NATIONAL ASSEMBLY, CAPE TOWN, 23 APRIL 1998
Madame Speaker, Honourable members.
Four years into the democratic dispensation, and with an election scheduled before the next budget vote, today is a suitable occasion to pause and reflect on what we have done. Our critics often carp from the sidelines that we have not ‘delivered’. Now is an appropriate time to reflect on how much we have done, and what we still have to do. What have we done to transform the labour market? Have we succeeded in implementing the tasks we set ourselves at the outset, as outlined in our five-year transformation plan? And what challenges remain to be tackled in the final year of our first term?
One of the first things the Labour Ministry did, at the commencement of my term in office, was to develop a five year Programme of Action. We stated our intentions and we have endeavoured to carry them out. How have we performed?
During this period we have prioritised initiatives in the areas of skills development, dispute prevention and settlement, labour relations, inspection and advisory services, occupational health and safety, and labour policy. Four years ago, in the 1995/6 budget, only 44% of the department’s expenditure was committed to these priorities. The budget before you today earmarks, more appropriately, 77%. In short, we have taken steps to re-align the budget so that it more accurately reflects the policy priorities of the democratic government.
We said we were committed to eradicating racial and gender imbalances in the workplace. As the House is aware we have developed Employment Equity legislation aimed at outlawing discrimination and promoting a more diverse and representative workforce. We have done so both because it is the right thing to do and also because equity in the workplace will promote efficiency, enhance productivity and remove unnecessary tensions amongst our people. Although there has been some progress in bringing down apartheid barriers in the past few years, racial and gender discrimination at work remains concentrated in the workplace. Effective implementation of the employment equity legislation will be one of the major challenges of the next decade. As for the argument that we are re-introducing apartheid classifications, this must be rejected with contempt. The unfortunate truth, as has been said before, is that race is something which shouldn't matter, but which has mattered and therefore does matter.
I will be tabling the Employment Equity legislation during this session for your consideration. When you pass that law you will ensure that our workplace, at all occupational levels, will begin to reflect the broader society in which we live. Blacks and women will be able to aspire, train and occupy positions previously not associated with them; to become engineers, pilots, financiers, economists, architects, geologists and so on.
We said we would develop and implement far-reaching changes to training and employment services. Major changes have already occurred and both this year’s budget allocation and the Skills Development Bill aim to take this process further. Our tasks since we assumed office have been twofold – to restructure the existing training system, while at the same time introducing a dramatic overhaul of our approach to training and skills development. We have helped establish a new qualifications authority to raise the quality of training. Over four years we have trained more than 350,000 unemployed people in productive skills. We have funded the accredited training of over 26,000 participants in the NEF job-creation projects. We have helped find jobs, in the past year alone, for almost 300 people with disabilities. Tremendous progress has been made since the enactment of the National Qualifications Framework and the South African Qualifications Authority Act. In 1997 alone, by recognising prior learning, 3,600 people were assessed of whom 54% were successfully accredited in certain trades. This represents a major recovery of skills and hopefully their proper utilisation and reward.
The Department’s Annual Report contains detailed examples of what has been done in the sphere of human resource development. But the big challenge still lies ahead of us. As a country we need to dramatically increase both the quantity and quality of skilled South Africans, and we must be prepared to devote resources to this end.
This year’s budget includes a significant increase (to R320,5 million) in the amount allocated to Human Resource Development. This reflects the importance which government attaches to training and anticipates the introduction of the Skills Development Bill. We have made provision for the introduction of a new apprenticeship system, a planning unit, the publication of skills and employment information, the establishment of a new Skills Authority, support for sectoral planning, and associated transitional costs in moving towards the new dispensation.
In terms of the Medium Term Expenditure Framework government is committed to increase its allocation to skills development by R200 million per annum. These resources will add to those that will be generated as a result of the skills development legislation which will be tabled before the house during this session. We estimate the proposed payroll levy will generate annual revenue for training of at least R1,3 billion.
We said we would take steps to strengthen civil society to help make the labour market function more effectively. We have funded a number of major initiatives aimed at improving the skills of unionists and other stakeholders in the labour arena. We have given financial assistance totalling R5million to DITSELA, an education and development project of the two major federations, COSATU and FEDUSA, which we hope NACTU will join in due course. Many other projects have been supported, including R891,000 to IMSSA to provide specialist training on the new LRA to 467 unionists; assistance to the Industrial Health Unit to fund education and support work in the KwaZulu/Natal area; a small grant to the Workers Library and Museum in Johannesburg; assistance to the well-known SA Labour Bulletin to assist it in its move towards self-sufficiency; support for the Workers College in Durban to conduct training workshops; and a small grant to the National Coalition for Gay & Lesbian Equality to hold a workshop on workplace discrimination.
Our Strengthening of Civil Society initiative is a long-term project whose fruits will be reaped in years to come. It is not an initiative aimed solely at unions. Indeed there is room to expand it to enable small business to manage their industrial relations more effectively and comply with labour legislation. As we restructure the Department, we will be reorganising our labour centres and improving the service we deliver to the public. We envisage forging closer ties and building strategic partnerships between NGOs and the Department, at head office, in the provinces and at our labour centres.
We said we would re-enter the international arena. Today we are active members of the International Labour Organisation and participate in appropriate forums at both the Africa and the SADC levels. We have ratified key international conventions including those related to freedom of association, the right to organise and to bargain collectively, the elimination of forced labour and of discrimination. And we are active in the growing international campaign against child labour. As part of our work in Africa we recently hosted, and currently chair, the Labour and Social Affairs Commission of the OAU. In this role we will co-ordinate and input Africa’s views to the International Labour Conference.
We said we would build and transform key institutions in the labour market. We have transformed the Department of Labour, in terms of its composition and priorities. As with any dynamic organisation this task is ongoing. We have dramatically improved the representivity of the staff we employ. In 1994 the old Department of Manpower, in the positions from Assistant Director upwards, was 100% white and 11% female. Today in the Department of Labour such positions are 54% black and 27% female. We have made large strides in training and re-training government staff in their new functions. The increased amount allocated to general administration accommodates, among other things, the introduction of an enhanced capacity to manage the Department’s own staff and human resource function; the restructuring of labour centres to improve services to users (including job-seekers); and improving our IT capacity and the linkages between more than 150 local sites where we operate, the provincial offices and our head office.
We have transformed, although the process is again ongoing, a range of institutions associated with the Department. This includes the Advisory Council on Occupational Health & Safety, the Compensation Board, the National Training Board, the Unemployment Insurance Board, and the Wage Board. In all cases our social partners are now represented on such bodies. I have recently appointed a new Productivity Advisory Council, whose urgent task is to help transform the National Productivity Institute (NPI). Useful recommendations made by the Comprehensive Labour Market Commission should inform this process. In the interim, the Department will use the increased budgetary allocation to the NPI to finance programmes that meet with our goals.
We abolished the National Manpower Commission and the National Economic Forum, and replaced them with a single body, NEDLAC. This is a crucial institution which is more representative than the bodies it replaced, has a much broader agenda, and involves our social partners in policy formulation in the social and economic spheres.
We said we would overhaul the Labour Relations system and we brought new legislation into effect in 1996. Through this legislative intervention we aimed to promote collective bargaining, encourage employee participation in the workplace, provide an efficient mechanism for preventing and settling disputes, and generally facilitate a more stable and peaceful industrial relations environment. And our efforts have been largely successful so far. Over 86% of disputes heard by the CCMA in 1997 were resolved either through conciliation or sent to arbitration. This is a major achievement, especially in relation to the dismal dispute resolution mechanisms of the old dispensation.
Further there is increasing evidence of a substantial, long-term downward trend in the incidence of industrial action since 1994, despite signs of a small increase in industrial action this year. Remember the chaos of Mooi River in 1994? Even the recent security and transport strikes would have been longer and even more turbulent in the absence of a credible mediation facility such as provided by the CCMA. The CCMA, as its Annual Report issued this week concedes, still has much to do. In some areas quality must improve. In some regions, especially Gauteng, there remains an unacceptably high backlog of referrals. And there is a need for more preventative work, especially in the security and retail sectors. But, notwithstanding these teething problems, we have laid the foundation for an important institution which can facilitate both equity and industrial relations stability.
In the past four years workers have taken advantage of the organisational rights provided for in law. Unionisation has increased by about one million. This is a positive phenomenon and will assist the development of mature collective bargaining.
We said we would revise the Basic Conditions of Employment Act. We have done so. Some provisions of the new Act, such as the prohibition of child labour, and establishment of the Employment Conditions Commission, have already come into effect. The remaining provisions will be operationalised in the latter quarter of the year. This Act will impact on every worker. It takes a modest first step towards our goal of a 40 hour week. It provides basic protections to some of the most exploited workers in our country – especially in construction and security, on commercial farms and in domestic service. The BCEA outlaws child labour. It increases the overtime rate in an attempt to get more people working, and not simply existing employees working more. And we have introduced these changes while sensitive to the need to enhance flexibility in the arrangement of working time. We remain alert to any potentially negative implications for small business or job creation, and a study on that issue should be completed shortly.
We said we would amend the Unemployment Insurance Act. The Department has done the preparations for this and legislative proposals are now to be considered by my office. Over the past four years we have focussed on improving the administration of the fund, ensuring employers pay over monies deducted from workers, reducing the incidence of fraud, and introducing more efficient financial management. The challenge remaining is to get the systems fine-tuned and working better to ensure the long-term viability of the funds.
We said we would amend a number of other labour laws. Apartheid left us with separate labour laws in Bop, Venda, KwaNdebele and the other homelands. We have simplified and unified labour legislation and, through the Integration of Labour Laws Act, we have swept away the divisions in labour law which apartheid generated.
We have seen the Insolvency Act amended to ensure that employees are not left at the back of the queue when a company is wound up. But other legislative amendments must still be tackled. In particular the LRA needs fine- tuning on a regular basis, and the Unemployment Insurance Act remains to be finalised.
We said we would change our approach to health and safety. We now have an advisory council for OHS, which includes union representatives. We have tried to increase proactive inspections and general awareness of the importance of occupational health and safety. But we have been hampered by a shortage of staff, especially of skilled staff. Poor working conditions lead to accidents and illness. The human suffering which follows is incalculable. The cost to our economy runs into hundreds of millions of rands. Latest figures show that in financial year 96/7 the Compensation Fund paid over R780 million in compensation and medical expenses to accident victims. And workplace accidents, excluding the dangerous mining industry, result in over 22 million lost days per annum!
As my colleague the Minister of Transport has stressed, it is much better to prevent accidents than to deal with their human and economic consequences. There has been a decline since 1994 in the number of reported incidents and fatalities (excluding mining figures which are reported elsewhere), although there is possibly still under-reporting. Even one death is one too many. Fatalities in certain sectors – transport, construction, agriculture, local authorities and iron & steel – are especially disturbing. In the budget before you the amount allocated to Occupational Health & Safety has increased by almost 10% primarily to enable us to fill vacancies, train staff and improve our preventative capacity.
At present job creation is negative in some sectors and stagnant or modest in others. Overall we are not seeing net growth in registered, formal employment. There are indications of job growth in smaller businesses and the service sector, although much of this is unregistered. Mining employment, especially in gold, is declining – although the Gold Crisis Committee has managed to alleviate and moderate the extent of the job loss. The key manufacturing sector, including the export sector, has shed jobs, although perhaps fewer than expected. The overall picture remains that insufficient new jobs are being created.
Preparations are underway for the Presidential Jobs Summit and an announcement on this will be made in due course. The President’s office will call this summit to emphasise that job creation and the fight against unemployment are central national objectives. Unemployment is unacceptably high and we must do more to get businesses to create jobs and to get our people, especially young school-leavers, trained through our new learnership system and moved into employment.
We reject the simple equation that job creation is simply, or even mainly, a matter of labour market policy. And we remain committed to labour standards on grounds of equity and because they contribute to a more stable labour relations environment. But we are also pragmatic and committed to finding the right balance where there is a trade- off, as there sometimes is, between creating more jobs and creating better jobs.
In preparation for the Summit all government departments are asking what existing policies could be adapted to enhance job creation, and what new policies could be introduced. Out of these processes and interactions with our social partners we hope that an agreed Employment Strategy will emerge.
But I must sound a note of caution. We inherited a deliberately distorted social and economic system. This encouraged a capital-intensive approach to investment. It forced people off their land leaving us without a balanced rural sector. Apartheid then tried to keep the African unemployed banished to the rural homelands. It discouraged entrepeneurship and labour mobility. It encouraged inflated salaries for a small elite alongside low wages for others. I say all this, not so much to place blame elsewhere but rather to stress that there is no quick-fix solution to unemployment. There are short-term measures which can and should be taken. But, mainly, we face a long haul to get the structure of our economy and of our labour market right so that we can look forward to an era of justice and of labour-absorbing economic growth.
Honourable members, I commend this budget to you. I thank you.