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Deputy President David Mabuza: Reply to questions in National Assembly

30 Aug 2018

19. Ms N Gina (ANC) to ask the Deputy President:

With reference to the 16th annual Nelson Mandela lecture delivered by the former US President, Mr Barack Obama, wherein he illuminated Madiba's vision of a united, just and equal society and the struggle for social cohesion in our society, which is defined by competing interests, unequal distribution of wealth and power and a fierce contestation of perspectives and ideologies, (a) what are the Government's programmes in this centennial year to continue building on Madiba's legacy of forging national unity and social cohesion and (b) how can our country continue to be a beacon of hope to Africa and the world that we are capable of overcoming our differences and focus on achieving social and economic justice? NO2391E

Reply:

We are proud of the contribution that former President Nelson Mandela made in our country in the fight against apartheid to a democratic society that we enjoy today. This is why government resolved to celebrate Madiba's centenary.

President Cyril Ramaphosa officially launched the National Programme during the State of the Nation Address on 17 February 2018. Subsequently, various provinces and municipalities also announced their intentions of celebrating this centenary.

These centenary celebrations are meant to bring diverse South Africans together in pursuit of building a nation as envisioned by these leaders. Among key issues, is to highlight the principles and values espoused by these great Africans, and to galvanise the spirit of national pride and Ubuntu.

In essence, the celebrations are about sharing the lessons from the life and leadership of Madiba to forge a shared sense of nationhood and patriotism.
It is envisaged that the messages shared through these celebrations will contribute to the removal of obstacles that divide us, as we strive to build upon the many ties that bind us.

We hope that South Africans will among other issues, be encouraged to give an amount of their time to make every day a Mandela Day; and use these celebrations as a vehicle to actively promote social cohesion.

Madam Speaker,

A capitalist economic system anywhere in the world, consists of inherent contradictions that inevitably perpetuate not only the income gap amongst the people but also breeds unwanted social friction.

To achieve a just and equal society would require us to confront these prevailing contradictions. In our instance they manifest themselves in racially skewed socio-economic patterns.

For as long as these contradictions exist, attaining a just and equal society would continue to be elusive and difficult to achieve.

This therefore calls on all of us to emulate the values of Madiba just as we should do the same with Mama Albertina Sisulu's values. These values are underpinned by selflessness, courage and compassion for the poor. This would be a continuation of their vision to build a united and cohesive society.

Without this, it would be difficult to address the current crisis of poverty, unemployment and inequality that continues to polarise our society. A cohesive society must be able to balance all such contradictions in a mutually reinforcing manner, and work towards reducing if not eliminating inequalities in society. Therefore, to achieve a truly cohesive society we must be ready to balance all these socio-economic contradictions.

In many respects, the soul of our nation remains broken along two parallels of the rich and the poor. As much as we have made great strides since 1994, we are still far from attaining the South Africa of Madiba's dream. That is why we have taken the route of addressing these imbalances through amongst others, the unfolding process of land reform.

We will do this process within the prescripts of our constitution and law. South Africans have demonstrated their resilience and ability to confront and to resolve national challenges through dialogue. This is Madiba's virtue, this is our virtue, and this is our contribution to the world. Because of this position, we will remain a beacon of democratic governance in Africa.

Our ability as a nation to come together, negotiate and build consensus on difficult issues remains our defining character. It is this character that defines our allegiance to democratic governance in our own country, in the region and the world.

Thank you!

20. Mr M Hlengwa (IFP) to ask the Deputy President:

Given South Africa's past and present socio-economic inequalities, which have resulted in the breakdown of social cohesion in the country, has he found that the escalating cost of living is in the best interest of promoting social cohesion, economic growth, job creation and the eradication of poverty? NO2390E

Reply:

Honourable Hlengwa, this is an important question.

The cost of living in South Africa has a deep impact on the lives of our people. The poor will often feel the impact of increasing cost of living, thus further entrenching the levels of poverty. Government is therefore, very focused on addressing these rising costs across the economy.

During 2015 and 2016, the severe drought across the country had a serious impact on our agricultural production. This led to increases in the cost of bread and other cereals, which are staples in the homes of many South Africans. The poor were, of course, the hardest hit. Since then the drought has eased in many parts of the country, and production levels for wheat and maize has increased substantially. This provided some relief to food prices.

In the last 12 months, food prices have increased by 3%. The rise in food prices has been softened by a decrease in the price of bread and cereals by 3% over the same period, and a decrease in the price of fruits by 4% over the same 12-month period. This will have eased some of the pressure on the poorest households in South Africa, but food prices remain unaffordable to many citizens.

There are a number of products that are currently zero-rated for VAT. These include brown bread, maize meal, samp, milk, rice, vegetables, eggs and fruit. A task team was established by National Treasury last month to investigate other products that could be zero-rated, or exempted from VAT. We expect to receive their findings in due course.

Fuel prices continue to be a concern for Government. Between July 2017 and July 2018, the fuel price increased by 25.2%, leading in part to a 10% increase in the cost of transport. Fuel prices have been driven by higher global oil prices and a weaker rand. Government is currently considering available options to address the costs of petrol and diesel.

While there is a lot of work to address the cost of living, particularly for the poor, there is also a lot of work underway to improve job opportunities and better wages, so that more South Africans can be enabled to mitigate the impact of the rising cost of living.

The National Minimum Wage is an important policy intervention in ensuring that more South Africans earn a decent wage. The National Minimum Wage Bill when assented into law will complement the efforts of trade unions through collective bargaining, as well as the monthly social grants payments.

Honourable Members, it must be pointed out that social cohesion can never be achieved if the majority of South Africans remains trapped in poverty.

The escalating costs, especially where the poor feel the impact more than other parts of society, are a challenge for any economy. Given South Africa's history, the high levels of inequality, as well as the need to reduce poverty levels, it is imperative that as this Government we make the necessary interventions to mitigate the impact. We have no choice but to address the cost of basic goods and services in order to provide our people with opportunities to create their own businesses, find decent work, and earn decent wages.

Therefore, our response to address the negative impact of rising costs to the poor requires a comprehensive approach that is multi-faceted.

Over and above the VAT zero-rating of basic food items, our comprehensive anti-poverty programmes are geared towards cushioning the poor, in order to ensure that poor households earn incomes that allow them to participate in the economic system.

Government will continue to prioritise public employment programmes to create job opportunities and provide many young people with some income relief.

We are also focusing on developing and supporting small businesses and cooperatives in order to expand economic participation and job creation of all South Africans across all sectors of our economy. As we do this, the poor will be absorbed into productive economic development and employment opportunities.

More importantly, the government has also embarked on a vigorous campaign to attract investment, which will grow the economy and expand employment opportunities. To this end, the President has announced an Investment Conference for later this year, with the aim of attracting R1.3 trillion over the next five years. This investment should come from foreign and local investors.

Thank You!

21. Mr M L Filtane (UDM) to ask the Deputy President:

Whether, the Government has any plans for new and innovative practical steps that it intends taking to drastically reduce the ever-rising unemployment rate that currently stands at 36,7% of which 52% is youth unemployment in light of the failure of the Expanded Public Works Programme due to alleged corruption, mismanagement and incompetence by the public administration? NO2394E

Reply:

We must start by dispelling the myth that the Expanded Public Works Programme is a failure. The programme continues to impact positively on the lives of participants, especially in alleviating poverty through the provision of work opportunities for poor and unemployed people living in socio-economically depressed areas.

The fundamental objective of the EPWP is to increase employment opportunities so that individuals, who cannot find work can earn an income, gain experience and skills through productive work.

Whilst the EPWP contributes to the creation of employment opportunities for the unemployed youth, there is sometimes an unrealistic expectation for the EPWP to be the panacea for unemployment challenges in the country. It is a transitional intervention, while the structural changes in our economy are addressed towards full employment.

Undeniably, EPWP has an important role to play but it cannot be the only instrument to address unemployment. These unrealistic expectations are likely to result in failure and pessimism about the value of the EPWP. Other government interventions that responds to youth unemployment include government support in initiatives that promote industrialisation, improved agriculture production and improved tourism. These are supposed to contribute towards increased employment along with the EPWP.

Through the partnership with the Manufacturing, Engineering and Related Services Sector Education and Training Authority (merSETA), government seeks to address the shortage of scarce and critical skills required by the economy. This includes training youth on various artisan trades such as Auto Electricians, Boilermakers, Diesel Mechanics, Electricians, Fitters & Turners, as well as Motor Mechanics.

Over and above the training provided, hundreds of Small, Medium and Micro Enterprises (SMMEs), which includes cooperatives, have been supported. This support includes capacity building and training assistance with regard to compliance matters required from SMMEs by various industry bodies.

Let me state that abuse of recruitment of EPWP participants for narrow party political, factional, or individual reasons is unethical and unacceptable, regardless of the party-political affiliation of those involved.

To address the risk of corruption and fraud in the EPWP, the Department of Public Works has developed the EPWP Recruitment Guidelines that were approved by the Minister of Labour in December 2017. These guidelines describe the requirements for fair, equitable and transparent recruitment processes of participants in the EPWP. In implementing these guidelines, all participating stakeholders are expected to enforce them. In cases where these guidelines are violated, members of the public are encouraged to report such incidences.

Thank You!

22. Mr X Mabasa (ANC) to ask the Deputy President:

In the context of building the township economy as a vehicle for economic growth and development that is more inclusive and creates job opportunities, how is the Government ensuring that the economy is regulated in a manner that results in investment in the townships? NO2393E

Reply:

Honourable Mabasa, townships under the apartheid spatial planning framework, were designed simply to be pools of labour to service the main industrial and commercial areas. Economic activities were confined largely to spaza shops, taverns and other small businesses. Such policies kept black South Africans out of the mainstream economy.

With freedom that came after the democratic elections in 1994, concerted efforts were undertaken by the ANC government to reverse the legacy of apartheid spatial planning.

We saw a roll-out of essential services to the townships, which saw them being electrified, larger shops and malls located closer to where people live. Today there is a flourishing number of township enterprises that were not there before. However, the opening of bigger businesses in the townships, negatively impacted on township businesses previously owned by local residents leading to most of these businesses having to close down.

It is worth noting that rapid rate of urbanization provides a constant growth to the potential economic base of township enterprises. However, many of these township enterprises are still constrained by policies, practices and sometimes regulations that do not give them the space to grow into larger, dynamic businesses.

These include absence of appropriate infrastructure, onerous municipal regulations, risk-averse attitude by some financial institutions and concerns about crime, to cite a few examples.

In respect of infrastructure, for a hawker who sells at the side of the street or near major commuting centres, the absence of water points or sanitation facilities is a constraint. In townships with inadequate supply of electricity, it means that spaza shops cannot have fridges for certain perishable products.

Similarly, small traders often have no places where their goods can be stored. Therefore, to address these challenges, Government has been rolling out economic infrastructure such as electricity and roads to boost the informal businesses in township and rural areas.

To promote access to capital, we are putting more money into small business development initiatives to give agencies like Small Enterprise Finance Agency and others, more resources to support township enterprises. We need commercial banks to come to the party and partner with government and fund township and rural entrepreneurs.

Making space for new investment in township and rural enterprises has the potential to unlock growth and employment, create the entrepreneurs of tomorrow, and foster the creativity and innovation desired for the Fourth Industrial Revolution.

There must be a deliberate effort to leverage government procurement to support economic participation and industrialization efforts in township and rural areas.

Big businesses must meaningfully integrate township businesses into their procurement value chains to ensure that economic benefits accrue to local businesses. For instance, a mall in the township must find a way of sourcing its fresh produce and goods from local farmers and producers where these are available at the right level of quantity and quality.

As government, we have begun to open up markets to emerging farmers and small businesses to participate in the Government Nutrition Programme. We want to ensure that government is able to procure all that is produced by emerging farmers to ensure that our facilities such as schools, hospitals and correctional centres contribute to stimulating the agricultural sector.

More importantly, we must leverage our government infrastructure development programme to stimulate manufacturing of construction materials in townships and rural areas. We already have township and rural businesses that are manufacturing bricks, tiles, doors, roof trusses etc.

As government, we will ensure that we support the development of township and rural businesses to supply construction materials to government infrastructure projects such as construction of roads, houses, hospitals, schools etc.

In some provinces, this is already happening albeit at a very small scale. This is not yet enough. More work still needs to be done across all government sectors.

For us, this is at the heart of economic transformation and empowerment.

Making space for new investment in township and rural enterprises has the potential to unlock growth and employment, create the entrepreneurs of tomorrow, and foster the creativity and innovation that will address the needs of our economy.

Township enterprises provide opportunities for employment across a number of segments of the labour force and are an important means to address inclusion and reduce poverty. In addition, entrepreneurial opportunities represent an important channel for economic participation and transformation. This would allow disadvantaged South Africans, including youth and women, to create their own opportunities to participate in the economy.

Thank you!

23. Ms D Carter (Cope) to ask the Deputy President:

With reference to his inaugural question and answer session in the National Council of Provinces on 28 March 2018 in which he supported the announcement made by the President, Mr M C Ramaphosa, in his reply to oral question 5 that all members of the national executive would be subjected to lifestyle audits, (a) what is the current status of the Government's decision to introduce lifestyle audits and (b) are the lifestyle audits being undertaken by an independent body with no relation to the Government? NO2443E

Reply:

The President established a technical team under the leadership of the Director-General in the Presidency to explore various options in the conduct of lifestyle audits.

The team consisting of various key stakeholders in the law enforcement, public service and taxation section, is currently seized with the matter. I am advised by the Director-General in the Presidency that a stakeholder roundtable is scheduled to take place by the end of September to finalise recommendations that will be presented to the President for his consideration.

Given that this process is still underway, once it is finalised, the public will be informed of its implementation by the President.

Thank you!

24. Mr A Botes (ANC) to ask the Deputy President:

In light of the fact that the Human Resource Development Council successfully hosted its third Summit in May 2018, where it launched the revised strategy towards 2030, what (a) were the key recommendations of the summit and (b) are the significant aspects of the revised strategy? NO2573E

Reply:

On 10-11 May this year, we hosted a third HRDC Summit that was attended by similar institutions from the region. The intention was to develop new networks, strengthen existing partnerships, and share the latest lessons on how we can transform our economies through education and skills transfer. This is important in light of emerging trends in global economy especially the implications of what is termed as the Fourth Industrial Revolution.

At that Summit, a point was made that the pace of change over the last few years has largely been shaped by technological disruption and innovation. Such technological disruptions have an equal impact on the current set of jobs in the market. Of course, we have to embrace these global developments. As we do so, our training and skills development must be accelerated to keep up with the pace of change bearing in mind that even jobs that were considered as vocational, are now becoming high tech and require specialised knowledge and skills.

It is important to capitalise on opportunities that would be presented by the Fourth Industrial Revolution to our economy. In so doing, we must be mindful how the first three industrial revolutions impacted the world in general.

During the First Industrial Revolution, the western world moved from mostly agrarian and rural societies into becoming industrial and urban, yet Africa lagged behind.

When the Second Industrial Revolution that was characterised by a period of growth for pre-existing industries and expansion of new ones, such as steel, oil and electricity, again Africa lagged behind.

The Third Industrial Revolution, which was about the advancement in Information Communication Technology, once more Africa throughout this period of development, has been left lagging behind.

Therefore, the HRDC Summit looked at how as a country and region, we should position ourselves to mitigate any similar negative impact on economic growth, development and job creation.

The recommendations of the third Human Resource Development Council Summit had several components, including youth unemployment and empowerment where it resolved that research should be done to provide a much clearer understanding of supply and demand in the labour market. This should enable proper planning for, and absorption of youth into employment. To this end, Government will ensure that resources intended for youth employment are aligned with the current policies for youth development.

On the Fourth Industrial Revolution, it resolved that the potential of future jobs in our country should be explored by relevant departments and institutions of the state. This implies that the Fourth Industrial Revolution and the economy should be the subject of ongoing research, where targeted programmes are developed to exploit its potential by connecting the National Human Resource Development Strategy and sector-based actions.

The Department of Science and Technology is making investment in technological building blocks of this revolution through public-funded science, technology and innovation plan of action. Through smart investments in research and development, the Department is supporting South African industry to grow and create more jobs through building scientific, technological and knowledge-based capabilities.

The Summit further emphasised the issue of partnerships between all stakeholders especially government, training institutions and industry. The Executive Committee of the HRD Council is establishing a Standing Committee, to monitor the implementation of recommendations between the summits.

Honourable Members,

The reviewed Human Resource Development Strategy seeks to align itself with the National Development Plan. This aims to build a skilled and capable workforce to support an inclusive growth path, which would be achieved through an increased access to education and training.

In this regard, government is working together with various stakeholders in academia, business sector, organised labour and civil society to realise these objectives.

Thank you!

     
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