9. Mrs J D Kilian (Cope) to ask the Deputy President:
With reference to the report by the Special Investigating Unit that was tabled in Parliament on 26 July 2012, in terms of which more than R5 billion in allegedly misspent taxpayers' money is being investigated, how does the Government intend to stop the (a) looting, (b) tender fraud and (c) irregular spending in all three spheres of government?
Reply
Honourable Member, in respect of dealing with corruption we have the laws and institutions in place and targets have been set, so our attention is on ensuring the effectiveness of these measures, and to build public confidence.
For example, our endeavour to root out corruption has necessitated that we pay greater attention at eliminating weaknesses in our procurement system which is often the source of most of the corruption we encounter.
In this regard National Treasury is busy with the refinement and optimisation of our procurement system. Additionally, National Treasury recently published for public comment Municipal Financial Misconduct Regulations whose aim is to introduce measures intended to combat corruption in the public and private sectors through advocacy, strengthening the legal and policy prescripts and frameworks and most importantly, the implementation thereof.
Furthermore, it is well known that apart from the Special Investigating Unit, government has established other agencies whose mandates, among other things include combating serious commercial crimes and corruption. These include the Directorate for Priority Crime Investigation (or HAWKS), the Asset Forfeiture Unit, the Multi-Agency Working Group and the Public Service Anti-Corruption Unit.
In addition, several departments have established anti-corruption Hotlines to which suspected incidents of corruption are reported by members of the public.
However, rooting out corruption demands far more than just institutions and laws. Corruption happens when people who work inside and outside government manipulate the system for their own benefit. This happens despite the robustness of anti-corruption institutions.
In short Honourable Member, I am arguing that corruption undermines democracy and therefore, all of us, especially ourselves who are entrusted by the public to uphold the Constitution, must work in concert to strengthen institutions and programmes designed to free our society from the scourge of corruption.
We must raise the bar in terms of accountability and monitoring of how public funds are used. We must work together to ensure that each programme of the democratic state yields quality results thus accelerating transformation, service delivery and the building of a non-racial, non-sexist, prosperous and democratic South Africa.
I thank you.
10. Ms J Tshabalala (ANC) to ask the Deputy President:
(a) What were the considerations that underpinned the Government's decision to loan US$ 2 billion to the International Monetary Fund’s crisis fund (details furnished) and (b) how is this intended to (i) influence world economic policy, (ii) transform the governance of international financial institutions (iii) enhance peer leadership among developing nations?
Reply
The commitment that the International Monetary Fund secured from some of its members at the G20 Leaders Summit in Mexico in June 2012 to increase its resources by US$456 billion, is intended to create contingency funding in the event of further deterioration in the global economic situation, and could be used by any of the members of the IMF to stave off the risk of another financial crisis.
South Africa’s commitment to contribute US$2 billion to the fund was informed by the need to promote global financial stability and prevent a downturn in the global economy, which will have adverse consequences for South Africa’s growth and employment prospects, given our trade and financial exposure to the Euro Area and global markets. Thus, it is in our national interest to strengthen IMF resources.
The funds used for this purpose would be considered part of South Africa’s foreign reserves. The funds will be invested and earn interest, and would only be drawn down in emergency circumstances. If the funds are drawn down, they will ultimately be repaid and they will continue to earn interest over this period.
South Africa’s commitment is intended to promote global economic policy coordination and cooperation. South Africa´s participation in this resourcing exercise anticipates that all the quota and voting reforms agreed upon in 2010 will be implemented in a timely manner.
Thus, South Africa’s resource commitment is intended to promote reforms in the governance of the International Monetary Fund in particular and of international financial institutions in general.
South Africa’s contribution was part of US$75 billion committed by the BRICS and is intended to enhance peer leadership among this group of developing nations. The relative contributions per country are:
- Brazil - US$ 10billion
- Russia - US$ 10 billion
- India - US$ 10billion
- China - US$ 43billion; and
- South Africa - US$ 2billion
The resource commitment by South Africa and the other BRICS members, in anticipation of the implementation of the 2010 International Monetary Fund reform agreement, will strengthen their leadership in advocating for the reform of the governance of the IMF.
I thank you.
11. The Leader of the Opposition (DA) to ask the Deputy President:
(1) Whether the National Economic Development and Labour Council (Nedlac) has submitted its final proposals on the implementation of the youth wage subsidy scheme to Cabinet; if not, (a) why not and (b) what are the reasons for the continued delay; if so, when;
(2) whether the proposals will be made public; if not, why not; if so, on what date and (b) what are the further relevant details;
(3) whether he, as head of the Job Creation Commission, approved the National Treasury’s Model for a Youth Wage Subsidy (details furnished); if not, what is the position in this regard; if so, what are the relevant details?
Reply
Cabinet has not yet received final proposals on the implementation of the youth employment incentive. I am informed that both organized business and labour have made comments on the proposal and have raised several issues that require further discussion.
The Honourable Member would recall that the Youth Wage Subsidy proposal was announced in the State of the Nation Address of 2010, whereas the Short-term Job Creation Commission was announced after the July 2011 Cabinet Lekgotla.
The proposed Youth Wage Subsidy is part of government’s response to youth unemployment. The intention of the scheme is to create opportunities for the youth or first-time job seekers to gain entry into the labour market and work experience which will improve their employability.
Government was well aware at the time that it proposed the Youth Wage Subsidy policy that it would have to be referred to NEDLAC for discussions so that when it is implemented all social partners will have been consulted and considered the socio-economic impact of this policy - as required by the Constitutive Act of NEDLAC.
Once this legislative provision has been satisfied, and all social partners have participated and enriched the proposal, government will complete its processes and make the necessary announcements.
I thank you.
12. Mrs E M Coleman (ANC) to ask the Deputy President:
(1) (a) What progress has been made in achieving the targets of job creation that were set in October 2010 (details furnished) and (b) what steps did the Government take to encourage the private sector to create jobs;
(2) whether the Government has identified any new areas that have the potential for creating employment on a greater scale; if not, what is the position in this regard; if so, what are the relevant details;
(3) whether the Government has assessed the impact of slow growth on the economy in order to reach the target of creating 5 million new jobs; if not, what is the position in this regard; if so, what are the relevant details?
Reply
The New Growth Path sets a target of creating five million new jobs by 2020. We note that there is a steady rise in job creation. The Labour Force Survey shows that over 300 000 new jobs were created by the end of 2011.
However, this is no cause for celebration since we believe that there is a long road ahead, and thus we are accelerating measures to increase employment through public sector interventions as well as assisting the private sector to create more jobs.
For example, we have streamlined key elements of the regulatory framework. Important steps in this regard include:
- Enhancements to the mining licensing and environmental impact assessment systems;
- The establishment of the Consumer Protection Agency;
- The development of an “unblocking” project in the Economic Development Department, which has assisted large new employment-creating projects to overcome unnecessary bureaucratic delays; as well as
- Continued efforts to simplify tax administration, including the acclaimed instrument of e-filing
We have also initiated major programmes to support key economic sectors. These include the auto industry scheme, which has already led to billions of rand in new investment; the clothing and textiles scheme, which has stabilised this critical labour-intensive industry; continued support for business process services, which has already succeeded in creating tens of thousands of new jobs; and a number of programmes to bolster agro-processing.
In addition, we are expanded financing and business support opportunities for small, medium and micro enterprises.
The key driver of the job creation element of the New Growth Path is the newly adopted National Infrastructure Plan. This Infrastructure Plan will encourage employment creation in four ways.
- Key projects will improve the competitiveness of core industries and opening up new opportunities for them, especially through the Durban-Free State-Gauteng corridor and the opening up of the Northern Mining Belt, as well as security the energy supply and upgrading the ports
- Major investments will also go to increase the access of historically deprived regions to the core economy through improved roads, rail and communications as well as enhancing their productivity through investments in household and economic infrastructure and in social capital
- Construction employment for the build programme will in itself generate thousands of jobs. Moreover, the introduction of a co-ordinated pipeline approach should stabilise employment in the industry
- The commitment to maintaining public investment will act as a counter-cyclical stimulus for the economy as a whole. In this context, the decision to maximise local procurement of inputs will ensure the greatest possible multiplier from the build programme.
Certainly, the current slowdown in the global economy, combined with the fragility of the overall recovery in Europe and the United States, remains a major cause for concern. Government is considering a range of measures both to sustain growth and to ensure the greatest possible benefits for our people in terms of employment creation in particular. These measures will include both macroeconomic and microeconomic interventions.
In spite of these challenges we remain confident that the measures we have put in place will help us to create new jobs.
I thank you.
