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Date : 02/04/2004
Source: Department of Labour
Title: M Mdladlana: Launch of A-card pilot project


DRAFT SPEECH FOR HONOURABLE MINISTER OF LABOUR, MMS MDLADLANA, MP, ON THE OCCASION OF THE LAUNCH OF THE DEPARTMENT OF LABOUR AND TEBA BANK A-CARD PILOT PROJECT, Lebowakgomo, Limpopo , 2 April 2004

Executives from TEBA Bank
The Provincial Director
Honoured guests
Comrades and colleagues
Ladies and Gentlemen.

Just as It is from small beginnings the mightiest of God's creatures grow, so to is it that an endeavour that is set to change both the way in which we provide a social security net and the way in which our people access banking must start with a small pilot project such as this. But while this pilot project represents a new beginning it is also firmly located within the commitment that this ANC-government made when it took power, that we would deliver a better life for all South Africans, particularly the most vulnerable members of our society. This project is a manifestation of a people's contract to fight poverty, with government, the private sector and community joining hands to ensure that when working people are at their most vulnerable they are given easy and secure access to some of the resources they will need in order to survive.

The project also was given impetus by another people's contract, the contract that was signed between business, labour and the community at the Growth and Development Summit, committing all social partners to make South Africa, a country where there are economic opportunities for all, where greater effort is aimed poverty eradication, reduction of income inequalities and availability of basic services to all.

Addressing the Growth and Development Summit, President Thabo Mbeki, reminded South Africans that in crafting the Bill of Rights, the founders of our democracy knew too well that political rights without a socio-economic foundation would be unsustainable.

"They knew that a political settlement without an enduring contract among the economic role-players for growth and development would in time collapse on a foundation of sand", President Mbeki emphasised.

It is this ANC-administration that has recognised that our people do not forfeit their socio-economic rights if they lose their jobs and it is this administration that through a series of strategic and sustained interventions, such as the Unemployment Insurance Act of 2001 and the Unemployment Insurance Amendment Act of 2003, has ensured that this social security net is expanded. Also that this expansion has been coupled with increased efficiencies that have ensured that the string of serious deficits sustained by the fund has been turned into an excess of 5.7 billion rand for the most recent reporting period.

As this current government's term winds down, we can say with pride that the African National Congress has ensured that more people than ever before enjoy the protection that unemployment insurance provides and that the Fund is in a better financial position than ever before. To illustrate, Between April and December of last year (2003), UIF contributed immensely to poverty alleviation. A total of R1.6 billion in unemployment, maternity, dependants or death, illness and adoption benefits, was paid out to more than 380-thousand South Africans.

However, this on its own is not enough.

The African National Congress has made it a priority that the Unemployment Insurance Fund will also play a significant role in reducing poverty through a set of policies and programmes, developed in consultation with stakeholders, and includes the aim of rendering effective and accessible service to all stakeholders. Flowing from this, my department continues to search for innovative ways to improve our service delivery.

This has taken many varied and successful forms, including escalating Inspection and Enforcement activities, and providing more contact points within the community through infrastructure development, such as setting up more labour centres.

A significant challenge remains the safe, secure and convenient delivery of unemployment insurance benefits to those who apply for such benefits.

It is estimated that over 14 million people in the country do not hold bank accounts, many of those who do not hold bank accounts are in jobs on the margins of our labour market. It is those people who are most vulnerable when it comes to hiring and firing. Without bank accounts payment options are limited, making it extremely difficult for recently unemployed people to access their benefits. Furthermore, without an income from steady employment it is almost impossible for people to open bank accounts and oftentimes the costs incurred in so doing severely impact on the people that need to use all of their benefits.

It is also a truism that a bank account is an almost essential part of successfully operating in a modern economy. It is this reality that the ANC-government ensured was captured in the Financial Services Black Economic Empowerment Charter, which seeks to ensure that the majority of the people in the country have effective access to basic affordable financial services. The whole financial services sector, which developed and adopted the Charter, committed itself to increasing access to first order financial services of 80 percent of people in the five lowest of the nine living standard measure (LSM) categories as classified by the All Media Product Survey (AMPS) by 2008. If I may add, this charter is a further example of a people's contract to create work and fight poverty.

It is in the context the Financial Service Charter, the Growth and Development Summit and the ANC's commitment to the development of partnerships that deliver a better life for all that the Department of Labour - through the Unemployment Insurance Fund - that discussions were held with TEBA Bank on more accessible benefit delivery mechanisms.

On the basis of these discussions, TEBA Bank and the Department of Labour are launching the A-card pilot programme here at Lebowakgomo and next month in Welkom in the Free State. The A-card programme is not only aimed at extending banking facilities to the poor by securing a payment solution to unbanked UIF beneficiaries, but it will also provide them an entry into to the formal economy once they return to work.

The "A-Card" is a debit/ATM card that provides beneficiaries with an "instant bank account" to meet all their transactional banking requirements easily, conveniently and affordably. It also promises to provide an entry-level low cost and effective electronic banking solution that enables beneficiaries to transact money without using cash.

As Minister of Labour, I expect that this pilot project will develop into a nationwide means of benefit delivery, that will not only ensure that we provide auditable, secure payment mechanism that eliminates the need an issue cheque, but that it also results in improved service delivery, that - most importantly - empowers our beneficiaries.

I would also like to congratulate TEBA Bank on their foresight in developing a concept that so neatly dovetails with the priority of delivering a better service to our people and I hope that their involvement in this method of delivering services to the unbanked is both successful and profitable.

For too long our people were pushed to the margins of their economy and it is only since the African National Congress was elected into power close on 10 years ago, have people-centred policies begun to address this. Many of the policies that have changed the South African landscape had small beginnings such as this pilot project.

And it is partnerships - or people's contracts - such as the one between the Department of Labour and TEBA Bank that highlight the successes of our policies and it is these that will ensure in the long term that all the people of this country enjoy the benefits of a well-functioning and modern economy, even when they are unemployed.

I thank you.

Issued by: Department of Labour
2 April 2004
Source: Department of Labour (http://www.labour.gov.za)

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