National Council of Provinces - 29 May 2008
THURSDAY, 29 MAY 2008 __
PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
____
The Council met at 14:08.
The Acting Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 1354.
PRECEDENCE TO ORDER OF THE DAY
(Draft Resolution)
The CHIEF WHIP OF THE COUNCIL: Chairperson, I move:
That Order No 2 becomes Order No 1 and consequently Order No 1 becomes Order No 2.
I so move, Chair.
Agree to.
NOTICES OF MOTION
Mr C J VAN ROOYEN: Thank you, Chairperson. I will move at the next sitting of the House:
That the Council -
1) notes that the Council of the University of the Free State decided
to close the Reitz men’s residence on its main campus by 20 June
this year;
2) further notes that the university plans to convert the hostel into
a Institute for Diversity to make a contribution towards
transformation;
3) notes the misplaced displeasure of the FF plus and DA in the Free
State regarding this decision of the university; and
4) welcomes this announcement, which is a step in the right direction
and further calls on the university to further speed up
transformation.
Mr M A MZIZI: Thank you, Chairperson, I hereby give notice that on the next sitting day of the NCOP, I shall move on behalf of the IFP: That the Council —
1) notes that while thousands of municipal workers gathered outside
the council offices in Germiston to protest low salaries and other
issues, one worker, Wessels Lesenyelo, stripped down to his
underwear and made it known that he intended to urinate on the
mayor;
2) further notes that the police officers who were monitoring the
strike ignored Lesenyelo as he walked around in his underwear
hurling insults at the mayor;
3) acknowledges and supports the rights of workers to strike legally,
but expresses disapproval of the actions of Mr Lesenyelo; and
4) realises that Lesenyelo’s indecent behaviour was insulting and that
the police officers on duty should have arrested him for public
indecency.
INTERNATIONAL CHILDREN’S DAY
(Draft Resolution)
Ms D ROBINSON: Thank you, Chairperson. I move without notice:
That the Council –
1) notes that Monday, 26 May 2008, marked the beginning of Child
Protection Week which will culminate in the commemoration of
International Children's Day on 1 June;
2) further notes that the theme for the week is: "Getting South Africa
ready to implement the Children's Act";
3) recognises that a large number of our children, one of the most
vulnerable groups in our society, are still victims of neglect,
abuse and violence on a daily basis;
4) acknowledges the selfless role stakeholders in civil society and in
local communities have played in campaigning for the protection and
development of our children; and
5) calls on all South Africans to stand together to ensure that our
children are protected from all forms of abuse, so that they can
enjoy the benefits of freedom and democracy which they so rightly
deserve.
Motion agreed to in accordance with section 65 of the Constitution.
APPEAL APPLICATION TURNED DOWN
(Draft Resolution)
Mr Z C NTULI: Thank you, Chairperson. I would like to move without notice:
That the Council –
1) notes that on Wednesday, 28 May 2008, the Pretoria High Court
turned down an application for leave to appeal in the Supreme Court
in Bloemfontein against the conviction and 12-year prison sentence
for assault and murder by Christoff Becker, Frikkie du Preez, Gert
van Schalkwyk and Reinach Tiedt, also known as “the Waterkloof
Four”, who murdered an unidentified black man in a Pretoria park
six years ago;
2) further notes that on passing their judgment, Judges Willie Seriti
and Piet Ebersohn indicated that “there is no prospect that another
court could come to an alternative decision on both accounts”;
3) acknowledges that Magistrate Len Kotze branded the four as
“callous, cowardly killers without a shred of remorse, humanity or
conscience”, and sentenced them to direct imprisonment for the
December 2001 murder; and
4) takes this opportunity to reiterate its strongest condemnation of
the inhuman and appalling criminal act committed by the four who
are currently out on bail and using every trick in the book to
avoid serving their sentences.
Motion agreed to in accordance with section 65 of the Constitution.
DEATH OF VUYO MOKOENA
(Draft Resolution)
Nk M N OLIPHANT: Ngiyabonga Sihlalo, ngiphakamisa ngaphandle kokwazisa:
Ukuthi sihlalo siyile Ndlu yoMkhandlu Kazwelonke Wezifundazwe -
(1) siphakamisa ngokukhulu ukushaqeka nobuhlungu ukudlula emhlabeni komculi wodumo uMnumzane uVuyo Mokoena;
(2) Sithi umndeni, izihlobo, abangani, balale ngenxeba uMdali uphile futhi uthathile;
3) Singumphakathi sizomkhumbula ngengoma yakhe ethi, “Sakhiwe Phezu
Kwesisekelo”. (Translation of isiZulu draft resolution follows.)
[Mrs M N OLIPHANT: Thank you, Chairperson, I move without notice:
That the Council –
1) notes the death of the renowned singer Mr Vuyo Mokoena;
(2) would like to say to the family, relatives and friends to accept the painful fate of his death - the Lord gave and the Lord has taken; and
(3) acknowledges that as a community we will remember him through his song entitled “Sakhiwe Phezu Kwesisekelo”.]
Motion agreed to in accordance with section 65 of the Constitution.
DEATH OF ABRAM RASELEMANE
(Draft Resolution) Mnu S SHICEKA: Sihlalo, ngiphakamisa ngaphandle kokwazisa:
Ukuthi siyiNdlu yoMkhandlu Kazwelonke Wesifundazwe sifaka isiphakamiso sokuthi -
(1) siyoxoxa ngendaba yokuthi sixhase;
(2) nokuthi siyiNdlu yoMkhandlu Kazwelonke Wesifundazwe sizimbandakanye nokuzwelana ngokuhamba emhlabeni ngokukhulu ukuzuma komfana obeyiqhawe lokushaya amagoli, edlalela iqembu leBidvest Wits;
(3) kanye nokuthi lo mfana, u-Abram Raselemane, ushone ngoLwesibili eBloemfontein, eshona ngokuzibulala emuva kokuthi bexabene nomama wasekhaya, unkosikazi;
(4) sithi ke siwuMkhandlu sizwelana nomndeni, sizwelana nekhaya lakhe, ilahlekelwe iWits njengeqembu lezikanobhutshuzwayo, ulahlekelwe umndeni, silahlekelwe isizwe, ilahlekelwe iBafana Bafana ngoba lo mfana ubeke waba ngumshayi wamagoli kuBafana Bafana; futhi
5) sithi umndeni wakhe mawulale ngenxeba akwehlanga lungehlanga. (Translation of isiZulu draft resolution follows.)
[Mr S SHICEKA: Chairperson, I move without notice;
That the Council –
(1) will discuss the issue of supporting;
(2) expresses its condolences as a result of the untimely departure of a young player who was a remarkable goal scorer, playing for the Bidvest Wits football team;
(3) notes that this young player, Abram Raselemane, died in Bloemfontein, having committed suicide after a conflict with his wife;
(4) would like to say that we share in the pain with the family and his home and realise that Wits has suffered a loss as a football team, the family has suffered a loss, the nation has suffered a loss, and Bafana Bafana too because this young player was once a goal scorer in the Bafana Bafana team; and
(5) says to the family to accept the fate and pain and look ahead.]
Motion agreed to in accordance with section 65 of the Constitution. APPROPRIATION BILL
(Policy debate)
Vote No 19 – Defence:
The MINISTER OF DEFENCE: Madam Deputy Chairperson, the Minister of Trade and Industry Minister Mpahlwa, Deputy Ministers, members of the House, this debate takes place against the backdrop of a very unfortunate atmosphere in which, in the recent period, we have seen in our country violence erupting in communities against very innocent and desperate people. This is an event which in a very large measure has also undermined the image our country has been developing since democratisation, where South Africa has been exporting peace, bringing stability to troubled countries and reciprocating the goodwill that we had enjoyed whilst we were struggling for freedom in various countries of our region and beyond.
I take this opportunity today to present to this House or at least to announce to you the findings of the defence update, which maps out the direction we hope our National Defence Force should take in the period that lies ahead, perhaps up to 30 years from now.
The issues that informed the 1996 White Paper on Defence and subsequently the 1998 Defence Review centred on the transition to democracy and the resultant transformation of the Department of Defence.
The period leading to democratisation was characterised by a defence posture by this country, which was offensive, focused on subduing sections of the population as well as some of the countries of our region, especially those who showed themselves in support of the struggle for freedom.
Since we were democratised, we adopted a defensive posture concentrating largely on capacity to enable our nation to defend itself in the event it was attacked. Now, 14 years on, the situation has further changed, requiring a review and an adjustment of our approach to defence.
In light of the engagements that we have been in, conflict prevention, conflict resolution, peacekeeping and post-conflict reconstruction commitments, these impose necessary adjustments, if Defence is to remain relevant to the challenges that our nation is facing.
The adoption of a defensive posture has meant a full review of our support activities right down to the content of the training that we give to the soldiers in the National Defence Force. Members of the National Defence Force need to be equipped today with skills which give them versatility in peacekeeping, skills which once back, they can also take into society and contribute to growth and development in this country. In addition, the advancement of our African agenda has been a lodestar in the complex transformation of the Department of Defence.
The 1996 White Paper on Defence and the Defence Review two years later advocated the importance of civil-military relations, military professionalism, transparency, efficiency, effectiveness and economy in all defence activities. The above principles continue unchanged into the second decade of South Africa’s freedom and are now, to a large extent, encapsulated in domestic law and regulation.
The funding of a defence capability commensurate with functional realities and constitutional imperatives constitutes a major challenge to government and the Department of Defence, especially given that differences exist in terms of focus and priority.
The SA National Defence Force should only be employed within the means of what government can afford. The SA National Defence Force must therefore have the ability to provide military forces with the full spectrum of support during peace and war.
Since our first democratic elections in 1994, South Africa’s strategic environment has changed dramatically. We have seen in this period a movement away from Cold War thinking, with globalisation and an American hegemony taking centre stage in world affairs.
Presently, the danger of the shortage of resources threatens the stability in the world, particularly in the developing world. South Africa’s approach to security derives from these realities. And I remind the House of the main tenets of our present approach to security. First of all, the South African notion of national security is now premised on our commitment to multilateralism and effective functioning of multilateral institutions. These alliances have produced groundbreaking agreements like the Common African Defence and Security Policy, and the SADC Mutual Defence Pact, which in turn influence the common understanding we must have regionally in setting up the SADC brigade and continentally by participating in the African Standby Force.
Secondly, we have broadened the concept of human security to include political, economic, social and environmental matters. We aspire to operate on the basis of collective security. This is the collaboration among states in the defence and protection of an existing security order from mutually recognised threats.
Thirdly, national security is viewed as an all-encompassing condition, which includes the safeguarding of South Africa and its people against a wide range of threats, many of which are nonmilitary in nature. Since many of these sources of insecurity transcend state borders, collective action must be undertaken within multilateral organisations to provide adequate responses and lasting solutions.
We have an integrated approach to the security sector reform with particular focus on post-conflict reconstruction, especially in the areas of security sector reform and the successful integration of the armed forces. We understand that development and growth depend on peace and security.
We have noted the increasing privatisation of warfare, and that mercenary activity is a manifestation of unregulated foreign military assistance and has the potential to undermine legitimate constitutional democracies.
Climate change now has to be factored into our planning, since disaster management is one of our responsibilities deriving from our constitutional mandate.
Defence diplomacy is a very important area of our work since it ensures peaceful cofunctioning. We now have defence attaches’ in 32 countries and we are accredited to 52 countries. Maritime security, entailing the protection of trade and maritime resources including fisheries, seabed minerals and energy resources, has to be allocated resources as well.
The complex issue of crime must be discussed and understood in our different defence forums. Whilst the SA Police Service is responsible for this work, we may be called in at any time to support, and therefore we must be ready to do so at any time. Let me say at this point, however, that the SA National Defence Force has a range of capabilities to support all government departments in South Africa and not just the police.
Last but not least, the growing utilisation of the SA National Defence Force in peacekeeping has compelled a review of the distinction between primary and secondary functions. The above indicates the changed situation we find ourselves in since the 1998 Review. We have to align accordingly.
Indeed I may say to the House that the United Nations today relies on South Africa and therefore on the SA National Defence Force to secure elections, as far deep as Madagascar, as far as the Comores, disaster management as far as Ethiopia, world fires, terrorists attacks and the evacuation of victims as far deep as Tanzania and Kenya.
There’s hardly any of the countries of our region that is able to do this. South Africa, in fact, carries the responsibility for the entire region south of the Sahara.
However, responding to the changing strategic environment, the SA National Defence Force has increasingly been undertaking functions aimed at addressing conflict and stability on the continent, rather than being solely preoccupied with deterring or preventing an external military threat. Often people ask: Why are we devoting so much energy and time to stabilising countries around South Africa?
The issue is that unless South Africa is surrounded by stable nations – unless that is so - then domestic stability is in danger. You can see large numbers of people running away from conflict from various areas, putting pressure on resources and so on inside the country, and that also destabilises the country as it is. So, we do need to expand stability so that the people in the various countries surrounding us can live peacefully and are able to enjoy a better life there and have no need therefore to come here. We also needed to go to these countries when there was no stability at home.
When charting a new force design, therefore, a number of assumptions had to be made: Firstly, that long-term planning for the SA National Defence Force’s conventional capacity would determine the force‘s design and capabilities; secondly, that prime mission equipment would be acquired to equip for the defence and protection of the Republic and would be used in the execution of all other missions and tasks; and thirdly, in the short and medium term, mission specific tasks that require specific equipment would be sourced from the operational budget for each specific mission.
The Department of Defence has thus adopted the “core growth-one force” strategy. This concept has been retained as a fundamental design driver to establish a defence nucleus to maintain the required defence capabilities of the Republic.
The force design will provide a core nucleus of capabilities that can be expanded upon and developed should the need arise. This implies the need to ensure that all the necessary building blocks, such as doctrine, technology and training capabilities are retained at an appropriate level to provide the backbone to future growth as and when required by government. This concept gives equal prominence to the role of the regular and reserve forces.
We are now structured to meet this requirement. We have adopted the doctrine of command and control of the joint forces. This means we have combined force employment.
In terms of landward defence, and in the context of our defence objectives, the mandate to defend and protect the sovereignty and territorial integrity of the Republic means we must have versatility to counter a range of potential threats, for example, firepower and protection to engage potential opposing forces, but also the mobility to operate across the range of terrain that may be encountered.
Our contribution to global security implies long-term involvement in peace missions. We must have light, mobile forces and the ability to deploy and sustain such forces over considerable distances in remote areas, and into hostile and underdeveloped areas. It takes a lot of doing to provide support for our forces that are deployed in the Sudan.
And the weather conditions – the sandstorms which are not common here – require even that the dress code of our soldiers has to be able to adjust to those conditions. Many people see the people of the north with all these veils that they put on and think that they are merely there for decoration. Actually, that dress code is imposed by the speed of the sandstorms which have the capacity to cut the face and cause people to bleed. Therefore, those ``doekies’’ actually mean that people are able to cover their faces and only see with the eyes where they are going.
Our soldiers, dressed appropriately as they are now deployed in the Sudan in the Sahara, are confronted with those sandstorms and find themselves in difficulty. We have seen them with our eyes and we do now know that we have to acquire a new dress code that will make it possible for them to survive in conditions wherever we deploy them on the continent.
In terms of air defence, the South African Air Force provides a defence umbrella for other assets. It must therefore have the ability to detect hostile or illegal flights in the affected areas, but is dependent on other means such as aerial surveillance or mobile ground systems.
Maritime defence has three components: Surface, subsurface and air capabilities encompassing the defence of South Africa’s territorial waters and sea lines of communication. This is vitally important to effective maritime defence but cannot be done by surface vessels alone. Aerial surveillance by satellite and/or aircraft is critical. A suitable combination of systems is a key requirement.
I read in newspapers a few days ago that there was a very fallacious assertion that the SANDF has no crews to operate its submarines. Nothing could be further from the truth. Each of the submarines that we have acquired has a full complement as it was built in Germany. We were developing side by side with that process a full complement of naval staff, including engineers and everything, to look after it. We have a crop of the most competent well-trained young officers that man those submarines around the clock. At the present time we are developing access capacity that has to be available in the event we have to replenish or put others out of service or send them on leave; we have all of that in place.
I need also, of course, to add that we have moved on in terms of the Corvettes that we have acquired. We are able to say now without hesitation that we have bought the helicopters that match them because that increases the reach of the ships, radar detection and so on. All of those helicopters have their personnel in place and we are now able to operate them with those helicopters on the ships.
The health and fitness of members of the SANDF is central to an effective force. Comprehensive health care must be provided to all members of the SANDF and must also include a mobile capability for members deployed on operations. There is just one more word I would like to say on this – members of the House must take careful note of the point I am about to make. It is very unfortunate that there is a general public perception that comprehensive medical checks of all people who are recruited into the armed forces started with the advent of HIV/Aids. I want to say quite categorically that comprehensive medical checks have been part of the building of armed forces from time immemorial. Everybody building an armed force has to first and foremost make sure that each and every one of the people recruited is healthy, because if there are any people carrying illnesses which are not curable they cannot be taken.
There are some people who suffer from haemophilia. Haemophilia is a condition where people have blood that does not clot. If such a person is taken into the armed forces, even in training such a person will get scratched, will start bleeding and chances are that such person will die, especially if they are involved in operations far away from hospitals. You can’t therefore take someone with haemophilia into the armed forces.
Then there are people with other conditions – hepatic A, hepatic B – which cannot be corrected. If you take those people into the armed forces and you want them to run for three hours up a mountain for training they are likely to collapse and die. Now, you can’t take people that are not well and make them soldiers. HIV/Aids only comes into the picture now.
This practice has been with defence forces for centuries. You are the legislators. If a law was to be allowed that anybody who is sick could go into the armed forces, soon enough 90% of your armed forces will consist of sick people; sick people to defend healthy people! [Laughter.] You have to get healthy people who can endure the tough conditions to defend them. There are various other areas where we can look after people.
Now, if there are people who are sick or who become sick when they are already in the armed forces, we take responsibility for that. In our hospitals, whether it is HIV/Aids, broken legs or lost arms, we don’t throw them away, because they came in healthy. We look after them till the end of their days.
But we can’t go and take people that are already not well and bring them in. So, the recent pronouncement by the courts is being studied, and we are going to do some work to try and correct that situation.
The success of securing and stabilising areas of conflict depends to a large extent on a sound understanding of the conflict. The focus, therefore, of defence intelligence must move beyond the traditional focus on opposing military forces to include broader intelligence expertise.
The new force design must meet all the requirements we have outlined above. Note that the 1998 recommended force design levels were in many cases not achieved. It was finally decided that the Department of Defence is duty- bound to ensure that basic capabilities are retained despite severe budget constraints. The new force design is now ready and will be presented in detail to both the executive and the legislature within the next month.
The magnitude of this initiative requires that the programme be staggered against a clear prioritisation of the requirement. First priority will be given to those elements of the landward programme that are critical to the fulfilment of the international obligations of the Republic, namely the forces required for UN and AU peace missions, humanitarian and disaster assistance and those elements required for the SADC Brigade and the Africa Standby Force.
The second long-term priority will be the conventional elements of the landward capability. The understanding of this House of the tasks that lie ahead for the SANDF and the support for our programmes to be able to carry out our constitutional mandate is central to our success.
We are justly proud of our brave men and women in the SA National Defence Force, and this speech is dedicated to them. I take this moment to say to hon members that the SANDF and the youth of our country have been doing exceptional and outstanding work. As I talk to you, the African Union and the Sudanese are putting us under heavy pressure to lead the command and the mission in Darfur.
As I talk to you, the UN has recently insisted that we must take the command and leadership of the UN forces in the DRC. We had no choice and we accepted that. General T T Matanzima has now been appointed and he is now getting ready to take command of all the UN forces across the biggest of Africa’s countries, the DRC, to command that and consolidate peace. I thank you. [Applause.]
Mr J W LE ROUX: Chairperson, hon Minister and colleagues, the aim of the Department of Defence is to defend and protect the Republic of South Africa, its territorial integrity and its people. To fulfil its core function, the Defence Force must have funds and manpower. It is clear that the budget allocations will not allow the Defence Force to fulfil all its obligations.
Alhoewel die begroting met 7% verhoog is, is daar in reële terme feitlik geen addisionele fondse beskikbaar gestel nie. As ons kyk na die belangrike rol wat Suid-Afrika nou in vredesoperasies vervul – en dit strek regoor Afrika – sal dit haas onmoontlik wees om die begroting te laat klop. Hierdie nuwe rol, soos minister Lekota nou net gesê het, sal talle nuwe eise en uitdagings aan die Weermag stel. Daarvoor het ons genoeg geld en kundigheid nodig, Minister.
Wat die beheer en kontrole van Weermagfondse betref, is daar groot probleme. Selfs ons bateregister is onvolledig en nie op datum nie. Belastingbetalers betaal miljarde rande aan die Weermagbegroting en dit is die plig van die departement om te verseker dat hierdie fondse deeglik en eerlik bestuur word. Die aantyging van enorme korrupsie tydens die aankoop van wapens is nie net ’n skande vir die land nie, maar beïnvloed die moraal van belastingbetalers sowel as weermaglede.
Wat die territoriale integriteit van ons landsgrense betref, is daar groot probleme. Duisende immigrante stroom onwettig die land binne en die probleem wat dit veroorsaak, is nou baie duidelik. Die feit dat die Suid- Afrikaanse Polisiediens nou hierdie beheerfunksie van ons grense by die Weermag oorneem, gaan die probleem net vererger. Ek kan werklik geen rede sien waarom die Weermag nie gebruik kan word om ons grense te beskerm nie.
Dit is verstaanbaar dat die Weermag en SAPD verskillende funksies het om te vervul en dat hul opleiding verskil, maar in die lig van die huidige vlakke van misdaad, is dit noodsaaklik dat die Weermag die SAPD in hierdie verband moet ondersteun, soos wel nou gebeur. In dié verband wil ek graag die Minister bedank vir die humanitêre hulp wat die Weermag tans bied aan hawelose mense in Kaapstad. As die Minister nog huisvesting beskikbaar het, sal dit die probleem nog gouer vir ons oplos. (Translation of Afrikaans paragraphs follows.)
[Although the budget has been increased by 7%, in real terms virtually no additional funds were made available. When one looks at the important role that South Africa is playing in peace operations at the moment – and it stretches across Africa – it will be almost impossible to balance the budget. This new role, as Minister Lekota has just pointed out, will put several new demands and challenges to the Defence Force. For that purpose we need enough money and expertise, Minister.
There are big problems as far as the management and control of the funds of the Defence Force are concerned. Even our asset register is incomplete and not updated. Taxpayers contribute billions of rand to the Defence Force budget, and it is the duty of the department to ensure that these funds are managed in an appropriate and honest manner. The allegation of enormous corruption with the procurement of weapons is not only an embarrassment to the country, but also influences the morale of taxpayers as well as members of the Defence Force.
There are major challenges with regard to the territorial integrity of our country’s borders. Thousands of immigrants enter the country illegally, and it has now become clear that it is causing a problem. The fact that the SA Police Service has now taken over this function of controlling our borders from the Defence Force is only going to compound the problem. I really don’t understand why the Defence Force cannot be used to protect our borders.
It is understandable that the Defence Force and the SAPS have different functions to fulfil and that their training differs, but in light of the current high levels of crime it is imperative that the Defence Force should support the SAPS in this regard, as is the case right now. In this regard I readily want to thank the Minister for the humanitarian support that the Defence Force is currently offering to homeless people in Cape Town. If the Minister has more accommodation available, it will solve this problem for us more quickly.]
Minister, as far as the protection of South Africa against foreign invasion is concerned, what we heard in the committee was alarming. However, you have now said that as far as our submarines are concerned we definitely have enough trained men. What we heard in the committee was that we actually only had fully trained staff for one submarine and that the staff for the rest of the submarines were not fully trained yet. It was alarming to hear that, but I am very glad that you have corrected the misconception.
As far as the air force is concerned, Gen Gagiano informed the committee that virtually all his training staff has left the force. He said that in the very week that he addressed us, he had lost four senior trainers to the Australian Air Force. Here, again, the fact that we have modern fighter aircraft, Minister, doesn’t help us much if we don’t have suitably trained staff.
Dit bring my by my laaste punt, naamlik die gebrek aan gekwalifiseerde mannekrag. Dis algemene kennis dat die Weermag te veel kundige personeel verloor. Die Weermag moet bemagtig word om hierdie tendens om te keer. Alle regdenkende Suid-Afrikaners weet dat regstellende optrede nodig is om die diskriminasie van die verlede reg te stel. Dis egter ook waar dat die diskriminasie teen wit lede van die Mag die paraatheid van die Weermag benadeel het.
Ek haal graag aan wat die tesourier-generaal van die ANC, mnr Mathews Phosa, in dié verband gesê het:
Daar was baie onopsetlike gevolge van swart ekonomiese bemagtiging en regstellende optrede, soos byvoorbeeld die breinkwyn. Die skade, veral by ons plaaslike owerhede …
Ek sluit sy aanhaling en ek sit by … dit geld ook vir die Weermag.
… is ’n ramp. Daar is geen ander manier om dit te beskryf nie.
Dis weer Phosa se woorde. Mathews Phosa het gesê:
Die regering moet dringend ingryp en sorg dat ervare mense in sleutelposte aangestel word.
Ek sluit sy aanhaling.
Die Weermag se rol in Suid-Afrika is van uiterste belang en die Minister moet sorg dat ons te alle tye paraat is. Ons sit in Suid-Afrika met duisende werklose mense wat reeds Graad 12 geslaag het. Minister, is dit nie nou tyd dat ons weer kyk na ons stelsel van vrywillige weermagdiens nie? Ek dank u. (Translation of Afrikaans paragraphs follows.)
[It brings me to my last point, namely the lack of a qualified workforce. It is common knowledge that the Defence Force is losing too many skilled personnel. The Defence Force should be empowered to prevent this tendency. All right-minded South Africans know that affirmative action is necessary to correct the discrimination of the past. However, it is also true that the discrimination against white members of the Force has been detrimental to the preparedness of the Defence Force.
I would like to quote the treasurer-general of the ANC, Mr Mathews Phosa, in this regard:
Daar was baie onopsetlike gevolge van swart ekonomiese bemagtiging en regstellende optrede, soos byvoorbeeld die breinkwyn. Die skade, veral by ons plaaslike owerhede …
I close his quote and I add … this applies to the Defence Force as well.
… is ’n ramp. Daar is geen ander manier om dit te beskryf nie.
These are the words of Phosa once again. Mathews Phosa said:
Die regering moet dringend ingryp en sorg dat ervare mense in sleutelposte aangestel word.
I close his quote.
The role of the Defence Force in South Africa is of vital importance and the Minister should ensure that we are prepared at all times.
We have thousands of unemployed people in South Africa who have passed Grade 12. Minister, has the time not come for us to reconsider our system of voluntary service in the Defence Force? I thank you.]
Kgoshi M L MOKOENA: Chairperson, colleagues, hon members, comrades and friends, let me start off by thanking the hon Minister of Defence for outlining the strategy plans of the Department of Defence and all of its activities, and also to thank my colleague hon Le Roux for the wonderful speech. I agree with him in all respects of what he said concerning what happened during our budget hearing with the department. I thank him so much, because that’s what we are doing in our committee; politics take a backseat.
I only differed with him on two things that I want to correct, because we should not create an impression that only the Defence Force has the only people who are able to man our borders. It is not true, because the Police Service is getting the same training on how to man our borders. How do you differentiate between the two, because they are going through the same training, even though the Defence Force is trained differently. The police are trained to deal with people right there on the spot. On that issue I think we need to get our facts correct.
On the issue of discrimination against white force members, again, colleague Le Roux, I don’t think you’re right. For example, on the day we had our budget hearings with the department, the senior officials who were leading us in briefing the committee were our senior white officials whom we trust and love so much and who are very good. Even though there were black senior officials, they were led by white officials who were briefing the committee. So, the question of discrimination, I think, existed 10 years back, but not now.
Chairperson, I want to thank the Department of Defence because they were honest and frank and they didn’t shy away from acknowledging some of the shortcomings within the department. They were able to respond to some of the probing questions asked by committee members. This happened on 8 May 2008, when they came to appear before the committee. It was clear that in this department we have very dedicated officials whom we are very proud of, and they can only have our support.
Hon Minister, among other concerns that were raised by members during these budget briefings is the retention strategy or retention policy. As was said by hon Le Roux, it looks as if we don’t entice our members enough to stay in the Defence Force.
For example, we were told that we’ve lost not less than 900 members within 6 months who were poached by Australia. When we asked as to why our members are being poached by other countries, we were told that they are enticing our people by giving them better salaries. Of course, let’s acknowledge that we cannot match some of these private entities, in terms of giving better salaries. The number of pilots that we are losing as a department is too much. The question is: What can we do to curb this exodus of our skilled personnel?
Now, one other thing that was sharply raised by members is the question of the qualified reports that the department has been receiving every year. It has been so now for four consecutive years and this is not sending the right message to the public. We asked as to whether this department had audit committees and the department does indeed have audit committees. We asked what these audit committees are really doing, because these are the issues that were identified by the Auditor-General as challenges. They cannot identify the same issues for four years in a row and then still not address them. For example, it was shocking to learn that there were instances where you find that someone within the department had passed on, but the medical aid was still paying the premium even though this person was no more.
I am happy to say that the department has made this commitment to the members to say that qualified audits will be a thing of the past. We are very glad to hear this commitment from the department. Indeed, there are some of the serious issues that the department said they cannot respond to and they can only be responded to by the hon Minister. In terms of addressing these issues that were identified by the Auditor-General, we want to suggest that the department should dedicate some officials who will concentrate or only dedicate their focus on the issues that were identified by the Auditor-General. I think this will address some of the challenges that are faced by this department.
Hon Minister, we are happy that after the Lohatla incident you personally acted swiftly and were even on the spot and visited the family and gave them support. We appreciated that very much, because it is only people who have a good heart who can do that.
What I want to raise, hon Minister, is to find out whether, when we acquired some of these ammunitions from these countries or companies, we were notified that some of this equipment might have some deficiencies. If not, I think we have to make some follow-ups to find out as to why it was the case. If we don’t do that some people might conclude to say our members were negligent and I don’t think it might be true.
Now, one other issue that I want to raise, hon Minister, is the question of the famous - let me not say the famous but rather the notorious - ship that was seen on our shores carrying those dangerous weapons. When we asked this question to your officials, they simply said that they heard the question but unfortunately they were not qualified to respond to the question. Only their colleague, the political head, will be able to respond to the question.
I am glad and know that the hon Minister will respond accordingly as to exactly what happened, because there is the allegation that the department gave the instruction that it must be refilled for it to proceed to wherever. Some of us don’t believe that is accurate, but this myth can only be removed by you, hon Minister.
A concern that we raised a few years ago was when we were told that flying hours for our air force when they were training had been reduced. If it is true why were you forced to reduce these hours, hon Minister? We will be committing suicide. There is no way we can have people who are half- trained. If it is a question of funds it’s up to us as this House. We want to plead, not as a committee, but as this Council to fight on behalf of this department so that there is adequate funding. If we have people who are going to be half-trained, we are heading for disaster. If it’s not true, we will be glad to hear that.
Another issue that needs our attention, hon Minister, is the question of the court case that you referred to. We would like to find out if there will be any negative impact if you implement or adhere to the court decision about those who are infected or affected by the HIV pandemic. Just take this House into your confidence. What it is going to say to the department and even to the morale of other members who were not taken simply because of that requirement.
My colleagues hon A L Moseki and hon N J Mack will deal with other issues. I want to conclude by saying, hon Minister: We are happy that we’ve noticed there are officials in your department who were dedicated and ready to talk to the committee and even identified issues that the committee were not aware of, and pleaded for our support for them to succeed. They can only succeed if they receive support from this House. Convey our sincere thanks to them, even though we have told them. We are very happy to have such officials in our government. If we can have many such officials, we can be a shining example to other countries really. To you colleagues of this committee …
Re rata go leboga re re go lena go a bontšha gore le apeilwe ka pitša ya go butšwa. Le belegwe ke banna le basadi ba go tšea gabotse. Go a bontšha gape gore re kgonne go fenya go fihla mo re lego gona ka gore re šoma bjalo ka sehlopha. Go a bonagala gape gore ba a rereša ba kgale ge ba re: Tau tša hloka seboka di šitwa ke nare e hlotša. Ka gona ke re sethikwa ga se na maatla. Re a leboga. (Translation of Sepedi paragraph follows.)
[We would like to thank you. What we are conveying to you is that we are also aware that you are well trained. You were born and bred by principled parents. It is also an indication that we have conquered thus far, because we were working as a team. It is also clear that our ancestors were correct by stating that unity is strength. Therefore, nothing is difficult as long as we work together. Thank you.]
Mr N J MACK: Hon Chair, hon Minister, Deputy Ministers, hon members, special delegates and ladies and gentlemen, I know that hon Le Roux is a man of integrity and a very good man. I don’t think he ever wanted the perception to be out there that our Defence Force is weak because whites are leaving the force. I think we should stop the brain drain which involves both blacks and whites. I don’t think that is a perception that you wanted to send out.
Hon Minister, this debate is of personal significance to me also today. I will allude to this during my speech. During 1955, South Africans gathered in Kliptown at the Congress of the People and they declared for the world to know that the people shall govern, that there would be houses, security and comfort. The doors of learning and culture would be opened. There would be peace and friendship.
In this year, 1955, I was born. That is of personal significance to me. In 1996, the people spoke and declared through their Parliament:
Defence must serve to uphold peace and security in a democratic society so as to create a stable environment for the improvement of our people’s lives and for the development of progress of our country.
Today we gather here to debate a critical budget at a time when the SANDF is needed within and outside our country to uphold peace and security.
As our Minister said during his budget speech tabled in the National Assembly, ‘‘the SANDF is in demand everywhere’’. What is of significance also today is that this debate is taking place on the same day and same month I was born. [Applause.] [Interjections.][Laughter.]
The Military Skills Development System was started in 2003 to ensure the enhancement of the SANDF mission’s readiness for the systematic rejuvenation of its human resource composition, through yearly intakes of the county’s youth.
The ACTING CHAIRPERSON OF THE NCOP (Ms P M Hollander): I would like to bring to the attention of the House and the members here that Rule 32 says that during a debate in the Council, no member may converse aloud. Please take note. Thank you.
Mr N J MACK: The MSDS also ensures a continuous provision of personnel to the SANDF reserves. This system also provides the youth with skills and employment opportunities.
The programme is indeed welcomed, and gives a sense of hope for developing our future generations, and arms them with education instead of shooting children, as happened during June 1976 when commanded to do so by the previous regime.
Within 19 days from today we will celebrate National Youth Day. I challenge all members present here, as a small contribution or gesture towards upliftment, to download the application form for young matriculants between ages 18 and 22. Forward it to your constituency offices and to all high schools and other public buildings to target our youth to be recruited into the Defence Force. This is a small request.
Our 1994 democratic breakthrough had introduced a paradigm regarding the national Budget. It meant that the interests and aspirations of the poor and marginalised would also inform processes relating to the budgeting and allocation of our national resources.
The ANC subscribes to the instrumentalist view of the Budget. Hence it expects the government to use the Budget allocations to implement programmes that purport to change our society.
Debating the Budget becomes a strategic task of the ANC to determine whether the Budget takes into account policy priorities of the movement. The Military Health Support Programme provides prepared and supported health capabilities services for the defence and protection of South Africa.
Its measurable objectives contribute to the defence and protection of South Africa by providing medical support elements for deployed and contingency forces consisting of five medical battalion groups, including one specialist medical battalion group, and providing a comprehensive multidisciplinary health service to a patient population of 2 230.
This fits in with what the Minister said, namely that we give a health support system to our members when they are in the Defence Force. The SANDF has played a helping role even beyond our borders, because it also provided relief and rescue support to people of Mozambique who were trapped in floods.
Moreover, following the explosion at the ammunition storage facility in Maputo, the SANDF also provided support to clear Maputo of all the unexploded ammunition.
Members of the SANDF continue to provide peace, support and post-conflict reconstruction operations in various areas within the African continent. This should happen because the democratic movement harbours a firm belief that without peace in the SADC region and the continent, South Africa cannot be at peace.
While progress has been made, there are still challenges within these security forces. There are still those who have not fully accepted and internalised the Constitution of our Republic.
Afrikaans remains a dominant language at field level in the SANDF, as was the case during the apartheid days. At the middle management level of the SANDF population, demographics of the country do not seem to be reflected and this poses serious challenges when it comes to the leadership succession within the SANDF.
Serious attention should be paid to the issue of training and development of black members of the SANDF with a view to creating a pool of people to occupy middle management positions within the Defence Force and the department.
I am also concerned about the poaching of our members by other countries. I think that a better remuneration package should be there for our members that will support the Defence Force to keep the members that we need.
That is why I will also support the call for the Defence Force’s budget to be reconsidered and maybe more money to be allocated so that we retain our people. I also do believe that there are quite a number of internal labour- related matters that some Defence Force members are not happy with. Surely, Parliament should not involve itself with labour matters as such and it should be correctly addressed within the bargaining council. The ANC supports this budget. Thank you very much. [Applause.]
Mr M A MZIZI: Chairperson,
… uNgqongqoshe nePhini lakhe ngithi unwele olude. [… hon Minister and his deputy, I greet you all.]
The 2008-09 Defence budget increased from R26,2 billion last year to R28,2 billion this year. This represents a nominal increase of about 7,7%. However, if the average rate for last year is factored into the allocation of it, it is clear that the Defence budget has in fact decreased in real terms. I will return to this issue again later.
Over the medium term, the Defence budget will grow by an average of 7% per year to increase to R32,2 billion in 2010-11. If the projected annual inflation rate for the next three years is above that figure, it becomes clear that the Defence budget will not just stagnate in real terms, it may even go backwards, depending on the inflation figure.
With economic conditions worsening, it is likely that inflation over the next three years will be substantially more than 7% and the budget picture of the SA National Defence Force, therefore, looks very bleak. The IFP cannot find fault with the main objective listed in the department’s strategic plan for the next few years. However, we are extremely concerned that the budget cannot be aligned at all with the strategic objectives. Virtually all the individual budget programme allocations have gone backwards and the strategic objective cannot be met by allocating more funds. This means that the Defence Force itself will go backwards if the funding situation does not improve.
For a number of consecutive years the department has received qualified audits, and it is clear to the IFP that it is not in a position to effectively spend its allocation or properly account for the finances in terms of the Public Finance Management Act. This raises a question on the quality of the SANDF’s internal audits. Surely, if the internal audits were of a high quality, they would have raised early alarm bells to alert management to the problems.
The recent wave of xenophobic attacks on foreigners in South Africa has many causes, which I do not want to go into now, but these events have clearly shown that our country has inadequate immigration policies and that our borders are wide-open to anyone who wants to enter, whether for illegitimate reasons or not.
The IFP has long believed that government’s decision to transfer border control from the SANDF to the SA Police was a mistake. The SAPS simply does not have the manpower and other resources to carry out this very important function. The IFP feels that the SA Army should again be responsible for controlling our land borders, while the SAPS can deal with entry points such as airports and harbours.
I realise that the existing Defence Budget is inadequate to provide for the army to take up border control again, but the Minister must now push Cabinet for the reversal of its previous decision and lobby the Minister of Finance to release the necessary funds. The IFP supports the Defence budget, but we feel that it is high time that it should be increased to allow the SANDF to meet all its commitments and obligations.
Voorsitter, ek wou net die stelling maak dat ek ten volle met die agb Minister saamstem dat ons Weermag getoets moet word. Ons kan nie toelaat dat die siekes die gesondes moet dra nie. Baie dankie. [Gelag.] (Translation of Afrikaans paragraph follows.)
[Chairperson, I only wanted to state that I am in full agreement with the hon Minister that our Defence Force should be tested. We cannot allow that the hurt and the lame should have to care for the healthy. Thank you very much. [Laughter.]]
Mr A L MOSEKI: Chairperson, hon Ministers and Deputy Ministers, I see hon Sibiya wants to say, “Amandla”. It is fine to say that in this House. Is there something wrong with that? No, there is nothing wrong with it.
I just want to say that the security of a nation in a developing democratic state is the prerequisite for stability. South Africa, as a developing democratic state is a witness to this statement. Since 1994, South Africa has experienced peace and stability and those conditions have created an opportunity for socioeconomic development in our country.
These conditions have helped to advance the strategic agenda of the country to fight poverty and banish unemployment to a certain extent. In addition to that, the role played by the SA National Defence Force has also assisted to ensure that this environment that we have just alluded to prevails. It is our view that our national Defence Force must be commended for doing a wonderful job.
Over and above that, the SA National Defence Force has played a very strategic role in ensuring that peace prevails in Africa, particularly in the region that is known to all of us as SADC, but beyond that on the continent as a whole as well.
The debate on this budget today, Vote No 19, also gives us the opportunity to reflect on some of the concerns that we raised in the last financial year. In the last financial year we raised concerns about transformation in the various units of the Defence Force.
In particular we pointed out that the SA Air Force still lacked with regard to integrating other nationalities in the country. In a meeting that we held briefly with the department three weeks ago, we received a progress report that shows a great improvement in that respect, and for that we commend the department.
However, as the chairperson of the committee said, one challenge that seems to be arising with regard to transformation, particularly in that unit, is that we are losing these expensive skills that we might have introduced, like pilots, to the commercial sectors and to the foreign countries, particularly Australia.
The question, therefore, is: What are the strategic plans that the department has put in place to ensure that we retain these scarce and very expensive skills? That is very important, because if we don’t do that we will keep on training and using the little resources that we have to develop these skills, and at the end of the day they leave the country.
It is also important to point out that we indicated in the last financial year that we have realised that middle management of the Defence Force was still also lacking in terms of transformation. We are pleased to report today that a lot of progress has been made. However, there are challenges and in our discussions we raised the matter, and it looks like progress is being made.
There are still challenges with regard to gender imbalances, particularly at the levels that we are talking about. We were told that there is the good intention to ensure that this challenge is being addressed, but we want to urge you, Minister and the department, to develop an aggressive strategy and ensure that those gaps of transformation are closed.
Having said all these things, without really repeating what my colleagues have said, we want to say that we are satisfied as a select committee generally about the progress that has been made by the department in terms of driving the transformation agenda, of ensuring that our military forces remain disciplined, but we are also satisfied that many of our defence force units do participate in international peace missions.
We however think that in terms of ensuring that our forces remain ready for combat for the future activities that are unforeseeable now, we need to ensure that in addition to activities that we normally engage in, there should be other activities that keep our forces active at all times. Otherwise, if we don’t do that, we know, if soldiers are not kept active, what could happen.
It is in this context that in general we are satisfied with what the department is doing and we move as a select committee that this budget be adopted. [Applause.]
The MINISTER OF DEFENCE: Madam Chair, I start off by thanking the House for its general support of the budget. It is important that our nation today comes to terms with the reality that, on average, all nations of the world spend at least 1,5% of their GDP on defence needs. Under apartheid, this country spent up to 7% or 5% of its GDP at some point and those were huge quantities of money.
We don’t need to go that high. However, we must, given our responsibility, spend an amount of money that is commensurate with the responsibilities we carry. We estimate today that an average of 1,5%, as with many other nations, would go a long way to deal with some of the problems members have alluded to. Therefore, I am very grateful for that.
Let me deal briefly with some of the particular issues. We will never escape the loss of trained personnel to other industries and the private sector. All national defence forces suffer from this illness. This is simply because, generally, national treasuries try to maintain a certain level of the wage bill, whereas the private sector can choose to pay more.
Sometimes Checkers chooses to pay a CEO much more than what the country can afford to pay the President of the country, but if you are going to try and match Checkers and pay the President of the country the same as you pay the CEO, then there will be no money for water for people in Soekmekaar and so on. So, you have to keep a balance between what is available in the kitty of the nation and what you need to do for the people.
Similarly, with Defence, we have to sit and think every year about the fact that if we devote so much money to Defence, how much money will we have for housing; how much money will we have for medical care; and how much money will be available for social welfare. So, when you look at that balance, it becomes very, very difficult to come out where you would like to come out at. You work with what is available.
So, we lose trainers. We don’t lose them only to other countries. At the present time, there are other African countries that I approached in this regard. When we lose trainers here, I go and get trainers from other African countries because we can afford to pay trainers better that some other African countries. But what am I doing to that country? I am leaving it without trainers.
The first time I had to do this was because we had our own home-bred trainers finding all kinds of reasons why they could not train black youngsters to be pilots. They would say this one is too short. Then I would say to them: But the Chinese are shorter than this guy. [Laughter.] Then they would say to me: But this guy is overweight. Then I would say to them: Well, make him run and lose weight and then he must come and do this. But they would find all kinds of reasons.
Then I decided that if that was the situation, then I would get some of these trainers from other African countries because I really wanted to check whether these trainers who have been trained in very advanced countries would come with the same excuses.
Then some of our white home-bred trainers decided that if I was going to get trainers from some other country to come and do parts of their work, then they better go to Australia. I have nothing against Australia. The other time I spoke about this and then there was trouble. Others go to, of course, Virgin Atlantic or these huge airways companies. They can pay incredible salaries.
The only institutions that can really train pilots as well as the defence forces are other defence forces. Defence forces have jet fighters and all kinds of planes you can think of. So, when a pilot is qualified in the Defence Force, that pilot would have flown an aircraft that no civilian training thinks it can produce.
Civilian trainers want people who are thoroughly trained and therefore present the greatest possibility of getting people safe to their destination. So, they will pay any amount of money and salaries for these people. So, we lose these people as a result of that. But we are working hard on this. We are countering some of these things in the manner in which I am just saying now.
Then, the other issue I want to deal with relates to the suggestion that was made by one of the members that we must get volunteers – maybe go back to voluntary service and so on. But the Defence Force is voluntary. Anybody who wants to be a member of the National Defence Force may come. The reserve forces are kept there for people who can get training and who are prepared to do work even just for an allowance and not for a salary.
What we need above all is a youth that is patriotic. I keep saying to the young people who come to the armed forces that they must take a decision like the former President Nelson Mandela did; they must take a decision like all of the people who brought democracy to our country to say: I will give 5 or 6 years of my life to the service of my country. I will train as a soldier in any area. I will complete that – usually basic military training takes 9 months and you are done.
I will devote a further 4 years doing work in the national Defence Force. In the fifth year, I will then give way so that others can come in, and I can go and make money.
I talk to these people. We take them in and send some of them to universities as civil engineers and mechanical engineers. We send them to our military academies elsewhere and train them as pilots and all of that.
I say to them that once they have finished the course – whether as a pilot of a ship, pilot of an aeroplane, medical doctor, nurse or whatever – they must give us 2 or 3 years of their full-time training to plough back some of the money that we spent on them because that would be at the expense of the nation. They plough back into our service for the salaries that we pay – they don’t do it for free. After that they can go to the private sector and so on.
There will be others to take the gap and so on. They must do the same thing – a little patriotism of 3 or 5 years that they give. I tell them that Nelson Mandela gave 27 years of his life to all of us so that we could have democracy. The commander in chief, Thabo Mbeki, grew up virtually in exile, working for freedom and democracy to come. I am not asking them for 30 years; I am not asking them for 27 years. Oliver Tambo was there for more than 30 years, and Sisulu was there for more than 26 years. Patriots gave their lives. Bram Fischer gave his life.
They must give just 4 or 5 years to the national service and then take the skills they have and go back to their lives and make as much money as they want. But they must just give us this amount of time. Even if a big company comes and offers them big money, they must say to them: Sorry, you can get me after 5 years. These 5 years I am still giving to my country.
That is the philosophy we must really get our young people to understand. If we can get that, all of these training opportunities that are there in the national Defence Force would benefit the country and give it lots of skills. We would never say we are running short of pilots for helicopters, jet fighters and for this and that – personnel will be there.
Let me just deal with the question of the Chinese ship briefly. The national Defence Force is a military institution. The only harbour where we fix our ships is Simons Town. There is no commercial ship that can approach the national Defence Force and say we must give them fuel. We cannot do that. The only ships that come into Simons Town to refuel are those ships from countries with whom we have signed agreements – defence force to defence force.
As to why people think that the national Defence Force carries fuel to any commercial ship that might run short of fuel, I don’t know. We couldn’t possibly do that. It’s impossible. It is not done; it cannot be done; and it will not be done.
So, the ship that carried the cargo that was going to Zimbabwe was a commercial ship. I don’t even know which company it belongs to. They could never have gotten petrol or fuel from the national Defence Force at any stage. They could have bought it from somewhere else – Engen or somewhere else – and not from the national Defence Force. So, that already is a fallacy. When we leave here, our ships leave too. They can only fuel in at ports in the military zones of countries we have signed agreements with.
Therefore, when a country like Zimbabwe or Botswana buys equipment from some other country and so on, we are not involved in the transaction – we are not there.
Nevertheless, when the goods bought in that transaction comes here and that country is a member of the customs union, that cargo will be checked under the customs arrangement with the countries that are members of the customs union to which we are duty-bound. If we are satisfied that the cargo does not transgress any international protocols and so on, then we, of course, let it go. It gets checked and we let it go.
Zimbabwe is not a member of the customs union, but we inherited a bilateral arrangement with Zimbabwe. A lot of their cargo comes into Cape Town, Port Elizabeth and Durban harbours in terms of that agreement. It is checked just like all the others. They have to pay for their cargo and not the members of the customs union. The arrangement and agreement is there, and then we let this thing go.
Unless we don’t want this. If we didn’t want this, then we would cancel the agreement with Zimbabwe and say that we don’t have this agreement. Then, of course, none of their cargo could pass here. As long as that agreement is in place and it does not give us the powers to impound their cargo, then we cannot do so. We would be in contravention of international practice and international law.
So, I am only saying to members: We knew nothing of the transactions. All that happened is that Zimbabwe came to ask us … And, of course, we heard later that the company that owned the ship owed somebody and they ran away. We had nothing to do with that.
I am saying to members: If they had transgressed the law and the police went to court and got an order to say that the ship had transgressed such and such a law and must be arrested, we, not the police, would have commandeered it and we would have compelled it to stay here. It would have never left here. But there was no such transgression of the law and there was no such order of the court. We are not pirates. The national Defence Force cannot act like pirates and just take anybody’s ship. We can’t do that kind of thing. [Laughter.]
The last point I want to deal with is that of budgeting. As we deal with issues of budget, where sometimes we may find that we have duties to do but we don’t have sufficient budget, we look at everything that we have to do and then we may decide that such and such a project must be held in abeyance and take money that was budgeted for that and use it for other things.
When members say to you that we have reduced flying hours, practice hours and shooting hours, it means as a result of the shortage of money, we have not bought ammunition for daily shootings. So, maybe we can decide that soldiers will practice shooting thrice a week rather than every day. What that does is that it reduces training hours in terms of shooting, and it affects the efficiency and the sharpness of your armed forces. If you say we have reduced flying hours, it doesn’t mean that there is no flying. They do fly. It is now just reduced to lesser hours than what we would otherwise do if the budget was sufficient.
I have said to the members of the national Defence Force, and I am saying to the members of the House that this budget is going to be important as we move beyond this period. You cannot have an air force that is going around on foot. There is a difference between walking on the ground and flying.
So, if you say this is an air force, it must be up there in the sky. It cannot be on the ground. So, we have reduced flying hours. What this means is that our air force people are spending more time on the ground walking around rather than flying. This is a formula for disaster. I thank members for the support, and I wish you well. Thank you. [Applause.]
The ACTING CHAIRPERSON OF THE NCOP (Ms P M Hollander): We thank the hon Minister. We appreciate and congratulate you on your comprehensive and fact- finding speech. Thank you for participating in the debate.
Debate concluded.
APPROPRIATION BILL
(Policy debate)
Vote No 32 – Trade and Industry:
The MINISTER OF TRADE AND INDUSTRY: Thank you, Chairperson and hon members, ladies and gentlemen. I would like to recognise MEC Saaiman and thank him for attending our debate. Yesterday, in the NA we addressed the hon members on matters relating to the state of the economy. Through you, Chairperson, I would like to repeat some of the key points here today.
Firstly, we argued that at the inception of democracy this government was faced with the massive task of rebuilding the economy. In taking up this responsibility the policy choices were defined by the objectives of eliminating poverty, the reduction of inequality and to that end ensuring the sustainable growth of the economy.
There is no doubt that we have done remarkably well in this task, and there is no reason to doubt that we can and must continue to aspire to the higher rates of growth that we envisaged in the Accelerated and Shared Growth Initiative of South Africa. We must, all of us, aspire to continue this level of growth if we are to make further inroads into reducing unemployment, poverty and inequality.
Secondly, we expressed the view that our economy is stronger than it was at the dawn of democracy because, overall, the economy grew by 5,4% in 2006 and by 5,1% in 2007. Fixed investment, as a key indicator of the underlying capacity of the economy, had grown dramatically from 15% in 2004 to 21% of gross domestic product in 2007. Real income per capita had been rising at around 4% per person annually since 2004 and the rate of unemployment fell from 31,2% in March 2003 to 23% in September 2007. This translated into an increase of approximately 1,8 million employed people and meant that employment was beginning to respond to the economy’s higher growth rate.
Thirdly, and very significantly, the majority of new jobs since 2004 have been within the services-related subsectors of trade, construction, financial and business services, as well as manufacturing, which together also reported the highest rates of GDP growth.
Growth in these areas was significant, because it has shown that our economy has undergone deep structural changes and that the fastest growth had taken place in increasingly diverse and new sectors of the economy. In fact, the data I have quoted revealed that there is a strong underlying growth momentum in the economy that should ensure its resilience in the current environment and sustain the upward trend over the medium to long term.
While we found that the domestic manufacturing sector could not take full advantage from strong demand conditions, both globally as well as in South Africa, as it was operating at almost full capacity, this should change as the sector has been re-capitalising and investing in new capacity with a view to expanding production in the future.
Quite clearly then, our growth has thrown up a set of new challenges, such as the electricity supply and pressures on our infrastructure, but it is in taking up these challenges that we also now have very significant new opportunities to exploit for the benefit of our nation. These new opportunities involve responding to the everyday needs of our people, our enterprises and industries for more and better infrastructure, means of public transport and freight, amongst others. The Department of Trade and Industry has a key role to play in assisting industry to respond to these demands.
In addition, as the demand for goods and services increases in South Africa and as we vamp up our capacity to respond to them, we would also find that our capacity to export would be increasing. In turn, as our exports increase and are diversified through increased value-addition, it would impact positively on the current account balance and help reinforce macroeconomic stability.
It is for this reason that the department had and would continue to pursue strategies that would respond to these new opportunities. In this regard, the National Industrial Policy Framework and the action plan that we have developed has, as its central objective, the diversification and strengthening of manufacturing with an emphasis on nontraditional tradable goods and services and labour-intensive activities.
Therefore, this framework had become the fulcrum on which our interventions in the real economy would rest. So, we would continuously expand our access to markets, encourage investments and boost our exports. Simultaneously, we have and would be continuing to promote competition, vigorously combat anticompetitive behaviour in certain industries, protect consumers, and broaden participation by encouraging massive growth in small businesses and co-operatives as well as promoting broad-based black economic empowerment.
As a whole, these initiatives must be undertaken in a co-ordinated and integrated manner which would enable us to reach the objectives of halving unemployment and poverty by 2014, as set out in the Accelerated and Shared Growth Initiative for South Africa programme. It is clear that pursuing these objectives is not the responsibility of the Department of Trade and Industry alone and we have been involved in intensive intradepartmental and intergovernmental co-ordination, including through the Economic Cluster and Minmec.
As you know, in the context of the economic cluster, our work is focused on three key areas - enhancing economic efficiency in the economy, promoting dynamic growth sectors, and growing small enterprises. And the Minmec is a vital forum and vehicle for us to engage and co-operate with provinces on these matters. In fact, we now have absolute clarity on what needs to be done and we have moved forward in implementing this plan.
Implementing our plan requires a national effort and no person in this country, in whichever province he or she may reside, would be left untouched by these developments. But, indeed, at the policy and implementation levels it had been our experience that engagement with the provinces improves the depth and robustness of our work. During the past few years it had, therefore, been our privilege to work with provincial governments and municipal structures as we set about together building our economy. Our working together has enabled implementation in very significant ways and ensured the broadest possible impact of national policies and strategies.
For instance, the implementation of the Industrial Development Zones programme is an excellent example of how the efforts of the three spheres of government could be focused to achieve commonly desired goals. Since I last addressed this Council on this matter, the regulations of the Industrial Development Zones have been amended in order to remove the ultra vires provisions of the customs and excise section, as well as in relation to issues regarding Value-Added Tax administered by the South African Revenue Service.
In addition, the IDZ enterprise permit has been replaced with broad guidelines which operators should comply with in assessing whether or not an enterprise could locate or trade within an IDZ or the customs-controlled area. These amendments are improving the ease with which the establishment and operations of the IDZs could be taking place and, together with the completion in February this year of the IDZ Operational Guidelines, has done much to promote investor certainty.
I can also report that the Industrial Development Zone Policy Review has been completed and presented to Minmec and other relevant stakeholders for input. Furthermore, we have completed an international benchmark study to ensure that we develop a competitive value proposition, and I am confident that we will have a new policy in the near future.
Together all of these initiatives and the possible introduction in future of IDZ legislation will allow us to adapt our programme to ensure that we build on the momentum that has been generated in the four designated Industrial Development Zones. And certainly, what we have seen is that the zones are increasingly being seen as attractive nodes for manufacturing and related service industries. For instance, I am informed that the Coega IDZ has been able to generate private sector investment in excess of R49 billion.
An interesting story to emerge from this IDZ is with regard to the firm Dynamic Products, which exports frozen yoghurt and pepper. The firm employs 650 people of whom over 80% are women, all from the surrounding areas, and the suppliers are mostly emerging farmers from the area. In using this business model, the firm is successfully exporting 25 tons of yoghurt per day to the United States, Canada and Europe.
I relate this example because I think this is a good case study of the economic benefits to communities surrounding IDZs and, in particular, the potential for surrounding communities to build sustainable businesses based on the anchor IDZ investment.
We are, therefore, encouraged that the Richards Bay IDZ has secured major investors and that the Johannesburg International Airport IDZ is set to begin operating in the foreseeable future. Similarly, now that an international airport license has been granted to the Mafikeng Airport, a major obstacle to the designation of the Mafikeng IDZ has been removed and further work can be done in this regard.
We have made this progress even though we could not take anything for granted when we undertook these initiatives. Yes, there are and will be challenges, but the fact is that we are succeeding in attracting investments that would not have materialised without the active intervention of government to enable such investments.
It is in this context that I raised the investment opportunities regarding business process outsourcing in the National Assembly yesterday, and I wish to do the same here today. Because over the next few years the global BPO industry is forecast to grow at approximately 50% per annum and because we have several competitive advantages to offer investors, a window of opportunity exists for South Africa to realise significant value by developing this sector.
In fact, since the department started supporting this sector in 2007, over 9 000 direct jobs have been created and approximately R700 million worth of investment value realised. At the outset we set a target of 100 000 jobs and current indications are that we can achieve this if we continue to work hard at promoting this sector.
I raise this matter here, since I believe that BPO offers an opportunity to achieve some of our regional development objectives as, already, a number of localities - some in rural areas - have been identified as suitable for call centres. But I also raise this matter here, because the mere possibility that such a highly technology dependant industry can locate in a rural area should alert us to the great many possibilities of investment for economic development in whichever province or municipality we may find ourselves. And provinces must become increasingly alert to this new range of possibilities.
Consider for instance that the DTI has during the past year - in its work to mobilise domestic and international investment - generated a pipeline of 74 projects worth R206 billion with the potential to create more than 30 000 new jobs. Of this, domestic investment projects are worth R153 billion and foreign investment worth R53 billion, and already, R171 billion in the pipeline is committed or is in progress with manufacturing accounting for R19,7 billion of this investment, resources accounting for R182,7 billion and services R3,6 billion.
I am also glad to be able to report that our trade and investment division has had great success working hand in hand with provincial investment agencies leading to the very significant Heineken brewery and associated investment in Sedibeng of R7,7 billion; the new R3,2 billion cement plant investment in Mafikeng, and the Unilever and Cognis investments in a R750 million Hoodia extraction plant in the Western Cape, as well as agronomy investments in Karbees in the Northern Cape.
In the same way as the spin-offs from the IDZ investments, these investments will result in enormous opportunities for especially black- owned companies entering the manufacturing sector as suppliers in glass bottling and canning. Furthermore, procurement opportunities from local companies will be released in respect of raw materials, construction, distribution, warehousing, transport, marketing and advertising.
I have spoken in detail of these opportunities to illustrate the importance of building local economic development capacity to ensure that we can respond effectively to the type of investments I have described. In this regard, we have as the department, working with the Department of Provincial and Local Government and other role-players, begun to implement Project Khulisumnotho, which involves, during 2008, addressing the Local Economic Development, LED, capacity-building needs in 17 of our district municipalities.
The intention of this project is to assist district municipalities or metropolitan areas in building capacity in order to ultimately develop credible LED strategies and bankable projects with viable business plans, thereby allowing them to take up investment opportunities when they arise.
However, a key aspect of sustainable LED capacity-building is the involvement of provinces in identifying the broader regional economic projects that are of industrial significance and that will impact on the selected districts, and I thus urge all provinces to partner with us in this project. In this way, from national to provincial to municipal levels, we can jointly give impetus to industrial development on a more regionally spread basis, which in turn can sustain growth in our economy for generations to come.
Finally, through you, Chairperson, I wish to thank the National Council of Provinces and the select committee in particular for its role in the DTI’s legislative programme. Since 2004, the Council has applied its wisdom to, amongst others, the National Gambling Act, the National Small Business Amendment Act, the Co-operatives Act, the National Credit Act and legislation relating to our technical infrastructure.
All of this legislation, together with those pieces of legislation that you will be asked to consider this year, have a huge impact on our society and our economy. We are privileged to have been able to walk this journey with you. I would like to commend the DTI budget to this House. Thank you. [Applause.]
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Ms E Thabethe): Chairperson, members of the National Council of Provinces, hon members, ladies and gentlemen, I know that today is the Cell C Take a Girl-Child to Work Campaign, but I hope the members will accept the explanation that yesterday, as the Department of Trade and Industry, DTI, we brought about 10 girls to work and they attended the Budget Vote in the National Assembly, but they had to go back to school today because they cannot miss two days of school. We want them to be good students. They were from the Eastern Cape from Zweledinga High School. We hope that they are going to further their business opportunities as upcoming young businessgirls.
One of the resolutions taken at the last national conference of the ruling party states that the building of small and micro enterprises is a critical developmental challenge which requires the state to deploy resources, to build capacity and institutions. The Department of Trade and Industry fully concurs with this sentiment as well as with all the references to improve the quality of life of our communities, in particular those in the rural and peri-urban areas.
If you are to give true expression to this resolution we must intensify and strengthen our implementation of initiatives that make the most of the economic potential of every province in the country. In this regard I can proudly say that the department has, since 11 February 2006, been on a campaign to provide our rural and peri-urban communities with the tools to make the correct decisions that will improve their lives.
What we have done as an initiative from DTI has been to embark on a campaign of taking the DTI to the people. We have visited the 52 district municipalities, including the metros; approximately 33 of them. It is my full intention to visit all 52 with the assistance of the communications and marketing divisions under the leadership of Clement Manuku, present here today. Attendances to these events have an average of 700 to 800 community members, of which two thirds are often women.
Through the campaign the DTI has focused on this support offered for enterprise development, not only by the DTI, but also by its agencies, as well as by our provincial governments, districts and local municipalities. The campaign is in line with commitments we made to our nation of government’s commitment to working with communities and to ensure progress in creating awareness about government’s programmes for enterprise development support.
Feedback from the campaign indicates that government needs to intensify its effort to make the economic environment friendlier to the growth and sustainability of Small, Medium and Micro Enterprises or SMMEs. In this regard the DTI sees co-operatives as an important vehicle to support enterprise development in rural and peri-urban communities.
Over the past five years the department started implementing the provisions of the Growth and Development Summits, and agreements of 2003 including the establishment of a fully fledged Co-operative Development Unit. The Minister participated in some of those Growth and Development Summits, GDS. The total number of co-operatives currently is approximately 17 000 that are registered with the Companies and Intellectual Property Registration Office, Cipro.
KwaZulu-Natal, with 40%, leads, followed by the Eastern Cape 19% and 10% in Gauteng. KwaZulu–Natal has emerged to achieve high levels of performance and provides the best practice on how to successfully promote co-operatives within the country. In some provinces the provincial treasuries, for example, KwaZulu-Natal, started setting targets for the departments to set aside certain percentages of their procurement to co-operatives.
This resulted in the fact that linen used by the KwaZulu-Natal health department is produced in this manner by these co-operatives. This best practice requires closer examination to provide lessons that could be emulated throughout the country. Member of Executive Council, MEC Mkhize, is one of those best placed to give us those lessons. Well done to you and your department.
Whereas a great deal of progress has been made by government and other role- players’ efforts to promote collective entrepreneurship and development of co-operatives, some important challenges still remain. This change of mind- set for South Africans, who either interpret co-operatives as poverty relief projects or as an entity only meant for agricultural purposes, is also a particularly difficult challenge.
Despite these challenges the DTI will utilise the process of finalising the Co-operative Development Strategy to outline a number of programmes to strengthen the support programmes designed to build the co-operative movement in SA.
I would be doing this House a disservice if I failed to mention that this year we saw the launch of the Isivande Women’s Fund. The fund is critical and aims to unleash the entrepreneurial potential of many women. The Deputy President in conjunction with the Minister officially launched this fund in February this year. The fund is set to be capitalised with plus minus R500 million in total aimed at providing affordable enterprise loans to women ranging from R30 000 to R5 million. We are aiming to have the fund operational by August this year.
The SA Women Entrepreneur’s Network, SAWEN, is busy with the gender and women empowerment unit together with the Industrial Development Corporation, IDC, to make sure that women can then access this money and be trained on how to use the money.
I would like to take this opportunity to thank those who have made a positive contribution to our work, Minister Mpahlwa, Deputy Minister Davies, our Directors-Generals, and DG Matona. I wish to express also to the Deputy Director-Generals, DDGs, present our thanks for their support in ensuring that our policies make a meaningful contribution to the lives of our people.
Special thanks also go to other officials and the DTI and its agencies who week after week participate in the taking of the DTI to the people campaign, who go to deep rural areas leaving behind their families often for days, in order that they may fulfil the task of informing communities about the services that this department is providing. I hope that they will continue to do this good job.
I also want to congratulate the officials from the creative industries led by Nadia Surjee for making sure that we can win accolades for the department this year. Under the handmade collection we won, in Durban, the Decorex gold award and a certificate at a Decorex Cape Town. The DTI has been instrumental in raising awareness of the work of our crafters by giving them national and international exposure. The Decorex event was one of these.
Allow me to thank our provincial counterparts for supporting the work undertaken by the DTI, especially in the Northern Cape where we have a good working relationship with the MEC, present here today, and the premier. We hope that we will be able to continue the good job. The achievements which I have highlighted would not have been possible without their assistance. I thank you. [Applause.]
Ms S S CHEN: Hon Chairperson, hon Minister, hon Deputy Minister and all my hon colleagues, ladies and gentlemen, the current uncertain economic environment in the United States and Europe amidst the global credit crisis are issues for concern. This is compounded in the context of the global economic slowdown, the increase in petroleum prices as well as higher domestic interest rates. This is of particular concern due to the negative impact on consumer spending, on which our GDP mainly relies. All these negative aspects will no doubt test the quality and durability of South Africa’s economic growth and employment creation.
As the department provides leadership to South Africa through its understanding of the economy and its very important role as the co-chair of the economic cluster, it should listen widely to all input offers. It is extremely critical that the DTI enhances its capacity and position as the department for implementation of a “Business Unusual” approach. We often have a well-intentioned policy, but when it comes to implementation, it does not achieve the original good intent. An example is the curb on imports through the implementation of quotas on Chinese products. This policy has done little to improve the local industry as retailers have simply turned to other countries for imports.
As our broad unemployment rate remains stubbornly high, it is time for critical interventions on the part of the DTI to enhance and grow our SMME sector. We have spent a long time arguing and debating about policy and the structure of SMME development, but now is the time for action.
International experience has proved beyond any doubt that a SMME-rich economy equals a healthy economy. The phenomenal economic success typical in Asian economies shows that SMMEs are comprised of 99% enterprises. Over 60% of the economy is comprised of private sector employment, while 40% of the economies are involved in exports. Taiwan and Korea are leaders in the Asian model of economic development and they have relied heavily on SMMEs. In these two countries, SMMEs provide about 80% of the private sector’s employment. It will be beneficial for us to share and learn from their experience.
Recently I heard of the DTI’s new idea of the Move the Ten Product Plan of government procurement to the SMME sector. This is much welcomed as our SMMEs have always faced difficulties in accessing markets. It is time for us to provide open and equal opportunities for all. We acknowledge that the department is facing huge challenges ahead and we sincerely wish for our hon Minister and his department to have the wisdom and strength to lead our country forward. I thank you.
Ms M P THEMBA: Hon Minister, Comrade Mpahlwa, hon Deputy Ministers, Comrade Thabethe and Comrade Davies, hon Chairperson and hon members of this very important House; hon Deputy Minister Thabethe, we really appreciate the fact that you brought girl-children to work yesterday and we also agree that you could not have let them out of the classroom again today for two successive days. It is our considered view that today you could have brought others from different schools and we hope that in future you will alternate them so that they can know that Parliament is made up of two Houses.
There has been quite substantive progress in transforming the economy in order to benefit the majority, especially the poorest of the poor or, rather, the previously disadvantaged. The Budget Vote in front of us today really presents the ANC with an opportunity to objectively look at whether its policy objectives are adequately met through the implementation of government programmes. This Budget Vote presents us with an opportunity to reflect on what is objectively possible, given the available resources and prevailing circumstances. Accordingly, as the ANC, this year’s entire Budget process presents a very critical period, especially for trade and industry, looking at the circumstances forming what one chooses to call subjective factors.
This point actually becomes more relevant within the spirit of the 52nd National Conference of the ANC where there has been more emphasis on certain issues and the current Budget Vote should effectively address those areas emphasised. The DTI has been very effective in the manner in which it structured its programmes. For example, 19 existing agencies each have a medium-term plan that outlines its contribution to the achievements of DTI’s transformation strategy. The extent to which the DTI exercises oversight within the 19 agencies immediately becomes a very critical measurable area for providing credible and customer-centred services that enhance service delivery.
The 52nd conference also stated that there is a need –
Building and strengthening development finance institutions, as well as nonfinancial institutions, which are accessible to the people, and which are able to effectively channel financial and institutional resources towards a variety of economic transformation objectives.
As the country is depending on the DTI’s programmes to rescue all those trapped in poverty and unemployment, the DTI has outlined areas of policy development and selected achievements which include industrial policy, broad-based participation, equity and wider access to customised sector programmes, exports and investment and many more.
In this regard, one would expect one day to see an independent, profitable and commercially viable women’s Sasol-like or youth PetroSA-like and many more big industries run by our daughters and sons, brothers and sisters and also those with disabilities, amongst others. I am saying the above because the DTI has moved miles with establishing bodies such as SA Women Entrepreneurs Network, Technology for Women in Business, and others. Those bodies should be in a position to assist in building the kind of big businesses that I have mentioned above.
As for co-operatives, there is a need to position those collective forms of ownership as equal alternatives. The DTI as the custodian of co-operative programmes has established the interdepartmental committee to co-ordinate co-operatives development activities and programmes with key departments, or even better vehicles to pursue economic participation and creating wealth in the same manner as close corporations. I am very proud to mention that in all these areas there have been significant successes which the DTI stipulates clearly in the estimates of the national expenditure for 2008. As the ANC, we therefore support the Budget Vote. I thank you.
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Dr R H Davies): Chairperson, Minister, MEC Saaiman, hon members, I want to use my time to focus on matters of spatial and regional economic development and the role of the different spheres of government in this endeavour.
But before I do, I need to respond to some of the remarks made by the hon Chang about the quite extensive agreement with China covering certain clothing textile products. I need to make it clear that we never saw this as a panacea that was going to solve all the problems in the clothing industry, rather it was a measure which would provide a breathing space during which we could elaborate on a series of plans to deal with the productivity issues in that industry.
Although it’s true that there has been an increase in imports from countries other than China, figures which I tabled here in this House in response to questions a few weeks ago indicate that the volume and the value of imports from other countries have been much less than the reduction in imports from China. In fact, we judge that a breathing space has been provided. In the meantime, we’ve been working energetically on a new package of support measures encouraging productivity and capital upgrading.
Our Constitution is singularly vague when it comes to prescribing the roles of national, local and provincial government in the area of economic development. Schedule 6 of the Constitution defines trade without any further qualifications as a concurrent function between national and provincial government and all spheres of government recognised within the framework of the ambition to create a developmental state, that they have roles and responsibilities in promoting local economic development.
As we move into the elaborated and more importantly the enhanced implementation of our industrial policy, however, practice rather than just theory will require of us that we sharpen our definitions of the respective laws of the three spheres of government in this regard.
The National Industrial Policy Framework and the Industrial Policy Action Plans, which have emerged from it, have involved the selection of priority sectors. Simultaneously, provinces have embarked on growth and development summits, which have also identified within the provinces a number of priority areas and sectors. At the same time, the local growth and development summit processes in district municipalities have performed similar functions at that level.
What these three exercises demand of us is firstly that, within the spirit of co-operative governance, we ensure a level of co-ordination and harmonisation and, secondly, that appropriate support measures are put in place to ensure that the actions of departments operating in the three spheres of government are mutually reinforcing.
It has not been necessary at the level of evolution of our industrial policy to date to exercise hard choices about what projects and programmes arising from provincial and local government processes national government would want to support.
Often, indeed, provincial processes have identified activities that are genuinely province-specific and which have no resonance in other provinces in the country. An example of this is the oil and gas rig servicing programme in the Western Cape, which is a successful programme specific to that province.
However, we can anticipate that as our industrial policy becomes operational on a larger scale, there will be a need for us to make sharper choices at national level, which could have implications at the other two levels. Even today, it is apparent that more than one province has ambitions to become active in particular lines of economic activity, which probably the country cannot support in more than one of them. Co-ordination and harmonisation would therefore emerge as significant challenges for industrial policies and sector strategies across our three spheres of government.
Beyond this we face the long-standing, but also very difficult challenge to try to promote a broader spread of economic activity throughout the country. There are very strong economic forces, which tend to concentrate economic activity in the established urban areas whilst simultaneously excluding from opportunities people who reside outside those areas.
A principle which has been established in the Regional Industrial Development Strategy is that we need to make purposeful interventions to try to bring about a more equitable spread of economic activity and opportunity. This has to be based, in the first instance, on an objective and sober assessment of the economic potential of particular areas, and then an identification of steps and strategies necessary to promote that potential.
The instruments which we have developed since 1994 include Industrial Development Zones and the Spatial Development Initiatives, SDIs, sometimes known as Corridor Programmes. As the Minister indicated earlier, we have four IDZs at present, which operate by providing particular infrastructure, and the opportunities of concentration around that infrastructure orientated particularly towards export activities. IDZs have, therefore, been linked to major international airports and ports.
In addition to this, they offer duty-free entry of inputs, which are then used to manufacture products that are exported in a special customs administration arrangement. A range of other incentives have also been developed for the IDZs. The IDZs, which we have in place have all achieved some degree of success in achieving their objectives, but I believe as a conclusion of the review, which the Minister mentioned, that all of them could potentially reach much higher levels of activity.
Together with our partners in Minmec, we have therefore completed the review of the operation of the IDZs and have identified the need for a new Industrial Development Zone Act, which will be presented to the next Parliament. Among other things, the IDZ policy strategy needs to deal with issues of governance, defining more closely the roles of national government, provinces, local government, as well as that of the direct authorities established to run those IDZs.
In addition to that, there is a need for a clear funding stream and an incentive programme for the IDZs. The Minister indicated that we have lifted the moratorium on new IDZs and the Mafikeng IDZ business plan has been prepared, and is well in the process of adjudication. In addition to that, a number of other IDZ proposals are at various stages of development. What we have realised though is that IDZs are a model applicable only to activities in certain parts of the country, in particular in activities, as I’ve mentioned, related to exports and linked to ports or airports.
We have accordingly developed and discussed with our colleagues in Minmec another model to encourage broader spatial economic development, called Special Economic Zones or Regions. A number of candidates for Special Economic Zone status have already been identified in many of our provinces. Beyond this, we could anticipate assisting municipalities in developing particular industrial clusters and in developing a series of support services and related schemes linked both to the Special Economic Zones and to Municipal Industrial Clusters. Ultimately, what we have identified is a need to establish some sort of Regional Industrial Development Fund, somewhat similar in conception to the European Union’s Regional Development Fund Programme.
The other key measure I’ve mentioned is the SDI programme. These programmes are related to particular infrastructure development such as road or transport links, which package together a series of investment opportunities linked to those infrastructural investments and potentially benefiting from them. These programmes have had some measure of success, the most important being perhaps the Maputo Corridor Programme.
Here again, there is a need for us to revisit the SDIs that have been established in different parts of the country, to take stock of their successes and challenges and to confront the possibility of new approaches. All of these will require much higher levels of co-ordination and interaction across the three spheres of government.
At the last Minmec meeting, which we held in March this year, I believe that we took some decisions which could potentially take us a big step forward. These related mainly to the functioning of the Minmec process.
Minmecs can no longer be justified as gatherings where MECs and members of the Ministry meet together to simply receive general reports about current policy developments at either level. Meetings of the Ministry and the MECs need rather now to be grounded in ongoing work at technical and official levels.
We have accordingly agreed that Minmecs will be preceded by meetings at the level of heads of department and more frequent interactions between officials and experts. These will identify issues that need particular political decision-making, in particular over harmonisation and co- ordination of efforts to spur on developmental programmes.
A much sharper focus on a more rigorous Minmec process is the practice that we believe needs to be taken forward by the administration that succeeds us after the next elections.
Important recommendations have also been made for greater co-ordination of small business and co-operative programmes, and I’m not going to go into those. I’m simply going to suggest in the remaining seconds that one of the areas where I do think there’s a need for greater co-ordination is the matter of trade investment promotion programmes.
Our department, through Trade and Investment SA, has been developing an export strategy which is being used as the basis for decisions about the location of Department of Trade and Industry foreign economic offices. A feature of this strategy has been the development of a methodology to identify, in particular, new markets where we have big opportunities to increase our trade through appropriate promotion activities.
I believe that what we need to do is to have a much greater co-ordination around these, so that the efforts of provinces and of the national government in promoting exports are more co-ordinated.
Finally, let me say I’m very pleased to see that the NCOP continues to take an interest in international trade negotiations. I discussed this at some length in my speech in the National Assembly yesterday. I just want to draw the attention of the House and of the select committee to the fact that there are now very serious efforts underway to conclude the Doha Development Round this year, with many ministerial negotiations possible next month or July. South Africa faces many challenges especially in the nonagricultural market access negotiations and I trust that the select committee and the council will find ways of monitoring and effectively engaging in these very important matters. Thank you. [Applause.]
Ms A N T MCHUNU: Chairperson, Deputy Chairperson, hon Ministers, hon Deputy Ministers, hon provincial Ministers and hon members and staff, the aim of the Department of Trade and Industry is to lead and facilitate access to sustainable economic activity and employment for all South Africans and this sustainable economic activity may be in the household as a home industry or street vending, retailing, manufacturing or in agriculture. I am pleased that our hon Deputy Minister has just mentioned agricultural activity right at the end, which is so important.
The economic success and achievement of any country is measured against the extent of diseases affecting people, especially children and the elderly, and the death rate of infants, which we refer to as the infant mortality rate, IMR, of babies under a year old, which is a very sensitive age. The successes are being made at Asgisa level for the second economy, but the third economic group, the poorest of the poor, are failing to be part of economic growth, because of the abject poverty in which they find themselves.
Urbanisation, to look for job opportunities in cities, does not help them, because there are no jobs. The Department of Trade and Industry, therefore, needs to work with the Department of Agriculture to use the land to produce crops like cotton and sisal for further processing and production. Likewise many goats are slaughtered and their skins may be used for belts, sandals, skirts and waistcoats, just as we are doing in KwaZulu-Natal, where we are making leather skirts.
It is time to revive factories like the one at Tugela Ferry in Msinga where young girls and women were thronging shoes by hand in exchange for butter. Women were involved in economic growth while looking after the children in their homes. Home industries for clothing and textiles, through activities such as spinning, weaving and knitting are to be promoted by the SA Women Entrepreneurs Network, Sawen, and therefore Sawen needs to be visible in communities. There may also be a need to revive the KwaZulu-Natal Training Trust, which was based in Pinetown and trained all categories from poor communities in South Africa and in all skills.
Simple production skills should be taught from kindergarten, where children build houses for their dolls, grow food and make the dolls’ clothes. Making spindles for spinning and shearing homegrown cotton and sheep’s wool will contribute a lot to economic growth. It is better to start young and small. Our large population of orphans have to be assisted to be independent and economically viable.
Load-shedding or Eskom problems contribute to the downgrading of businesses and loss of jobs, for instance in Alusaf in Richards Bay. All South Africans, therefore, have to manufacture energy-saving kits so that businesses and retailers have enough electricity.
I commend DTI for supporting the Richards Bay Industrial Development Zone, IDZ, and the budget of R750 million for Tata FerroChrome Steel. Their support for metal sheet workers and the furniture technology incubator project in Mthatha, which is making furniture as well as tanks for rain harvesting and silos for grain storage, is appreciated. More areas have to be involved in the making of tanks in the face of water shortages and water tanks are in great demand, so making them can contribute to economic growth.
We have a Mr Mzila in Mbonambi in the municipality who would like to be assisted financially with this project as well. The IFP has always played a great role in Trade and Industry. Small and bigger industries were constructed for economic growth, for instance in Sitebe, Ezakheni and Newcastle. This budget is supported by the IFP. I thank you.
Mr P W SAAIMAN (Northern Cape): Chairperson, hon Ministers, hon members, in our department we are all optimistic that our economy is growing, but we all acknowledge that this growth in this era is under many stresses because of the rising cost of oil, basic services and especially the rising cost of foodstuffs.
We need the help of the Department of Trade and Industry and our Ministers to research and develop with us incentives and innovative solutions and meaningful interventions that can practically be applied to support our poorer communities when the full effects of the rising cost of basic foodstuffs and other essential commodities impact on us in the months to come.
Now this challenging picture, we agree with the Minister, is brought about by some external factors in response to the very good South African economic performance of the last few years.
In the Northern Cape, we are very excited and look forward with optimism to the new instrument of industrial policy to assist rural development and provide an important leverage to the Northern Cape to increase our economic growth and employment.
There is a bit of concern that some indicators in the National Spatial Development Perspective, the NSDP, indicate the Northern Cape as having limited economic potential with relatively no poverty. If the Industrial Policy Framework and the Regional Industrial Development Strategy, Rids, is largely based on the principles of the NSDP, how will that impact on us?
It is a position that we don’t agree with. We find it extremely difficult that an area such as the Northern Cape, with plenty of mineral wealth, can be considered by policy developers to have limited economic potential. We wish to appeal to the DTI and our Ministers to use the Industrial Policy as an instrument to develop rural economic centres, not only to empower communities, but also to achieve the bigger aim to curb rapid urbanisation with the accompanying social problems that it creates.
The Northern Cape is approaching this matter very positively and we are in the process of developing our provincial economic perspective so as to identify areas with relative economic potential where opportunities can be exploited to fight against poverty and to create work. For too long the Northern Cape exported employment, because we exported our raw material and commodities to be beneficiated in other areas of South Africa and they are counting the jobs for them and also internationally.
That is why we trust that the department and our Ministers will assist the Northern Cape to beneficiate at source, specifically in an economic exploding area. There is no excuse not to pay attention to the Kgalagadi area any more.
In this regard the province also wants to commend the DTI on the Khulisumnotho Local Economic Development Capacity Programme that was recently launched. In terms of the programme, 18 district municipalities in the country have been identified. Of these, four districts in the Northern Cape have been identified for support. We think we will go far with that to lay the basis for economic development.
We have listed with our department a few strategic projects and we believe and wish to reaffirm the status of Kimberley as the diamond hub of South Africa. As announced in this House last year, this strategy will see the relocation of the State Diamond Trader to Kimberley, a planned move which was reaffirmed by the Minister of Minerals and Energy when she recently opened the gold chain factory in Kimberley. A definite timeline for this relocation is being worked on and this step will contribute towards the availability of rough diamonds, so that the rest of the diamond strategy can be implemented.
Linked to this, we will see the diamonds and jewellery intricately linked to the Kimberley brand which is presently being identified. In an effort to address the skills shortage experienced in the industry throughout the SADC region, an international diamond and jewellery academy is planned. This will be coupled with a cutting and polishing facility, highlighting beneficiation as a key part of the Northern Cape’s provincial growth and development strategy. The establishment of a diamond hub will be the net result of the linkage of these various strategies in terms of the Rids.
The hub will be developed as a special economic zone. In general, mining is still one of the key sectors of the Northern Cape economy. This sector mainly focuses on the iron ore and manganese mining activities in the Kgalagadi area and diamond activities over the whole province.
The main concern in terms of the mining industry is the fact that the majority of inputs used in the production process are imported from other provinces or other countries. Linked to this, the economic analysis of the provincial economy also indicated that the manufacturing industry in our province is underperforming.
To address both these concerns, the North West University was appointed to research the possibilities of manufacturing, for the mining industry, products through the process of reverse engineering.
The Northern Cape province is also a pilot project for the Presidential project on the ICT. As part of the process, the province is in the process of establishing the business process outsourcing and offshore industry in the province. The Minister mentioned one or two. This links to the need to identify the provincial growth and development strategy to divert the economy from the interdependence on the primary sector to the service sector. The ICT sector has been identified by Asgisa as a sector that can contribute significantly to job creation in the South African and Northern Cape economy.
The province is proud to announce that the first Business Process Outsourcing and Offshore Industry call centre has been launched in Kgalagadi with the help of DTI and we thank the department and the Ministers for their enthusiasm. We are planning to open a second centre in Sol Plaatje Municipality in Kimberley; it is well-advanced. We hope to launch this with the help of the department very soon.
The Upington International Airport is being redeveloped as a cargo hub and the support of major role-players in the industry, such as the Airports Company of South Africa, SA Airways Cargo and some freight forwarders has already been confirmed.
The cargo hub project fits the definition of the logistics hub as identified in the Regional Industrial Development Zone Strategy. The major challenge is to secure enough freight to make this hub sustainable. The local Khara Hais Municipality is investigating the possibilities of establishing an industrial development zone or other special economic zone in the industrial area adjacent to the international airport. The support from DTI to ensure that this project is on the national agenda in terms of the industrial development is requested.
It should be clear from this brief overview about strategic projects in the Northern Cape that we are in full support of the recently launched National Industrial Policy. In this regard the province also wishes to congratulate the DTI for arranging a consultative meeting on these issues in Kimberley that was very successful and will take our processes to create jobs and new industries well forward. We believe that this initiative can only contribute to improving collaboration and co-ordination between the provincial and national departments, which is sorely needed if we are to reach the targets for economic growth and job creation, as identified in Asgisa.
We remain committed to facilitating the creation of job opportunities in our vast province with so many raw materials and resources to support that. The Northern Cape supports the vote of the DTI. [Applause.]
Dr F J VAN HEERDEN: Thank you, Madam Chair, according to news reports the Cabinet recently approved the new Companies Bill which will change the way businesses in South Africa are run. It is going to replace the 1973 Companies Act. The Minister announced the intended Bill already in February 2007 and it was supposed to be brought before Parliament in October last year to be ready for approval in February this year. The Bill was supposed to be introduced in Parliament in March this year but it did not happen. The question is whether the proposed Companies Act is still going to be introduced this year.
The original version of the Bill provided, amongst others, for the gradual phasing out of close corporations as indicated by the Minister in February
- I also understand that there was an agreement with the National Economic Development and Labour Council, Nedlac, to the effect that close corporations would be retained for the near future.
Volgens, in soverre ek kon vasstel, die nuwe weergawe van die wetsontwerp word die oprigting van beslote Korporasies of BK’s, verbied en geen maatskappy mag in ’n BK omskep word nie. Sou ek korrek wees, dan is die beperking op BK’s in stryd met die ooreenkoms met Nedlac. Dit is moontlik dat ek verkeerd is en dat ek bloot spekuleer.
Die Departement van Handel en Nywerheid is ’n goeie departement met goeie amptenare maar die skuld lê by hulle. Ek wil hulle nie beskuldig nie, want ek het werklik moeite gedoen om dit te probeer vasstel. Ek het by die departement navraag gedoen; ek het by Parlement navraag gedoen en ek het eweneens by die Staatsdrukker navraag gedoen. Ek kan nêrens hierdie wet in die hande kry nie.
As ek verkeerd is, sal ek graag wil weet wat die werklike stand van sake is. Wat my betref dui dit nie op deursigtigheid nie en die deelname van die publiek is gevolglik onmoontlik. Ek sal graag van die Minister en die departement wil verneem presies wat die stand van hierdie wetgewing is. Ek dank u. (Translation of Afrikaans paragraphs follows.)
[According to, and in as far as I could ascertain, the new version of the Bill prohibits the establishment of close corporations or CCs, and no company may be transformed into a CC. If I happen to be correct, then the limitations on CCs are contradictory to the agreement with Nedlac. It is possible, though, that I am wrong and that I am simply speculating.
The Department of Trade and Industry is a good department with fine officials, but they are to blame. I do not want to accuse them, as I really did make an effort to ascertain this. I made enquiries at the department; I enquired at Parliament and at the Government Printing Works as well. I have been unable to get hold of this Bill.
However, if I am wrong, I would really like to know what the actual state of affairs is. It does not, as far as I am concerned, indicate transparency and participation by the public is therefore impossible. I would like to hear from the Minister and the department what the particular status of this Bill is. I thank you.]
Mr D D GAMEDE: Thank you, Chair, there were two things I was going to say before starting on my speech, but the third one is that hon Van Heerden deprived himself of the correct information by not being in the meetings and by not even having a look at the strategic plan. He has not only deprived himself but also his party.
The second thing is that we as the ANC support this Budget Vote. Thirdly, let me say upfront or we will do an injustice to the movement, that we as the ANC condemn the recent attacks on foreign nationals and all South Africans. We call upon all our branches, our membership and our supporters to protect our foreign brothers and sisters, for it is a known fact that prior to 1990 the ANC was all over Africa, Asia, China and Europe. South Africa really belongs to all who live in it and as Africans we all know that “umuntu ngumuntu ngabantu” [a person is only a person through their relationship to others.]
The strategic framework has been presented to this committee and in order for this department to succeed it must be properly financially resourced. It must have the required human resources. It must have the skills and must be able to monitor, evaluate and then report.
Chairperson and hon Minister, while the appropriation by Parliament of about R16 billion over the three-year period is appreciated, we are worried about the decrease of close to a R1 billion in the outer year, that is, 2010 or 2011.
The question would then be: Where would the economic growth of the country be at that time? Would it be at 6%, 5% or 4% especially on programmes three and five? This department is one of the biggest and one of the key departments in eradicating poverty and creating employment. That is why it is one department that has two deputies.
In order for it to implement its strategy, it must have the skills and human resources; there must be persons. Therefore, this calls for filling all vacancies and retaining the skilled employees. This means that it would have to dig deeper into its pocket so that it does not lose the skilled employees to the private sector.
It is highly important that the envisaged women’s resources plan is developed as speedily as possible, as part of the department’s human resources strategy, including the revised Employment Equity Plan. While I am still there, it is really sad to know that the department has not reached the 2% target of employing people with disabilities, whilst it had done very well in employing women.
The Department of Trade and Industry, DTI, is the pillar of economic growth of any country, so it is imperative that we develop and institutionalise this knowledge and experience. The introduction of the Enterprise Content Management is highly appreciated.
Last but not least, it will be important that the department monitors, evaluates and reports to the relevant structures such as the Cabinet and Parliament. We as a committee will also monitor that it monitors. We shall hold the executive part of the DTI accountable.
Speaking in Parliament on 8 February 2008 at the state of the nation address, hon President Thabo Mbeki called for “Business Unusual”. When he addressed Parliament, he identified the 24 Apex Priorities. I am sure the Minister was happy to note that the first priority, which is the Industrial Policy Plan, is the responsibility of this department.
He said, and I quote:
We will urgently finalise and implement customised sector programmes for identified sectors of the economy such as agro processing, textile, car manufacturing and tourism.
The question is: Where is the department in this regard? I have heard that you have touched on this Industrial Policy Plan in your speech.
In closing, speaking at the University of Zurich early this year, ANC president, Comrade Jacob Zuma, said: “The ANC has firmly located our country as a developmental state.”
This presupposes active state intervention in the economy of the country and the sound mechanism to address the needs of the poor. We have come to the conclusion that a complete free market economy without any form of state regulatory intervention will not be able to address the huge and unacceptable backlog of eradicating poverty and underdevelopment. It is only the DTI that can meet this challenge. Once more, the ANC supports this budget. Thank you.
Ms J WITBOOI (Western Cape): Thank you, Chairperson. Hon Minister, hon Deputy Minister, hon members of the NCOP, it is always a pleasure for me to debate in the NCOP, the House where I started in 1999. Today I am glad to do so on behalf of the Western Cape province.
Under the direction of President Thabo Mbeki in 2004, the province was tasked with building the notion of a developmental state. He said:
Focus on the shortfalls of the marketplace, speed up the process of skills development and deliver a detailed programme that responds to the second economy so that we too can begin to contribute to economic growth.
The Department of Economic Development and Tourism in the Western Cape therefore developed the Microeconomic Development Strategy during 2004-05, which seeks to stimulate economic development and transformation in the Western Cape. The Microeconomic Development Strategy of the Western Cape is a focused set of interventionist sector strategies overlaid by an additional set of cross-cutting themes. Given resource constraints, the Microeconomic Development Strategy advocates that the province focuses on sectors that have the highest potential for growth, transformation, job creation and where government interventions could actually make an impact.
In the Western Cape, these prioritised sectors were oil and gas, business process outsourcing, ICT, tourism and the creative industries. The cross- cutting themes which we prioritised were the SMMEs, the informal sector and skills development.
Having developed a clear policy framework, the Western Cape in 2006 implemented the Microeconomic Development Strategy. We have had some challenges and considerable successes as a result of the Meds. We introduced the iconic red doors as the one-stop shop for SMME services, available to businesses and the informal sector.
We also improved our services to the rural areas by introducing the mobile Red Door and the mobile Cape Crafts programmes. We have facilitated the establishment of 16 sector bodies, private-public partnerships and have begun to stimulate growth, competitiveness and transformation in the target industries. As a result of the Meds, we have facilitated the creation of 69 384 jobs in the province, contributing towards the national Asgisa target of halving unemployment by 2014.
The Western Cape has spent an enormous amount of effort and time in nurturing and developing relationships not only with businesses, but also with civil society, labour, communities and municipalities. We want to offer the DTI this platform of engagement and our assistance to effect the National Policy Framework, and we do it humbly.
We also want to share with the DTI our successes and even our failures to help strengthen national policies. We really want to offer our eyes, our ears, our hands and our commitment to make economic growth and transformation happen.
Some of the collective partnerships between the DTI and the Department of Economic Development and Tourism are starting to bear fruit. In March this year, the province and the Companies and Intellectual Property Registration Office signed an agreement where the Red Doors will be facilitating the registration of closed corporations and co-operatives.
This is a win-win situation, not only for the DTI, who will now have a larger footprint and expanded capacity in the province, but also for the department of economic development, as it is able to add a valuable service to its table of assistance packages to businesses. It is also a win for Western Cape businesses and the informal sector, as this effectively reduces red tape and reduces the cost of doing business.
The DTI and province partnership is also beginning to take effect within the sectors. In the craft industry, the Craft Customised Sector Programme of the DTI is working closely with the sector body, the Cape Craft and Design Institute in our province, and we are thankful for that.
Regarding the business process outsourcing industry, the province is keen to engage and it needs the DTI’s support to grow the industry. This sector is of particular significance to the Western Cape and it is one of the priority sectors identified by the Meds. National policy is attempting to encourage the location of such operations in rural areas. This is being done on the grounds of equity and alleviating poverty in rural areas and we agree with that. We want to bring something to the Minister’s attention: In the Western Cape, in contrast with others, by far the largest portion of the poor is located not in the rural areas, but in the metropole regions.
We agree that halving unemployment and halving poverty by 2014 is a collective imperative of gigantic proportions that will only be achieved if we work together.
The economic needs of our country outstrip both the DTI and the province’s resources. As long as we are working together as a collective towards commonly determined objectives and projects, we will be able to realise and optimise our goal of shared growth.
We wish the Minister and his department well in their endeavours to close the gap between rich and poor in our country. The Western Cape supports this budget.
Ms B L NTEMBE: Hon Chairperson, hon Ministers, hon Deputy Ministers and, especially our hon MEC from the Northern Cape, Mr Saaiman; in the Northern Cape, we are united, regardless of our political affiliations. This kind of spirit can only come from inside, and from a divine spirit.
Hon Chairperson, I want the House to know that I take cognisance of the fact that the Department of Trade and Industry’s budget takes the form of transfer payments to the agencies that comprise the DTI group. It is with great interest that the ID waits to set its eye on the plan of the DTI in relation to the recruitment of high-calibre people, and by the retention of people who are holding key managerial and technical positions.
Hon Chairperson, higher or lower salaries play a big role. As part of the DTI’s mandate to contribute to regional economic development, which also includes the strengthening of local economic development leading them to partnering with the local government, the request is to partner a bit more with local government as the need is so deep at that level of government.
The ID is also looking forward to the implementation of the DTI’s investment strategy, which is to commence in 2008. The central approach to effective export promotion, as a priority in the targeting of new high growth markets to increase export in underexploited markets, has to be supported by all South Africans.
The Consumer Protection Bill is a good Bill. Just as with other Bills, it’s debated and we need to prioritise its implementation and monitoring for our people to benefit from and buy into it. When, at the end, a case or complaint is to be taken to court, finances will have to be available. Those who can afford to take the case to court and be able to read what justice is meant for will benefit. But the poor, again, hon Chairperson, will be denied such justice because of the lack of funds. It saddens us to know that money can buy justice in life. I thank you.
Mr J M SIBIYA: Hon Chairperson, hon Minister, the Deputy Ministers, officials of the department, comrades, colleagues, ladies and gentlemen.
As the Select Committee on Economic and Foreign Affairs - and I take it as the NCOP generally - we do appreciate the achievements of the DTI. As outlined by the Minister, his deputies and the departmental officials during our interaction, we are aware that we managed, as a country, to create about a million jobs and to attain macroeconomic stability in our economy, and that we are gradually shifting.
These achievements coincide with the belief the ANC expressed at Polokwane during our 52nd National Conference when it said South Africa is still at the beginning of the historic transformation of the economy as called for in the Freedom Charter of 1955. The conference went on to say that such a process of economic transformation aims, in part, to realise a thriving and integrated economy, which draws on the creativity and skills the population can offer, building on South Africa’s economic endowment to create decent work for all and to eliminate poverty.
On the basis of the above, the government, in general, and the DTI, in particular, says that the following constitutes the basis of its mission: Firstly, to provide leadership to the South African economy through its understanding of the economy, its ability to identify the economic opportunities, potential and its contribution to the Accelerated and Shared Growth Initiative for South Africa, Asgisa; secondly, to act as a catalyst for transformation and development of the economy and to respond to the challenges and opportunities of the economy to support the government’s economic goals of growth, employment and equity.
In the circumstances, the DTI waits for the finalisation and passage of relevant Acts and Bills so as to intervene decisively in the following areas: Firstly, industrial development; secondly, trade investments and exports; thirdly, broadening participation; fourthly, regulation; and fifthly, administration and co-ordination.
In pursuance of the above objectives as set out, the department has structured itself in a way that saw the seven programmes and 19 agencies in place. Among these we have the Industrial Development Corporation, IDC, Khula Enterprise Finance Limited, and others to assist people to become SMMEs, and grow, one day, to become big independent businesspeople in their own right. Nonetheless, we need to applaud the department’s assistance in the field of skills, whereby business plans that are necessary to access funds are given to the aspirants.
Apart from the institutions referred to, the department is working hard to build an equitable multilateral trading system and links with key economies in Southern Africa, Africa and the whole world.
Let us take the example of the links we have with the European Union. We are aware that such agreements and links are not based on equal relations, and that has been documented. We cannot, as a committee - and I take it as the House - expect the hon Minister, his deputies, the department, and his counterparts, beyond South Africa to achieve a miracle by changing these relations overnight; that would be impossible. Nonetheless, we say that as long as your efforts are resulting in your caring for us, some will benefit from these relations. Soldier on, comrades; we support you; we shall support you until we are on our last legs.
Hon Minister, comrades, ladies and gentlemen, on the issue international trade relations we have begged for a number of answers from the Minister and his team for Members of Parliament to be able to have a sharper understanding, and be able to argue factually for what the department asks of us in terms of maintaining and improving its capacity and future capabilities.
The first question is: How are provinces involved in the International Professional Security Association, IPSA, process? We have relations with India, Brazil, and to a certain extent China and other countries. We do consult in terms of putting a particular position when we meet those that are stronger than us in the economic competition. How do we get the provinces involved? Secondly, how do we ensure that the economic partnership agreement issues are filtered down to grassroot level?
It is the policy of the ANC that if there are issues to be discussed and decisions to be taken, whether policy or any other, we have a way of involving the lowest structures of the African National Congress, which are the branches. How are we getting it done?
Thirdly, how do we ensure that regional integration assists member states of the Southern African Development Community, SADC, in curtailing and/or minimising immigration towards the South which unfortunately resulted in the xenophobic attacks we learnt about recently?
Fourthly, are we doing enough to promote Pan-Africanism through trade, and if so, how far have we gone? And fifthly, can we measure the trade we have with our neighbours such as Swaziland, Lesotho, etc, who also need development to stand on their own and be able to assist us too? What benefits are likely to accrue to us as South Africa from the agreement with the Republic of Mozambique for mining iron ore in that country?
Answers to the above questions are intended to update the Members of Parliament in order to strengthen their resolution in arguing, if necessary, for what the department might need to sharpen its effectiveness.
On the other hand, the Polokwane resolution on the economic transformation emphasised that structures of production and ownership should be antimonopolised and anticoncentrated. This should aim at creating competitive markets, broadening ownership and participation of our people in addressing monopoly pricing and other forms of rent-seeking, anticompetitive behaviour and overcoming barriers to entries that inhibit growth of small enterprises.
Perhaps we need to add another point of achievement made by the department in this case: We had a serious problem in this country, where some people assumed the responsibility of becoming fixers. They didn’t announce it so that we can begin to compete with them; they did it on their own. Fortunately, they were unearthed and the Competition Commission took vital steps to deal with them accordingly.
It is the belief of our committee - and I take it the House as well - that those who might still be practicing will, one day, be unearthed and be dealt with accordingly. To maintain the policies in the economic field that our country has put in, the DTI is the engine of economic development. Let me refer to what I heard a certain Peter said the other day on television when he was interviewed and had to comment on Africa Day. He said a lot of things, but there are two things which interested me the most - I’m not going to quote him. He said that according to him and his colleagues in the National Media Group, South Africa is undoubtedly a cornerstone of economic development in the continent and a pivotal link in the world economy.
I think you will agree with me, ladies and gentlemen - as we always do, we can’t differ now - that the role of the DTI in this respect is not minor. We would like to say forward with DTI. I want also to go back to the slogan which I first heard when we went to Kuruman. It was said by the Deputy Minister, hon Elizabeth Thabethe, when she was given a platform to speak. She said that she did not come there necessarily to take part in the proceedings of the NCOP only, but to bring DTI to the people. This slogan meant a lot to me.
It is on this basis, ladies and gentlemen, that the Select Committee on Economic and Foreign Affairs unreservedly supports this Vote. We urge this House to do the same. Thank you. [Applause.]
The MINISTER OF TRADE AND INDUSTRY: Chairperson and hon members, I think I must thank the hon Sibiya for closing the debate on a rousing note, if I may say so. I think every time when he finishes you must always allow a few minutes, Chair, for the House to regain its composure. [Laughter.]
But let me attempt, Chair, to just respond to some of the issues that have been raised by members, because I think that they are actually very important issues. If I may begin with the absolutely important issue that the hon Member of the Executive Council raised around what the relationship is or is going to be between the National Spatial Development Perspective and the Industrial Policy, clearly ours is not the approach of the industrial policy framework and the action plan. It’s not an approach that is based on spatial concerns. Ours is an approach that is based on opportunities, capacities that we have, possibilities that we can create but also ensuring that we continue to grow the economy as we further industrialise. We will do that in a way that can also help us to move away from the concentration of industries that has historically evolved in South Africa.
We have, for example, an instrument to support our industrial policy in the Regional Industrial Development Strategy, through which we seek to provide the kinds of instruments to local authorities as well as provinces or regions to be able to identify economic opportunities and work in a systematic way with our support and co-operating with us to realise whatever potential has been identified in a particular area.
We are increasing our co-operation, as well as our participation, in some of the provincial and district-based processes of framing economic development strategies. We have been doing this and we are moving beyond just having IDZs, but also looking at other types of special economic zones and some of the 17 that I referred to and two of those are actually going in the Northern Cape.
But we are also making some resources available, both technically and otherwise, towards the sponsoring of provincial industrial strategies and we have also launched the first rural call centre in Kuruman. That must tell you about the approach of the Department of Trade and Industry. It is not the same approach as the national spatial development perspective but really it worked a lot more closely with provinces, regions and localities in identifying and realising economic opportunities.
I think the next issue that I should deal with is the issue that was raised by the hon Van Heerden - is he still here? Yes, from our perspective there hasn’t actually been a boring moment in so far as the Companies Bill is concerned. We have been working on further developing this Bill and finalising the drafting throughout 2007. And of course, the nature of this Bill generated a lot of interest, but also a lot of issues that we had to consider and deal with. The consultation process took a lot longer than we envisaged, but the Bill was adopted by Cabinet for introduction to Parliament two weeks ago. The state law advisers at the moment are working to certify this Bill and I do believe that by tomorrow this process should be complete.
Equally, the Competition Amendment Bill has also been adopted by Cabinet and it is also undergoing the certification by the state law advisers and so both of those pieces of legislation which are very important to our work will be introduced in Parliament during this particular sitting.
You also raised an issue around the question of close corporations. I don’t know how briefed you are from the time that we introduced the Companies Bill. What we proposed at the time was that we retain the Close Corporations Act and part of the reason we made that proposal is because of the sheer volume of registered close corporations. We felt that we needed a better approach rather than forcing all of these close corporations to transfer to the new Companies Act when this Bill becomes law.
As we create a much simpler mechanism through this new company law, we are hoping that companies will no longer see the need to go the route of the Close Corporations Act, because the Close Corporation Act had been put in place to offer simpler mechanisms for smaller companies to register. Through this new comprehensive review that we have done of company law we hope that for different categories of companies, particularly for smaller companies, we will be able to create a much simpler mechanism. Going forward you’d actually have a lot more smaller companies registering in terms of the new Companies Act. Over time, therefore, the need for the Close Corporations Act would simply dissipate, so that is the approach that we have taken with regard to this issue.
We accept the criticism around how we are doing on disability, but I think it would be quite a nice way to apologise for that by sharing with you something very interesting that we are doing.
When the Cabinet adopted its 24 Apex Priorities, it said that we needed to establish a dedicated investment centre to assist investors, particularly large investors, and work with them to make it easier to move from the point of registering an intent to the actual moment of investment.
We, as part of this dedicated centre, are going to have a call centre function and this call centre that we are establishing as part of this dedicated centre is going to be staffed completely by disabled people. And the way in which we are doing it is by providing the information technology infrastructure that will make it unnecessary for these people to move from the places where they reside.
So, this is an innovative thing that we are doing which we hope is actually going to work out quite well. We are making some efforts to address this matter.
About the concern that has been raised around the issue of costs that will be incurred by a consumer who has an issue that he or she needs addressed in terms of the consumer protection legislation, the approach that has been taken now is that the consumer would not have to incur any costs in this regard. The consumer would simply have to register his/her concern with the Consumer Commission and it will take over from there. Therefore, that problem has been resolved.
Let me also try to respond to the issue that has been raised around how far we are on industrial policy. We did make an attempt yesterday to provide some sort of an update. I will pick some of the aspects that we reported on yesterday. Certainly, a big effort in this regard is going towards this work on developing the capital goods industry because there is a major opportunity there.
We’ve got existing capacities in South Africa, the kind of labour that would be easy to absorb in those kinds of industries. A lot of this effort involves a co-ordinated effort between ourselves, the Department of Public Enterprises and Eskom, as well as Transnet who have major investment programmes that are going on. There are timelines by which, in terms of the economic cluster programme, we hope to attain the supplier development programmes coming out of these two major entities. There is a huge opportunity for that, but we are also looking at the costs of intermediate inputs in this regard into the manufacturing of these goods. Some of the import tariffs that relate to intermediate input will go into the manufacturing of capital goods and are being reviewed with a view to seeing whether we shouldn’t or can’t actually remove them.
Through the revamped Small Medium Enterprise Development Programme which we suspended at a particular point and has now resurfaced as a new scheme that we are going to be launching during the month of June, we are looking at supporting it because this is a scheme that’s going to focus on supporting small and medium enterprises and there is about R200 million in terms of investments.
We hope to assist those small and medium enterprises in the sector through this Enterprise Investment Programme and furthermore also on the work on the National Tooling Initiative which is a vital component of developing the capital goods and industry. This was launched in March this year.
The first phase of the National Foundry Technology Network, which is another important component in developing the capital goods industry, will commence in July and this is going to make a big difference in terms of the effort towards industrial upgrading.
On the automotive sector the work is going on towards completing the review of the Motor Industry Development Programme and we remain committed to the date of August in terms of completing that work, so that a new scheme can actually be introduced.
But there is other important work that is going on and you will remember that a particular focus in terms of the automotive industry as a priority sector in the Industrial Policy Action Plan is that we need to deepen components manufacture; we need to raise the level of local content in the vehicles that are assembled in South Africa.
And so we have begun to roll out the first component of a 3-year supplier development programme through the automotive industry development centre. There is also something that begins our work towards deepening a components manufacturing process.
We also want to state that we are quite pleased with the continued confidence in the automotive industry. If you look at some of the recent investments that have been announced by different companies, they show that we are correct in believing that the automotive sector still holds a lot of potential in South Africa. The hon Deputy Minister did touch a little bit on the clothing and textile sector but he focused more on the quota issue. We are also working on bringing on board new measures to practically support the clothing and textile sector.
We are working also in the forestry sector with the Department of Water Affairs in terms of fast-tracking the issuing of licences so that we can achieve afforestation of 3 000 hectares in the Eastern Cape this year, with another 800 hectares to follow.
This is some of the work that is going on, but in July at the Cabinet lekgotla we are going to provide Cabinet with a comprehensive one-year report on the implementation of the Industrial Policy Action Plan. We are also doing further work in this area of industrial financing and the revamping of what used to be the SMEDP into what is now the Enterprise Investment Programme - that’s part of the work that we are doing.
We are working with Treasury in terms of designing this. Remember, the hon Minister of Finance announced the R5 billion package on tax incentives for the next few years, so we are working with them in terms of determining how that is going to work.
We launched this year a revised Film and Television Incentive Programme which would support our local productions, because initially the Film and Television Incentive was really aimed at attracting big budget foreign films to be shot in South Africa. A huge cry from our local filmmakers made it important for us to reconfigure the scheme so that we can also accommodate smaller local producers of films. So, those are the things that we are doing.
The Enterprise Investment Programme, which is your revised SMEDP, is also going to support tourism with a very particular focus on encouraging investment in tourism infrastructure and facilities in your nontraditional areas. In other words we are going to use this scheme to attract investment not only to Johannesburg but also to infrastructure in Johannesburg, Durban or Cape Town. In Johannesburg you could use it to invest in a tourism facility in Soweto, for example. So, it’s to attract the investment in tourism infrastructure and facilities in those areas that are beyond your traditional urban areas, where you have the biggest concentration of tourism facilities and infrastructure.
Finally, I think on the points raised by the chair, around the issues of our trade relationships, of course we have to fight all the time to rebalance the power relations. I think that the World Trade Organisation represents quite a major departure from what the G8 used to be. The G8 was where you know the developed countries really interact and those were the forums that were serving the interest of the developed countries. In the WTO it’s not so easy because the voice of developing countries is a lot stronger and the balance of power is a lot better than it was in previous times.
And so, even in the context of economic partnership agreements the stance that South Africa has adopted in this regard is representative of that. We cannot allow a situation where a region that has succeeded, precisely because of regional integration, can come amongst us, divide us and destroy the possibility for us to achieve the important objective of regional integration. We have insisted on staying within that process so that we raise these issues and have them corrected. It is one thing to just walk away, but is quite another to fight and retain that possibility for our own success of achieving regional integration.
These are ongoing battles that we have to fight every day. You are quite correct and, of course, the co-ordination amongst us as developing countries is a very important aspect in this particular regard.
We have to do a lot more work to overcome the barriers to trade amongst ourselves as African countries but also as countries of the South. We have to do more trade amongst ourselves as developing countries. We have to invest more in each of our countries. It’s quite interesting for us that we are beginning to see important investment. Have a look at India and the rate at which it is investing in South Africa. We are also beginning to see South African companies that are investing outward, so these are important issues that we have to continue to work on.
I think, Chair, I have taken too much of your time. So, I should stop here, even though there are still a few other matters that I would have addressed. Thank you very much, ladies and gentlemen.
Debate concluded.
The HOUSE CHAIRPERSON (Mr T S Setona): Thank you, hon Minister, I have allowed you to continue precisely because you are responding to the issues that were raised by the members.
Hon members, let me thank the hon Minister and the hon Deputy Minister and also the other hon Deputy Minister in absentia and also the MEC from Northern Cape, our special delegate from Western Cape and our guests in the gallery and also the officials from the department for your presence and participation in this debate. Thank you very much.
Hon members, I want to remind you that tomorrow our plenary will start at 9 o’clock. Lastly, I’ve been requested by the Chief Whip to inform you that those ANC members who have received the invitation by the Chief Whip should proceed to the Chief Whip’s office. Thank you very much. That’s the end of the business of the day. The House is adjourned.
The Council adjourned at 17:39. ____
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
ANNOUNCEMENTS
National Assembly and National Council of Provinces
The Speaker and the Chairperson
- Introduction of Bills
(1) Please note: The Announcements, Tablings and Committee Reports
of 28 May 2008 contained an error in that, under “Introduction of
Bills”, it referred to the Land Use Management Bill [B 27 – 2008]
as a proposed sec 75 Bill. It should have read “proposed sec 76”.
(2) The Minister for Intelligence
a) Protection of Information Bill [B 28 – 2008] (National
Assembly – proposed sec 75) [Explanatory summary of Bill and
prior notice of its introduction published in Government
Gazette No 30885 of 18 March 2008.]
Introduction and referral to the Ad Hoc Committee on
Intelligence Legislation of the National Assembly (see House
resolution in Minutes of Proceedings of 13 May 2008), as well
as referral to the Joint Tagging Mechanism (JTM) for
classification in terms of Joint Rule 160.
In terms of Joint Rule 154 written views on the classification
of the Bill may be submitted to the JTM within three
parliamentary working days.
National Council of Provinces
The Chairperson
- Message from National Assembly to National Council of Provinces in respect of Bill passed by Assembly and transmitted to Council
(1) Bill passed by National Assembly and transmitted for concurrence
on 29 May 2008:
(a) National Environment Management Amendment Bill [B 36B -
2007] (National Assembly – sec 76(1)).
The Bill has been referred to the Select Committee on Land and
Environmental Affairs of the National Council of Provinces.
TABLINGS
National Assembly and National Council of Provinces
- The Minister for Justice and Constitutional Development
(a) Draft Regulations in terms of the Criminal Law (Sexual Offences
and Related Matters) Amendment Act, 2007 (Act No 32 of 2007).
- The Minister for Agriculture and Land Affairs
(a) Report of the Commission on Restitution of Land Rights for 2007-
2008 [RP 30-2008].