Proceedings of the national assembly
BOLD AND DECISIVE STEPS TO DEAL WITH THE STRUCTURE OF THE ECONOMY TO PLACE IT ON A QUALITATIVELY DIFFERENT PATH
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BOLD AND DECISIVE STEPS TO DEAL WITH THE STRUCTURE OF THE ECONOMY TO PLACE IT ON A QUALITATIVELY DIFFERENT PATH (Subject for Discussion) Ms J L FUBBS: Thank you, hon House Chair. The contradictions in the structure of the South African economy have led to calls for radical economic transformation for inclusive growth. Indeed, South Africa has achieved much in the past 21 years, yet much more remains to be done. It is of no use pointing to great targets that no other country has reached, such as providing 400 000 solar heaters and thousands of houses in so short a time and the phenomenal number of social grants of R3 million to R16 million. We all know that the previous dispensation didn’t address one third of the population, but only addressed 10%. These are the facts. The 53rd Conference of the ANC resolved in the words of Pixley Ka Isaka Seme, to “review the past and reject therein all those things that have retarded our progress,” over the past 21 years. We are committed to building a developmental state and a united democratic, nonracial, nonsexist and prosperous South Africa. We will not rest until our developmental state restores our peoples’ dignity. The supporters of the neoliberal agenda cannot do this, not because they don’t want to, but simply because they put materialist values before people. The ANC is determined to put measures in place that will decisively implement policy and that will fundamentally alter the structure of the South African economy. Indeed, “Sekunjalo Ke Nako”, now is the time. It is time to change. We are going to harness the frustrations of our people into constructive development. We are determined to pursue this at all costs because we know that so far, economic growth has been slow and not inclusive. It is being characterised by consumption-driven growth, which has contributed to the debt-driven households. We also know that there has been a strong gross domestic product, GDP, but the reality is that it has masked the structural distortions in our economy that led to a sharp drop in the productive sectors such as agroprocessing and manufacturing.
We will transform cross-cutting broadband rollout to ensure digital sovereignty. South Africa must ensure that it gets digital sovereignty along with all other forms of sovereignty. We must grow the ocean economy. [Applause.] A developmental state is not simply growing the economy. That is the essential difference. It is about development and about linking the intrinsic relationship between the social areas and the economic areas. That is what a developmental state is. It is people oriented. We all know where the neoliberal model came from; it came from the Austrians with a rather authoritarian approach to the market economy. A developmental state, in contrast to the neoliberal model, works deliberately to develop a new generation, which is not only equipped with hard-core skills, but also puts people at the heart of developmental change. We are saying we need to look at economic development, not simply because we want to modernise and upgrade what exists. We will do that, but it also means we must shift our landscape. Our interpretation of a developmental state model is not one of welfarism. We do not believe in a welfare state — that is not a developmental state, but rather a state that encourages an income. Expenditure on social assistance was R62 billion for 12 million beneficiaries, this also encouraged beneficiaries to benefit. [Interjections.] Yes, that was five years ago. I have also just checked your facts. We want to look at ... [Interjections.] Mr G G HILL-LEWIS: [Inaudible.] Ms J L FUBBS: I don’t like or appreciate your interruptions. [Laughter.] One of the central tenets underlying... [Interjections.] The HOUSE CHAIRPERSON: (Ms M G Boroto): Hon members, Please! Continue, hon Fubbs. Ms J L FUBBS: I think we should listen to this. One of the central tenets underlying the developmental state is people acting collectively in the spirit of human solidarity that moved us and shifted us towards democracy. This will shape the contours of economic development led by the ANC in a developmental state, and not by the neoliberals in this House. In fact, I would rather like to persuade them to review their thinking and to become South Africans. Thank you. [Applause.] Mr G G HILL-LEWIS: Chairperson, it is beyond question that South Africa’s economy must diversify, and that it must be restructured; and the state can and must play a significant role in actively effecting this restructuring to make this country a fairer place in which to live, work, and raise a family. That the DA supports this principle is an absolute given. That is why we support true broad-based empowerment, and why we have had such success where we do govern in creating jobs and tackling social inequality. However, it is six years into this administration and the great injustice that still defines the South African economy is not getting better, Chairperson, in fact, it is getting much, much worse. Since this government came into office — and the hon Fubbs will do well to remember these figures — 1,6 million more South Africans are unemployed. That is 730 more South Africans for every single day that the ANC is in government, hon Fubbs. There is nothing decisive or bold about that, except that it is decisively making South Africa poorer. The gross domestic product, GDP, growth has gone down in every single one of the years that this government has been in office and the number of people living in absolute poverty has jumped to 10,9 million. This is the highest number since 1994. Therefore, given this government’s performance thus far, let us examine the complete absurdity of their argument today, as presented by Ms Fubbs. They would have us believe that our current malady is all someone else’s fault, or the global economy’s fault and that if the government could just have a little bit more control with which to browbeat the economy, then things would start to work, the economy would start to grow and jobs would start to be created. However, this argument collapses under the sheer weight of economic mismanagement under the ANC. In truth, every single one of the obstacles to growth in South Africa is brought about by this government – by the ANC. They quote the very high-sounding quotes from the ANC’s conference about removing everything that retards growth in South Africa. Well, hon Fubbs, it is the ANC that is the biggest obstacle to growth in South Africa today. [Applause.] Whether it be the electricity supply, red tape, building a capable state, reforming the labour environment, stopping corruption, reforming education, you name it, these are all areas where the government has full control already. However, it does not play the leading role it claims to play. The ANC-led government has proven time and time again that it cannot get the basics right. The President, speaking here last week, tried to make the argument that economic growth is a matter of fate. And I wonder whether his ANC colleagues here today, the Ministers, agree with him. He says we cannot grow as fast as our peers because we are bigger and more developed. So, basically, if we follow his logic, there is nothing that the government can do to change our growth directory. We grow as fast or slow as economic fate allows. Now, I strongly disagree with that view, and I am sure that the economics Ministers, present here, would too. Economic growth is a consequence of the policy decisions and actions that government takes on a day-to-day basis. Growth is fostered by sound policy and good leadership. That is why Peru, Turkey, Chile, Thailand – all countries with similar-sized economies to ours, are all growing faster than us. We are, in fact, growing more slowly than some highly developed countries like the US and the UK. It is no accident, Chairperson, that where the DA governs, the economy is growing and jobs are being created. That is not fate; it is the consequence of proper planning, sound leadership and policy decisions that support innovation and entrepreneurship. A DA-led government will never shy away from its responsibility to act in the economy to address the awful legacy of apartheid. The difference is that we get it right. Now, last week — yes, I am coming to you, hon Minister Davis — the Minister of economic destruction, Minister Patel, tried to tarnish our record in government with some statistical gymnastics that would have made an Olympian athlete proud. His key manipulation was to rely on the narrow definition of unemployment, by which definition he would have as believe that Limpopo has the lowest unemployment rate in South Africa. It should be immediately clear to every sensible hon member in this House why that argument is completely laughable. No, Minister, the results of DA economic policy are there for all to see – an economy growing considerably faster than the national economy; the lowest unemployment rate in South Africa; and the lowest income inequality in South Africa. These are all facts. Tomorrow in this House this government will tell us why we all need to tighten our belts and cough up with extra taxes because economic fate is conspiring against us. There will be talk of challenges and there will be a great deal of blame-shifting. However, these excuses are wearing thin on the public, hon members. Every South African knows that the extra tax that they will be forced to pay after tomorrow is to patch up the gaping fiscal holes left by the failure of this government to grow the economy; to pay up for the luxury and corruption of one man; and to cover up the wholesale destruction of jobs that this government has wrought in South Africa since it came into office in 2009. Thank you very much. [Applause.] Mr M Q NDLOZI: Hon Chairperson, the major characteristics of South African colonial conquest was the extraction and exploitation of raw and natural mineral resources for the benefit of white countries; and also super exploitation of blacks through a process of cheap, dangerous labour and their broader “zombification” through the mediocre Bantu Education. This colonial feature of the South African economy has not changed in South African society. Therefore, economically, we are still colonised, and this colonisation has been perpetuated, hon Fubbs, by ANC neoliberal policies. The neoliberal policies are not implemented by the DA only. Even your government, whom you spoke on behalf of here, advocates for neoliberalism with passion. Tomorrow you will see this passion during the Budget Vote. What then, are the decisive steps to change this long colonial nightmare? Number one, take strategic ownership of and nationalise the mines, banks and other strategic industries, as the Freedom Charter says, since you said this is the year of the Freedom Charter. Our call for nationalisation is not just for nationalisation’s sake; it is in order to domestically beneficiate and industrialise. The fact is, you cannot beneficiate what you do not own. Number two, if this is the year of the Freedom Charter, you must pay attention to the food economy. Actually, the food economy is the biggest economic sector in South Africa, and food has much greater price stability than commodities, which makes it safer for us to invest in. The food economy means we must take land without compensation. We must expropriate it without compensation for equal redistribution. We need water, energy and adequate infrastructure. We need to process our food locally. We need retail stores that are owned by our people, not multinationals like Walmart. We also need to break the oligarchies, like Pick n Pay, Shoprite-Checkers and Woolworths, in order to include more players in the retail market. Number three, if this is the year of the Freedom Charter, you must radically change your trade and tariff policies. All countries that have successfully become industrialised have implemented strategic imports substitution of basic commodities, but not your government. You must tell us, Minister Davis: Why do you import timber, plastic, sweets, towels and basins? You import cell phones, TVs and microwaves. Even this microphone I am speaking into has been imported. Why don’t you build local capacity through trade and tariff policies to produce all these products and create jobs? As it stands, the National Development Plan, NDP, hon Fubbs, is a policy of cosmetic changes because, without change in the fundamental structure of the colonial patterns of control and ownership and distribution, you are essentially class representatives and prefects of monopoly white capitalism. Let me move to the end. Only a radical leadership with no vulnarability to being puppets and prefects of imperialism can lead a decisive economic transformation, not cowards who spend time composing songs instead of leading a people’s war, and who now call the police to protect them against questions, to kick hon members out — protecting them against questions. That is basically because you are invested in protecting foreign ownership. You deal in the best interest of foreign ownership and your obsession with foreign direct investment is the biggest reflection of low self-esteem, to say the least. Thank you very much. [Applause.] Prof C T MSIMANG: Hon House Chair, the executive summary of the ruling party’s 2014 election manifesto reads as follows, and I quote: South Africa has begun a new and far-reaching phase of its democratic transition. This calls for bold and decisive steps to place the economy on a qualitatively different path. The National Development Plan, NDP, aims to eradicate poverty, increase employment, create sustainable livelihoods and reduce inequality by 2030. The question is: Has this country seen anything bold or decisively different since that statement? The answer must be a resounding no, because there is nothing bold or decisive, save the ruling party’s repackaging of worn-out rhetoric. Every year, it’s the same old song. We are developing infrastructure, creating millions of jobs, stamping out corruption, reducing crime, improving health care and promoting local procurement of goods and services. I would think that, if we were serious about being bold and decisive about qualitatively improving our economy, we would start by actually providing basic service delivery and infrastructure. And what about stopping the haemorrhaging of our gross domestic product, GDP, through incessant power outages and shortages and scrapping e-tolls altogether? The above would be bold and decisive and would immediately and qualitatively improve our economy. To tighten up in terms of fiscal revenue collected by Sars would also help. How many hundreds of millions of rand have we lost through theft or corruption? Hon House Chair, being bold and decisive infers that one admits that one has been timid and indecisive for too long. In the ruling party’s case, this has been for the last 21 years. It’s high time that the ruling party took the high road and actually walked its talk. Hon House Chair, the IFP agrees with the sentiment of this topic, but fears that it is just that — a topic. No matter how great the rhetoric or plans put on paper are, the evidence of failure is etched in the faces of people as they struggle even to meet their basic needs. I thank you. Mr S C MNCWABE: Good evening, hon House Chair and hon members. As the NFP we believe that our economy is failing to create a conducive environment to enable us to boost investor confidence and in the process create much-needed jobs. However, we can still change this situation by tackling issues broadly. We need to have the political will to take decisions that can also force the private sector to play its role. Our country has vast natural resources, but the sad reality is that white monopoly within the mining sector is party to the economic crisis that we are faced with. The time has come for a policy shift that will force mining companies to invest half of their profits into the communities they operate in. This should not be debated. We also need to invest in the township economy by making capital available to assist small and emerging businesses. This should be coupled with skills empowerment so that we do not spend millions of rands on businesses that will not succeed. We also believe that co-operatives need to be revived and the focus should be on agribusiness so that the vast land that is lying unused in rural areas can be utilised. This will also open doors for government to revitalise agricultural colleges. Agriculture is crucial, not only for food security but, most importantly, for creating jobs, because no matter the economic crises, land will always be there. We also need to deal with the predicament of ageing infrastructure that causes unnecessary delays in the delivery of services to the people. We can no longer ignore the problems caused by infrastructure that has been there for the past 30 years. It is also imperative for government to have parastatals that are functioning properly. Load shedding is not doing us any good in this regard, but instead it points to even bigger problems at Eskom and the immeasurable challenge this puts on businesses. I thank you. Mr A F MAHLALELA: Hon House Chair and hon members, the ANC's economic vision rests on the Freedom Charter’s call that the people shall share in the country's wealth and that the national wealth of our country beneath the soil, the banks and monopoly industry shall be transferred to the people as a whole. The ANC’s Strategy and Tactics document of 2007, argues that a national democratic society will have a mixed economy with state, co-operative and other forms of social ownership and private capital. The balance between ownership and private ownership of investment resources will be determined on the balance of evidence in relation to national development needs and the concrete tasks of the National Democratic Revolution at any point in time. As stated in the 8 January statement of the ANC, the vast mineral wealth of our country that lies beneath the soil has been transferred, through the Mineral and Petroleum Resources Development Act, to the ownership of the state on behalf of the people as required by the Freedom Charter. Attached to this is the right to levy royalties as well as a variety of regulatory instruments that will see communities benefiting from the economic activities in their areas. At the same time, the state is continuously building its capacity to lead economic development through development in partnership with all stakeholders — including the masses of our people who act as their own liberators and not passive recipients — of a national vision and strategic plan, as well as the implementation of the Industrial Policy Action Plan, Ipap. However, we acknowledge that this has not yet been fully translated into equal ownership and for the full benefit of the vast majority of our people, who, in the context of the National Democratic Revolution remain Africans, in particular, and blacks in general. As part of our second phase of democratic transition, we need to accelerate growth and intensify our programme for radical socioeconomic transformation by decisively overcoming the triple challenges of poverty, unemployment and inequality. At the heart of this radical socioeconomic transformation is the need for co-ordinated interventions in a number of sectors to fundamentally change the structure of our economy, its ownership patterns and relations. Borrowing from Amilcar Cabral's, The Weapon of Theory, he states that a people that does not own and is not in control of its national productive forces will never determine its historical destiny. The ANC government inherited a country whose commanding heights were owned and controlled by a few companies and individuals. Twenty years into our democratic dispensation, this concentration of control in certain sectors of the country’s economy is still unacceptably high. The structure of our economy is arranged in such a manner that the economy supports mineral exports, with a very high concentration of ownership and control whereby the richest 5% of households received more than 35% of the national population’s income, and the richest 1% of households received about 20% of the national population’s income. Therefore, needless to say, this must be changed. It is important to note the point raised by Prof Guy Mhone, who argued that what matters is not the quantum of growth per se, but its quality. The primary aim of economic development is to advance a people-centered approach to economic development – human welfare — in a sustained manner over the long period of time. Doing this requires a structural and radical transformation of the South African economy – an economy that, in the words of Prof Mhone, can be termed as an enclave economy. According to him, and I quote: Coexistence of two interrelated segments of labour force; a minority engaged in dynamic activities propelled by the capitalist imperative of accumulation, and a majority trapped in low productivity noncapitalist forms of production that are static from the standpoint of accumulation. The capitalist sector, which is the formal sector, exists as an enclave in the sea of poverty and underdevelopment. He further argues that the problem is that this interrelated coexistence ultimately leads to a vicious cycle of economic stagnation and marginalisation of the majority. The point, therefore, is that being able to address the high level of poverty in the country requires the total dismantling of the structure of this enclave economy in order to enable the majority of South Africans to meaningfully engage in productive economic activities. The market on its own will not lead to more equitable development or job creation to close the gap between the haves and the have-nots unless the state intervenes decisively to mobilise stakeholders towards a common goal. It is in this context that the 52nd National Conference of the ANC identified 15 pillars under which we need to pursue economic transformation. Significant progress has been made in the implementation of these pillars, of which key amongst them was the creation of the National Planning Commission, NPC, which developed a living and dynamic policy document, the National Development Plan, NDP, which articulates the vision that is broadly in line with our objective of creating a national democratic society, and which should be used as a common basis for the mobilisation of society. The ANC government remains committed to the implementation and realisation of the programmes as envisioned under the New Growth Path, NGP, and the Industrial Policy Action Plan, Ipap. These programmes are aimed at improving reindustrialisation, expanding and diversify our manufacturing sector and creating sustainable jobs across various sectors. The ANC government has launched an ambitious infrastructure programme, which Minister Patel explained is the largest in the country’s history and the largest on the continent of Africa. There has been an increase in employment on these infrastructure projects and spending has drastically improved. Some of these infrastructure projects, especially with regard to social infrastructure, have become the most important interventions which support labour-intensive activities; provide for a more equitable ownership, especially collective ownership through the state, worker control and co-ops; and investment in people and communities through education, skills development and social programmes like health care, welfare, housing and water. However, there is a serious problem with private voluntary social security arrangements in areas such as health care, retirement and the death and disability of a breadwinner. Aspects that need to be considered include compulsory contributions and participatory protected minimum benefits, and publicly accountable institutions. There is therefore an urgent need for government, and the country as a whole, to carefully re-evaluate the quality of existing programmes and institutions – both public and private – that are focused on meeting the basic needs of our people. The wealthiest countries in the world, as a group have the most comprehensive systems of social protection. Social security is an essential basic service in all successful states that have experienced long-term sustainable growth rates alongside successful poverty reduction. In addition to creating jobs ... [Interjections.] Mr N S MATIASE: Madam Chair, on a point of order: It’s pointless to sit here listening to the hon member when one half the ruling party members are absent from this House and the other half are fast asleep. It’s pointless to be sitting here listening to the speaker. [Interjections.] The HOUSE CHAIRPERSON (Ms M G Boroto): Hon member, sit there and listen. There is nothing pointless about it. Continue, hon Mahlalela. Mr A F MAHLALELA: In addition to creating jobs and eradicating poverty, our transformation agenda also embraces the creation of a nonracial entrepreneurial class by ensuring that the ownership and control of capital is deracialised so that we broaden the ownership base and break the stranglehold of monopoly capital on our economic development. It is, therefore, imperative that the Competition Commission continues to address monopolistic, collusive and anticompetitive behaviour, and should even become bolder in its preventative and punitive measures. This should stimulate competition in various sectors and assist with expanding black economic empowerment, BEE, participation in the economy. The recently revised broad-based black economic empowerment, BBBEE, policy, including the scorecard, is an essential policy direction which seeks to deracialise the economy and broaden capital ownership and control. I thank you. [Applause.] The HOUSE CHAIRPERSON (Ms M G Boroto): Hon members, before I call the next speaker, let us please refrain from raising frivolous points of order, and stop wasting our time. Mr N L S KWANKWA: Hon House Chair, colleagues ... ... masithetheni ngolu hlobo. [Let us do it like this.] Let’s first provide a very important distinction, a fundamental distinction, between cyclical and structural issues so that we can give this debate the right kind of context. In so far as what the government has done in terms of dealing with short-run issues and demand management or stabilisation policies when, for example, you use the interest rate or you use fiscal policy and you then rely on your countercyclical fiscal policy stance ... ... asikwazi ukunigxeka kuba nisendleleni. Kodwa ndicinga ukuba imiba eyiyingxaki yinto yokuba ukuba niza kuthetha ... [... we cannot criticise you because you are on track. But I think if you are going to talk ...] ... about the developmental state, there are structural issues which are more long term ... ... ekufuneka zijongiwe ... [which need to be looked at ...] ... like your parastals, the state-owned enterprises and the role they play and whether or not we are getting value for money. The efficiency of state-owned enterprises, SOEs, because they are an important element to make sure that as a developmental state, the objectives that are set are achieved. Once you start talking about the structural issues, the challenge we have is that it affects the fabric of the economy and then the debates become ideological. Ke thina uphuhliso lwesizwe njengefilosofi yezoqoqosho sayithetha kuqala kune-ANC. [But as far as national development as an economic philosophy is concerned, we talked about it long before the ANC.] I think what is important now is to keep on reminding you about the ways of doing it including the governance issues. Kutheni sisoloko nje sisilwa nemiba yorhwaphilizo, ... [Why do we always fight issues of corruption, ...] ... precisely for the reasons of making sure that governance is on the right track. Let me give an example about the state-owned enterprise, Eskom, the ruling party likes to say that there are no bail outs. There are no enterprises that are bailed out. It is like saying the grass is green and the other person saying, green is the grass because at the end of the day once you give a guarantee if they do not pay, who will pay? The government will pay. In essence even if it is better like that it raises government contingent liabilities. So, it is a bailout in the true sense of the word. The question we must ask is, for how long are we going to continue bailing out the state-owned enterprises that are not effective and efficient instead of dealing with especially the people who run these state-owned enterprises and making sure that they are effective and efficient? They deliver on their developmental goals and their developmental agenda of government so that the developmental state is achieved. How do we make sure that the role, in particular, of development financing institutions – to ask a critical question - is to build and also mediate in the interaction between government on the one hand, and the private sector, on the other, because that will ensure that the objectives that we set, which we want to achieve when we put economy on a different path, are correct. [Time expired.] Mr A D ALBERTS: Hon Chair, this debate could not have come at the more opportune time and our thanks to hon Fubbs for tabling it. The signs of the economic decay are everywhere and too many to enumerate here. It suffices to note that our credit rate is near junk status and that the unemployment figures have remained static since 2009. Clearly, if we are to make policy choices that are rational and thus lawful as a Constitution requires us to do, then the current policies - given the lack of success - must be removed and replaced with those that work. Die korrekte ekonomiese beleid gaan natuurlik ook oor menslikheid. Dit gryp aan ’n mens se hart wanneer ’n vrou haarself en haar kinders dood maak omdat haar inkomste te min is, terwyl die staat geld vermors asof daar geen einde is nie. Dit kan natuurlik nie so voortgaan nie. Akademici reken ons staar ’n fiskale afgrond in die gesig teen 2026. Ons reken daardie afgrond is veel nader, gegewe die omvang van verspilde en vrugtelose uitgawes asook endemiese korrupsie. (Translation of Afrikaans paragraphs follows.) [The correct economic policy naturally also concerns humaneness. It tugs at one’s heart strings when a woman has to kill herself and her children because her income is too low, while the state wastes money as if there were no limit. Things can obviously not continue in this way. Academics predict that we will be facing a fiscal cliff by 2026. We are of the opinion that that cliff is much closer, given the extent of wasted and fruitless expenditure as well as endemic corruption.] This government has set its sights on evidence-based policies, if one regards the Cabinet decision that regulatory impact assessments are to be performed for all pieces of legislation. Evidence-based policies need data and that is something we, plenty as a human race, have amassed plenty of over the past 100-odd years or 200-odd years. Let us assume that the earth has been a giant laboratory since the inception of the Industrial Revolution. In this laboratory many forms of government and economic ideas have been tested at great human cost. Where we stand now, we can see the emerging results as clear patterns in history. In the final analysis the conclusion is clear. The best form of government is a liberal democracy with sufficient safeguards for minorities, while the most affective economic policy is a free-market-oriented policy with ample support for entrepreneurs. Daar is dus nie ’n ander pad nie. Enige gedagtes oor ’n ontwikkelingstaat is in effek dood gebore. Dieselfde land wat dié idee geskep het, naamlik Maleisië, het dit ook verwerp. Hulle het ook regstellende aksie geskep en dit verwerp. China het gedink dat hulle vryemark beginsels kon toepas sonder demokrasie en nou begin dit faal. (Translation of Afrikaans paragraph follows.) [There is consequently no other way. Any thoughts of a developmental state are effectively still-born. The same country that created this idea, namely Malaysia, has also rejected it. It also created affirmative action and rejected it. China thought that it could apply free-market principles without democracy and now this has started to fail.] We are privileged that we can use data procured at the huge expense of human rights and dignity over the ages. Just ask those who survived Stalin’s economic destruction. Let us honour those who were sacrificed in the name of failed policies and apply the right ones for those still facing social injustice every day. Ms D CARTER: Hon House Chair, the focus of the ruling party and most of its energies are hell-bent on defending and protecting Number One. In defending the indefensible, one must question just what the ruling party’s ideology is. Is the National Development Plan, NDP, bold enough? The NDP fails to make the policy shifts essential for increased investment, growth and jobs. I wish to proffer the following. We need to boldly go for growth. The cure for poverty is to allow people to earn money. The key is to remove the barriers that stop poor people from earning poor by removing the impediments employers face in hiring them. We need to liberalise our economy. Rather than obliging the poor to rely on the failing state for some alleviation of their plight, let them use the only asset they have, namely their labour. The little growth of under 2% that we have is not creating job absorption. We have 5,1 million people who are unemployed. Of this number 1,5 million people have been looking for a job for the last five years. This really tells a story — and not a good story. Liberalise our labour market. To deny anyone the opportunity to earn a living is one of the worst violations of their human rights. With the stagnant economy and declining tax revenue, fiscal space has all but vanished. The national debt of R1,3 trillion, which costs R100 billion to service annually, means that we are in a precarious position in terms of trying to avoid a downgrade. The next downgrade will confer junk status on our sovereign bonds. The present government took that debt from 28% of gross domestic product, GDP, in 2008, to 47% at present. We have to reform our education. The growing demand for both private schooling and places in suburban government schools tell us that many parents know that government is incapable of fixing the township schools. Privatise our state-owned entities, SOEs, because government has no business being in business. It is in conflict with their role as regulators. It is also unfair competition because they can offload their losses onto the taxpayer, which real business cannot do. Government must create an environment for business to want to invest in our economy and in our country. If we want to drive the private sector and unleash its energies, we have to unshackle it. Like restriction of free speech and other political freedoms, economic restrictions in the form of regulation should be kept to the minimum. We need property ownership certainty, unlike uncertainty. Stop the corruption of employment equity and black economic empowerment, BEE. I thank you. [Time expired.] Mr S N SWART: Hon House Chair, the ACDP shares the view that South Africa needs an economy that is more inclusive and more dynamic, and one in which the fruits of growth are shared equitably. Now we know that tomorrow the hon Minister will announce his inaugural budget, possibly increasing taxes for hard-pressed taxpayers and, of course, everyone will ever be looking very closely at the economic-growth figures. In his Medium-Term Budget Statement, MTBS, in October, he highlighted certain structural constraints. These constraints include what he then referred to as “tightness” in electricity supply, labour tensions, skills shortages and transport constraints. That tightness now has become a crisis. Now the broadly accepted National Development Plan, NDP, also highlights solutions. It proposes to enhance human capital, productive capacity and infrastructure to raise exports. This will increase resources for investment and reduce reliance on capital flows. High investment supported by better public infrastructure in skills will enable the economy to grow faster and become more productive, according to the NDP, and, of course, that also depends on the electricity crisis being resolved. The rise in employment and productivity will then lead to a rise in incomes and living standards and to a decrease in inequality. Remember that we all broadly supported the NDP and we need to see, as a matter of urgency, that the bold and urgent steps it now requires is incisive implementation. Long-term growth investment also requires a shared vision, trust and co-operation between government, labour and business. The level of trust is regrettably very low and labour relations have become unduly tense and, more often than not, violent. This trust deficit needs to be addressed as a matter of urgency. Surely it is time to really look at the concept of an economic Codesa. It has been raised by many members in the previous Parliament. Let us get together and get these sectors together to discuss these various issues because we all have the same idea — to improve economic growth. It is just a matter of finding how to get to this economic growth that we need in order to uplift all our people. We also need to increase our comparative advantages such as our mineral and natural resources; our sophisticated financial-business-services sector; our proximity to fast-growing African markets; high quality universities; and companies that are global leaders in sectors such as civil construction and mine rescues. We heard that mentioned here today day. Regrettably, we have not enjoyed the benefits of these comparative advantages due mainly to those constraints mentioned in the NDP, such as the state’s poor infrastructure and, of course, the electricity crisis, but most importantly, regulatory and policy and certainty. To conclude, it does not help when President Zuma shows investors at Davos that we are open for business and then in the state of the nation address he announces steps to limit foreign ownership of land, as well as undermining the agricultural sector. I thank you. Dr M B KHOZA: Hon Chairperson, first of all, you know that it is very difficult to engage in a debate with people who are lamenting the same old story, rather than using this opportunity to come up with persuasive arguments to make their case heard. They are going over and over the same issues. That is why many people were asleep here. Let me say this: You know, if the truth be told, the ANC has been extremely modest about its achievements. [Laughter.] No, that’s very true, and I’m going to present this case to you. Some of you were talking about economics, but I don’t think that you actually comprehend the complexity of the field. There is a sociological and historical rationale to the ANC’s policy choices of pursuing a developmental agenda, as opposed to merely a pure neoliberal path of economic development. Pure, mere liberal policies are motivated by a profit motive at the expense of the people. Whilst there is no economic doctrine that can claim to be absolute, economics is a social science. The state intervention in the economy is the only logical path to addressing South Africa’s structural economic challenges. I also want to challenge those who are arguing that the ANC is pursuing a neoliberal path. I am a reader of Noam Chomsky, and I must also say that in his paper published in November 1997 entitled: Market Democracy in the Neoliberal Order Doctrines and Reality he captured the essence of my argument and the ANC’s line of thinking when he argued: Freedom without opportunity is a devil’s gift, and the refusal to provide such opportunities is criminal. The fate of the more vulnerable offers a sharp measure of the distance from here to something that might be called “civilization”. Now, let me state, especially for the members on this side, that what I actually want to do is to compare and contrast. Just refresh your memories a bit. From three decades ago, let’s look at what characterises the South African economy. I’m going to argue today that South Africa in the last 20 years has experienced an electrification revolution, but there is nobody that will admit to that on this side. [Applause.] I’m sure that when I make this compelling argument, people will understand it. I will be doing that because some of the members on this side forget that, when the Industrial Revolution in the United Kingdom, UK, happened in the 1780s, 300 years ago, electricity was their revolution whilst in South Africa it only began 21 years ago, when the ANC took over. Today we have over 90% of people who have electricity in South Africa. [Applause.] Let me unpack this thing for you in economic terms. Electrification is not just about addressing social injustice; it is also addressing economic imbalances. Firstly, it increases the demand for all those appliances that I’m sure most of you, especially the black folk, will actually concur. In the 1980s, lots of people were using primus stoves, paraffin and candles. Actually, we were stuck in the age of candlelight, but when the ANC came in it brought electrification to 90% of the South African citizens. [Interjections.] The HOUSE CHAIRPERSON (Ms M G Boroto): Order! Order, hon members! Ms M B KHOZA: Now, they have electricity in their homes and that has increased the demand for the commodities such as fridges, irons and so forth. [Applause.] However, having said that, I also want to remind you that the ANC was addressing a backlog. Something that happened 300 years ago in the UK, the ANC was able to do within 20 years. Let me also remind the members that despite being deliberately deprived of the critical skills, notably in mathematics, business finance, actuarial sciences and many other critical skills that were to be necessary for the inevitable, pending future, more and more black and white South Africans joined hands and realised that we need each other. Separate development was uneconomical, irrational, unsustainable and isolationist, as we were isolated from the global market system. These South Africans from all races vowed to destroy the systemic state violent repression, the segregationist policies which were premised on a separate development theory. They wanted nothing less than majority rule and a people-centred government in order to drive an inclusive economic growth agenda, as outlined in the Freedom Charter. Now, if we look at what has been happening presently and we are very serious about this thing, we have to remember, hon members, that it is the ANC-led government which has introduced the Ministry of Small Business under the hon Minister Lindiwe Zulu. What does that say to you? You rose here to say that we are not serious about entrepreneurship. What it is that she is supposed to be doing? The ANC has given the exact mandate to Comrade Lindiwe to actually spearhead entrepreneurship. [Applause.] It is because we are dealing with the people that were denied the opportunity to even sell peanuts on the trains. They were not allowed to trade in the city centres. Everyone here is enjoying the fruits of the freedom brought about by this ruling party. [Applause.] Let me also address the problem of load shedding. Yes, hon members, you are absolutely correct, it is a setback. I agree with you, but let me remind you that it is not a unique South African phenomenon. In 1974 in Britain there was also load shedding. Factories were only opened for three days and they were closed for four consecutive days. They were shut down completely in 1974. [Interjections.] The HOUSE CHAIRPERSON (Ms M G Boroto): Oder, hon members! Ms M B KHOZA: We must therefore accept that there are trade-offs so we will be addressing the past imbalances. Yes, it is uncomfortable, but you must remember that it’s not that this government is not addressing the energy crisis. Just last week the President was committing the government to spending R23 billion on energy. Over and above that — I don’t know about Cape Town, the most-talked-about city in the Western Cape — but the patriotic city of Tshwane, which is led by the ANC, has come up with a plan to actually minimise the impact of load shedding. We must assert that if we are going to be patriotic about this country, we are all going to have to address the issues together, rather than lamenting our problems. That is not leadership. [Applause.] I also want to address you on our Strategic Integrated Project, Sips. You must remember that we are emerging from a broken society, okay? The apartheid separate development was breaking up our society. [Applause.] The HOUSE CHAIRPERSON (Ms M G Boroto): Order, order, hon members! I can’t hear the speaker. Ms M B KHOZA: It is therefore the ANC which has come up with the idea of integrated development, whereas the members on my other side were very happy to enjoy all the comfort that came with the apartheid segregationist policies. The ANC was by then hard at work, it wanted to declare that we are ready to govern that is why we are governing. [Applause.] Let me tell you hon members, don’t ... Kuye kuthiwe ngesiZulu: Kushaywa edonsayo ... [It is normally said in isiZulu: The diligent one is exploited ...] ... the one that pulls the cart, hon Mr Steenhuisen. DIE VOORSITTER: Agb lid, ongelukkig is u tyd verstreke. [Hon member, unfortunately your time has expired.] Mr Y I CARRIM: Chairperson, comrades and friends, at the core of the second more radical phase of our transition is the need for a quality to the New Growth Path. Of course, there are cyclical aspects to our poverty, unemployment and inequality challenges, but fundamentally our problems have deep, structural, historical roots. They are systemic and, in fact, they include many other things. The fact is that South Africa’s economy is a semiperipheral economy that is subordinated to the global economy. In the global division of labour, South Africa is essentially an exporter of primary products and an importer of value-added products. Our recent growth, to the extent that we had it up to at least 2010, was fueled by debt and by the commodities boom which is obviously unsustainable. In fact, we now have very high levels of household debt. Secondly, there is the dominance of the minerals-finance monopoly sector with a relatively underdeveloped manufacturing sector. Thirdly, we have a highly monopolised economy with a historically underdeveloped small businesses and co-operatives sector. Fourthly and more specifically, is the existence of a highly monopolised financial sector dominated by the four large banking oligopolies. Huge special inequality is yet a further structural constraint that must be addressed. Finally amongst many other things that we could have mentioned had the time been available, is a historically energy-intensive growth path based on mining with its exploitation of our natural resources and the damage it causes to our environment. As an alliance document notes, these are key features and they are systemic in the sense that they are interrelated, interdependent and mutually self-enforcing. Because they are systemic, transformation in one aspect has to be linked with others as part of the overall strategy. We need a structural transformation of the economy as a whole. This is essentially what our second and more radical phase of the transition is about. If you look at the DA, on the one hand, it basically refuses to acknowledge the fundamental structural roots of our problem. All of it is reduced subjectively to the ANC government as if any other government, if it were to come to power in 20 or so many years from now and face similar structural constraints, would be able to do any better. The EFF, on the other hand, pays mere lip service to structural constraints of the economy. Now if you look at the DA, Mr Hill-Lewis in particular, we see essentially yet another form of what is a fundamental problem with the DA’s approach. Their approach is that let the economy grow and that would automatically lead to job creation and the reduction of poverty and inequality. Of course, growing the economy is crucial and we don’t deny that, but it will not in itself lead to development. We need to focus on the quality and the character of the growth. We need to direct that growth sensibly in co-operation with the private sector, otherwise the poor and the disadvantaged will not benefit adequately. Tell us where in the world has the trickle-down policy that the DA has, served to benefit the poor proportionately? In fact, a new Oxfam report says that by 2016, the richest 1% of the world will actually have half the world’s wealth. In our country, given our huge inequalities such a trickle-down theory will never work. In fact, inequality reduces the prospects of economic growth, which is why we talk about the relationship between growth and development. Even Pope Francis, in November 2013, witheringly critiqued the trickle-down theory of the DA. He said, and I quote: Some people continue to defend trickle-down theories which assume that economic growth, encouraged by the free market will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion which has never been confirmed by the facts, let me stress again - which has never been confirmed by the facts — expresses a crude and naive trust in the goodness of those wielding economic power and in the secret workings of the prevailing economic system. Meanwhile the excluded are still waiting, and they still wait, but they will not wait forever. The question that also arises, interestingly, is: Is it because this Pope, unlike his predecessors, comes from Argentina, a country of the south? These theories that the DA supports may have some or other relevance in other parts of development that we don’t know, but not for this country. And for all the claims about the government not allowing the private sector to grow and so on, it is interesting that since 1994, the major and significant gain for the poor and the disadvantaged is not private monopoly capital. There has been a significant benefit. With the ending of the apartheid era sanctions, private monopoly capital has been able to dramatically increase its profit rate and increase its share of the growth domestic products, GDP, as against workers’ wages. Interestingly, it failed significantly to reinvest profits into the productive economy in South Africa. Mr Hill-Lewis, the member says ... [Interjections.] Hon Hill-Lewis. He is a member. Member Hill-Lewis says that Mr Patel made a whole lot of statements that are not valid. This occurred at the end of the first debate of the year. There was no reply from the DA on the second day of the debate. Slow thinkers as you are, you come with these replies now and it completely distorts what he said. Fact one: He said that since Premier Zille took office, 181 000 more people are unemployed in the Western Cape. Instead, the DA confuses matters by drawing a distinction between narrow unemployment and broad unemployment. They then hang their argument on broad unemployment which includes discouraged work-seekers. But as Mr Patel said last Tuesday, the DA fared very poorly even by this standard. When Premier Zille took over, there were 525 000 unemployed including discouraged work-seekers. Today, note there are 705 000 unemployed including discouraged work-seekers. In fact, these were precisely the figures used by Minister Patel because he used the very definition that the hon Hill-Lewis did in seeking to lecture us earlier today. Fact two: Since Premier Zille took office, the employment rate in the Western Cape grew from 19,9% to 24,5%, almost 5% points higher under the DA. It also grew at a faster rate than the national rate, please note. Fact three: Since Premier Zille took office, even where jobs were created most of them went to the whites. Fact four: The DA is proud of the United Kingdom’s growth rate. Let me tell you, in the past five years, the UK’s average growth rate was 1,7% per annum and South Africa’s was 2,4%. It’s not the ANC that created the global financial crisis, but it is the people who identify with the markets in the way the DA does that are responsible for that. Now, let’s deal with the EFF. We are, and we must make it very clear that we commend to radical restructuring of the economy. But radicalism is not populism. The EFF needs to understand. In fact, structural change cannot be achieved overnight, but it is a painstaking process and it has to be sustainable to ensure real material gains - gains primarily for the poor and the disadvantaged and not the elites. Where is the substance in the EFF’s policies? If you look at the December 2014 conference, there is an economic policy document. Much of it indeed is a rehash of the ANC and the alliances’ policies on the economy, but with several populist twists. Several proposals are, in fact, being implemented in some or other aspects of the implementation. A job-creating industrial policy — what’s new? That has been done. A state-owned mining company — that’s an original ANC position; beneficiation — that has been done and the President said it last week; skills development strategies; a stronger more development state; and a state pharmaceutical company — all of them have been done. The EFF bleats on about how the ANC policies are responsive to their clever revolutionary policies. But it is the EFF that is responding to the ANC’s policies. It is just that they give them a populist twist. Ultimately, what matters is the resolution that the EFF has passed. That’s what counts. But all you have is a wish list. Most of the wishes are fine. Many of us in the ANC can agree with many of them, but they are only wishes and have no content, no strategy, no programme. But Marxists are materialists and they shape their approach in large part by the material conditions of the time; by the balance of the forces both domestic and global; by an assessment of the resources; and by an understanding of the stance of the working class and its alliances [Interjections.] What is Marxist about the wish list that you have adopted as EFF in your resolutions? You are idealists, and not materialists. There is nothing Marxist about you. You are basically populists. You are left in appearance, but right in substance. What we are basically saying is that by pretending to be a Marxist you are an embarrassment to the party that I come from and its alliance. [Applause.] What is especially embarrassing, and I’m afraid the Minister is not here, is that some of you come from the very ranks of the SA Communist Party, SACP. If there is any lesson that we drew from you it is that we have to improve our political education programmes for those of you who came into our ranks. [Applause.] Tell us, what is Marxist about the wish list? [Time expired.] [Applause.] Debate concluded. 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