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DA: Swart: Speech by the Democratic Alliance Shadow Deputy Minister of Finance, on the appropriation and division of revenue bills, Parliament (05/03/2010)

5th March 2010

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Date: 05/03/2010
Source: The Democratic Alliance
Title: DA: Swart: Speech by the Democratic Alliance Shadow Deputy Minister of Finance, on the appropriation and division of revenue bills, Parliament

Mr Speaker.

On Tuesday Parliament approved the report tabled by the Standing Committee on Finance in respect of the fiscal framework. We now need to discuss the expenditure in relation to the fiscal framework and revenue proposals.

In his budget speech the Honourable Minister of Finance highlighted the key spending priorities of government to create a better life for all. One of the main focus areas raised by the Minister is job creation. The Minister quite correctly said that one in four adults seeking work is unemployed and almost half our young people have not found work.

We agree with the Minister that job creation is of the utmost importance. Not only will people with jobs be able to look after themselves and their families financially but they will also be contributing to tax revenue, growth in the economy, better schooling and opportunities for their children as well as building a sense of self esteem.

The Minister announced various measures by which Government proposes to create jobs. These included amongst others a shift in emphasis towards labour intensive jobs, increased public sector infrastructure investment of R845 billion over the next three years ,increased expenditure on the Expanded Public Works programme, increased investment in skills development, encouragement of small business development and a focus on promoting youth employment.

These proposals are to be welcomed - particularly the proposal of a cash reimbursement to employers for employing young people without experience and whereby an expected 800000 jobs will be created in the short term with a further projected 500000 jobs of this nature by 2013.

The proposed allocation of R52 billion over the next three years for the expanded public works programme however is disconcerting. Although it aims to create 4.5 million job opportunities, the jobs are unfortunately of a short term nature and no or very little skills transfer takes place.

The Department of Public Works in a presentation to the Appropriations Committee admitted that it was impossible to train all people employed on the EPWP programmes in order to improve their skills levels. The appropriateness of this programme is therefore questionable as it does not create sustainable permanent jobs nor does it equip recipients to afterwards find jobs easily as a result of skills gained. In our opinion the funds provided for the EPWP programme should rather be used to extend the youth employment programme and grant more assistance to small and medium enterprises.

The proposal that a significant portion of the public sector infrastructure investment to create jobs be undertaken by state owned enterprises is also disconcerting. These parastatals have received some R260million in financial bailouts over the last four years due to bad management. Eskom in particular where the major portion of these infrastructural investment job opportunities are to be created is a prime example of how businesses should not be managed. Instead of job creation Eskom is likely to contribute to job losses in the economy with their huge proposed inflationary tariff increases. Soos daar in Afrikaans gese word - dis so goed as om wolf skaapwagter te maak.

In his speech on the fiscal framework in Parliament on Tuesday the Hon Mufamadi mentioned the example of a graduate known to him who finds it impossible to find a job. Yet we have Government Departments with vacancy rates of 25% and more with funding available to fill the vacancies. Government should indeed be ashamed that we have thousands of people out there looking for jobs on the one hand and thousands of job opportunities in Government itself yet they fail to bring the two together.

One of the greatest impediments in creating jobs in South Africa is the current labour legislation. In his budget speech the Minister said: "Organised labour must embrace and act on behalf of all our country's workers - both those employed and those desparate for employment"

The Minister is quite correct.

Conversely, Cosatu in a presentation to the Finance Committee rather attacked the fiscal policy framework and contributed nothing in terms of recommendations with regard to the relaxation of our stringent labour laws so as to create more employment. They also failed to offer improved productivity in the workplace as opposed to only demanding higher wages. Had they done this our businesses should become more competitive in both the local and overseas markets and more rather than less jobs will be created. They are adamant that labour brokers be abolished thereby shedding even more jobs in the economy. Cosatu seems to be less interested in job creation and more in increasing membership to ensure a good life for leadership. They propose instead a wealth tax to balance the budget. They seem to forget that it is normally the wealthy investors who start businesses and thus create employment. If they don't believe me I suggest they contact that wealthy businessman Julius Malema to establish how through his endeavours and directorship of Companies he created a stream of jobs in Limpopo.

Cosatu should rather follow and support the DA's model of creating an open opportunity society. It will lead to the attraction of more investments which in turn will lead to economic growth and hence more jobs. Unfortunately continued talks about the nationalisation of mines, takeover of the Reserve Bank, scrapping of inflation targeting and the tendency of increased centralisation of power will negate any possibility of attracting more investment.

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