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TUESDAY, 22 JULY 2014
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PROCEEDINGS OF EXTENDED PUBLIC COMMITTEE - OLD ASSEMBLY CHAMBER
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Members of the Extended Public Committee met in the Old Assembly
Chamber at 18:32.
Mr J M Mthembu, as Chairperson, took the Chair and requested members
to observe a moment of silence for prayers or meditation.
APPROPRIATION BILL
Debate on Vote No 36 - Trade and Industry:
The TEMPORARY HOUSE CHAIRPERSON (Mr J M Mthembu): Hon members,
before I call the Minister, let’s apologise to all the guests who
are in the gallery and the members of the media. Members of
Parliament were engaged in some other important business in the
National Assembly. We would like to apologise profusely for this
late start. We were supposed to start at 18:10, but we are starting
at 18:30.
The MINISTER OF TRADE AND INDUSTRY: Chairperson, colleagues, ladies
and gentlemen, it’s a pleasure to be sharing this Budget Vote debate
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with our colleagues from the Ministry of Small Business Development.
This particular Budget Vote debate is taking this format because a
number of the programmes that will be transferred to the Ministry
and Department of Small Business Development still fall under Budget
Vote No 36.
The new Ministry will give dedicated focus to small business and cooperative development, areas that are fundamental in bringing about
economic transformation. As soon as we heard the announcement of the
new Ministry, we in the Department of Trade and Industry worked very
closely with the newly appointed team and have already transferred
parts of the DTI and some of the institutions of the DTI family to
the new Ministry. We want to assure that Minister and Deputy
Minister that this close co-operation between our sister departments
will continue and, undoubtedly, together we can do more.
I will not be able, in the time allocated to me, to cover all the
ground I would have liked to, and I therefore circulated a written
version of this input which, together with the similar document that
will be circulated in the NCOP tomorrow, represents a consolidated
statement that we wish to convey in relation to Budget Vote No 36.
The rationale for placing industrial development at the centre of
the DTI’s work has already been shared in a discussion with the
portfolio committee. Achieving the target of 5% sustainable growth
by the end of this administration requires bringing about structural
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changes in the economy, including placing productive sectors at the
forefront of the growth process and moving higher up the value
chain.
We have also argued that our experience in the past administration,
when we tabled and implemented successive iterations of our
industrial policy action plans, shows that where we have acted
purposefully in pursuit of well-defined industrial policy objectives
we have achieved successes and demonstrated that industrial policy
does indeed work.
However, hon members know that the President has called on us to
implement the central task of this administration, namely to bring
about radical economic transformation. This has a number of
dimensions, but requires, among other things, that the impact of our
industrial policy is increased to the point where industrial policy
becomes a key driver of higher levels of growth along a
qualitatively different, higher value-added and more job-creating
growth path.
We discussed with the portfolio committee some of our thinking on
the elements of a higher impact by industrial policy. They include
building and expanding the infrastructure development programme;
implementing a number of mineral beneficiation projects; pursuing
active development integration on the African continent; and
repositioning South African manufacturing on a continent that is
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itself seeking to industrialise and creating a platform for more
granular engagements with dynamic and leading companies, based on a
higher level of support against greater conditionalities.
Hon members, allow me now to be more specific regarding some of our
plans in the current financial year. Firstly, we anticipate an
acceleration in the automotive sector, where the Automotive
Production and Development Programme, APDP, has already supported
significant new investment. Projected capital in expenditure for
2014 is anticipated to reach a record level of R7,9 billion. As the
National Association of Automobile Manufacturers of South Africa
puts it, and I quote:
The relatively high levels of capital expenditure in recent years
may be attributed in large part to investment projects by
manufacturers as part of the Automotive Production and
Development Programme.
Moreover, adjustments to the APDP and the designation of buses in
terms of the Preferential Procurement Policy Framework Act, PPPFA,
have resulted in Mercedes-Benz, Volvo and MAN winning tenders to
provide locally assembled buses for metros’ commuter bus expansions
and for the production of the uniquely South African S’esfikile
taxi.
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In the coming year, the APDP will undergo an early review, which
will allow us to take stock of efforts and determine what more can
be achieved in growing the industry in South Africa. In addition,
the Automotive Supply Chain Competitiveness Initiative, launched in
2013 to enhance localisation, and to raise productivity and supply
capabilities, is proving to be successful and we will continue to
expand the programme.
Also, the Automotive Export Manual report of 2014 shows that vehicle
and component exports increased by 8,2% from R94,9 billion in 2012
to R102,7 billion in 2013. This is the first time that the industry
has exceeded the R100 billion export mark. [Applause.] Hon members,
this is a sector that employs in excess of 100 000 people. It is an
important sector and we will continue to support it.
Secondly, the clothing, textile, leather and footwear sector, an
important labour-absorbing sector that many have written off a few
years ago, has now been successfully stabilised through the
introduction of a number of interrelated measures. These include
improved monitoring of imports to ensure compliance with customs and
excise regulations and to reduce unfair and illegal imports; the
designation of products from this sector under the PPPFA, and
collaboration with key retailers to encourage local procurement; the
introduction of the Clothing and Textile Competitiveness Improvement
Programme, which has succeeded in a number of cases to attract
investments to the sector; and the creation of two regional footwear
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clusters. These clusters have revitalised the previously moribund
footwear sector in KwaZulu-Natal and the Southern Cape, leading to a
new production of more than 150 000 pairs of shoes per month, with
the creation of 700 sustainable jobs.
In the coming year, the department will continue to roll out the
Clothing and Textile Competitiveness Improvement Programme, CTCIP,
to reach more companies within the sector and I will announce in the
near future details of a significant programme to increase value
addition in the exotic leather and animal hide industries through
the national exotic leather cluster.
Chairperson, the metal fabrication, capital and rail transport
equipment sectors are the bedrock of a modern industrial economy.
The DTI has been active and instrumental in unlocking these sectors’
potential and we can now expect significant expansion to take place.
A combination of the designation of locomotives in terms of the
PPPFA, and the work of the National Tooling Initiative and the
Gauteng Foundry Training Centre has been pivotal in securing
substantial local content commitments in Transnet’s and the
Passenger Rail Agency of South Africa’s rail rolling stock
investment plans.
Indeed, the localisation success in renewable energy, buses and rail
rolling stock will become the yardstick against which the
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localisation of government procurement is measured. To unlock the
value of localisation for South Africa, further refinement of
procurement legislation will be required, including a focus on
ensuring compliance across all tiers of government; improving the
transversal procurement process; and utilising the multibillion
infrastructure build programme to support local manufacturing,
especially in the transport, energy, and construction sectors.
The DTI has already designated a number of products for local
procurement, including railway rolling stock; power pylons; buses;
canned and processed vegetables; the textiles, clothing, leather and
footwear sector; solar water heaters; set-top boxes; pharmaceutical
products; furniture products; power and telecoms cables; and valve
products and articulators.
I want to take this opportunity to say that in the next round of the
designation of products government anticipates designating steel
products, conveyance pipes, transformers, building and construction
material, and rail signalling and components. To add to this
momentum, the private sector needs to buy more from local companies
and, indeed, made such an undertaking in the Local Procurement
Accord, signed a few years ago.
The President assented to the Special Economic Zones Bill earlier
this year. Simultaneously with processing the legislation, we
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embarked on a process, together with the provinces, of conducting
feasibility studies on potential special economic zones.
I will speak about this more in the National Council of Provinces
tomorrow. But I want to indicate that, in addition to the Saldanha
Bay Industrial Development Zone, IDZ, which was designated last
year, in the very near future we will be handing over the operator
permit to allow the Dube TradePort to become another industrial
development zone.
Public consultations are under way for the Harrismith TradePort in
the Free State also to become an industrial development zone, IDZ.
Work is well advanced on industrial sector special economic zones,
including two potential platinum value chain special economic zones,
one in the North West and the other in Limpopo.
We will continue in the year ahead, and in the course of this term,
to support investments through a number of incentives. In addition
to that, as the President noted in the state of the nation address,
South Africa’s development finance institutions have an asset base
of R230 billion. Over the coming year, we will work closely with the
Industrial Development Corporation, IDC, and the Department of
Economic Development to upscale IDC support for industrialisation
and to achieve greater cohesion with the deployment of DTI
incentives and IDC programmes.
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Our aim is to seek a stronger developmental conditionality and
reciprocal obligations from beneficiaries of state support in areas
such as competitiveness upgrading, employment retention and
creation, investment and so forth.
We have spoken often of beneficiation, and the case for
beneficiating our mineral wealth is unassailable. We can no longer
afford simply to remain located at the bottom of global value chains
as producers and exporters of primary products and importers of
finished goods. Now is the time to move into action.
The DTI has been charged with developing a Minerals Beneficiation
Action Plan as a component of the Industrial Policy Action Plan. A
good deal of preliminary work has been done to identify potential
value chains, and also some of the measures that can be deployed to
turn our aim and ambition of beneficiation into a reality.
Government is committed to facilitating broad-based black economic
empowerment through targeted interventions to achieve more inclusive
growth. In order to facilitate broader participation, the department
will begin implementing the BBBEE Amendment Act, which was passed in
the last Parliament and signed into law in January this year.
The BBBEE Amendment Act and the accompanying Code of Good Practice
seek to increase alignment between BBBEE activities and government’s
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objectives of industrialisation, localisation, skills development
and job creation.
Chairperson, South Africa recognises the importance of foreign
direct investment. We are, and will remain, open to foreign direct
investment, FDI. South Africa accounted for the bulk of new
investment projects in Africa, with investments arriving from the
USA, EU member states and, increasingly, from China, India, and
other Asian countries. The reasons are not hard to find. South
Africa offers many opportunities, not only for access to a growing
domestic market, but also as a platform to the dynamically growing
markets of the African continent.
Allow me to state some recent facts on foreign investment in South
Africa. Firstly, in August 2013, the global Financial Times magazine
of the UK voted South Africa the overall winner for the best
investment destination on the African continent. [Applause.] And
this was for both 2013 and 2014.
Secondly, the AT Kearney Foreign Direct Investment Confidence Index
ranks South Africa in position number 13 amongst 25 leading
economies, and we moved up two places from the ranking we had in
2013. [Applause.] South Africa, in fact, ranks better according to
this index than countries like Switzerland, Sweden and the
Netherlands.
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Thirdly, International Investment Initiative director at the
University of Bern’s World Trade Institute, Dr Stephen Gelb, says if
we look at the number of firms investing in South Africa, and not
just at the number of dollars flowing in, we see that over 130
foreign firms either entered South Africa or expanded their
investments during 2013 – that is about 2,5 foreign firms per week
to announce investment in South Africa.
Finally, our investment team, Trade and Investment SA, Tisa, has
developed an investment pipeline which is a very good indication of
foreign investment coming to South Africa. The total of potential
investment projects for 2013-14, which Tisa is monitoring, stands at
R60,5 billion. This is a substantial increase on what it was a few
years ago.
These factors have been recognised by leading investors and, for
example, this year we are welcoming Samsung Electronics, which will
establish a manufacturing hub for Africa at the two newly designated
IDZs in Dube TradePort.
It’s worth repeating that South Africa’s economic development is
inextricably linked to the African continent.
The TEMPORARY CHAIRPERSON (Mr J M Mthembu): Hon Minister, you have
two minutes remaining.
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The MINISTER OF TRADE AND INDUSTRY: Two minutes. In that case I am
going to miss all the stuff on foreign trade ... [Laughter.] ... and
on Brics, simply to say that there is a legislative programme that
will be introduced. I am not going to go through the Bills that are
here. I just want to say that each proposal made to Parliament will
be accompanied by a regulatory impact assessment. This process will
include a cost-benefit analysis, which assists us in choosing the
appropriate legislative tools to employ.
In addition to the Bills we will be presenting, we will be
developing regulations under the Lotteries Amendment Act to
introduce full-time distributing agencies to improve the
disbursement of funds. The National Credit Amendment Act, which was
passed through regulations in terms of that, will see the
introduction of compulsory affordability assessments. With regard to
the Intellectual Property Laws Amendment Act, we will be publishing
regulations in terms of the establishment of the Council on
Indigenous Knowledge.
Finally, let me express a word of thanks to the DTI, the staff, the
director-general and the deputy directors-general. It has been a
great pleasure to work with all of you. Thanks also to all the
agencies that are part of the DTI family - many representatives are
sitting here today. There is a very good story to tell in the
programmes of the agencies, but unfortunately I don’t have the time
to go into that today.
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Let me also welcome Deputy Minister Masina to the DTI. He is already
providing some very significant support, and I look forward to
developing a close working relationship with him. Thank you very
much. [Applause.]
The TEMPORARY CHAIRPERSON (Mr J M Mthembu): I call on the Minister
of Small Business Development. I am told that it is the Minister’s
maiden speech.
HON MEMBERS: Malibongwe! [Praise!]
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Hon Chairperson, it is
really a pleasure to see you here, in the Chair. We have come a long
way to be where we are today.
Minister Davies and other Ministers; Deputy Minister Thabethe,
Deputy Minister Masina and other Deputy Ministers; Director-General
Lionel October - these are the people we have been working with Acting Director-General, Pumla Ncapayi, who is my Acting DG; hon
members; chairmen and chief executive officers of state-owned
enterprises; distinguished guests; captains of industry; ladies and
gentlemen, comrades and friends, we have just returned from a flurry
of activities, responding to the call by our government to honour
the birthday of the late Comrade Nelson Mandela. Thousands responded
positively. I for one joined the Premier of the Free State, Comrade
Ace Magashule, in cleaning and painting Pelonomi Hospital. We take
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the opportunity to thank all who positively responded to this noble
call. This show of solidarity and responsibility should extend
beyond just honouring Comrade Nelson Mandela.
There are critical areas in the life of South Africa that need unity
of purpose, one of which would be support for the call by the ANC
for radical economic transformation. It is important to note that
the ANC is not anti-business. However, it has a responsibility to
respond radically to the needs of the people, including strong
protection measures against exploitation and unjust measures. The
ANC stands for an economy that is inclusive, equitable and fastgrowing.
Those still debating the concept of radical economic transformation
should realise it is do or die for the majority of the black people
of South Africa. [Applause.] Government cannot forever be a buffer
between the rich and poor, neither can it be a scapegoat for those
who prefer to meander, or sit on the fence. It cannot be a scapegoat
for those who do not contribute meaningfully to the socioeconomic
challenges facing our country. This country belongs to all of us,
including you in the opposition. [Interjections.] Together, we will
move South Africa forward.
The world is conscious of the deep wounds inflicted upon our people
by the defeated apartheid regime. It is also aware of our efforts to
heal, but the focus on us is no longer the same as it was for 20
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years. The world that supported us is going through its own
challenges, with some now looking at us as competitors. We therefore
need to step up and take responsibility for our destiny.
We must focus on ourselves and our needs, while realising our
commitment to African development and the better world we envisage.
Of course, we are saddened by some of the things that are happening
globally. Our ultimate goal is to build a South Africa with decent
employment, entrepreneurial opportunities, a vibrant economy and a
high quality of life, which everybody would like to see. Our goal is
to build a South African economy geared towards addressing the
triple challenge of unemployment, poverty and inequality.
It is an honour for me to present my maiden Budget Vote, jointly
with the Department of Trade and Industry, DTI, the department that
has been the custodian of small, medium and micro enterprises,
SMMEs, and co-operatives. I am ably supported by my Deputy Minister,
Elizabeth Thabethe, in this regard.
In the past years much has been done by the Departments of Trade and
Industry and of Economic Development to address SMMEs and cooperatives. However, due to the ANC’s recognition of the importance
of this sector, as well as listening to the calls by SMMEs and cooperatives for a stand-alone department, the ANC-led government
decided to create a department, with its own budget and structures,
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to give undivided attention to advance the interests of SMMEs and
co-operatives. Something new is here and it is going to work.
It is important for us to note the programmes considered by the DTI
during the previous financial year, and we are raising them because
those programmes still have to continue. Through the Incubation
Support Programme, the DTI has to date approved support for 39
incubations amounting to R590 million, focusing on the agriculture,
services and manufacturing sector. In addition, the Small Enterprise
Development Agency Technology Programme has created 291 new small
and medium enterprise entrants, supported 1 227 existing SMMEs and
created 1 258 employment opportunities. We know that this is not
enough when we look at the challenges in South Africa.
Centres for Entrepreneurship, such as King Hintsa Further Education
and Training College in the Eastern Cape, that focuses on agroprocessing, as well as Ekurhuleni West College in Gauteng, that
focuses on welding and waste management, have been established. In
the current financial year, we envisage the establishment of two
additional institutions to upscale our efforts with regard to
entrepreneurship.
Twenty-eight projects were approved through the Support Programme
for Industrial Innovation, amounting to R76 million, with
beneficiaries from Gauteng, the Western Cape and KwaZulu-Natal.
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Areas of focus include the green economy, information and
communications technology, energy and manufacturing.
Through the DTI, the review and amendment of the Co-operatives Act
and the National Co-operatives Strategy have been completed. This
will allow for the establishment of new institutional arrangements
such as the Co-operative Development Agency and the Co-operatives
Tribunal.
In addition, 243 projects amounting to R62 million were funded
through the Co-operative Incentive Scheme during the previous
financial year, with 1 897 beneficiaries, of whom 990 were female,
253 were youth, 25 were people with disabilities and 629 were male.
The new department will continue to collaborate with provincial
entities to advance Cabinet’s decision of 2007, which calls for 85%
procurement of 10 specified products and services set aside. Within
this context, I would like to commend KwaZulu-Natal, the Eastern
Cape and, most recently, the Free State, on their efforts to advance
the initiatives and co-operatives movement in South Africa.
[Applause.]
Furthermore, the DTI has approved the establishment of secondary
marketing co-operatives as well as an incentive amounting to
R10 million per co-operative, focusing on advanced value addition in
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respect of goods and services, use of technology as well as improved
logistics and infrastructure.
In addressing measures for a conducive environment, the DTI recently
launched the National Informal Business Upliftment Strategy, which
will enhance enterprise development support and co-ordinate
intergovernmental and stakeholder relations for broader
participation of South Africa’s informal sector in the economy. In
addition to this, the implementation of the integrated small-mediummicro enterprises and co-operative development will allow for
harmonisation and co-location opportunities in the informal sector.
The red tape reduction measures – and I think this is of interest to
many - for municipalities were launched and rolled out in all nine
provinces. We will watch this with a hawk’s eyes. This will allow
for a reduction in red tape in local government’s small business
environment and will serve as a monitoring mechanism.
During the course of the previous financial year, the DTI approved
the Youth Enterprise Development Strategy, YEDS, aimed at increasing
the contribution of youth-owned enterprises to South Africa’s gross
domestic product, GDP. The YEDS envisages direct support to young
entrepreneurs with the objective of creating and managing
sustainable and efficient business capable of providing decent,
permanents jobs.
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In this regard, my department will take the lead in the
implementation of these programmes, in collaboration with other
departments, and this will serve as a direct response to South
Africa’s National Youth Policy.
It became imperative to set up a focused centre to help to create a
favourable legal and regulatory environment, including support for
infrastructure and mechanisms to assist SMMEs and co-operatives to
grow sustainably. This centre will scale up support and expand the
number and viability of the sector to achieve development vision.
The Department of Small Business Development aims to provide
extensive support to small business and co-operatives, and increase
support through consolidated public agencies, enterprises coaching,
mentorship, incubation and intensive support mechanisms.
We will build on the commitment in the social accords to bring
black-owned small businesses and co-operatives into the supply chain
of large companies and the public sector. We will also mobilise the
private sector and state-owned enterprises to support SMMEs and cooperatives.
The National Development Plan, NDP, envisages a trebled economy by
2030 with a target of 11 million job opportunities. SMMEs and cooperatives can make a meaningful contribution to this objective. We
believe SMMEs and co-operatives are a critical means to empower our
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people, a mechanism to draw new entrants into the economy,
strengthen inclusive growth, build the economy, encourage solidarity
and create large numbers of jobs.
We envisage a close collaboration, as already mentioned, with
Ministers Davies and Patel and their deputies, and we draw on their
experience. This will allow for a successful and complete migration
of functions, programmes and projects that have been in their
purview. A co-ordinated effort is important, as we believe the work
around SMMEs and co-operatives cuts across all government
departments. We will be knocking on each and every door of all the
departments.
We present the budget midyear and also at a time when we are engaged
in the process of configuring the department as well as fulfilling
the government’s plans to implement the changes that will affect the
macro-organisation of the state. This is an organised government.
We are conscious of the need to establish the department at high
speed. [Interjections.] SMMEs and co-operatives cannot afford
vacuums of any sort. Within this context, we have been mindful of
the end user and have considered business continuity as a principle
from which recipients will continue to benefit whilst we configure
our department.
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We cannot afford to disappoint organisations such as the Black
Business Council, National African Federated Chamber of Commerce,
Nafcoc, the Co-operatives Movement in South Africa and many others,
or even individuals, including Mr Sandile Zungu and, of course, our
hon chairperson, Ruth Bhengu, whose passion for co-operatives runs
deep. [Applause.]
Facts and figures indicate that SMMEs contribute 57% of South
Africa’s GDP and account for 56% employment, 76% in the informal
sector. In an attempt to benchmark South Africa’s performance, there
are three countries of interest to us, namely Brazil - not because I
was ambassador there - Chile and India, whose SMMEs and cooperatives have contributed approximately 20% to their countries’
GDP and employ 60 million people. This highlights the significant
contribution by SMMES and co-operatives towards economic growth.
The department, guided by this understanding, will have to ensure a
concerted effort focusing on enhancing areas such as policy,
regulatory environment, advancing localisation as well as leveraging
on public procurement, financial and nonfinancial support.
The TEMPORARY CHAIRPERSON (Mr J M Mthembu): Hon Minister, you have
two minutes remaining.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Chairperson, in
advancing the initiative of small business development, we will be
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looking at upscaling the identified interventions, enhancing
existing partnerships to enable government departments and stateowned entities to work together. Furthermore, there will be a
concerted effort in our engagement with the private sector and
labour to sustain the gains and advance the common objective of
supporting this sector. Those structures that will be migrating from
us will be indicated.
With this in mind, my department will focus on the active
participation of SMMEs and the implementation of the entrepreneur
programme through centres for entrepreneurship and the Seda
Technology Programme and the Incubation Support Programme. I think I
have already mentioned many of those, Comrade Chair. Chairperson,
sorry.
I wish to thank the portfolio committee, including the opposition,
that had made very positive contributions during our meeting; Deputy
Minister Thabethe, for her unwavering support and valuable
leadership; the staff in my office and the staff in the Broadening
Participation Division.
In conclusion, I would also like to thank all those who supported us
as we started this new department. I would specifically like to
thank my family, who has supported me. My family is represented by
my son Boitumelo, who is in the gallery today. I would also like to
thank Jessica Longwe, one of the comrades who has assisted us for a
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very long time through European parliamentarians to support
parliamentarians. Many of us were sent to many countries to do study
tours through that programme and it is my wish that they would
continue that programme because it is still important. Thank you
very much. [Applause.]
Ms J L FUBBS: Chairperson, hon members of this House, guests in the
gallery, men and women of South Africa, first of all, let me say
thank you, South Africans, for your confidence in the ANC ...
[Applause.] ... which has given us another five years to roll back
three centuries of socioeconomic and racial discrimination which
deprived our country – that is why we are going at a little slower
pace – of harnessing the potential of all our peoples.
Trade and Industry’s objectives in its Budget Vote No 36 are to roll
back monopoly practices, advance black industrialists, and grow an
inclusive employment-creating economy through radical economic
transformation in our developmental state. The Industrial Policy
Action Plan, Ipap, underpinned by a strategic trade policy, is
pursuing the New Growth Path. In this way, we are busy recapturing
essential policy space, policy space that will enable us to steer
our country in the right direction, safely through the global storms
that continue to buffet our shores. This is why the ANC is
supporting the people’s budget.
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However, we cannot ignore the effect of protracted strikes on the
economy. Short, sharper strikes create more room to manoeuvre and
get better results for the workers. Recently a National Union of
Mineworkers, NUM, strike successfully negotiated an increase of
R1 000 in the first two years for lowest-paid workers, followed by
R950. I would be the first to say that is not enough, but I do
welcome a strategic result. I want to say to the captains of
industry - and I suggest you have tea and wine and tell them as well
- that they should not continue to act with impunity in certain
industries and continue to ignore the productivity of the workers in
favour of their wealth, and ignoring the continued plight of the
workers due to their wages.
In the Portfolio Committee on Trade and Industry the ANC said these
challenges – the challenges of eliminating poverty and creating
decent and sustainable employment – called for radical economic
transformation. However, most opposition parties actually believe
you can overcome poverty and create sustainable employment while the
country pursues business as usual. [Interjections.] In fact, what
they want is to maintain the status quo. Well, the ANC is giving
this House notice ... [Interjections.]
The TEMPORARY CHAIRPERSON (Mr J M Mthembu): Just a minute, hon
member. Hon members, we have no problem with interjections, because
it is your right to interject, but please do not stop the member
from speaking. [Interjections.]
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Ms J L FUBBS: The ANC is giving this House notice: Twenty years of
sunset clauses and the determination of some to sustain the status
quo are over. [Interjections.] You have had your honeymoon!
[Applause.] In the fourth term in Parliament, the portfolio
committee had already embarked on this path, which is quite clearly
spelt out in the Broad-Based Black Economic Empowerment Act, which,
I must say, the poor DA got very confused about. [Interjections.]
Indeed, 20 years of democratic transition calls for bold and
decisive steps to place the economy on a qualitatively different
path that substantially, significantly reduces inequality,
especially for women.
More than 75% of the Department of Trade and Industry’s budget,
R9,8 billion, directly and indirectly, is geared to ramp up
industrialisation. The Minister’s decision to use manufacturing to
spearhead this drive makes sound economic sense. Manufacturing has
the highest economic and employment multipliers of any sector. Read
the KPMG report and learn. Higher levels of value addition, as South
Africa shifts up the value chain, are expected to generate higher
income levels and greater wealth. [Interjections.] The one thing
that will go up is, of course, the ANC’s support.
Using the R9,8 billion budget, the Department of Trade and Industry,
DTI, is expanding manufacturing to create jobs through the
development of the productive sectors. This, the committee believes,
is its greatest contribution to capturing policy space. In the state
EPG 22 JULY 2014
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of the nation address, President Jacob Zuma also mentioned three
issues. He spoke about increasing private sector investment to
support industrial development, with the impending piece of
legislation, the Protection and Promotion of Investment Bill,
already in the pipeline. [Interjections.] Yes, you may well say
“Woo!” As soon as final regulations on broad-based black economic
empowerment, BBBEE, become effective, you will be “wooing” your way
out! [Laughter.] He also spoke about strengthening the country’s
economic and investment ties with other regions. Yes, we are going
to become Africans, if we are not already thinking of ourselves as
Africans. We won’t have a choice, we are deepening our entry into
African trade.
We are very fortunate that there has been a sixth iteration of Ipap.
There is absolutely no doubt ... [Interjections.] No doubt you have
never ridden one! Yes, the Ipap, whilst recognising the achievements
of the past, has acknowledged that the results have been somewhat
uneven. Yes, much more remains to be done. As the Minister keeps on
putting it, let’s develop greater traction here. [Applause.]
We all unanimously agreed that ... [Interjections.] If you would
like to take the floor and dance, do so [Laughter.] ... there should
be greater co-ordination between the national departments, between
the three spheres of government, regarding the implementation of
Ipap. I must say, hon Minister, I know you are not a silo conformer
and I am pleading with your colleagues to stop the silo mentality.
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We have to work together. We do not want any maestros around here.
[Interjections.] We don’t! [Laughter.]
Furthermore, we want to see the decentralisation of productive
activities. I want to congratulate you, Minister, for actually
recognising this. Did you know, mealie meal was taken all the way up
from the rural areas to Gauteng, where I live - yes, I do eat mealie
meal occasionally - it is then refined and taken all the way back?
[Interjections.] I guess you are not interested in what poor people
eat. [Interjections.] You are not! The cost of the mealie meal
included transport there and back and, on top of it, did not create
jobs in local areas. Minister Davies, the director-general and his
team, Lionel October and the rest, worked together on this, and they
are now intent on developing a lot more of these mills around the
country. That is a very good idea. [Applause.]
Chairperson, if I may just say one thing, because I see we are on
the point of closing: The budget is a political tool. That is why
there is so much noise here. [Interjections.] The budget is a
socioeconomic tool. The budget, as we will learn very soon, is a
legal tool – we have to vote on it. Most of all, beyond all of those
technicalities, the budget is about improving people’s lives. It
absolutely is. [Applause.] Let me say that one of the better moves
that we have made as a government was to separate small business, to
take it out, to give it its own place in the sun. You have two
specialists, two passionate people, in co-operatives, and they are
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the hon Ruth Bhengu and the hon Mabasa. Their name is “cooperatives”. So, you will certainly go far with that.
I do want to say that the Minister of Trade and Industry, the
Minister of Small Business Development, and the Minister of Economic
Development, as well as the Deputy Ministers, are really an example
to their colleagues of how we should be working together
collegiately and collectively to actually implement our budget
effectively. I thank you. [Applause.]
Mr G G HILL-LEWIS: Chairperson, Minister Davies, Deputy Minister
Masina and hon members, South Africa is in the eye of an economic
storm. We will stave off another recession – only just – and we all
feel relieved by that. However, no-one can deny that it has been a
tumultuous year, although one would never say so, listening to
Minister Davies’ speech. Perhaps the part dealing with reality was
in the pages he couldn’t get to. [Laughter.]
The fact is we have had our sovereign rating downgraded this year,
with the threat of another. We are in the middle of a second
crippling strike, with another starting next week. Employment and
output are down in key labour-absorptive sectors. Investor
confidence is exceedingly low. We had an unsustainably large trade
deficit at nearly R7 billion in May despite the weaker currency.
Government revenue will not meet its targets, which means the budget
deficit cannot realistically be reduced, and we are now in the
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triple bind of high inflation, low growth and rising interest rates.
An economic storm, indeed.
It is, of course, true that there has been a great recession from
which the world’s economies are only now starting to emerge. We
ourselves were not immune to that difficult time. It has, I hope,
been a valuable lesson for the ANC. By promising voters 5 million
jobs, even while the economic warning lights were flashing bright
red in 2009, the party set itself up for failure. In May this year,
we saw the consequences, hon Fubbs – the worst ANC election results
since 1994. [Interjections.]
However, the recession alone is not a sufficient explanation for our
current turmoil. We are in this position because our national
government, from the President down, and including this Minister,
has proven unable, and even unwilling, to speak with one voice on
the economy, and because they have failed to remove the impediments
to a higher rate of growth.
The fact is that the storm we now face is also of our own making.
Our competitor economies are all growing again, and much faster than
us. Chile is growing at 5,9%; Nigeria at 7,2%; Russia, Costa Rica
and Poland, all at over 4%; and Turkey at 8,2%. The recovery is well
under way among our competitors. We are performing far below
potential. So, how do we turn this around?
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This government must urgently address the following problems if we
are to reverse our current decline and build a solid foundation for
creating growth. Firstly, all government departments must speak with
one voice on a plan for economic growth. However, it is not enough
to just speak with one voice. Government must also act in unison.
Policy uncertainty is the surest inhibitor of investor confidence,
and it is the reason that private sector investment is presently so
low. This government has got to stop contradicting itself on key
economic policy questions.
The Minister referred to foreign direct investment numbers. He says
that we are now ranked 13th and that this is something to celebrate.
What he doesn’t tell you is that two years ago we were ranked 11th.
[Interjections.] It is a decline, not an improvement, Minister – and
we are attracting one-sixth of the foreign direct investment that
Brazil is attracting; only one-sixth! [Interjections.]
A member of the public sent me a copy of the China Daily, the
biggest English newspaper in China, with a special focus article
last week on South African investment. The editorial says:
The downside in South Africa is that labour issues, including
strikes, are a big headache, and the power supply can be
unreliable.
That is a summary of some of the problems we have.
EPG 22 JULY 2014
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Just one month ago, nearly 30 days ago, the President committed
himself to the National Development Plan in his state of the nation
address. However, since then, this commitment has been subverted by
damaging visa regulations, a disastrous land reform proposal and
several other growth-undermining proposals. You, Minister, also
contributed to policy uncertainty by releasing a poorly drafted
Promotion and Protection of Investment Bill and by bungling the
cancellation of investment treaties. [Interjections.] Most recently,
you dropped hints about introducing export taxes on minerals.
Of course, the DA supports the drive for local manufacture and
beneficiation. We also believe South Africa must move up the value
chain. However, the way to do it is not with price controls and
trade-distorting taxes. We should be looking to attract
manufacturers to locate here, use our local raw materials, and pass
on skills and technology. That is how you build an industry.
In the context of our trade deficit, export taxes are simply
impossible, and talk of them just adds greater uncertainty. Are we
pursuing export-led growth or the import substitution policies of
the 1980s? Confusing, contradictory policy messages are the enemy of
growth and they have got to stop.
HON MEMBERS: Hear, hear!
EPG 22 JULY 2014
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Mr G G HILL-LEWIS: Secondly, remove those impediments to and
constraints on growth that the government already controls. This
department focuses on industrial policy and trade, but it cannot
hope to succeed in either until it can get tangible backing from
other government departments.
South Africa cannot hope to move up the global value chain with
double-digit municipal electricity surcharges on top of already
expensive electricity. We cannot export more with ports that are
among the most inefficient and expensive in the world. We cannot
attract foreign direct investment to our shiny, new special economic
zones until we spend our infrastructure budgets. Perhaps most
urgently, we must implement policy steps to address our
dysfunctional labour relations environment and end the continuous
cycle of strike action that destroys productivity and undermines
economic stability.
HON MEMBERS: Hear, hear!
Mr G G HILL-LEWIS: Thirdly, we must get serious and driven about
promoting South African products and companies abroad. The Minister
didn’t mention trade once in his speech. This department invests
precious little in trade promotion – only 3,7%, or R360 million, of
its total budget. This is wholly inadequate and it needs a
comprehensive rethink. The DA would equip teams of well-trained
trade diplomats to go and hunt opportunities for South African
EPG 22 JULY 2014
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companies abroad ... [Interjections.] Give us time! [Laughter.] We
would link local suppliers with new customers, and grow our exports.
[Interjections.]
An HON MEMBER: Listen, rather listen! [Interjections.]
Mr G G HILL-LEWIS: Finally, we need to end the it’s-not-my-job
mentality. All of these problems sit squarely with government. It is
simply unacceptable to shrug one’s shoulders and pass the buck to
another Minister.
This government, and this department in particular, are adherents of
the idea of a developmental state. They see the state taking the
lead role in the economy. As Minister Davies has said, the state
must steer, not row. Ironically, that comment sums up the problem.
This government wants to set the direction the economy must take,
but it’s not prepared to do the difficult work required to achieve
the necessary growth. A commitment to a developmental state must
start with the state removing the major impediments to growth that
it controls itself. [Interjections.] Start with your own house. That
is taking the lead.
HON MEMBERS: Yes!
Mr G G HILL-LEWIS: The DA knows that it is possible to accelerate
GDP growth from the current anaemic 2% to the 6% plus growth
EPG 22 JULY 2014
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experienced by our competitor economies. [Interjections.] With true
leadership and with a few key interventions, we can put South Africa
on a much higher growth path and begin to create large numbers of
new jobs.
With higher growth, we will significantly reduce unemployment,
poverty and income inequality, which concerns us all. We will have
more money to invest in basic services, to protect vulnerable South
Africans, and to truly realise an open-opportunity society for all.
It doesn’t need to take another 20 years for this to happen. South
Africa can be the next breakthrough economy. The DA believes that
emphatically and we have a solid, costed plan to do this. The
question is, Minister and colleagues opposite, do you? Thank you.
[Applause.]
Mr N F SHIVAMBU: Chair, may I please ask that you do not remind me
when there are two minutes remaining, because I am not going to tell
a story. I am going to debate the politics of industrial expansion.
[Interjections.]
Hon Minister, the Freedom Charter says that the mineral wealth
beneath the soil, the banks and the monopoly industries shall be
transferred to the ownership of the people as a whole. The sentence
immediately after that states that all other industry and trade
shall be controlled for the wellbeing of all people.
EPG 22 JULY 2014
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[Interjections.] That is what the Freedom Charter says. Those who
admit that the Freedom Charter is a programme, not of the ANC, but
of everyone, understand that it means that the nationalisation of
mines, banks and monopoly industries should happen, whilst all other
trade and industry is controlled for the wellbeing of the people.
That is the basis upon which we, as the EFF, debate industrial and
trade policy, which is one of our cardinal pillars.
There are two decisions that were taken by the Portfolio Committee
on Trade and Industry. One was the commitment that we are going to
pass legislation that will compel government to procure 75% of its
goods and services locally. If that is indeed the case and it is
true, and if it happens and government indeed purchases 75% of goods
and services locally, it looks like it is going to lead somewhere.
We agree with that. It should include the food that the government
buys for school feeding schemes, hospitals, prisons, and such areas.
It must include electronics. It must include textiles. It must
include all purchases for government activities. However, that must
be coupled with building local capacity to manufacture and produce
these goods and services.
With regard to food, there is low agricultural productivity in South
Africa. Why? It is because we do not have access to land.
[Applause.] If we continue at the current pace of land
redistribution, it means we are going to take more than 100 years
just to redistribute 50% of the land in South Africa. That deprives
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South Africa of the space to produce food locally. These are some of
the things that we must deal with at a policy and ideological level.
The second issue we agreed upon in the Portfolio Committee on Trade
and Industry was that a certain component of the mineral resources
produced in South Africa should be locally beneficiated and
industrialised. The ANC says 20%; the EFF says 50% of these minerals
must be locally beneficiated and industrialised. [Interjections.]
You can’t do that now, because you do not have access to mineral
resources.
Minister, none of the platinum from Platinum Group Metals is for
sale in South Africa. We are saying that, while we know the ANC
won’t nationalise the mines now, at least use the state-owned mining
company to extract minerals in order to locally beneficiate and
industrialise them. That is the only thing you can do. You have a
policy instrument and the space to deal with those issues.
The multinational corporations that are in mining will not work with
you to beneficiate platinum and all these other mineral resources.
Why not? It is because they are involved in practices and
occurrences of transfer pricing and base erosion, and all these
issues we have been speaking about.
I am happy that the chairperson of the portfolio committee has now
admitted that there is no proper alignment and co-ordination of
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industrial policy intra- and intergovernmentally. That is the
reality. Earlier on, the Department of Economic Development denied
that this was the case. However, it is the case that there is no
proper co-ordination of industrial policy in respect of what
provinces and local municipalities do and what national government
and various departments do. That is your primary responsibility. You
know about the Ministry of International Trade and Industry in Japan
that successfully industrialised Japan post-World War II. If you
could design a model like that, then we can talk about the
industrial success of South Africa. [Interjections.]
The other issue which is very important is to keep a close eye on
your development finance institutions. If you don’t give them proper
guidance, they will do what the National Empowerment Fund, NEF, did
– take money that is supposed to be financing sustainable industrial
development and give it to friends who are opening up boutiques and
selling luxury goods and services with access for a few individuals
only. [Interjections.]
Those are the basic, logical things that you have to deal with. You
don’t have to agree with the EFF with regard to our radical economic
policy position. [Interjections.] You can work with your current
policy instruments and institutions to realise successful industrial
expansion, as anticipated. Thank you very much, Chair. [Applause.]
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The DEPUTY MINISTER OF TRADE AND INDUSTRY: Hon Speaker, members of
the NA, Minister Davies and Minister Lindiwe Zulu, Deputy Minister
Thabethe and other Deputy Ministers who are here, other Ministers,
heads of department, the Acting Secretary-General of the ANC Youth
League, Comrade Magasela, the Speaker of the Council of Ekurhuleni,
other officials of government who are here, distinguished guests,
ladies and gentlemen, I am humbled to be part of the fifth
administration led by President Zuma. Even more so, as the ruling
party, we have received an overwhelming mandate from our people to
push for radical economic policies in which our department, the
Department of Trade and Industry, DTI, is going to play an important
role.
When President Zuma called for radical socioeconomic transformation,
he called on all South Africans to build an inclusive economy
anchored in a large and growing industrial sector underpinned by
broad-based black economic empowerment, BBBEE.
In the coming financial year, the DTI will continue to improve its
implementation of the Industrial Policy Action Plan, Ipap, as well
as the Minerals Beneficiation Action Plan, MBAP. We will also move
decisively to develop bolder and sharper instruments to support
black industrialists and youth entrepreneurs. But, more importantly,
we will ensure that they are sustainable and viable.
EPG 22 JULY 2014
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The groundwork required to fulfil these imperatives has been done in
terms of policy frameworks. These include the black economic
empowerment, BEE, legislation that has been put in place as well as
the National Industrial Policy Framework, NIPF, and Ipap.
The Broad-Based Black Economic Empowerment Act and its codes were
amended last year to close a number of loopholes that were
identified dealing specifically with issues in respect of companies
that were engaged on matters of fronting and also to ensure that we
better align the BEE imperatives with the need to promote
industrialisation of the South African economy.
Over the past 20 years of freedom, we have also been able to analyse
the extent to which the BEE has been able to achieve the required
results, from the number of black people who have been able to
participate in either shareholding, with little board influence and
strategic oversight, to the extent to which black people have direct
executive responsibility for major enterprises in manufacturing,
agriculture, mining and other services.
There is therefore a need to intensify black participation in the
productive sector, especially in sectors prioritised in Ipap, such
as plastics and chemicals, automotives, agro-processing, metal
fabrication and downstream mineral beneficiation, to name but a few.
EPG 22 JULY 2014
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To facilitate a more meaningful participation of black people in the
mainstream economy, we will look at various ways to develop black
sustainable industrialists. I will be leading a team that will be
working closely with the Presidential Broad-Based Black Economic
Empowerment Advisory Council to develop special action in this
regard.
One such action will be the creation of a targeted incentive to
support black entrepreneurs entering the industrial sector,
including the film sector, as well as focusing more on talent
support, which is often ignored. The government’s Infrastructure
Build Programme, as well as government’s procurement of goods and
services for its normal operations, provides a crucial opportunity
for deepening and transforming the industrial base in South Africa.
Assisting local enterprises to provide these goods and services will
create jobs in South Africa, develop skills and create a springboard
for these enterprises to progressively develop their capacity and
eventually enter the export market. Doing so is not just patriotic
from our side, but also, more importantly, is an economic and
financial necessity that we as the DTI will have to do. We will be
working towards meeting the target of 75%, as set by the ruling
party, of government procurement of goods and services produced by
local manufacturers throughout the country.
EPG 22 JULY 2014
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However, the government cannot drive the industrialisation agenda
alone. There is also a clear need for partnerships with the private
sector and broader society if we are to be able to drive this agenda
successfully. The focus over the medium term will be on engagement
with industry through an initiative called “Taking the DTI to the
factories”, amongst others, so that we get to exchange the
programmes of government that we lead.
We believe that to create new opportunities for the private sector
to engage with the DTI, and for the DTI to provide information on
the kinds of support that is available to them, will enable us to
take our economy forward.
Given the challenges of unemployment in the country, we are calling
on the private sector to utilise state instruments to fully
participate in the One Company, One Job initiative, the campaign
that will be driven by my office, working together with business,
labour and civil society so that we can deal with issues of
unemployment. [Applause.]
We will further monitor government expenditure linked to the ruling
party’s commitment to job creation, including imposing some
requirements on companies doing business with the state at all
levels. We will also focus on companies that are accessing some of
the incentives of the state, like companies that approach the state
requiring licensing as well as those that are doing imports and
EPG 22 JULY 2014
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exports, so that we are able to engage the broader economy.
[Interjections.]
Minister David has correctly articulated that we are now more
determined to implement a high-impact industrial policy that would
respond to the imminent threat of de-industrialisation and will lay
the basis for the creation of a stronger industrial base. Equally,
when the Minister was speaking here, he correctly reminded all of us
about designated goods and services that are to be procured to meet
the said percentage.
Indeed, we should welcome the next designation of strategic products
to be added to the R1 trillion in goods and services that our
government spends per annum so that those products can be procured
from our people, as proposed.
The youth forms a large part of our population and it is a segment
that is mostly affected by unemployment, at the rate of 36,1%
according to the statistics of the first quarter of 2014.
As the DTI, we are going to launch a number of initiatives to
address issues of youth unemployment. Due to the time factor, I am
not going to elaborate further on those issues.
The process of developing financing mechanisms to ensure that small
businesses as well as young people access start-up finance is at an
EPG 22 JULY 2014
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advanced stage. We will work together with other financial
institutions to ensure that young entrepreneurs are able to access
these benefits from government.
Furthermore, a range of financial reforms are on the cards to ensure
that inclusive growth is realised as well as access and
participation by the majority of our people who have not been able
to have access. It is not going to be “business as usual” if we are
to achieve the radical economic programme. We must just state at
this point that we are not going to be reckless or adventurous, but
we are going to be much more radical, bold and decisive in proposing
some of the reforms. [Interjections.]
Women’s empowerment is still central to our plans as the DTI. We
recognise that women play a critical role in South Africa’s economy.
As such, we have a number of programmes that we are going to
implement, which our colleagues in the small, medium and micro
enterprises, SMMEs, are going to be alluding to so that we can share
some of the experiences. Over the years, the DTI has developed
mechanisms to ensure that we integrate women into the mainstream
economy. [Interjections.]
With regard to the current review of the National Export Strategy,
NES, we aim to prioritise markets around Africa as a continent as
well as in the Brics countries, because we think that those markets
are fast developing. [Interjections.] [Laughter.]
EPG 22 JULY 2014
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We must just state that some of the key initiatives that we are
going to be looking at concern issues relating to the antipiracy
programme that we are going to be rolling out. More importantly, we
are also going to focus more on film and television, which have
continued to play a major role in the country. There are a number of
other proposals that we have here, including looking at the issue of
needle time in the music industry.
We want to call on our colleagues to work together with us to ensure
that we bring integrity to the work that we as a department do.
However, the opposition must assist us where we are not making
inroads so that we are able to grow the economy of South Africa.
[Interjections.]
The President has made a call for radical socioeconomic
transformation. All of us will have to work towards that. Thank you
very much. [Time expired.] [Applause.]
Mr I M OLLIS: Chairperson, is it parliamentary for the Deputy
Minister to refer to the Minister as “the hon David”? I thought his
name was “Davies”. [Laughter.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon member, sit down.
[Interjections.] Order!
EPG 22 JULY 2014
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The DEPUTY MINISTER OF SMALL BUSINESS DEVELOPMENT: Chair, please
allow me to acknowledge Minister L Zulu, Minister R Davies and other
Ministers present; Deputy Minister Masina and other Deputy
Ministers; members of the NA; MECs, if they are here; Acting
Director-General, Ms P Ncaphayi; Director-General of the Department
of Trade and Industry, Mr L October; leadership of SA Women
Entrepreneurs Network, Sawen, represented by Ms Ruth Masokoane, Ms
Gail Downing as well as Ms Zanele Xaba; Chair of Technology for
Women in Business, Twib; Speaker of Ekurhuleni Metropolitan
Municipality; leaders of business, labour; distinguished guests, I
would like to specifically recognise my Techno-Girls competition
winners from Photani Secondary school in Malamulele, Limpopo
province, who are seated over there. [Applause.] These are future
industrialists, economists, people who are going to change our
country and whom we believe in nurturing and, as a caring ANC-led
government, have trained them. We hope that they will do well congratulations. [Applause.]
As we begin the fifth term in Parliament, we are more eager to move
South Africa forward and strongly believe that our products and
services as the new Department of Small Business Development will
respond to the needs and aspirations of our entrepreneurs. In this
regard, the Department of Small Business Development, led by
Minister Zulu, will aggressively explore opportunities for small,
medium and micro enterprises, SMMEs, and co-operatives locally and
across the globe. We have already begun work and will move our
EPG 22 JULY 2014
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people out of poverty and help create the 6 million job
opportunities that President Zuma spoke about during the launch of
the ANC’s manifesto.
I can assure you, hon members, that we are already working towards
achieving this goal by supporting our entrepreneurs in sectors of
the economy that have the potential to create jobs as they increase
production, hence my emphasis on access to markets despite many
other challenges faced by SMMEs, including access to finance, skills
development and so forth.
A week ago, I led a delegation of women, and a few men, of course,
to Santa Fe in New Mexico, and Atlanta. In Santa Fe ...
[Interjections.] We were not shopping. Listen, we do not spend
taxpayer’s money on shopping, but the Folk Art Market attracts
buyers from many countries and this year’s participation was even
greater. The project, though small in scale compared to other
missions, provides crafters from the most rural areas an opportunity
to present to modern-day collectors traditional artwork that some of
the middle persons - that I am sure some of you people are
supporting by buying products that cost R200 - sell for 200€ and
200$. That is what we have tried to ensure; that we can take our
people straight there to sell their products. Some of them make
money that they can live on for two or three years. This is what the
Department of Trade and Industry has been doing and will now be done
by the Department of Small Business Development. We do not just
EPG 22 JULY 2014
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theorise, we do work and this is exactly what has happened
[Interjections.] Listen! Again, shut up, thula! [Interjections.]
Mr E J MARAIS: Chairperson, on a point of order: It is not
parliamentary for the hon member to say “shut up” to hon members. I
want the hon Deputy Minister to withdraw that now.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon Deputy Minister, I
think that “shut up” was too sharp. [Laughter.] I would like you to
withdraw that.
The DEPUTY MINISTER OF SMALL BUSINESS DEVELOPMENT: They are also too
sharp. I apologise, and move on.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Thank you very much.
Continue.
The DEPUTY MINISTER OF SMALL BUSINESS DEVELOPMENT: We have also reestablished a permanent showroom in Atlanta, USA, showcasing home
décor lifestyle products from this beautiful country. The products
displayed in our showroom are primarily produced by co-operatives
and small businesses owned by women and men. We have also ensured
that they represent our diverse culture and rich heritage.
EPG 22 JULY 2014
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I am proud to share with you that we received the Hashtag and the
Atlanta Market Favourite awards for ottomans made by Ozzy’s Eco
Decors, owned by Yolanda Msutwana from East London. [Applause.]
Ms J L FUBBS: Congratulations!
The DEPUTY MINISTER OF SMALL BUSINESS DEVELOPMENT: These are the two
primary awards that are offered by a third party to identify the
most impressive, unique, inspiring products at all of the 2014 July
markets. It is quite prestigious for exhibitors to win even one of
these awards, but to win two of them is quite an exciting honour; a
good story to tell. [Applause.] Not theory, a good story! You can
talk to those crafters and they will be able to tell you that
through the ANC-led government they managed to reach those markets.
While South Africa and Africa as a whole have an abundance of
creative talents and handicrafts, it is sad that out of the 10
leading crafts and arts exporting economies, only three were from
developing economies, namely China, the Republic of Korea, and
India, with the rest being made up of Belgium, Turkey, the USA,
Italy, France, the Netherlands and the United Kingdom. No African
economy features in this top 10. This is definitely a niche market
that the department should explore, working together with the
Departments of Economic Development and of Trade and Industry.
[Applause.]
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Our continued participation in the Santa Fe Folk Art Market depends
on the support of all. Make sure that you are in the showroom; make
sure that you give access to our people so that they can create jobs
in terms of making sure that they have orders. There are figures
that you can research for yourself, but the increase is there in
respect of our products, because our people make very good products.
Of course this is all done within the Department of Trade and
Industry and now will be done by the Department of Small Business
Development.
So, some of the members need to do their research. Yes, I agree, we
do not yet have everything, but on the other hand we cannot just get
two international awards while not making good products. We are
indeed making good products and, of course, supporting business. We
have started, in the portfolio committee, to discuss the issue and I
am sure hon Chance will not come again and tell us that the ANC is
not pro-business. We have proven that we are pro-business; we have
taken some of the entrepreneurs abroad just last week to make sure
that we can and we do support them.
We hope that you will be able to agree with me that we opened small
business offices here in the Western Cape under the Small Enterprise
Development Agency, Seda, after the DA-led government closed Red
Door. It is because we support entrepreneurship. We support small
businesses because we believe that it is what we must do. That is a
clear, straight point that we do not have to debate too much. We
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will go ahead and then deal with the implementation of the cooperatives academy, together with the Department of Higher Education
and Training. I saw the Deputy Minister here.
Allow me to say that we have trained 170 women, that is women
falling under Sawen, together with the Consumer and Corporate
Regulation Division, CCRD, from the Department of Trade and Industry
and the gender unit, to sit on many boards. Given the fact that few
women are sitting on boards, we will continue with this programme.
It is making quite good progress.
Ba re bommangwana ba tshwara thipa ka fa bogaleng. Nna ke a re,
kgale dithipa tse di re sega. [A mother will do anything to ensure
that her children are taken care of. But I must say we are used to
carrying out this responsibility.]
We are no longer feeling the pain. We are ready to move our country
forward. Under the leadership of the ANC-led government, our
department will be able to move forward and make sure that we
support small business and create job opportunities. I thank you.
[Applause.]
Mr M HLENGWA: Chair, I rise on behalf of my colleague, the hon
Dr Mario Oriani-Ambrosini.
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We are critical of this department that we see as a department of
welfare for traders and industrialists rather than a department for
the promotion of trade and industry. We wonder how much longer it
will take before it is recognised that welfare policies do not
promote economic growth.
Economic growth is happening north of our boundaries in countries
such as Botswana and Zambia that have adopted the type of probusiness and free market-based approach which the IFP has been
appealing for decades. This department should be the grand advocate
of business concerns within the collegial thinking of Cabinet, but
it is not. It goes along with the mindset of a welfare state that
will never become a developmental state.
Under its umbrella responsibilities, in terms of the Industrial
Policy Action Plan, Ipap, this department should make its voice
heard on a variety of issues and should do so publicly, loudly and
effectively, but it has not done so, remaining meek and weak.
It should have proclaimed to the Minister of Finance the madness of
the obsolete and absurd Exchange Control Act, which makes it a
nightmare for foreigners to do business in our country. It should
have criticised the Minister of Home Affairs for the new immigration
regulations, as these are also an expression of policies having been
derailed as they stop those wanting to settle in our country.
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Closer to home, the department should have more openly welcomed the
IFP’s Private Member’s Bill introduced by Dr Ambrosini – the Medical
Innovation Bill – which promotes the legislation for and regulation
of cannabis for commercial and industrial purposes. This Bill ticks
all the boxes in that it promotes a viable product with a varied
domestic and international market, within a framework in which we
can finally use co-operatives, both as ground-level and as secondtier co-operatives. Cannabis is the perfect product to show the
viability of the newly established co-operatives, and yet not a
single word of public support has come from this department, in
spite of the country having intensely debated the issue for six
months.
The examples could have multiplied, but have not. Further to the
point, this department has yet to find the inspiration, courage and
ideological fortitude to do its job and be the countervailing force
to the prevailing policies driven by labour and welfare
considerations.
This department should have raised its voice when the Minister of
Land Affairs allowed the publication of the draft policy forcing the
gratuitous transfer of 50% of farmland from owners to tenants,
something that has placed an entire segment of our economy in
disarray.
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It should have spoken out against the continuously disastrous role
of the South African Airways, whose monopoly and trade practices
have undermined tourism, one of our few viable industries.
It should have continued to demand the reform of the Labour
Relations Act to introduce maximum flexibility in the labour market
so that South Africa may become productive and competitive
throughout its territory, and not only in designated special
economic zones. [Interjections.] All this and much more this
department should have done, but did not, and under its present
leadership ...
The DEPUTY MINISTER OF HIGHER EDUCATION AND TRAINING: Chair, I rise
on a point of order: The Minister is expected to respond after this.
The hon member is going on and on and I cannot hear what he is
saying. I am sure that the Minister is also unable to grasp what he
is saying. So, could he speak more slowly, please? [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Thank you. Continue, hon
member.
Mr M HLENGWA: Sihlalo, vele phela enenxeba kusheshe kuzwele kuyona.
Futhi siyijwayele le genge ephaphayo ngoba nakhu ifuna ukugqama ...
[Chairperson, the truth often hurts. Also, we are familiar with
people who are forward, who always want to be in the limelight ...]
[Laughter.]
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The TEMPORARY CHAIRPERSON (Mr B L Mashile): Thank you, your time has
expired, hon member.
Mr M HLENGWA: Uma ethi akezwa ... ngiyaqhubeka impela. [If he says
he doesn’t hear...let me continue.] [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon Hlengwa! Hon
Hlengwa, your time has expired.
Mr M HLENGWA: Zonke lezi zinto ... Ngiyathokoza Sihlalo. [All these
things ... Thank you, Chairperson.] [Interjections.]
Nkosi Z M D MANDELA: Chair, I rise on a point of order: I would like
to know whether it is parliamentary for the hon member to say “la
magenge aphaphayo” [these forward fellows]. [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon Hlengwa, it is
derogatory and I am sure you know what you meant by that. I would
like you to withdraw the words “la magenge aphaphayo”. Please assist
the House.
Mr M HLENGWA: Hon Chairperson, with due respect to the Chair, I
would like clarity with regard to what I am expected to withdraw,
because “amagenge abantu” is a group of people. [Interjections.]
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The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon Hlengwa, I did not
really ask for an explanation. What I have raised is that “la
magenge aphaphayo”, the utterance that caused the hon Deputy
Minister to raise the point of order, is derogatory. Therefore I am
asking you to withdraw the words “la magenge aphaphayo”.
Mr M HLENGWA: Chair, I am unable to do so, because I was not
referring to the Deputy Minister or a member of this House. I am
unable to withdraw that, sir.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon Hlengwa ... Wait for
a while, hon Mncwango. I am still addressing hon Hlengwa.
Mr M A MNCWANGO: Ngiyabonga, Sihlalo. [Thank you, Chairperson.]
For the benefit of the Chair ... [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order, hon members!
Order! Could we all keep quiet! I have not recognised you, hon
Mncwango. I am still addressing hon Hlengwa.
Mr M A MNCWANGO: Thank you.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon Hlengwa, what I said
is that the words “la magenge aphaphayo”, in reference to the point
of order raised by the Deputy Minister, are derogatory. I therefore
EPG 22 JULY 2014
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request that you withdraw the words “la magenge aphaphayo”.
[Interjections.] Can we be orderly in the House! [Interjections.] I
expect hon Hlengwa to respond by withdrawing those words so that we
can move forward.
Mr M HLENGWA: Hon Chairperson, with all the respect due to the
Chair, I want to repeat again that if I withdraw that statement I
would be setting a precedent that would stifle the expression of the
isiZulu language. [Interjections.] Therefore, I am unable to do so.
[Interjections.]
Mr I M OLLIS: Chair!
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order! [Interjections.]
Order, hon members! [Interjections.] Order! Hon Hlengwa, if you do
not accept the Ruling, you will need to excuse yourself from the
House. [Interjections.]
Mr M HLENGWA: Thank you, Chair. [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order! Order, hon
members! I expect hon Hlengwa ...
Mr M A MNCWANGO: On a point of order, hon Chair.
EPG 22 JULY 2014
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The TEMPORARY CHAIRPERSON (Mr B L Mashile): Just hold on! I expect
hon Hlengwa to respond to the Ruling. [Interjections.] I said that
if he did not accept the Ruling to withdraw those words, he would
have to excuse himself from the House.
Mr M A MNCWANGO: May I please address the Chair on the Ruling?
The TEMPORARY CHAIRPERSON (Mr B L Mashile): That is the final Ruling
on the matter pertaining to hon Hlengwa. Will hon Mncwango please be
seated for now. [Interjections.]
Mr M HLENGWA: Chairperson, as I indicated to you, with all due
respect, I am not going to legitimise ... [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon Hlengwa, excuse
yourself from the House! [Interjections.] Order, hon members!
[Interjections.] Order, hon members! [Interjections.]
The member thereupon withdrew from the Chamber.
Mr I M OLLIS: Chairperson, may I address the House? [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Are you raising a point
of order? [Interjections.]
EPG 22 JULY 2014
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Mr I M OLLIS: Chairperson, I am concerned about the level of
screaming in the House. Could we perhaps just have some order and
hear one person at a time? [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon members, I need to
call on all of you to behave in an orderly manner. We cannot all
speak at the same time. It seems as if you are singing. You are
ruining the decorum of the House, and that is untenable. When we
call for order, hon members must respond to the call and keep quiet.
Thank you.
Adv A D ALBERTS: Chairperson, Minister, the committee and the
department form the firewall of South Africa in the sense that
without economic expansion the fabric of our society will start to
unravel. What the committee does and what the Minister and the
department plan and execute are to a great degree the difference
between having a country that works or not.
In this endeavour it is important that the tool used to create
wealth must be the free market. It is the only system proven to
work. The question is finding the right model.
Scientists, especially those from the fields of econophysics and the
chaos theory, have confirmed that the equilibrium and rational
economic agent theories are flawed. The real-life economic system is
complex, chaotic, in disequilibrium and the economic agents are not
EPG 22 JULY 2014
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rational. This means that the system needs clever nudges to provide
the desired outcomes, but these require a light touch to avoid
unintended consequences due to the system’s complexity.
Die onsigbare hand van die vrye mark werk ongelukkig nie perfek nie
en kan vasval in die aantrekkingskrag van magskonsentrasies, tot
nadeel van talle mense. In daardie opsig steun die VF Plus wel
uiters beperkte inmenging. Daarom aanvaar ons aspekte van die
regering se industriële beleidsaksieplan as sodanige poging, soos
plaaslike produkontwikkeling. (Translation of Afrikaans paragraph
follows.)
[The invisible hand of the free market does, unfortunately, not
function perfectly and can get stuck in the appeal of power
concentrations, to the disadvantage of numerous people. In that
regard the FF Plus no doubt supports extremely limited interference.
That is why we do accept aspects of the government’s Industrial
Policy Action Plan, Ipap, as such an attempt, like local product
development.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): You are already on your
last two minutes.
Adv A D ALBERTS: Thank you, Chair.
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Die problem is egter dat, ten spyte van die Ipap, industrialisasie
steeds aggresief plaasvind. Hoewel daar verskeie negatiewe faktore
is wat van buite die landsgrense die ekonomie beïnvloed, daar wel
faktore is wat binne die land se beheer is. (Translation of
Afrikaans paragraph follows.)
[However, the problem is that, in spite of Ipap, industrialisation
is still happening aggressively. Although there are several negative
factors that are impacting on the country’s economy from outside its
borders, there are indeed factors that are within the country’s
control.]
Let us make some suggestions, Minister, to kick-start the economy
with this budget.
Firstly, entrepreneurs and businesspeople detest red tape. In light
of this, we request the Minister to drop the Business Licensing Bill
or only to allow licensing for those businesses that deserve
regulation for the public good, such as those in the food industry.
The parliamentary portfolio committee has accepted the proposal of
the FF Plus, as contained in the budget report, which requires any
policy by the department to be supported by research to be submitted
to the committee for interrogation. This includes a regulatory
impact assessment for every Bill and every regulation. This will
strengthen the committee’s oversight function. We trust the Minister
EPG 22 JULY 2014
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will accept this request. This will reveal broad-based black
economic empowerment, BBBEE, as an irrational policy that leads to
rent-seeking and really strengthening the status quo by enriching a
few individuals. We need a new policy that works and creates wealth.
Verder versoek ons die Minister om beter finansiering vir die
Verbruikersraad en die aanstel van Afrikaanse en amptelike
taalsprekers sodat almal in die land inklusief bedien kan word.
(Translation of Afrikaans paragraph follows.)
[Furthermore, we call on the Minister to provide adequate funding to
the Consumer Council and to appoint speakers of Afrikaans and other
official languages in order to provide services in a more inclusive
manner to everyone in the country.]
Lastly, we think that experimenting with economic programmes to test
what truly works must be considered. In that respect, while it may
seem counterintuitive to traditional ANC thinking, pockets of
freedom zones should be created where strict interventionist
policies like BBBEE and affirmative action are not applicable.
Thereby one can gauge whether those pockets create more jobs than
other areas.
Once we have proper research in place we can make proper decisions
on what works at the end of the day. Thank you. [Time expired.]
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Ms N R BHENGU: Hon Chairperson; hon Ministers and Deputy Ministers;
hon members; the Acting Director-General of the department, Ms
Ncaphayi and her team; the small, medium and micro enterprises,
SMMEs, and co-operatives represented here; ladies and gentlemen and
fellow South Africans, the ANC has tasked me with explaining the
context in which the ANC government is developing SMMEs and cooperatives. Before I do that, I will explain why we are
participating in the Budget Vote debate of the Department of Trade
and Industry.
I will briefly report on the oversight conducted by the Portfolio
Committee on Small Business Development since the proclamation of
the Department of Small Business Development so that hon members can
understand where the process is now.
The Portfolio Committee on Small Business Development is
participating in the Budget Vote debate of both the Department of
Trade and Industry and the Department of Economic Development,
because the budget allocated for SMMEs and co-operatives is
currently in these two departments. The Minister of Small Business
Development briefed the portfolio committee on the mandate of the
department, which the portfolio committee supports.
The process of establishing the Department of Small Business
Development to become a fully fledged department with its own budget
is progressing well. The budget report of the Portfolio Committee on
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Small Business Development therefore relates only to the mandate of
the department for now.
All the political parties that attended the portfolio committee
meeting that considered and adopted the report supported it. We
thank all parties for their frank political engagement with the
Ministry, pointing out issues that affect SMMEs and co-operatives,
which the Department of Small Business Development will need to
address.
The exclusion of the word “co-operatives” from the name of the
department was sharply highlighted by the ANC in the context of
marginalising and treating co-operatives as a secondary issue. All
parties supported the view of the ANC study group. The ANC study
group believes that co-operatives have a political-perspective role
to play in the development of SMMEs. If adequate support is given to
SMMEs and they are made to understand the concept of co-operatives,
SMMEs could become a powerful co-operative movement that could
control the economy, as is the case in Kenya, and the Mondragon cooperative in Spain.
The Portfolio Committee on Small Business Development thinks that
the department should be named the “Department of Small Business and
Co-operative Development”. A number of co-operatives that have
contacted the portfolio committee share the same view.
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Kungaba kuhle ukuthi silungise igama lomnyango kusaqala nje, kungaze
kwakheke isithombe sokubukela phansi izinhlangano ezisebenza
ngokubambisana ezingqondweni zabantu. Kumele senze abantu bazi
ukuthi izinhlangano ezisebenza ngokubambisana zinezimiso zokwakha
imiphakathi, azifani namabhizinisi ancike kogimbelakwesabo anenhloso
yokwenza imali kuphela.
Izinhlangano ezisebenza ngokubambisana yizo ezingasiza kakhulu
ekushintsheni indlela yokuphathwa komnotho waleli zwe, ubuyele
ezandleni zabantu nakubasebenzi bezimboni, kuphinde kuphele
nokuxhashazwa kwabasebenzi ngongxiwankulu nogimbelakwesabo.
(Translation of isiZulu paragraphs follows.)
[It would be a good idea to change the name of the department at the
very beginning of its establishment before the general impression
that co-operatives are looked down upon is created. We must inform
our citizens that co-operatives are aimed at developing communities,
unlike capitalist businesses whose sole aim is the generation of
profits for themselves.
Co-operatives could play an important role in changing the manner in
which the economy of the country is handled. They could pave the way
for ordinary people and blue-collar workers to play an important
role in the development of the economy, thus eliminating the
exploitation of workers by greedy capitalists.]
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We should avoid having a narrow perspective of co-operatives and
begin to place them at the centre of our radical socioeconomic
transformation agenda. We also need to confront the evils of
capitalism that are dominant in our economic space. The issue of the
name of the department therefore becomes very crucial in creating
the correct mind-set about what we seek to achieve through SMMEs and
co-operatives. [Applause.]
The portfolio committee and the Ministry have agreed to have a
strategic planning workshop before the final configuration of the
department so that the portfolio committee can also provide the
political leadership required of it. The strategic planning workshop
will take place before the Budget Review and Recommendation Report
process.
We still need to understand which programmes will migrate from both
the Department of Trade and Industry and the Department of Economic
Development.
Hon members, resolutions of the 53rd conference and the Election
Manifesto of the ANC outline specific interventions in the
identified challenges of poverty, unemployment and inequality. The
establishment of the Department of Small Business Development is a
direct intervention in these challenges.
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The 53rd conference of the ANC resolved that, in the second phase of
our transition, the ANC government would lead a radical economic
transformation agenda as a continuation of our struggle for
liberation and a consolidation of our democracy. The focus of the
ANC government on small business and co-operative development is in
the context of building a developmental South Africa, wherein
ordinary citizens would actively participate in their own
development. Our job creation drive is in the context of enabling
workers to own the means of production. [Interjections.]
The small, medium and micro enterprises, SMMEs, and co-operatives
therefore become an important pillar in mobilising communities
actively to participate in the second phase of our transition. Those
who think that SMMEs and co-operatives are Cinderella businesses
that deserve only breadcrumbs have a lot to learn about our radical
socioeconomic transformation approach and should prepare themselves
for a radical paradigm shift.
The current situation in market share that is 80% big business and
20% SMMEs and co-operatives will have to change to 80% SMMEs and cooperatives and 20% big business. [Interjections.] This would
demonstrate the firm commitment of the ANC government to inclusive
economic growth that begins to address the socioeconomic
inequalities that exist in our society. The growth of our economy
should have a direct impact on poverty reduction, resulting in poor
families becoming self-sufficient and self-reliant. There should
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come a time in South Africa when not so many poor families are
dependent on social hand-outs for daily survival. [Interjections.]
The development of SMMEs and co-operatives should be aimed at
creating a permanent exit of poor families from the social grant
register and the indigence registers of municipalities.
Sihlalo, ngokuthuthukisa amabhizinisi amancane asafufusa, phecelezi
ama-SMMEs nezinhlangano ezisebenza ngokubambisana siqonde ukuthi uma
kufika unyaka wezi-2030 babe sebabaningi abanezithakazelo, abayobe
sebenezitolo emadolobheni amakhulu nezimboni zokukhiqiza ukudla
nezimpahla. Akungabi sengathi thina bendlu emnyama sasidalelwe
ukuthenga nokuba yizisebenzi ezimbonini zabokufika kuleli zwe
lobabamkhulu. (Translation of isiZulu paragraph follows.)
[Chairperson, we have set ourselves a target, that by 2030 small and
developing businesses - that is SMMEs and co-operatives - should be
well developed. Our goal is that many of these business owners
should own businesses and factories that produce food and other
products in big cities. It should not look like we black people were
destined to be only customers and servants in the industries owned
by those who are not the indigenous inhabitants of this country.]
We will not only give people fish to eat, we will also teach them
how to fish. [Applause.] We will ensure that SMMEs and co-operatives
operate in the mainstream of the economy and become the backbone of
EPG 22 JULY 2014
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our economic transformation process. Through SMMEs and cooperatives, the ANC government seeks to bring about sustainable
development. One of the objectives is to effectively reduce the gap
between the rich and the poor. [Applause.] We can only achieve this
goal by putting in place proper support systems and creating
investment opportunities for SMMEs and co-operatives, as well as
ensuring that there is a sustainable market for them, starting with
government becoming such a sustainable market.
The biggest challenge to the development of SMMEs and co-operatives
would be our own failure to understand the role that SMMEs and cooperatives can play in reversing the inequality that exists in our
economy. We should be brave enough to admit and overhaul policies
when we realise that some of them do not adequately address the
needs of SMMEs and co-operatives and, as a result, retard progress.
We will not be shy to exercise our power to legislate and to use the
space we occupy to remove obstacles that prevent the development of
SMMEs and co-operatives.
Some of the policies that we will focus on to assess their impact
include the Preferential Procurement Policy, the Set-aside Products
Policy, the Broad-Based Black Economic Empowerment Policy and the
price-based Supply Chain Management Policy. Our target group for
development includes organised groups that operate on the periphery
of the economy and continue to be exploited. These groups include
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the taxi industry, street vendors and hawkers, stokvels and burial
clubs. These are real broad-based black economic empowerment groups
that organise themselves. They resemble the structural design of cooperative movements that exist in other countries, yet they are
continuously exploited and marginalised in South Africa. Our role
will be to release them from the shackles of exploitation.
An announcement by the President is non-negotiable. That should be
understood by all government officials. This includes an
announcement like the 30-day payment policy relating to all invoices
for goods and services supplied to government that was announced by
His Excellency President Jacob Zuma.
This means that all government departments and all spheres of
government must pay service providers within 30 days of the invoice.
[Applause.] There are government officials in various departments
who do not process and pay invoices of SMMEs and co-operatives
within 30 days, resulting in affected SMMEs and co-operatives being
forced to close down due to nonpayment by a government they voted
into power - a shame, an embarrassment and a complete lack of
understanding of what the struggle was all about.
To government officials with an ANC background, I would like to say
that we depend on you, comrades, to instil revolutionary values and
principles at bureaucracy level. [Interjections.]
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The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order, hon members!
Order!
Ms N R BHENGU: Failure to comply with a command of the commander-inchief, President Jacob Zuma, and nonpayment of invoices of SMMEs and
co-operatives within 30 days is counter-revolutionary in the true
sense. [Interjections.]
Sihlalo, sifuna kucace kumuntu wonke ukuthi uKhongolose wathi
uzovula amathuba emisebenzi. Amabhizinisi amancane asafufusa kanye
nezinhlangano ezisebenza ngokubambisana azikwazi ... [Ubuwelewele.]
(Translation of isiZulu paragraph follows.)
[Chairperson, we would like everyone to know that the ANC promised
to create job opportunities. Small businesses and co-operatives
cannot... [Interjections.]]
Mrs A M DREYER: On a point of order, Chairperson.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order!
Mrs A M DREYER: There is no interpreting service.
Nk N R BHENGU: ... ukuthi zingakhokhelwa nguhulumeni zize ziwe,
zivalwe, kuphele imisebenzi kuze kulambe imindeni ngoba nje
umsebenzi wahulumeni efuna ukufumbathiswa noma evilapha ukwenza
EPG 22 JULY 2014
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umsebenzi awuholelayo. Yinto embi neyihlazo ebonisa ukungazi lutho
ngomzabalazo waleli zwe kanjalo nokungabazweli abantu abahluphekayo.
Abasebenzi bakahumeni abajwayele lo mkhuba abawuyeke. Labo
abangakawenzi abangawuqali, usho kanjalo uSotswebhu ohloniphekile,
u-Comrade Stone Sizani. [Ihlombe.] Abenza lo mkhuba sizobabiza
bazosichazela ukuthi abawakhokheli ngani amabhizinisi amancane
asafufusa kanye nezinhlangano ezisebenza ngokubambisana,
zingakapheli izinsuku ezingama-30, ngoba phela le mali akuyona eyabo
imali kahulumeni. Uma beshwashwatha kuyodingeka ukuthi bajeziswe.
Asidlali! (Translation of isiZulu paragraphs follows.)
[... survive without getting their due payment from the government
to the point that they run out of business and close down, which
leads to the loss of jobs and the impoverishment of families. This
happens when government officials demand bribes or are too lazy to
do the jobs that they are paid to do. Such acts are so disgraceful,
since they imply their ignorance of the history of the struggle for
freedom in this country and it also indicates that they do not have
the poor’s best interests at heart.
Government officials who continue to display such disgraceful
behaviour should refrain from it. Those who have not yet started it
should not even start as the hon Chief Whip, Stone Sizani, said.
[Applause.] The government officials who are involved in corruption
will be summoned and asked to explain to us why they do not pay out
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small businesses and co-operatives for services rendered within 30
days, since the funds paid out come from the government not from
their own pockets. If they cannot explain themselves they will have
to pay the penalty. This is not a joke!]
We are moving South Africa forward. The ANC strongly believes that
the establishment of the Department of Small Business Development is
a step in the right direction. The ANC supports the budget
allocation for SMMEs and co-operative development. I thank you.
[Applause.]
Mr R W T CHANCE: Chairperson, hon members, visitors in the gallery,
good evening, sanibonani, goeienaand. The hon members across from me
like telling stories, but let me tell a story of my own. And thank
you so much, hon Bhengu, you gave me the perfect introduction. For
many South Africans the formation of the Department of Small
Business Development is a fairytale come true. And in all fairytales
there are heroes as well as villains. Will the heroine be the new
Minister, the hon Lindiwe Zulu? Perhaps so, if she casts herself in
the role of Cinderella.
HON MEMBERS: Viva!
Mr R W T CHANCE: As Cinderella she can shake off the shackles of her
two ugly sisters – the Departments of Trade and Industry, DTI, and
of Economic Development - which for the past five years have been a
EPG 22 JULY 2014
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great disappointment as regards creating opportunities for small
business. Like Drizella and Anastasia, with their big feet and
unwieldy frames, they have been slow to move and have presented the
disagreeable face of the ANC government to small business. Now small
businesses have an opportunity to emerge from their shadows and be
nimble of foot. I have made it clear to the hon Minister that I will
adopt a constructive approach to the department and in the
committee.
So let me take the analogy a step further by saying I am willing and
ready to play the role of Prince Charming ...
HON MEMBERS: Viva! [Applause.]
Mr R W T CHANCE: ... opposite Minister Zulu’s Cinderella. The DA has
the experience and finesse to fit the slipper of enterprise and
opportunity onto the hon Minister’s delicate foot. Instead of the
clumsiness displayed by her sister, the DTI, the new Ministry has an
opportunity to tread boldly along the path of small business
development. Her inheritance is mixed. On the report scorecard we
might say: Good intentions. Short on delivery. To paraphrase Winston
Churchill, the hon Davies would have us believe he is a very modest
man. Indeed, he has a lot to be modest about. [Laughter.]
The FinScope Small Business Survey found that only 4% of small
businesses had heard of the DTI’s flagship small business support
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agency, Seda. By its own admission, Seda had to refocus its strategy
after years of mediocre performance. We will be scrutinising it
closely in the coming years and expect a dramatic improvement. We
need a massive upscaling of support for small business and cooperatives in South Africa. Brazil, for example, has over 400
business incubators. The DTI’s target is 250, but it has not yet set
a date for the implementation of this.
Nearly two years after the incubator support programme was
announced, reportedly only eight are up and running, of whom only
two have received the promised funding. That is just not good
enough. Perhaps the most urgent priority for Minister Zulu is to
lead the creation of an entrepreneurial ecosystem in South Africa.
The Global Entrepreneurship Monitor 2014 Report, arguably the most
authoritative of its kind, rate South Africa below our SADC
neighbours and other emerging economies in all the major markets of
entrepreneurship.
In South Africa it is more attractive and lucrative to get a comfy
job in government than to start a business. This has to change for
the country to create the jobs we so desperately need. By rigorously
pursuing the strategy outlined in the National Development Plan,
NDP, the Department of Small Business Development can reduce the
cost of doing business, make it easier to hire employees, boost
local procurement and greatly expand instruments for financing and
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marketing small businesses and co-operatives. This includes
implementing the latest recommendations of the Davis Tax Committee.
With regard to the issue of local procurement, let this be
interpreted to mean not just South African products, but also those
produced by small and informal township and rural enterprises for
local retail and wholesale outlets. If hon Zulu sticks to this plan,
we can make history by voting in unison on the new department’s
budget later this year. I look forward to constructive engagement in
the coming months with that end in mind. But please, Minister, no
more flirtations with the national democratic revolution - that is
the ugliest sister of them all.
Ngiyabonga. [Thank you.] [Time expired.] [Applause.]
[Interjections.]
Mr N F SHIVAMBU: Chairperson, on a point of order: Do you know that
since we have begun with this process, there is an hon member from
the ANC who is always interrupting people who are speaking. Maybe
she should be given a chance to speak, because we can’t hear what
she is saying. It’s really irritating.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Okay, sit down, hon
member.
Mr N F SHIVAMBU: Please.
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The TEMPORARY CHAIRPERSON (Mr B L Mashile): Thank you.
Mof M A TSOPO: Modulasetulo ya kgabane, Matona a kgabane a teng
kajeno le Batlatsi ba bona, Ditho tse kgabane, Bahlanka ba Lefapha
ba etelletsweng pele ke Molaodi e Moholo le Molaodi ya tshwereng
mokobobo, ba amehang esitana le ditheo tsa Lefapha la Kgwebisano le
Indaseteri, DTI, baeti ba hlomphehang, bomme le bontate, tjhebelo
pele ya nako e telele ya Aforika Borwa ke ho bopa setjhaba se
lekanang. Jwalokaha e hlaloswa ke Moralo wa Ntshetsopele wa
Naha,National Development Plan, NDP, le Industrial Policy Action
Plan, Ipap, eitshetlehile mohopolong ona mme e thathisetsa ebile e
fupere tshiya ya bohlokwa ya dintlhakemo tse radilweng ho ya kamoo
di tekilweng kateng motjheng wa kgolo e ntjha. Tsena di kgonne ho
etswa feela ke ANC. Ke kahoo kajeno lena re utlwang ba ka
lehlakoreng lane le letona ba bua ba etsa mabinabine hore NDP, Ipap
le Freedom Charter ke eng? Kaofela ditokomane tseo – ANC.
Mmuso o tlameha ho thea tsebe o be o bontshane mabaka le setjhaba ka
kakaretso. Ha o ntse o hahamelletse momahanong ya maano kahare ho
mafapha a mmuso, esita le ho bohle ba amanang mmoho le balekane bao
re sebedisanang le bona.
Diphephetso tsa bohlokwa tsa moruo wa Aforika Borwa di amana haholo
le boqhetseke ba mosebetsi, leqeeme la mesebetsi le kgaello ya
bokgoni ba ho phetha mesebetsi ditheong. Ho ya ka maemo a renang
mothathing wa jwale, esita le manti-a-makoma a hore ANC e se e
EPG 22 JULY 2014
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busitse ka dilemo tse 20, jwale re tlameha ho latela motjha o
hlwahlwa wa phethoho e kgolo moruong ho rarolla mathata a bofuma, ho
se lekalekane le leqeeme la mosebetsi. Katoloso ya seabo moruong e
bolela ntshetsopele ya maemo le mawa a thehwang tikolohong e ntle
bakeng sa SMMEs, ebile e ntlafatsa qothisano ya lehlokwa ya meruo ya
dibaka le ya diporofensi ho fihlela kgolo e lekanang le tlhahiso ya
mesebetsi.
Modulasetulo, katoloso ya seabo ke e nngwe ya mawa a ileng a talolwa
ke Moporesidente Puong ya Pulo ya Palamente. Lena ke lenaneo la
boraro le leholohadi la DTI ka kabo e fetang R1 bilione bakeng sa
selemo sa ditjhelete sa 2014-2015. Tjhelete ena e reretswe mesebetsi
e latelang: ho fana ka tshehetso ya ntshetsopele ya dikgwebo
dikoporasing ho ya ka Molao wa Dikoporasi le ho bapatsa broad-based
black economic empowerment, BBBEE; matlafatso ya basadi ka Letlole
la Basadi la Isivande, le fanang ka ditjhelete tse lekanang
dikgwebong tsa mahaeng makaleng a fapaneng a moruo. Nako e kgolo le
e nyenyane dibui di bua hore ha ho na mosebetsi o etswang mane
dibakeng tsa mahae. Hona ke sesupo sa hore ha ba latele ditokomane
tsa mmuso ka botlalo hore ba tle ba utlwisise hore le dibaka tsa
mahae, le dibaka tse fapaneng di a kgona ho fihlellwa ke mmuso o
eteletsweng pele ke ANC.
Sekoto sa bohlokwa se tsheheditseng ketsomolao ona, ke molao wa
BBBEE o reretsweng ho rarolla le ho se lekane hoo e leng masalla a
nako e fetileng Aforika Borwa. Leano le rarolla ho se lekalekane
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hona ka ho fana ka menyetla ya moruo bathong ba batsho ban eng ba
kotetswe nakong e fetileng ebile ba ne ba se na le menyetla jwaloka
mehleng ena. Ke hona re ipotsang kajeno hore na ebe batho ba batsho
ba lebetse nalane ya bona hore nakong ya mmuso wa kgethollo
[apartheid] ha ho ne ho shejwa ya mosweu le ya motsho phapang e ne e
etswa ka tsela e jwang. Rona, re le Komiti ya Tshebetso, re tlameha
ho etsa tekolo e hlwahlwa lefapheng lena hore le fihlele
ditabatabelo tseo lefapha le ipehetseng tsona.
Puong ya Pulo ya Palamente, Moporesidente Jacob Zuma, o boletse hore
mmuso o tla bapatsa phumantsho ya dibaka tsa lapeng, o be o eketse
tlhahiso ya lapeng ka ho reka 75% ya thepa le ditshebeletso
bahlahising ba Aforika Borwa. [Mahofi.]
Phepetso ya lefapha ke ho nnetefatsa hore mosebetsi wa lona o lebisa
boiphumanong botjha ba boitshepo ba kgwebo. Sena se tla fihlellwa
haeba mmuso o aha bokgoni hobane ka lehlohonolo, ha re bua re le
dibui kajeno, ha re mmuso. Re lekgotla la Palamente, le tshwanetseng
ho etsa bonnete hore mmuso o fihlela maano ao o ithehetseng oona. Ke
hopola hore ba bangata re ka be re emela nako ya 2019 re bone hore
seo le ileng la itshepisa sona ka 2014, ebe se tla phethahala kappa
tjhee, kappa e tla dula e le toro.
Mmuso o boela o tlameha ho ntlafatsa momahano le tlhophiso e ntle
dipakeng tsa makala a mararo a mmuso ho fihlela dipehelo tsena.
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Ho fihlela mothathing wa hona jwale, dihlahiswa tse ngatanyana di se
di reretswe phumantsho ya lapeng mme di akga meroho e makotikoting,
dihlahiswa tse itseng tsa meriana, dihlahiswa tsa fenetjhara,
masela, lekala la matlaalo a dieta, difuthumatsa metsi ka matla a
letsatsi, fenetjhara ya dikolo le dikantoro le mehala ya motlakase
le ya dikgokahanyo tsa difonofono. Hangata Basotho ba re ha ba bua
ka puo eo ke kgolwang hore ba batsho boholo re a e utlwisisa, ba re:
“O se ke wa lora letsatsi le tjhabile”. [Ditsheho.] Ke bona eka toro
e ngata kahara bana bao e leng mekga ya kganyetso [Mahofi.] Ha ba
utlwisise hore na mmuso ona o eteletseng pele naha ya Aforika Borwa
o fihleletse eng.
Leano la sebaka sa moruo o kgethehileng [Special Economic Zone], SEZ,
le reretswe ho bopa sesebediswa sa ntshetsopele ya diindasteri tse
sebetsang ka bokgabane e leng mabatowa a ikgethileng a moruo. Leano
le fana ka moralo o hlakileng ho ya ka ditshebetso tsa ntshetsopele
le bolaodi ba mabatowa a ikgethileng a moruo. Porofensi kang e
lebeletswe hore bonyane e be le lebatowa le ikgethileng la moruo le
leng le le leng hanghang ha molao o se o kentswe tshebetsong.
Ho fihlela mothathing wa jwale, mabatowa a latelang a ikgethileng a
moruo, a se a sisintswe: Limpopo - Messina Agro Processing and Petro
Chemicals le setlamo sa Polatinamo sa Tubatsi. Leboya-Bophirima –
Kgubu ya Polatinamo ya Rustenburg. Gauteng - agro-processing and
Logistics mane Nasrec. Kapa Botjhabela – Coast Agro-processing. Kapa
Bophirima – Atlantic Renewable Energy. Foreisetata – Harrismith, e
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seng QwaQwa ntate Floyd empa Harrismith hobane ha e na dithaba, e se
e bile e hlwailwe. KwaZulu-Natal – Dube TradePort e hlwailwe mme e
se e sebetsa. Mpumalanga – Agro Processing.
Ho tla ba le keketseho e bonahalang ditekanyetsong tsa ditjhelete
tsa DTI tse amanang le mabatowa a ikgethileng a moruo, ho tloha R450
milione selemong sa ditjhelete sena se hodimo ho ya ho R1,68 bilione
ka 2016-2017. Ho na le diphephetso tse tobaneng le matsapa a di
indaseteria tse bakwang haholo ke ditheko tse nyolohang. Tsena di
akga ditheko tsa motlakase le ditefello tsa madibohong a ho kena. Ka
nyollo e tswellang pele, ka ditheko tsa motlakase tse etswang ke
Eskom.
Dilemong tse mmalwa tse fetileng, lekala la tlhahiso le ile la
thefuleha habohloko. Lekala la tlhahiso le sebedisa motlakase o
mongata. Ditefiso tse hodimo tsa madibohong a ho kena di ama thepa
ya tse tswang naheng ya rona le tse tlang kahara naha mme sena se
ama ditjeho tsa lekala la tlhahiso ka kotloloho. Moralo wa motheo wa
dipalangwang, ke phephetso e nngwe ya poloko ya maemo e kginnweng le
ntlafatsong ya meralo ya motheo e bakang nyollo le ditjeho tsa
fumana ditshebeletso kamoso.
ANC e hatile dikgato tse ngata. Re isa Aforkia Borwa pele. Re
tshehetsa ditekanyetso. [Mahofi.] (Translation of Sesotho speech
follows.)
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[Ms M A TSOPO: Hon Chairperson, hon Minister, hon Deputy Minister,
hon members, departmental officials led by the director general,
Department of Trade and Industry stakeholders and entities,
distinguished guests, ladies and gentlemen, South Africa’s long
term vision of an equitable society is defined by the National
Development Plan, NDP, and the Industrial Policy Action Plan, PAP,
and is both framed by and constituted a key pillar of the
programmatic perspectives as set out in the New Growth Path. These
are only possible because of the ANC. That is why today we hear all
those on the other side making a noise asking what is the NDP, Ipap
and the Freedom Charter? All those documents are ANC documents.
Government must listen and engage up and down the social spectrum
whilst continuously pushing for optimal policy coherence within
government departments and across the full range of stakeholders
and social partners.
South Africa’s critical socio economic challenges revolves around
skills, unemployment and institutional capacity. Given the current
environment and the reality that the ANC has been in power for 20
years, we must pursue a radical economic transformation to address
poverty, inequality and unemployment. Broadening economic
participation refers to the development of policies and strategies
that create an enabling environment for small, medium and micro
enterprises, SMMEs, and enhances the competitiveness of local and
provincial economies to achieve equity growth and job creation.
EPG 22 JULY 2014
Chairperson,
Page 82 of 109
broadening
participation
is
one
of
the
strategic
areas that were highlighted in the state of the nation address by
the President. This is the third largest programme of the DTI with
an allocation over R1 billion for the 2014-15 financial year. This
funding
business
is
development
operatives
empowerment,
Women’s
targeted
Act
enterprises
in
the
support
and
BBBEE,
Fund,
at
and
following
to
co-operatives
promoting
women
which
provides
various
sectors
activities:
broad-based
empowerment
affordable
of
the
as
per
the
black
through
Co-
economic
the
finance
economy.
providing
Isivande
to
rural
Speakers always
mention that there is no work done in the rural areas. This is a
sign that they don’t read government documents in order to fully
understand that rural areas and other areas are visited by the ANCled government.
The main piece of legislation championing this is the Broad-Based
Black Economic Empowerment Act which is aimed at addressing
inequalities in South Africa, which are the legacy of the past.
The policy addresses these inequalities by providing economic
opportunities to black individuals who were previously
disadvantaged and had no access to such opportunities in the past.
That is why we ask ourselves today whether black people have
forgotten their historical background. During apartheid, when
looking at a black person and a white person, how was the
differentiation made? As the portfolio committee we need to do
vigorous oversight on the department to achieve equality.
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In the state of the nation address, President Jacob Zuma stated
that
government
domestic
would
production
by
promote
having
local
the
procurement
state
buy
75%
and
of
increase
goods
and
services from South African producers. [Applause.]
The challenge for the department is to ensure that its work leads
to business confidence being regained. This will be achieved if
the state builds its capacity because, fortunately, as we make
speeches today we are not the government. We are a government
council which is supposed to ensure that the government fulfils
all the goals it has set for itself. I would like to think that
most of you would want to wait until 2019 so as to see whether
what you promised in 2014 would indeed materialise, or forever
remain a dream.
The state must also improve integration and co-ordination between
the three spheres of government to achieve the set targets.
To date a number of products has already been designated for local
procurement, which include canned/processed vegetables, certain
pharmaceutical products, furniture products, the textiles,
clothing, leather and footwear sector, solar water heaters, school
and office furniture and electrical and telecommunication cables.
Often when the Basotho speak in a language I believe most us
understand they say: “Stop building castles in the air”.
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[Laughter.] I think that this is mainly prevalent in the
opposition parties.
The special economic zone, SEZ, policy is aimed at developing an
effective industrial development tool, namely, the special
economic zones.
The policy provides a clear framework in respect
of the development operations and management of SEZs. Each
province is expected to at least have one SEZ once legislation is
implemented.
To date the following SEZs have been proposed: Limpopo -
Messina
agro processing and the petro chemicals Tubatse Platinum Group;
North West – Rustenburg Platinum Hub; Gauteng -
Nasrec agro
processing and logistics; Eastern Cape - Wild Coast agro
processing; Western Cape Atlantic – renewable energy; Free State –
Harrismith - not Qwaqwa, Mr Floyd Shivambu, but Harrismith because
it has no mountains - has been designated; Kwazulu-Natal - Dube
Trade Port, which is now functional; Mpumalanga
-Nkomazi agro
processing.
There will be a substantial increase in the DTI budget for SEZs
from R450 m in the 2014-15 financial year to R1,68 billion in
2016-17. There are challenges that face the industrialisation
efforts, mainly a rising from administered prices. These include
both electricity prices and port charges, with the continued
increase in electricity prices implemented by Eskom.
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In the past few years the manufacturing sector has been adversely
affected. The value adding sector uses a significant amount of
electricity. High port charges adversely affect both exported and
imported goods and this directly affects costs of the
manufacturing sector. Transport infrastructure, is another
challenge. There is limited maintenance and upgrading of
infrastructure which results in an increase in the costs of
acquiring these services in future.
The ANC has made a lot of strides. We are moving South Africa
forward. We support the Budget Vote. [Applause.]]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): I now call on the hon D
W MacPherson. He will be making his maiden speech. [Applause.]
Mr D W MACPHERSON: Hon Chairperson, I think the entire nation,
including Luthuli House, literally heard the hon Tsopo tonight!
[Laughter.]
The Portfolio Committee on Trade and Industry is surely one of the
most important committees in Parliament as it is tasked with the
responsibility of setting the tone of and course for
industrialisation. It is similarly tasked with creating an enabling
environment for investment, both foreign and local, and ensuring
that regulatory institutions tasked with the mandate of protecting
citizens’ rights in a consumer market work effectively.
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Against this backdrop, we have to take stock of where we are in
order to know where we are going as a committee, as Parliament and
as a country.
Of the proposed budget of R9,8 billion, 45% of the budget, or
R4,4 billion, is used as incentives to support sustainable and
productive economic growth. This is a good thing. However, we have
government departments that are working against one another, because
we know that the ANC as a whole does not support the NDP.
[Interjections.] We can see that the ANC and its alliance partners
are pulling in opposite directions to the NDP and only pay lip
service to it, with devastating consequences for investment and
development.
The strike by the National Union of Mineworkers of South African,
Numsa, which has now shut down the automotive manufacturing sector,
is one such example. This department invests heavily in the sector
through the Automotive Investment Scheme, yet it is prepared to
stand back and watch the industry collapse and, in turn, the
investment of South Africa’s tax rands, because the Minister is
unwilling to engage stakeholders – more specifically the unions and
the Minister of Labour – on the matter.
Labour unrest is one of the biggest challenges facing South African
manufacturing. Today, the Southern African Clothing & Textile
Workers’ Union, Sactwu, issued strike notices to employers of a
EPG 22 JULY 2014
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strike in the textile industry commencing on Thursday. Should this
happen, factories will close, jobs will be lost and government will
lose its investment through its incentive scheme in the industry.
Where is the Minister to be found? What is his plan? The
manufacturing sector certainly doesn’t know and neither do I.
Instead of ensuring an enabling environment for investment and
manufacturing – which this department is tasked with – it would
appear the department is hellbent on doing exactly the opposite. I
refer to the Government Gazette of 15 July 2014, which is set to
revoke corporate visa applications for those wanting to participate
in the hospitality industry, fast food outlets, and franchises in
the cosmetic and beauty industry. How can this be a good thing for
our economy, hon Minister? How will this create jobs?
What is more worrying is how the Minister could have agreed to such
a recommendation with Home Affairs when it was not even discussed in
our committee. Even worse, it would seem that no regulatory impact
assessment study to determine the effects of this decision on these
industries was completed. If this is indeed true, then this must be
one of the worst examples of this Minister and this department
speaking with a forked tongue on investment and job creation, and
then doing the exact opposite.
The National Empowerment Fund, NEF, is supposed to promote and
facilitate black economic participation through the provision of
EPG 22 JULY 2014
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financial and nonfinancial support to black-empowered businesses, as
envisaged in the National Empowerment Fund Act, Act 105 of 1998.
Regrettably, this is no longer happening due to budgetary
constraints, depriving aspirant black entrepreneurs from
contributing to the economy and creating much needed employment.
To date, the NEF has created 46 000 jobs and, should the agency be
fully recapitalised, it could support 21 strategic projects that
have been identified and support job creation for 80 000 people. The
sad reality is that for the last 12 months up to April 2014 the NEF
was unable to finance a single project because it did not receive
sufficient financing from the DTI. However, the DA’s Western Cape
government gave R18 million to the NEF, while not a single ANC
province in this country did the same thing. [Interjections.]
A request to Treasury for R2,3 billion was turned down, rendering
the fund paralysed, with entrepreneurs being the biggest losers.
Access to affordable finance is at the heart of emerging
entrepreneurship, and the very entity that should be doing this
can’t, because it does not have the support of the DTI.
What has the department done to help them? Very little, only further
showing how little the DTI is willing to engage in crossdepartmental discussions, which is now at the expense of black
businessmen and women. How do we grow black industrialists, hon
Fubbs, when we can’t even finance them?
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The National Regulator for Compulsory Specifications, NRCS, is
another example of an entity under this department that is failing
the people of South Africa who are trying to create jobs. It has
come to my attention that the NRCS has unilaterally decided to
change the procedures around letters of authority to the electrotechnical industry. The lead time for applications has now gone from
21 days to 120 days. [Interjections.]
From what I understand, inadequate notice of this revision was given
to stakeholders and it appears that very little, if any,
consideration was given to the effects which this decision would
have on the industry. We now have a situation in which goods are
being held up by customs at ports because letters of authority are
not issued. Where is the good story to tell? Minister, these are
just a few examples that clearly need your attention and leadership.
On the whole, incentives in key sectors are working, but more can be
done. We all agree that South Africa must industrialise on a scale
that creates millions of real, sustainable jobs. We simply cannot
pay lip service to the National Development Plan, NDP, and the
Industrial Policy Action Plan, Ipap, which is currently happening.
There are no quick fixes to South Africa’s jobs crisis, hon
Minister, but you can either be remembered as the man who heeded the
call of the 34% of unemployed South Africans to take urgent action,
or you can be remembered as the man who ignored them, bound by an
EPG 22 JULY 2014
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ideological fantasy, determined to go it alone, fighting a zero-sum
game of political economic populism with your former Red
revolutionaries.
I would just like to draw attention to two things that the hon Zulu
raised. She said that by 2030, 11 million jobs would have been
created. But this is not going to happen with growth of 1,7%. You
truly have to be living on planet Nimrod to believe such a thing.
[Laughter.] [Interjections.] In fact, we have lost 122 000 jobs just
in this quarter. How on earth are you going to create 11 million
jobs?
The hon Fubbs talks about manufacturing going up, but let me tell
you, there are only three things that have gone up this year and
they are interest rates, the petrol price and unemployment. Those
are the only three things that are on the up. Employment is not one
of them. I thank you. [Applause.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon members, I just want
to issue the call that those members who have declared that they
would be making their maiden speeches, should be assisted and
advised by their political party structures not to be controversial.
All of those who have made maiden speeches have been controversial.
We cannot build a culture of respect for those making maiden
speeches, while we undermine that same culture. Thank you very much,
hon members.
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I now call upon the hon Mr B M Mkongi, who will be making his maiden
speech.
Mr B M MKONGI: Hon Chairperson, Members of Parliament, and
distinguished guests, I am standing here in the front of this House
this evening to put forward a case for the youth, especially in the
era of reindustrialisation. I am dedicating my speech to millions of
young people and their generation, who stood firm and fought
tirelessly against the apartheid colonial machinery that wanted to
rob them of their freedom in their lifetime. [Applause.]
Over the past 20 years the ANC has laid a solid foundation for the
creation of a national democratic society and a better life for all
our people. The ANC-led government has put in place many policies
aimed at youth development and the participation of the youth in the
economy. For this purpose, the ANC-led government established the
National Youth Commission in 1996, the Umsobomvu Youth Fund in 1998
and the National Youth Development Agency in 2009, including the
National Skills Development Framework and the National Student
Financial Aid Scheme, to name but a few. However, more needs to be
done if we want to integrate young people into the mainstream of the
economy.
Youth is a microcosm of society. The problems of our society are
huge and difficult, therefore youth problems are complex and
melancholy.
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More complex challenges still persist and most of them continue to
affect young people in this country. This is a call for action in
the case for the youth. It is in this context that President Jacob
Zuma, in his 17 June 2014 state of the nation address, reminded all
South Africans that, as we enter the second phase of our transition,
we have to embark on radical socioeconomic transformation to push
back the frontiers of poverty, unemployment and inequality; and that
we have to realise that this change will not come about without some
far-reaching interventions. Indeed, we need these far-reaching
interventions.
The ANC understood that the problem in South Africa is structural
unemployment, widening inequalities and widespread poverty. The ANC
is of the firm view that this triple challenge is a direct result of
the persisting and stubborn structural problems in the South African
economy.
The ANC 53rd National Conference in Mangaung concluded that:
These structural problems in our economy require a structural
solution that would transform the trajectory of our economic
landscape.
Since the youth is the largest social group of the unemployed, it
therefore goes without saying that any meaningful economic
transformation will have to jealously target and benefit young
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people. Hence, in this second phase of the transition, the ANC has
adopted a radical stance to economic change based on the currently
existing material conditions. This radical stance is aimed at
decisively breaking ranks with the past through a decisive break
with rising youth unemployment, widespread youth poverty and
widening inequality between the youth and the older generations in
South Africa. This project also calls on us to rid our country of
predatory and exploitative tendencies in the workplace.
This is why the ANC and the President adopted the position that if
we want sustainable and inclusive growth in our country, South
Africa needs to implement industrialisation, reindustrialise, and
integrate youth in the forefront of our industrial strategies.
At the outset we need to state that industrialisation is key to any
meaningful economic transformation to tackle the three interrelated
social ills of poverty, unemployment and inequality. It is key,
because it is only through massive industrial expansion of
production that our economy will be able to create the large number
of decent jobs that our country require and our youth desperately
need, as well as to eradicate poverty as we reduce the income
inequality gap.
The ANC welcomes the development of the Youth Enterprise Development
Strategy by the Department of Trade and Industry, DTI, and many
other similar initiatives that are aimed at increasing the
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contribution of youth-owned and youth-managed enterprises to the
gross domestic product as well as increasing the number of youthowned and youth-managed enterprise start-ups in all sectors of the
economy. However, more still needs to be done.
Going forward, the intensive and extensive training of our youth to
become the core of our labour-intensive, high-tech-based production
processes is therefore essential. Our youth must be targeted in
large numbers for training as artisans, technicians and engineers in
various fields of the real production of the economy to groom them
to be future industrialists.
The ANC-led government therefore remains committed to the agreements
of the Youth Employment Accord, the Skills Accord and many other
initiatives that are aimed at including the youth in skills
development projects; to the improvement of education and training
opportunities for the groupings between school leaving and first
employment; and to connecting young people with employment
opportunities through, amongst others, support for job placement
schemes and work readiness initiatives.
The ANC embraces the creation of black industrialists as well as a
nonracial and nonsexist entrepreneur class in South Africa. Hence
our strategy involves the formulation and strengthening of policies
that support the development of young black industrialists and
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entrepreneurs who will provide productive inputs into the real
economy rather than the so-called shareholder transactions.
The Global Entrepreneurship Monitor 2012 Report notes that,
throughout the world, shifts in population dynamics, technology
changes, fluctuating economies and other dynamic forces have
transformed societies as never before, bringing new challenges and
opportunities to the forefront. Among the responses to these
shifting forces is increased emphasis on entrepreneurship by
government, organisations and the public.
Hence, at home we are facing a major problem of how to tap into this
growing global trajectory when the challenges we are facing are
further exacerbated by the history of the apartheid colonial system,
which today still remains a major obstacle to our collective
prosperity.
In a nutshell, our people face the well-known problems of inadequate
access to credit, lack of business skills, and lack of business
networks to facilitate a prosperous trading environment. Therefore,
what we need to address during this fifth term of Parliament is
marshalling and locating the youth as a key driver of economic
growth. Whilst recognising the great strides that the DTI and our
government have made for the youth in the past 20 years, I contend
that we need to do the following, and fast.
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On the regulatory front, we need a tax regime that facilitates the
ease of doing business by new emerging black industrialists. This
specifically means that in the same way that we aided the growth and
sustainability of white businesses by allowing them to meet minimum
broad-based black economic empowerment requirements, we should have
specific incentives and relaxed regulations for emerging young black
entrepreneurs, and Africans in particular. [Applause.] We should
develop a tax system and regulations that encourage new small and
medium enterprises, SMEs, and growing firms owned by young people,
especially young women. Why do we have an income tax for micro
enterprises or a tax system that hinders the entrance of young
Africans in particular?
There is a clear correlation between exploitation of business
opportunities and levels of education. It follows, therefore, that
the long-term solution lies in education and further education and
training, as Minister Blade Nzimade put it. It responds to the
national priorities of the state. It must produce industrialists to
respond to the era of industrialisation in South Africa. This was
the design of apartheid for white kids. We should teach our youth to
be independent thinkers and go-getters in business and arm them with
entrepreneurial tools from an early age.
We should aim to achieve greater results in innovation, where the
focus should be on new products and services as opposed to competing
in the "me too" commodities and retail environment. We must find a
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way to reward innovation and encourage it amongst young
entrepreneurs and finance those with highly innovative ideas that
would benefit the youth.
We must improve the availability of financial resources in respect
of equity and debt of small and medium enterprises owned by young
people, including grants and subsidies.
Lastly, I believe that access to infrastructure is critical. We must
ensure ease of access to physical resources such as communication,
utilities, transportation, land or space at a price that encourages
the sustainability of young people.
Well, I am taking my gloves off and removing my red beret. Hon
Chance, you must not allow yourself to come into this House and take
chances by telling this House about the DA’s experience. I want to
remind you that the DA has the experience of supporting slave wages
in our economy. In the Western Cape, the DA has the experience of
closing down every institution that is established to empower a
black businessperson. [Interjections.] [Applause.]
I want to tell you about the kind of experience that the DA has. It
has experience in closing down schools that are utilised by black
children in this province. [Applause.] It has a negative track
record, one of fighting against black economic empowerment. That is
the DA that I know. It has governance experience of throwing people
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out of Lwandle and burning their shacks. That is our experience of
the DA in this province. I had to migrate to Gauteng, run away from
this oppression. [Interjections.]
Mrs S V KALYAN: Chairperson, may I address you on a point of order?
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Hon member, you are on
your last two minutes.
Mrs S V KALYAN: May I address you on a point of order?
Mr B M MKONGI: In the last two minutes, the gloves are off. The
matters that are related to the Freedom Charter ... [Interjections.]
Mrs S V KALYAN: Chairperson, I rise on a point of order and submit
that the member is deliberately misleading this House. I ask you to
rule on that. [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order, hon member! It is
unparliamentary to say that somebody is lying.
Mr B M MKONGI: No, it was in the last sitting.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order! Is he
deliberately misleading the House?
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Mrs S V KALYAN: He is misleading the House. [Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Can I hear you?
[Interjections.] Order! Order, hon members! Let us hear the point of
order, please.
Mrs S V KALYAN: Yes, on a point of order: The member is misleading
this House.
Mr B T BONGO: I rise on a point of order, Chair!
The TEMPORARY CHAIRPERSON (Mr B L Mashile): No. Sit down. Can you
continue, hon member, and finish your last two minutes.
Mr B M MKONGI: It is a national question that the DA closed schools
that are utilised by black children in the Western Cape. It is true.
[Interjections.] [Applause.]
Mr G G HILL-LEWIS: Hon Chairperson ...
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Is that a point of
order?
Mr G G HILL-LEWIS: Hon Chairperson, I want to know if the hon member
will take a question on the falsehoods he is saying ...
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Mr B M MKONGI: I don’t have time!
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Take your seat! Hon
member, will you take a question?
Mr B M MKONGI: The Freedom Charter ...
Mr D W MACPHERSON: Hon Chairperson, will he take a question?
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Take your seat. Hon
member, will you take a question?
Mr B M MKONGI: No.
The TEMPORARY CHAIRPERSON (Mr B L Mashile): All right, continue.
Mr B M MKONGI: The Freedom Charter is an authentic document of the
people. The leader in terms of getting the demands of the people
into the Freedom Charter is the ANC. And the ANC ...
[Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order, just hold on, hon
member. Can we avoid misusing time? [Interjections.]
EPG 22 JULY 2014
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Mr D W MACPHERSON: I am not. Chair, I would like to ask you if the
hon member is prepared to take questions on evictions in Gauteng.
[Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): No. Hon member, that
question has been raised and the hon member refused to take a
question. [Interjections.] Please let us not misuse time
unnecessarily. It is late in the night. Hon member, could you finish
in 30 seconds?
Mr B M MKONGI: With regard to the economic transformation agenda of
the ANC, the ANC is an experienced driver that has a licence to
drive a vehicle, and this vehicle is the South African masses.
[Interjections.] The ANC cannot be a reckless driver and put our
economic transformation trajectory in reverse, towards recklessness.
Robustness is not equal to recklessness and radicalism is not equal
to rudeness. The ANC, as the leader of society, is leading our
people into a national democratic society, laying an economic
foundation for that particular national ... [Interjections.] What I
am trying to say is that the EFF is trying to engage in
grandstanding. Thank you very much. [Time expired.] [Applause.]
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Chairperson, I liked
what Ms Tsopo said, namely that we should teach our youth to be gogetters. I think this is very important, because for a very long
time the space was never created for our young black people to be
EPG 22 JULY 2014
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go-getters. [Interjections.] I would also like to send the message
to young people that they must never be afraid of confronting
challenges.
My department envisages a partnership with Basic Education and with
Higher Education and Training so that we will be able to inculcate
the culture of entrepreneurship in our youth. This is the time for
them to do so.
As I did not have enough time in the beginning, I would like to
conclude by saying that I pronounce the Budget Vote as collectively
presented by the leadership of the DTI and the Department of Small
Business Development, which has focused on elements that are aimed
at advancing our mandate. I would also like to say that we are new,
we are young, we will be creative and we will be robust, because the
most important thing that we have to do is deliver on our mandate.
[Interjections.]
I want to say that our department will focus on the active
participation of SMMEs and co-operatives in the priority sectors as
identified by the National Development Plan, the Industrial Policy
Action Plan, the New Growth Path as well as the priority areas for
public procurement. I am mentioning these points because they are
very important.
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The implementation of the Entrepreneurship Development Programme
through centres for entrepreneurship in all nine provinces came into
being; the Seda Technology Programme has started in the nine
provinces; the Incubation Support Programme increased and enhanced
demand for goods and services produced by small businesses and cooperatives; the programme to enhance secondary co-operatives for
inclusion in the value chain was implemented, as was the National
Informal Business Upliftment Strategy, Nibus; and there is
collaboration with the DTI on implementation of export villages and
support for township economies, jointly with Economic Development.
I would also like to make it very clear that there is no confusion
with regard to the functions that have to migrate to us. These are
the following: Co-operative Development Strategy; gender and women
empowerment programmes; the Incubation Support Programme; support
for township business; the Small and Medium Enterprise Development
Programme, SMEDP; Centre for Entrepreneurship; Small Enterprise
Finance Agency; and the Small Enterprise Development Agency, Seda. I
would also like to say that there are financial incentives that have
supported SMMEs and co-operatives within the DTI.
In conclusion, I would like to address Mr Chance.
Mnu Chance, ngicela ungathathi ishansi. Ngicela ungathathi ishansi
ngoba mina nawe sisasendleleni iminyaka emihlanu futhi
nginesiqiniseko sokuthi kule minyaka eyisihlanu esizobe
EPG 22 JULY 2014
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sisebenzisana kuyo, ngiyabonga ukuthi kukhona okuhle futhi okwakhayo
okuvela ngakunina.
Kepha-ke, ngifuna ukusho kuwena Mnu Chance ukuthi angiyena uCinderella mina. Ngilapha ngoba ngikuvezile ukuthi kungifanele
ukuthi ngibe la. Umzabalazo ungihambise amazwe amaningi engingabala
kuwo i-Tanzania, i-Angola, i-Uganda, i-Russia kanye namanye amazwe.
[Ihlombe.]
Ngakho-ke, Mnu Chance ungathathi amashansi ngoba angiyena uCinderella. Siyabonga, Sekela Sihlalo. [Ihlombe.] (Translation of
isiZulu paragraphs follows.)
[Mr Chance, please don’t take chances. Please don’t take chances,
because we have been working together for five years and I’m sure
that something good and constructive will come from you for which I
will be grateful.
However, I’d like to tell you, Mr Chance, that I’m not Cinderella.
I’m here because I have demonstrated that it is befitting for me to
be here. The struggle has taken me to many countries such as
Tanzania, Angola, Uganda and Russia as well as other countries.
[Applause.]
Therefore, Mr Chance, don’t take chances, because I’m not
Cinderella. Thank you, Temporary Chairperson. [Applause.]]
EPG 22 JULY 2014
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The MINISTER OF TRADE AND INDUSTRY: Chairperson, I think we have had
an indication of the spectrum of opinion on these matters, which
actually leads me to believe that we are on the right track. To
start off with the DA, I think that they have been showing
themselves to be very good at describing the woes. In fact, there is
a phrase that was coined by the late bird fellow in the ideological
sense, Spiro T Agnew, who was a Vice President of the United States,
which I think sums them up to a tee: “They are a bunch of nattering
nabobs of negativism!” [Laughter.] [Interjections.]
And, I think, while they are that, they are actually not very good
at offering solutions. You see, the contradiction with the DA is
that their inclination was summed up by the hon Alberts. They
believe in light-touch-only interventions. I think Mr Chance was
also moving in that direction in his intervention.
By the way, I tried to search Mr Chance on Google because I do not
know him, but I find that he does not have a profile on Google, so
he must be even more modest than I. [Laughter.] [Applause.] I think
the contradiction is that when it comes to the Western Cape
government, they want to claim all of the programmes that owe their
existence to our interventions when, in fact, they have done very
little to achieve anything in those programmes. [Interjections.]
[Applause.]
EPG 22 JULY 2014
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That is true of the oil and gas industry in the Saldanha IDZ. It is
true of the clothing and textile sector. It is true of the
television manufacturing that is taking place in Atlantis. It is
true of the green industries that are receiving IDC funding. It is
true of the film incentives that have been the support of the film
industry and it is true of the business process services. All of
those programmes in the Western Cape province owe their existence to
the DTI’s incentive programme. [Applause.]
Let me come to a few points as quickly as I can. Let me say that we
do not believe that industrialisation will be confined to the South
African domestic market. We are not looking at an import
substitution model. We are looking at turning industrial development
towards the continent. We are looking at promoting regional
integration, because that will create a large regional market that
will support and sustain industrial development.
We have just come back from the Brics conference. One of the
interventions that we made during our tenure as chair of Brics was
that we launched a study into promoting value-added trade amongst
Brics countries, and we have agreement on it. That is an indication
that we are looking outside - but we are looking outside in a
strategic way – and we are looking to support manufacturing and
value-added investments.
EPG 22 JULY 2014
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On the bilateral investment treaties, I want to refer the hon HillLewis to an article by Ann Crotty in the last Sunday Times. She
points out quite correctly that the very people who have been
mouthing off about our cancelling the bilateral treaties are now
themselves having second thoughts about those treaties in the
context of the negotiations that they are having with the United
States. [Interjections.] I make no apology for being an early mover
on a very important matter.
Let me just say to the hon MacPherson that we are in fact working
energetically to recapitalise the National Empowerment Fund. We do
believe that the National Empowerment Fund has a critical role to
play.
With regard to the question of the LOAs, letters of authority, from
the National Regulator for Compulsory Specifications, who is he
speaking for? He is speaking for importers of potentially
substandard products. [Interjections.] The time we have taken is so
that we can do a proper assessment. By the way, the time that we
have been taking is much less than two years, which is common in
other places. Let me move very quickly ... [Interjections.]
Mr I M OLLIS: Chairperson, on a point of order, a very serious one:
The hon member who is sitting behind hon Manana just shouted,
“Voertsek,” across the floor. That is not parliamentary!
[Interjections.]
EPG 22 JULY 2014
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Nkosi Z M D MANDELA: Chairperson!
The TEMPORARY CHAIRPERSON: (Mr B L Mashile): Order, hon members! Is
it an allegation, or have you really heard him? [Interjections.]
Order, order! Hon Mandela?
Nkosi Z M D MANDELA: Chairperson, the hon member is misleading the
House. [Interjections.] No such thing was said. [Interjections.]
The TEMPORARY CHAIRPERSON: (Mr B L Mashile): Order! I did not hear
it either. Did the hon member say, “Voertsek?”
Ms N N MAFU: Hon Chair, ek het gesê:“Luister!” Hulle moet luister.
[Tussenwerpsels.] [I said: “Listen!” They must listen.
[Interjections.]]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order! Thank you very
much. Hon Minister, you can continue.
The MINISTER OF TRADE AND INDUSTRY: I want to recommend that they
all get a bunch of hearing aids. [Interjections.] Can I just sum up
what I think of the DA? The DA’s approach to localisation and
industrialisation is insufficient to bring about the structural
changes necessary to realise the growth rates that they are talking
about. So, the growth rates that they are talking about are just pie
in the sky.
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Let me turn briefly to the hon Shivambu. He is quite correct in
saying that we need to move further forward in localisation, towards
the target of 75%, and that we need to do this building on local
capacity. He is quite correct about that. In fact, what we are doing
is that we have included food in the designations that we are
dealing with. The designations are akin to our legal intervention.
What I think is the problem with the hon Shivambu is he thinks that
if we just stand up here and legislate 75% rather than move
progressively towards that ... [Time expired.] Thank you very much.
That’s the problem, See you when I have enough time!
[Interjections.] [Applause.]
Mr N F SHIVAMBU: Chairperson, can you allow him to conclude, please.
[Interjections.]
The TEMPORARY CHAIRPERSON (Mr B L Mashile): Order! That concludes
the business and the Committee will now rise.
Debate concluded.
The Committee rose at 21:11.