Budget Vote 35 - Trade And Industry

By Mrs SP Lebenya-Ntanzi MP


National Assembly:  4th May 2010


Honourable Speaker,


The IFP notes with great concern that the transition from the Mbeki administration to the incumbent Zuma administration has shown that the more things change, the more they stay the same. Despite all the radicalism of Polokwane and the announced policy shift, what we are witnessing two years on is a startling continuity. I will spell out its benefits as well as its drawbacks.


To prove this point as a background to my debate on the current Trade and Industry budget, I will quote Finance Minister Pravin Gordhan's recent pledge to "maintain prudent macroeconomic policies that promote a favourable environment for investment and job recreation through low stable inflation and interest rates ".


Among other policy announcements, the Minister confirmed an exchange rate policy that will further ease the way for imports while making life more onerous for our exporters. The obvious outcome is a growing current account deficit.


The Minister of Finance showed a great deal of innovation which was mirrored by his colleague at Trade and Industry in the field of youth employment. The government is planning to stimulate it by way of subsidising youth workers' wages by allowing employers to claim back part of such wages through the tax system.


The IFP welcomes this policy as an example of job creation with a direct involvement of the job-creating private sector rather than a bland government intervention. After all, the Expanded Public Works Programme, which has been the flagship government policy in the field of job creation until now, and which has proved to be more of a welfare promoting than job creating venture, inculcating further dependency on the state by exaggerating its role in job creation.


As we know, job opportunities created by the EPWP tend to be of a short nature - lasting a month and half on average, during which time little or no transfer of marketable skills can possibly take place. The fact that the government counts job opportunities separately even if they are afforded the same beneficiaries means that the total number of such jobs is vastly exaggerated. We believe that the proposal for a wage subsidy to support youth employment could inspire economic policy on a smaller scale in the provinces, working through various public entities.


The IFP has repeatedly in the past raised concerns with South Africa's lack of leadership and direction, especially on the economic front where there is a lack of economic vision and the lack of a clear, crisp and coherent industrial policy. It is with this in mind that the  IFP is concerned that the Minister has not outlined clearly how the new Industrial Policy Action Plan 2 or IPAP2 as it is commonly referred to, will be aligned with other Departments.  It is also worrying that it has not been made clear how this plan will be resourced. 


When the Minister made the statement on IPAP2 in Parliament early this year the IFP supported the good initiative by the Minister and the Department but in terms of its support for a new growth plan and for stimulating industry as part of the Department's industrial policy action plan, we wonder why priority is not given to small-scale agriculture. This would present an opportunity to speed up Land Reform through more business-friendly measures than the recently resuscitated threat to expropriate commercially exploited farm land.


Furthermore, IPAP2's vision to create 2 477 000 direct and indirect decent jobs, is definitely a step in the right direction. However, we sincerely hope that these ambitious plans will not remain a mere wish-list but that it will be a significant step forward in scaling-up up our efforts to promote long term industrialization and industrial diversification. The IFP has warned on numerous occasions, that a failure to urgently address our employment crisis will come at the expense of our young people, and the future of our nation.


In addition to our concern over IPAP2, Cipro remains a problem and seems to be somewhat dysfunctional with its registration of both businesses and intellectual property rights. Cipro with its current modus operandi will only lead to a slower economic recovery for the Country and measures must be put in place to rectify their shortcomings and the slow turnaround times for business registration.


In conclusion, one last comment about a threat to our economy that was put to bed during President Jacob Zuma's recent visit to the UK. The IFP appreciates and applauds the President's comments on nationalisation and his unequivocal denial that the nationalisation of South Africa's mining industry is the policy of this government. He has arguably done more for our Trade and Industry than the entire budget of this Ministry for the current financial year.


The IFP will support this budget vote.


I thank you!


Contact: Mrs Pat Lebenya-Ntanzi, 078 186 3619.