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Replies by Deputy President to Questions in the National Assembly

19 October 2017

QUESTION

Whether he can outline the (a) work of the Government in tackling both real and perceived corruption in the state-owned entities and (b) lesson that the Government has learned thus far through its work in tackling such corruption?

NO3220E

Honourable Members,

Corruption in state owned entities is one of the most serious challenges to effective governance in the democratic South Africa.

It constrains the growth of our economy and the development of our people.

We are only now becoming aware of the devastating effect that such corruption has had - and continues to have - on the financial and operational performance of key state owned enterprises.

In addition to the theft of public resources on a massive scale, corrupt practices undermine the ability of public institutions to meet their important development and economic mandates.

As more information becomes available in the public domain on the depth and extent of corruption in such entities, there are several lessons that government and broader society must draw.

The first of these is that SOEs need to be managed by skilled and experienced professionals who are committed only to the wellbeing of the institution and the fulfilment of its developmental and economic mandate.

While government is responsible for determining the mandate of these entities and holding them to account, neither elected officials nor public servants should be involved in the management of these entities.

Secondly, the appointment of SOE boards and executives needs to be more rigorous, consistent and transparent.

To this end, Cabinet has adopted a guide for the appointment of SOE boards and executive officers that should set a new standard across all SOEs. It is critical that this guide be applied for all appointments going forward.

Thirdly, the allegations of corruption that have surfaced over the last few months underline the critical importance of building credible and capable law enforcement agencies.

The criminal justice system needs to have the skills, resources and effective leadership required to investigate each and every credible claim of corruption and prosecute those responsible.

The fourth lesson that we should learn from this experience is that the existing measures to ensure ethical conduct in the executive, among public representatives and in the public service are not adequate.

Government needs to consider instituting lifestyle audits of all senior political leaders and government officials as a matter of course.

Our efforts to grow the economy are heavily dependent on entities like Eskom, Transnet and Prasa to provide goods and services - to citizens and business alike - efficiently and affordably.

It is therefore essential that we act boldly to root out corruption in all these entities and return them to financial and operational effectiveness.

The extent and nature of this problem means that it cannot be achieved by government alone.

It requires the involvement of institutions across society, including the Public Protector, law enforcement agencies, civil society groups and Parliament, which has taken up this challenge in a determined manner.

We are hopeful that all these efforts on various fronts will succeed in ending this corruption.

I thank you.

QUESTION

Whether, with reference to his replies to oral questions 28 and 29 on 23 August 2017 and oral question 32 on 6 September 2017 and given that South Africa has dropped 14 positions to number 61 in the latest Global Competitiveness Index of the World Economic Forum, with the top three reasons cited for this decline being corruption, crime and government instability, and his agreement that far more will need to be done than the current programmes and plans of the Government to restore investor confidence to ensure that our economy does not continue to suffer as a result of policy and political uncertainty, allegations of state-looting and persistent high levels of crime, the Government is taking any additional steps to assure investors that (a) the country remains competitive and investor-friendly and (b) it is addressing the primary concerns raised for the specified decline on the Global Competitiveness Index?

NO3218E

Honourable Members,

The current global and economic downturn has seen a contraction in investment flows globally and South Africa has not been immune to the contraction.

The global trend in relation to FDI flows is to invest domestically and also in the traditional developed markets and big emerging economies such as China and India.

South Africa`s drop in the World Economic Forum`s Global Competitiveness Report ranking from 47 to 61 is attributed to an increase in corruption, crime and theft and government instability.

That means that we need to decisively tackle corruption and address governance challenges as a matter of urgency.

At the same time, we need to strengthen our efforts to promote investment.

Government has established the IMC on Investment to oversee our overall investment policy, alignment and coordination and improve the investment climate.

As part of this approach and in consultation with the private sector, we have established an inter-governmental clearing house, Invest South Africa, as a one stop shop approach to investment.

To counter negative perceptions, Invest SA meets with investors on various platforms and on an ongoing basis to discuss investment opportunities and address investor concerns.

In view of the slowed growth and the decline in FDI, Invest SA is intensifying its efforts to attract and secure both foreign and domestic investment.

Invest SA has formalised a relationship with the World Bank to address South Africa`s ranking in its annual Ease of Doing Business Survey and overall investment climate issues over the medium to long term.

Invest SA, continues to market South Africa as a lucrative and attractive investment destination.

For the first two quarters of this financial year, Invest SA achieved an investment pipeline of R 42.7 billion.

More broadly, government`s massive infrastructure programme is improving conditions for investment.

Incentive programmes like that in the auto industry are attracting new investment and encouraging companies to expand their operations.

Despite the challenges, investors see South Africa as an attractive investment opportunity and a viable long term investment destination.

If we are to realise our economic potential, however, we need to meaningful address the problem of corruption and instability in government.

Once we have done that, I am certain that investor confidence will improve and South Africa will move up the global competitiveness rankings.

I thank you.

QUESTION

Whether, with reference to his address on 25 August 2017 at the Taking Parliament to the People programme, convened by the National Council of Provinces, in which he referred to the challenges identified in the latest Poverty Trends Report released by Statistics South Africa which offered a guide on where the country needed to focus its efforts when implementing interventions and programmes aimed at alleviating poverty and the fact that, whilst we are now in a better position than we were ten years ago when close to two-thirds of South Africans were living below the poverty line, he can elaborate on any measures that the Government has taken to avoid the danger that the progress made may be reversed without decisive action being taken?

NO3221E

Honourable Members,

The reduction of poverty and inequality is the central objective of government`s economic programme.

The most effective way to reduce poverty is through the creation of jobs and the development of skills.

Since 1994, we have used a combination of instruments to tackle poverty.

These include the reprioritisation of the budget towards pro-poor expenditure, social security measures, provision of services and facilities, redistribution of assets and creation of employment.

Budget spending continues to favour those areas that have the greatest impact on poverty.

As we work to grow the economy and overcome the legacy of apartheid inequality - a process that will take several decades - our social security system is critical to improving the lives of the poor.

The number of social security beneficiaries continues to grow, as does the value of the various social assistance grants.

Since 1994, government has been firm in its resolve to improve access for the poor to other social services, such as health services, sanitation, food security and nutrition, transport, housing, electricity and education.

It is important that our citizens receive the support they need to chart their own path out of poverty.

Key in this regard are government policies on land reform, the delivery of housing, the reform of water rights, infrastructure development and the meeting of energy requirements.

Through the implementation of public employment programmes, particularly the Expanded Public Works Programme, many poor houselds are able to receive a stipend that goes a long way in alleviating poverty.

Additionally, we have seen services being delivered through labour intensive methods while creating assets and effecting training.

In conclusion, there are a number of strategies that government is employing to combat poverty.

Some involve the provision of basic services such as health care, water and sanitation and education.

Others, such as the social assistance grant programme and the various poverty relief programmes, are intended to provide a safety net for those in society who are most vulnerable.

This has been possible through a sustained focus on pro-poor budgeting and underlines why it is critically important for us to grow the economy and expand the funds available to continue this work.

I thank you.

QUESTION

Whether he, in accordance with his responsibility as the Chairperson of the Inter-Ministerial Committee on State-Owned Enterprise Reform, offered the Minister of Finance, Mr K M N Gigaba, his considered views on the latest multibillion Rand bailout for the SA Airways; if not, why not; if so, what are the relevant details?

NO3219E

Honourable Members,

The Inter-Ministerial Committee on SOE Reform is responsible for the implementation of the key recommendations of the Presidential Review Committee on State Owned Entities.

These recommendations relate in the main to the design of our SOE landscape and the policy measures required to strengthen the ability of these critical entities to fulfil their developmental mandates.

The IMC does not have a mandate to deliberate on the funding requirements of specific SOEs.

The decision to transfer funds to SAA from the National Revenue Fund was therefore not placed before the IMC for consideration.

I thank you.

QUESTION

With reference to the issue of drug abuse that affects the youth as raised by him during Heritage Month at the opening of the Thari after-school Programme in the Free State and the Empilisweni HIV/AIDS and Orphans Centre in the Eastern Cape which focuses on the wellbeing of working class and poor children and the youth, also in the light of the statistical data recently released by Statistics South Africa and his observations regarding the state of our country`s youth, (a) what steps is the Government taking to address the multiple challenges faced by young South Africans and (b) how is the Government enabling partnerships with the corporate sector and civil society to work together with it to address the specified challenges?

NO3222E

Honourable Members,

The challenges that face our youth require urgent and sustained action by all social partners.

Our blueprint in seeking to address these challenges is the National Youth Policy 2020 which proposes a range of interventions, including:

Interventions to support youth absorption into employment, providing work exposure, developing and supporting youth enterprises and cooperatives to facilitate economic participation by the youth.

Ensuring support, guidance and provision of education and training to young people in need.

Multi-sectoral interventions to support healthy lifestyles and combat substance abuse among the youth.

Better coordination and implementation of the National Youth Service and broadening sports and recreation opportunities for young people.

Different government departments and agencies drive specific youth empowerment programmes.

The Department of Small Business Development has an incentives programme for youth-owned co-operatives and a programme on business development for young people.

The Expanded Public Works Programme has targets for work opportunities for young people.

The Department of Higher Education and Training has a very successful programme to combat HIV through engagement with students at TVET colleges and institutions of higher learning.

But government cannot successfully address these challenges alone.

Strategic partnerships with the private sector and civil society groups are critical in unlocking empowerment opportunities.

One of the key initiatives that we are currently embarking on in partnership with business is the Youth Employment Service, which aims to empower one million unemployed youth over the next three years by offering them quality work experience.

Another programme government is implementing in partnership with other stakeholders is the She Conquers Campaign for adolescent girls and young women.

The Campaign targets adolescent girls and young women aged 15-24 and their male partners with the aim of decreasing new HIV infections, decreasing teenage pregnancies, keeping girls in school until matric, decreasing gender-based violence and increasing economic opportunities for young people.

The Thari programme, which we launched in Botshabelo last month, is another outstanding example of partnership between government, NGOs and communities.

It aims to ensure the safety of children and improve educational outcomes.

Qualified child and youth care workers prove children with life skills and provide psycho-social support to vulnerable children and their families.

Women and children are empowered to protect themselves against abuse and exploitation.

The importance of such initiatives have been underscored by the recent case of 87 primary school girls in Soweto who were allegedly sexually abused by a security guard.

This is an atrocity that reflects the extent of the epidemic of abuse that is destroying the future of our children.

It is an indictment on all of us that this sort of crime is allowed to happen.

While the challenges facing youth are great, there are many important and valuable initiatives to empower young people and improve their lives.

By working together, we can deepen the impact and expand the reach of these initiatives and secure a better future for all our youth.

I thank you.

QUESTION

Whether he has found that the Minister of Finance`s directive to all of government and its entities to review their work programmes with a certain auditing firm (name and details furnished), in response to the revelations that the firm`s auditing of the SA Revenue Service was replete of impropriety, impacts any programmes of his Office or government entities reporting to him with regard to cost, since it will require the re-allocation of resources to conduct the review of government projects in his Office and of entities reporting to him that was audited by the specified firm and/or provided with technical expertise; if so, what are the relevant details?

NO3223E

Honourable Members,

The Office of the Deputy Pesident does not procure any auditing services, nor are there any entities that report to the office.

On the broader question, I am informed by the Finance Ministry that there is no intention from the Minister of Finance to retrospectively review the work done by KPMG.

Since government entities confirm the appointment of audit firms annually at their AGMS, the statement was to give guidance that they consider the factors surrounding this audit firm when they do so.

The objective is to protect the integrity and standard of accounting systems.

The announcement was to ensure that good governance is no compromised going forward.

I thank you.

     
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