas, and in restoring human dignity and self reliance, to encourage South Africans to utilise their own strength, ability and political leadership to generate development and growth domestically and on the continent.

Conditions for rural development entail that farm structures and land tenure patterns must be adapted to a dual objective of increasing food productivity and promoting a wider distribution of the benefits of agrarian reform. Agricultural and rural development that benefits the masses of the people can succeed only through a joint effort by government and all stakeholders, big and small farmers, and not just commercial farmers.

We must deal with the issue of the second economy. It is for this reason, and the reason of higher agricultural output and the achievement of greater efficiency and more equity, that land reform is proposed as a necessary first condition for agricultural development in many countries with least development.

The highly unequal structure of landownership is the greatest determinant of the existing highly inequitable distribution of rural income and wealth. When land is highly unevenly distributed, rural peasants can have very little hope for economic advancement. What I am saying is, this means that the full benefit of small-scale agricultural development cannot be realised unless government support systems are created. That will provide the necessary incentives and economic opportunities as well as access to the needed credit and inputs to enable small cultivators to expand their output and raise productivity, raise farm and nonfarming rural income, job creation through industrialisation and agro-processing from agro- industries.

Most underdeveloped and developing countries or economies start at the farming level. Let us take care of this sector. One of the challenges facing agriculture is to produce sufficient and affordable food, especially at household level. Another challenge is the lack of adequate support structures for emerging farmers - black and, in particular, women. Vulnerable groups have limited access to information, less experience and fewer resources due to their historical exclusion from the mainstream economy in the past. This must be corrected.

Other frustrations include the slow pace of land reform and the inaccessible loan system from various financial institutions citing the risk factor. The Department of Agriculture’s farmer support programme is critical to the development and support of emerging farmers, including the land reform beneficiaries.

Government intervention in the development of restitution grants, issued after settlement of land claims to buy tractors, cattle or any other livestock, is welcomed. It will go a long way in assisting these new incoming farmers to develop. Not only that, but land care programmes and programmes for infrastructure development are also welcomed to build dams and dipping tanks, erect fencing and purchase seeds and manure. If well monitored by the provinces this will go a long way. After that people can go to Mafisa for small loans.

Support from extension services must be enforced. Irrigation schemes must be built and the old irrigation schemes must be rehabilitated. Agricultural co-operatives working with the Department of Trade and Industry, the Small Enterprise Development Agency, Khula and all other Council of Trade and Industry institutions must be promoted.

The AgriBEE Charter will soon be finalised to enable blacks to also participate in agro-processing and export promotion. Private-public partnership and skills transfer by commercial farmers is welcomed. Universities must also take part in training. The review of the National Agricultural Marketing Council is very important so that rural people can also have access to domestic markets - our chain shops, fresh produce markets nationally and in neighbouring countries.

One of the most important things in South Africa is to respond to the change in the way in which the world economy works, which is globalisation. We cannot shy away from globalisation. It is there, the world is trading globally. The question is not whether we can globalise but how do we manage globalisation in a developing country like ours?

Usho njalo umhlonishwa uTrevor Manuel. [That is what the hon Trevor Manuel is saying.]

We must understand the change in policies in the world economically and socially and say what it is that government can do to create a positive environment for agricultural development and economic wealth and ensure efficient physical infrastructure through regulatory reform, investment in roads, rail transport, telecommunications, power and information and technology to improve our performance.

We must increase expenditure on research, training and managerial skills development, which will make a critical contribution in stimulating economic growth and reducing poverty and unemployment by improving agricultural productivity. It will also serve as an engine for growth and income for rural poor, smallholder farmers and the commercial farmers.

Research linkages with the global research systems are important for us to be more competitive. Research is very expensive but working within the limited resources that we have, we can make a mark. It is clear that reforms are needed to increase efficiency and sustainability, but with all the reforms we need funding.

Lastly, special attention should be given to the vital food-producing and entrepreneurial role of rural women and urban African women in informal and formal agricultural production. They must also have hope that one day they will have compensation for their labour.

Surely, all of us want to see a progressive South Africa, an economically stable country. Let us all work together to achieve this and make sure that our neighbouring countries are also developing so that we do not find ourselves being flooded with immigrants looking for greener pastures.

Kusobala ukuthi uma sifuna ukuthuthuka, ngeke sikubalekele ukuhlangana kwezizwe zonke emikhakheni yezohwebo futhi ngeke sikubalekele ukuhwebelana namanye amazwe. Okufanele sikwenze nje ukuqaphela ukuthi lokhu kuhwebelana sikusingatha kanjani ukuze kusize thina, nokuthi futhi abantu bakithi kube yibo ababamba iqhaza elibalulekile ekuzithuthukiseni, ikakhulukazi amabhizinisi amancane. Lolu usizo olutholakala kwa-DTI, usizo olukhona kwezolimo ngezinhlelo ezifana ne-Casp neMafisa, kanti futhi kunemali enikezwa labo abanikezwe imihlaba le ababeyifunile, abasuswa kuyo ngendluzula esikhathini esingaphambilini. Lokhu kwenziwa ngenhloso yokuthi bakwazi ukuqala ukwenza imisebenzi ezobaphakamisa ibasuse ebuphofini, ibabeke ezingeni lapho nabo bengasho khona bathi, “Sizophumelela ukuhweba namanye amazwe angaphandle. Kodwa masiqale ngokuhwebelana thina sodwa ukuze sikwazi ukuqina, sibambisane namazwe angomakhelwane bethu ukuze sikwazi ukuqina sibe nezwi elilodwa lokukhuluma namazwe angaphesheya ukuze nabo bavule kwezabo izimakethe sikwazi nathi ukungena.”

Siyacela-ke ukuthi abantu bakithi kuyo yonke le mizamo balibambe iqhaza, basukume ngamandla, baphakamele phezulu ukuze bakwazi nabo ukubuyisa isithunzi sabo nekusasa labo liqhakaze. Ngiyabonga. (Translation of isiZulu paragraphs follows.)

[It is clear that if we want to develop, we cannot run away from globalisation and trading with other countries. What we need to do is to be on high alert and make sure that we use this trade to our advantage. We also need to make sure that our people play an important role in developing themselves, especially the small businesses. Assistance is available from the DTI; and there is also financial assistance available in agriculture through programmes like Casp and Mafisa. There is also financial assistance given to those who receive their land back, from which they were forcefully removed in the past. This is all done with the aim of enabling them to start doing projects that will uplift them and remove them from poverty, and put them on the level where they can say, “We will succeed in trading with other foreign countries. But let us start trading amongst ourselves so that we can be strong, work together with our neighbouring countries and speak with one voice with overseas countries so that they can open their markets for us.”

We ask our people to actively play a meaningful role in everything that we are trying to do. They should stand up for themselves and walk with pride so as to reclaim their dignity and brighten their future. Thank you.]

Mr C M LOWE: Chairperson, a global world is a competitive world, and globalisation tells us that if we cannot compete then we will simply be left behind and the jobs and opportunities will go elsewhere. In a global world we have to be competitive and highly skilled to stay ahead of the game - and right now we are not.

Being a competitive nation and ensuring that our workforce acquires useful skills starts with education. Every successful nation has recognised the need to concentrate on providing quality education to its young people and skills training to its workforce. We have not done very well at either.

It is a sad but undeniable fact that more young people successfully passed their matriculation exam in 1994 than did last year. Of greater concern is the dramatic drop over that period in the number of matriculants leaving school without studying, let alone passing, higher grade maths and science. Without those two subjects their chances of studying further, acquiring skills and finding employment in a competitive global world are extremely limited.

Finance Minister Manuel has cited the example of the Eastern Cape, where more than nine out of ten children leave school without higher grade maths and are therefore unable to enter any of the technical professions.

The Deputy President has also acknowledged this problem, but now we need to do something radical to resolve it. We need to make mathematics and science interesting and exciting again so that young learners are encouraged to take them up. To do this we need to produce many more qualified maths and science teachers. Perhaps the Minister of Education can factor this into her planning when she utilises the extra funding announced in the Budget last week.

Perhaps it is time, most of all, to consider making mathematics, and possibly even science, compulsory subjects for all learners up to Grade 12, even if just at the standard level. If we are going to be competitive in a fast-changing and technical global world then that is something that should be seriously considered.

At tertiary level, too, there needs to be far more emphasis on producing engineers, actuaries, chemists, economists, physicists, accountants and scientists. Yes, the arts and social sciences are important and provide balance to a nation, but their faculties are largely oversubscribed and it is to the economic, scientific and engineering schools and to skilled artisans that we must look to provide citizens who will cope in a global world.

That is the future, but what of right now? What do we do with an unemployed workforce approaching 8 million, many of whom are totally unskilled? Where do they fit into a rapidly growing economy that seems to have left them behind? The first thing we need to do is to stop blaming the past and rather concentrate on providing as many of them as possible with the right skills, those skills that are most needed in the economy. Again, we have not been terribly successful at doing that either.

It is another sad but undeniable fact that, since 1994, the average age of South Africa’s remaining qualified artisans has steadily risen to a now embarrassing 54 years of age. Instead of producing more artisans to meet the growing needs of our rapidly expanding economy, we have simply stopped training them, creating instead what the Seta system euphemistically calls “learnerships”. Now we have a crippling shortage of engineers and skilled artisans.

Many of those skilled artisans have been driven overseas by affirmative action legislation that makes it impossible for them to find work, even when there are scores of vacancies to be filled, simply because they are the wrong race or skin colour. A whole generation of patternmakers, boilermakers, electricians, plumbers, welders and other artisans have taken their skills, acquired at great effort and much cost to the South African taxpayer, and gone elsewhere. That is not something a competitive nation in a global world can afford to do.

We urgently need to reverse the debilitating skills brain drain, and the proposal announced today by the Western Cape MEC Marius Fransman to put a moratorium on affirmative action in scarce skills to entice white South Africans back to South Africa, must be supported. In fact, the legislation must be scrapped, not just put on hold. What does the MEC propose doing with those South Africans whom he welcomes back so enthusiastically when their three years are up? Sling them all out again? No, it is long overdue for the Minister of Labour to announce a complete rethink of the employment equity legislation, repealing affirmative action, certainly in respect of scarce skills, and setting out plans actively to recruit engineers and skilled artisans back to their homeland where they belong and are so desperately needed.

In an era of increasing globalisation, it is vital that we tackle this most important of our challenges. After more than a decade of vast positive social change, and huge improvement in the lives of millions of South Africans, we still find that more than 7 million people cannot find work, and we cannot or do not fill the 500 000 skilled vacancies that exist. That is a tragedy that we have in our power to address, here in this House, starting today. And now is the time to do so. Thank you. [Applause.]

Mr M J BHENGU: Chairperson, globalisation has many definitions and is strongly supported by the one side while the other is vehemently opposed to it.

In brief, it can be defined as a process of increasing and accelerating integration between states, corporations, other organisations and individuals. Generally, the increasing convergence of markets, economies and politics can be identified. The term, of course, covers economic, trade, social, technological, cultural and political aspects.

Some hold that globalisation relies on three forces for its development: These are the role of human migration, international trade, and the rapid movement of capital across financial markets. The International Monetary Fund stresses, and I quote-

… the growing interdependence of countries worldwide through increasing volume and variety of cross-border transactions, free international capital flows, and more rapid and widespread diffusion of technology …

International trade has undergone a revolution since the middle of the last century, with barriers to trade lowered almost across the board through the General Agreement on Tariffs and Trade, popularly known as Gatt, and its successor, the World Trade Organisation or WTO.

What this has meant is that markets across the world have been opened to fierce competition between truly global corporations which have adapted their products to penetrate new markets, becoming vastly more profitable as long as they retained their competitive edge. It has also meant that those countries and companies that do not have the competitive edge in human and capital resources have been crowded out from the benefits of international trade. Rapid advances in communications and transport technology have increased the pace of international trade even further, with companies moving operations and technologies to countries where they will achieve the most benefit, while deserting those countries and markets that hinder their operations through over-regulation, lack of skills and political interference in the economy.

While the effects of globalisation have been beneficial to many developed countries, its effects on poor and underdeveloped or developing countries have sometimes been negative and dramatic, as whole industries went under, capital outflows increased and employment opportunities diminished. One of the main criticisms of globalisation is indeed that it is capitalism gone wild, with corporations and world bodies such as the IMF driving a neoliberal, unfettered form of globalisation that serves only the interests of the rich, while neglecting and marginalising the poor.

How, then, to create jobs and secure them in an economy that is still in a developmental phase? The answer is complex, but what is not is that globalisation is a fact. It is happening at an increasing rate and those countries that do not adapt to its demands will be left behind and will not achieve a developed status.

Such countries have to adapt by lowering trade barriers, creating a business-friendly regulatory environment, increasing skills development and developing new technologies. In essence, such countries have to open up their economies to greater competition while taking advantage of comparative strengths. At the same time, such countries have to provide adjustment measures to industries that are uncompetitive and to workers that are poorly skilled.

Finally, and this is where the Inter-Parliamentary Union can play an important role, the negative effects of globalisation should be addressed by launching a global forum for dialogue between all interested stakeholders. This forum should engage governments, global corporations, institutions such as the IMF, trade unions and community representatives, and should develop mechanisms and interventions that can assist those that are negatively affected by globalisation. That would actually help poor and underdeveloped countries to have a say in the whole process of globalisation, rather than to experience it as another form of colonialism. Thank you.

Mrs C DUDLEY: Chairperson, urgent measures to stimulate job creation and employment security in this era of globalisation must be implemented, and debate exploring innovative ideas is welcomed by the ACDP.

Interesting insights by Jason Urbach, published on the Free Market Foundation website, could add to this debate. He notes that unemployment has been a regular fixture in the South African economy since at least the mid-1970s.

According to the latest labour force survey, approximately 4,2 million potential workers are unemployed in South Africa, which equates to an official unemployment rate of approximately 26%. If we include discouraged workseekers, those that have given up searching for work because they believe that there is simply no work available, the number of unemployed jumps to 7,9 million, representing an expanded unemployment rate of approximately 39%.

Despite the South African government’s best intentions in wanting to protect workers, an unintended consequence over the present labour laws is that they effectively prevent the unemployed from gaining employment. The sayings “if you can’t fire you don’t hire” and “you can’t hire those who don’t earn their keep” may be unpalatable to politicians, Urbach says, but they are harsh realities of employing responsibility.

If government reduced the bureaucratic red tape and relaxed the statutory requirements that prevent people from getting jobs in the formal sector, it would not be necessary for so many people to turn to the informal sector for employment.

He further suggests that to allow labour market forces to function unhindered for young people at the low end of the market would benefit large numbers of jobless people if implemented. Young people, he argues, would not have such a desperate struggle to get onto the first rung of the employment ladder.

While the already employed of course argue that any weakening of job security legislation and erosion of minimum wages will lead to increased poverty, studies have shown that a significant driver of poverty is in fact unemployment. Thank you. [Time expired.]

Mr B A D MARTINS: Madam House Chairperson and hon members, the twin issues of job creation and unemployment, and the detailed investigation of the concept of accelerated and shared growth, and specifically, how the poor and the unemployed are to be engaged in development, becomes critical.

It is common knowledge that the South African economy has experienced the longest upswing in its history. While average GDP per capita growth was less than 1% per annum between 1994 and 2003, it has accelerated from 3,1% in 2003 to 4,8% in 2004, and to 5,1% in 2005. Government’s objective of growing the economy by at least 6% beyond 2000 remains within reach.

However, of the remaining challenges that need government’s focused attention, foremost amongst these are unemployment and poverty. According to Statistics SA’s Labour Force Survey of March 2006, 544 000 more people were actively seeking employment, and the unemployment rate declined slightly from 26,5% in March 2005 to 25,6% in March 2006.

The survey further states that over the period from March 2001 to March 2006, slightly over 1,2 million jobs were created in the formal sector, excluding agriculture. The reality that we face, however, is that the current levels of economic growth are insufficient to meet the needs of all South African citizens. Thus, for many, the dignity of work and the entitlement to a minimum standard of living remains a distant ideal.

The average annual growth target of 6% by 2014 is ambitious but realistic. This target is derived from the goal of cutting unemployment by half. The Accelerated and Shared Growth Initiative for South Africa document begins to spell out the various strategies and interventions designed to meet the 6% average annual growth rate. To ensure structural change in the economy, the critical growth path will have to highlight key interventions and key decisions required to actualise the 2014 ideal.

With the passage of time, in addressing the challenge of job creation and unemployment, the ANC-led government has enacted four key pieces of labour legislation, namely the Labour Relations Act, the Basic Conditions of Employment Act, the Employment Equity Act and the Skills Development Act.

In conjunction with legislation, other instruments such as government spending, taxation, and the provision of services such as health, welfare and education may be equally important in creating jobs for effecting a more equitable distribution of income, either directly or indirectly.

Creating jobs and ensuring the equitable distribution of income requires a common vision and co-ordinated action between government, business and labour. Our common endeavour to create a better and prosperous future for our country makes it imperative for us to include, amongst others, the following objectives: a need to continuously develop new strategies to sustain employment creation; raising investment levels; increasing labour absorption; broadening economic participation and increasing competitiveness; creating effective strategies to create employment in the formal economy to address the economic marginalisation that characterises the second economy.

Realising the aforementioned challenges, the Department of Trade and Industry’s five medium-term strategic objectives are, one, to promote the co-ordinated implementation of the Accelerated and Shared Growth Initiative for South Africa; two, to raise the levels of exports and promote equitable global trade; three, to promote direct investment and growth in the industrial and services economy, with particular focus on employment creation; four, to contribute towards the development and regional integration of the African continent within the New Partnership for Africa’s Development framework; and five, to promote broader participation, equity and redress in the economy.

Furthermore, the following policy initiatives will support the DTI’s strategic objectives just listed. The National Industrial Policy Framework’s objectives are to promote diversification, to facilitate progression up the value chain, and to foster growth in labour-intensive sectors of the economy. Implementing the policy will entail a range of incentives and interventions focused on job creation, investment and growth. Further, it is envisaged that an annual industrial policy action plan that identifies priority areas will guide implementation. Greater co- ordination between the different departments will be pursued through the economic cluster in order to overcome co-ordination failures in implementing industrial policy.

With regard to sector strategies, industrial policy work will focus on the implementation of sector strategies that have been finalised, and identifying action plans in sectors that have been flagged as priority sectors, such as capital goods.

In order to address regulation for growth, the department will put in place a range of regulations and legislation with the objective of contributing to the environment for growth. This, amongst others, will include the Companies Bill and amendments to competition regulation.

As far as enterprise development and broad-based black economic empowerment is concerned, the DTI will continue implementing strategies in support of enterprise development focusing on greater access to microfinance at the survivalist lowest end of the spectrum; the roll-out of infrastructure that provides financial support, such as the expansion of Khula; and the rolling out of the Small Enterprise Development Agency as a provider of nonfinancial support with expanded infrastructure to enable improved delivery.

Expanding trade and investment is critical in realising the objectives of Asgisa. In this regard, the DTI will focus on strategies to diversify and raise the level of exports, as well as promote foreign direct investment. Furthermore, the department will engage in a range of market access initiatives, in particular to contribute to the successful conclusion of the Doha development round of trade, as well as undertaking negotiations for free trade agreements with key countries such as China, India and other countries on the African continent.

In conclusion, consistent with the objectives of Asgisa, the outcomes the DTI seeks to realise are: One, an increase in manufacturing growth supported by sector strategies; two, increased industrial financing and broader economic inclusion; three, increased foreign direct investment; and four, overall growth in line with the Asgisa target of 6%. I thank you. [Applause.]

Mr J P CRONIN: Chairperson, in 1906 a young South African who was studying in the United States won a speech competition, which was a countrywide competition in the United States among college students. His name was Pixley ka Isaka Seme, and delivering his prize-winning speech, he said, among other things:

See the triumph of human genius today! Science has searched out the deep things of nature … taught the lightning to speak … spanned the sweeping rivers, tunnelled the longest mountain range, made the whole world a vast whispering gallery, and has brought foreign nations into one civilized family. This all-powerful contact says even to the most backward race, you cannot fall back, you must advance! A great century has come upon us!

Then he went on to predict an imminent African Renaissance. That was a hundred years ago.

Ours is not the only generation that has had the sense of living in the midst of an accelerated process of globalisation. Seme, who was one of the founders of the ANC a few years later in 1912, was of course celebrating the technological and scientific advances of his day – steamships, the telegraph system, railway engineering feats that spanned vast continents. These were the advances that, so Seme believed, had turned the world into one civilised family.

Over the past 30 years we’ve been living through another accelerated period of globalisation, spurred on in particular by the information and communications technology revolution. When we speak of globalisation and an era of globalisation, what exactly are we speaking about? The past 30 years? Well, certainly, yes, but also I believe that we need to see our past three decades as part of a general process that has been occurring in waves of acceleration for at least one and a half centuries.

For South Africa, the modern globalisation period begins really in the last quarter of the 19th century with the mining revolution. The most advanced forms of capitalism were imposed ready-made, out of the box as it were, from outside, with multinational joint stock companies, international finance houses, cutting-edge technology and modern logistical networks of railway lines and ports.

This global reality was superimposed, with the aid of a British army of occupation, of course, upon a geographical space that had seen a relatively extensive European settlement, as in other temperate zones like Canada, the United States, Australasia and parts of Latin America, which also had, unlike those other temperate zones and other colonial societies, a majority indigenous population still relatively intact, thanks to the durability of their societies and to the fierce military resistance that they had put up for some centuries.

It was this combination of three factors that laid the foundation of modern South Africa: an externally imposed imperial industrial revolution, extensive European settlement, and a black majority still present within the territory.

We speak nowadays of two economies, a so-called first economy and a so- called second economy, but from the very start our country’s insertion into the global circuits of advanced capitalism was based on duality. In fact, there were two kinds of duality, an internal duality and an external duality.

The internal duality at the beginnings of our industrial revolution was premised on a modern mining sector on the one hand and peripheralised labour reserves that exported not cotton, not tobacco, but labour - hundreds of thousands of male migrant labourers each year. It was labour that was reproduced cheaply, of course, for the mining houses, by peasant farming under the coercive domination of colonial and patriarchal power in the reserves.

But the mining revolution also involved another, external, duality. It integrated South Africa into the global economy as a semiperipheral exporter of primary products and as an importer of capital goods and consumer luxuries.

In the course of the 20th century, of course, many things changed, at least changed somewhat. By the mid-century a dual economy based simply on the articulation between an advanced mining sector and labour reserves was now taking immense strain. The war years, particularly in the early 1940s, had seen a vast expansion of secondary industry in South Africa and the increasing urbanisation and proletarianisation of black people. The overcrowded reserves were also in deep crisis and their ability to continuously reproduce hundreds of thousands of migrant labourers every year was more and more depleted.

Apartheid can be explained in many different ways, but one of the ways of understanding apartheid is that it was an attempt to sustain this dual colonial character of South Africa within a new reality. While the modern economic sector continued to depend to some extent on rural labour reserves, which were now called bantustans, increasingly, the internal dual economy was now characterised by a much more diversified formal economy and a mass of semiskilled black workers and their families, housed very often in peri-urban townships.

To forge this new relationship, the apartheid regime carried out harsh forced removals, it tightened up on influx controls and on many other coercive measures, including, of course, direct political repression.

But the apartheid government, we need to remember now in 2007, also delivered. It also rolled out mass housing, tiny matchbox houses in racially segregated townships, but mass housing.

It also delivered mass public transport. The late 1950s and early 1960s was the last time, until very recently, that any serious public transport systems were built, particularly rail infrastructure, which is why the average age of the Metrorail carriages is now 45 years. They date back to that roll-out.

There was also even the roll-out of mass education for the first time for the black working class. It was, of course, horrible, racially inferior bantu education designed to ensure basic literacy and numeracy for the new factory operatives. Now, none of this had anything to do with generosity of spirit or concern for the black majority. It had to do with ensuring a continued supply of suitable labour for the formal economy.

Indeed, apartheid succeeded in stabilising the economy and introducing growth. Between 1963 and 1973 the average growth rate in South Africa was between 6% and 7%. We have not succeeded in doing that since 1994.

Of course, in 1973 the global oil crisis struck and there was never to be a full economic recovery in South Africa until post-1994. Having done exceedingly well, thank you very much, out of white minority rule for many, many decades, by the mid-1980s the major South African corporations were increasingly restless. Apartheid could no longer guarantee profitability for them. The costs of repression, of militarisation, of regional destabilisation, of international sanctions and of an import-substituting industrial policy had become a huge constraint for them.

It was in these circumstances that big capital in South Africa began to support a negotiated settlement. Especially after the end of the Cold War, the risk of majority rule, from their perspective, seemed like a lesser threat than the stagnation of late apartheid. So, the new South Africa arrived into an era of renewed and accelerating globalisation, catch-up modernisation, liberalisation, access to markets, macroeconomic alignment and investor-friendly fundamentals. “Get competitive, -petitive, -petitive, -petitive, -petitive!” were the slogans of the day into which the new South Africa was born.

Indeed, we have certainly succeeded in stabilising the economy, ensuring that key sectors are globally competitive, and we’ve returned our economy to sustained growth. But this stabilisation and growth have gone hand in hand with the loss of 1 million jobs in the formal sector, with hundreds of thousands more workers being casualised. One million black farm labourers and their families have been forced off farms since 1994, as agriculture has been compelled to liberalise and become globally competitive on export markets. The growth of the past decade and the marginalisation of large numbers of working people are not disconnected phenomena. Similar patterns are to be found throughout the south over these past three decades.

So what can be done? In the first place we need to note that our growth path has not been, unfortunately, terribly dissimilar from the same growth path that integrated us for the first time into the global economy back in the late 19th century. Still today, our growth trajectory is excessively dependent on primary product exports, on capital goods and luxury consumable imports. Our economy continues to be characterised by dualities of all kinds, for example a dual labour market now, with the key division now being less racialised - that still is a factor - but increasingly between a small, permanent segment of workers in the formal sector on the one hand and a great mass of informalised, marginal, temporary and underemployed workers on the other.

We seem - I believe and I hope this is the case - to have stabilised our unemployment situation and perhaps there is some marginal growth in employment, but we’ve stabilised it at an extremely high level of between 35% to 40%. So, how do we address these challenges? Well, other ANC speakers have elaborated, on specific sector interventions, but generally speaking, first of all we need an active industrial policy that begins to transform our growth path away from its colonial mode of excessive primary product export dependence.

We need to transform the labour market in which we, among other things, need to overcome the unsustainable dualities that we find there, not least the widening - not narrowing, widening! - wage gap between upper levels of management, corporate owners and so forth, and the mass of workers. We also need, obviously, to address the huge problems of skills imbalances.

We need an accelerated agricultural and land reform programme, which is less about redress - that, of course, is important - but needs to be much, much more about ensuring sustainable households, ensuring that there is basic food security for millions of South Africans, many of whom are unlikely ever to find secure employment in the formal sector.

Above all, we need to build sustainable local economies in a world in which the so-called formal economy is increasingly unable to offer jobs to a large proportion of the world’s population, not only in South Africa, but right around the south. We need to affirm that socially valuable work is not necessarily a job, that work and jobs are not necessarily the same thing. We sometimes speak and think like the young Pixley ka Isaka Seme 100 years ago, as if the global trends that we are living in at the moment will just continue like this for ever.

But this era may end and it may end sooner than we expect. Somewhere in the next 20 years, perhaps sooner, oil production will peak and our oil-driven, globalised world economy will run out of bountiful, cheap energy. Will the global tourism industry survive? How will we compete, as South Africa, with our primary product exports, given our very long logistics chains and given the distance from our major markets, all of which are very energy-intensive and - consuming. What kind of global instability will oil scarcity bring? Already the opening rounds of what may prove to be a more generalised energy war are being waged in the Middle East as we speak.

It’s in this context that we need to understand that valuing local economic development, sustainable communities, sustainable households, land reform, and not just setting a premium on export-driven growth, is crucial. We need to value socially useful work like public sector teaching and health care. These are not just tax burdens - that’s how the rich view them - but they are also essential for building a caring society in the midst of an unsustainable global reality.

Building people-friendly communities, towns and cities that are walkable, where amenities are accessible, where it is pleasant and safe to walk or to cycle, are not just charitable acts to help the poor or to ensure a better quality of life for all; they may very well be the lifeboats for the challenges that lie ahead. Thank you. [Applause.]

Mr L M GREEN: Chairperson, at the centre of the economic philosophy of the prophets of a global economy is not a people-centred society, but a profit- centred society. People are viewed as an economic resource, not for their own improvement, but for the enrichment of those who would pay little to those whose economic power is only their labour.

Once their labour is no longer needed to enrich the rich, they will be discarded as a useless, redundant resource. It is believed that globalisation will address the divide between rich and poor. Countries will open their borders, relax exchange controls, scrap certain state subsidies, especially to farmers, and it is hoped that such policies will create a world market of equal access. Yet, when it comes to negotiating these initiatives, one soon realises that, the playing fields are far from equal or level.

Employment security is no more a guarantee, national governments are at pains to keep up with this global onslaught and the global monster appears to be ruthless. States will be required over time to relinquish their sovereignty if they want to be effective partners in a global economy. Foreign assistance will come at a price, and this price seems to come with diminishing benefits for the developing country’s citizens. Although labour- intensive job creation strategies will alleviate the plight of joblessness for a while, this cannot be sustained, since governments will need to develop at a faster rate to compete globally.

Yet, South Africa is a country with the infrastructure to build its skills pool and create jobs at a faster pace than certain other countries in our region. What is demanded by the global economy is that we are only as strong as our weakest neighbour. Thus, the more we aim to develop our economy, the more we must lend a hand and hope that our neighbouring countries will become partners in building the regional capacities. Thank you.

Ms H WEBER: Madam Chair, in a globalised world, investment goes to where the returns are the highest. If a market is popular as an investment destination, chances are that it will be able to provide more employment for its people and greater levels of employment security.

In South Africa we are hungry for investment in Greenfield Manufacturing projects, because of the acknowledged fact that such ventures will mop up the type of labour of which we have an excess namely, unskilled labour. In other words, we want this type of investment because it will create jobs where jobs are needed. Traditionally, South Africa has had difficulty in attracting this type of investment with the reasons being, amongst others, the regulatory burden of our economy, the high cost of doing business in South Africa, and our low levels of productivity.

Accordingly, it came as a surprise that government did not use the President’s state of the nation address, the recent one-year anniversary of Asgisa or the fresh-off-the-press Budget 2007 to bring about reforms or innovations that will address these problems in a substantial manner.

We need changes in our fiscal system that will stimulate investment in the production side of our economy, and there is room for it - R30 billion, in our estimation. Firstly, it is inescapable fact that our corporate tax regime needs to be looked at. We need to compete with other emerging market economies, whereas currently our effective corporate tax is more akin to the more mature economies such as the UK, the US and Canada.

It is no good that the Minister reduces the outmoded second tax on companies by a mere fifth, only to take what he gives by withholding tax on dividends. Our effective corporate tax needs to go down to below the psychological 30% barrier. This would require drastic reductions both in STC as well as in the primary corporate income tax.

Secondly, we need to put incentives for the creation of new jobs in the hands of employers and not waste wage subsidies on inappropriate applications such as income poverty relief, when the institution of a basic income grant and sectoral wage bargaining could deal with the latter in a much more fitting manner.

We need to look at our industrial policy. Far from seeing it as a discredited idea, the DA believes that effective industrial policy can make a very real contribution to job creation in our country, but not as it currently stands.

Government should stop wasting its time and taxpayers’ money on something that it is not competent to do - picking winners in the private sector. Instead, government should invest in strategy priority projects that will boost productivity and create interesting investment opportunities.

With respect to the latter, the conversion of our country’s five lame duck industrial development zone projects into export processing spring to mind immediately. These suggestions may seem bold, but they are affordable, and if government and the members on my right are serious about creating jobs and employment security in South Africa, then there is no way that they can deny their sensibility. Thank you. [Applause.]

Mr M J G MZONDEKI: Chairperson, Jenkins in his paper on ``Contrasting perspectives on globalisation and labour in South Africa’’ has this to say:

The impact on workers is a key aspect of the political debate about globalisation. Opponents of globalisation claim that it has been a major cause of job losses in the north, first in manufacturing, and secondly and more recently, in services as production migrates to low-wage countries.

It has also been held responsible for increasing wage differentials between skilled and unskilled workers, and seen as causing a shift in power from labour to internationally mobile capital. In the south, critics have focused on issues such as the exploitative conditions on export industries, and the instability associated with the expansion of footloose industries in the context of increased competition among developing countries.

On the other hand, defenders of globalisation argue that by increasing efficiency and growth, it creates new and more highly skilled employment opportunities in the north, whilst in the south, integration with the global economy is an important way in which countries can accelerate the economic growth and boost employment.

Now, whether we as South Africans are opponents or defenders of globalisation is another matter. The reality is that we are part of the world that is affected by globalisation. What is key for us as a country - I believe - is that we must be able to deal with the challenges that are brought about by globalisation, and to grab the opportunities. We therefore have to equip ourselves appropriately to take this challenge on.

I would like to focus on skills development, and specifically on employment security. There is no doubt that in order for us to compete in this new era we need new skills. Our oversight work as MPs in our various committees has clearly indicated that there is a great need for skills development. Hence, as government, we have embarked on programmes such as the national skills development strategy, the Joint Initiative for Priority Skills Acquisition, not only to compete globally, but also to achieve our goal, which is to improve the lives of all South Africans.

We have also noted the increased allocations in the Budget towards education so that our education system improves and assists us in producing the skills that we require.

We also note that there is great work in terms of making our roads, telecommunications, port facilities, etc, better. We note the efforts as a country to improve our infrastructure. We also know that, while we have been able to create more jobs, we have not been able to reduce unemployment.

The changing nature of work is a challenge. We are beginning to see more and more casual jobs, and more and more labour brokers, which have serious implications for employment relations. We observe less job security, as jobs become more and more short-term. We are beginning to hear noises about inflexible labour laws, and all these impact negatively on our workers, and our productivity. I am sure that my hon friend from the DA is an advocate of inflexible labour laws and, as the ANC, we know that there is nothing inflexible about those laws.

Bruno Trenton, in discussing rebalancing the employment relations at the International Labour Organisation, makes an observation that the new information and communication technologies, which have brought about a great leap forward in the process of globalisation, eventually affect all directly or indirectly. Far beyond the new economy, they are bringing about huge changes in types of skills in the very substance of the employment relationships and, more generally, in the postwar social contract.

He further refers to the introduction of new types of contracts, which we are very familiar with, like part-time, flexitime, temporary or even part self-employment, with very variable social protection in the form of retirement, sickness and unemployment. All of them are below those guaranteed by full-time indefinite contracts. I have no doubt that these are trends that we are seeing here at home. It is unfortunate that this is one of the evils of globalisation that we need to fight against.

He also refers to the firms returning to unilateral management of conditions of employment and working hours. These are rarely covered in collective bargaining, he says. I am also told, even if I do not have evidence of this, that the multinationals are now beginning to move into those countries where there are weaker trade unions. These lead to new insecurities in private and professional life, in family organisations and in male-female relationships. It is important therefore that, as find ourselves in this era, we must not allow the evils of the past to be smuggled back in the guise of globalisation.

It is important, I believe, that we should as a nation strive to strike a balance between being productive and competitive, and remain committed to the principles of decent work. That will need us to work together as business, labour and government. In doing our oversight work, we need to remain observant with regard to these trends and caution in time. It is clear, therefore, that, while globalisation creates new opportunities for growth and employment, it also brings challenges and problems such as job displacement and job losses, as well as increased stresses and tensions at the workplace.

However, it is important to be part of the trade and investment flows of the global economy. If we decide not to participate in these flows, we will remain as primary commodity exporters. Our efforts to improve in the beneficiation of resources such as diamonds, gold, and others that we are so blessed with, will go a long way to ensure that, while we produce the skills, we also create the opportunities for employment. Our legislative framework makes it possible for us to achieve these objectives. I believe that there is nothing wrong with our labour laws.

Finally, we welcome the announcements that have been made by the Minister of Finance toward economic services. We believe that the allocation of R17 billion for industrial development promotion, BEE, and small business development as well as the R1,2 billion for science and technology will go a long way to place us favourably in the global economy.

I just want to finally respond to the hon member Lowe from the DA, who will never finish any discussion without blaming affirmative action. He also wants us to forget the past. I am sure that we need to give him a bit of education, so that he can understand the reasons why we put affirmative action in place. It was precisely to deal with those imbalances that he wants us to quickly forget now. [Applause.] He talks about an education system that is poor. It is precisely that poor education system that has put us in the situation where we are, where we do not have the requisite skills. [Interjections.]

Mr C M LOWE: Madam Chairperson, I wonder if the hon member would take a question about the education system, seeing that he has so much to say? I would like to put a question to him. Thank you.

The HOUSE CHAIRPERSON (Ms C-S Botha): I think he is indicating that he is not going to take a question. Thank you. Please continue.

Mr M J G MZONDEKI: He fails to do that in the committee, so he can’t do it here.

The progressive laws in our country are in no way a reason for the people that decide to leave our country. There are countries that actually envy the laws that we have in our country. There is no way that, as the ANC, we are going to move away from the Employment Equity Act, which put this country where it is. Thank you. [Applause.]

Debate concluded.

The House adjourned at 16:49. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS:

National Assembly and National Council of Provinces

The Speaker and the Chairperson

1. Classification of Bill by Joint Tagging Mechanism

 (1)    The Joint Tagging Mechanism, on 1 March 2007 in terms of Joint
     Rule 160(6)(b), classified the following Bill as a section 75
     Bill:


     (a)     South African Judicial Education Institute Bill [B 4 –
          2007] (National Assembly – sec 75).

TABLINGS:

National Assembly

1. The Speaker (a) Report of the Public Service Commission on the Evaluation of Performance and Compliance with the Batho Pele Principle of Access – October 2006 [RP 233-2006].

(b)    Report of the Public Service Commission on the Evaluation of
     Performance and Compliance with the Batho Pele Principle of Redress
     – October 2006 [RP 234-2006].