3 November 2000
Mphasane-Moletsana Financial Services Annual Gala Dinner
Contemporary challenges and the way forward
Programme Director, Ladies and Gentlemen, good evening. Considering the history of this country, many have never imagined that a company of your statute will exist on the banks of the Vaal, This has been a great stride for Mphalasane-Moletsane, I am honoured to be you guest tonight.
When we talk about our economy in the 21st Century we must acknowledge the role of national economy in a globalised environment, which has open doors and allow more choices for many. As much as globalisation may present may present more opportunities and choices for prosperity it is not a panacea for all. From the perspective of the Public Service we need to consider the role of the state in harnessing the forces of globalisation in the interest of our broader community, conscious of the deficit between globalisation and communities. In analysing the Public Service within a global environment we understand the role of the Public Service in relation to one of the key indicators of our society: the Economy.
The core focus of this address is the key challenges faced by the Public Service in promoting the growth of the South African economy. I will shed some light on how we are meeting these challenges and will leave you with a few thoughts on the way forward for the Public Service.
Key challenges for the Public Service and the Economy.
The South African state is subjected to various pressures that will influence the way it delivers service to citizens and how it supports the national economy. The effects of globalisation; the impact of a strong civil society; corruption and self-centred interest of some civil servants; and the imperatives for social delivery all present challenges and pressures on the state’s ability to discharge its mandate as a developmental and coercive instrument in socio-economic transformation. Overcoming these challenges everyone in South Africa needs to play their role, government cannot do it alone.
Notwithstanding this complex environment, the core leadership of the public service together with the governing party is required to implement the policiesof Government. These Heads need to acquire skills to drive productivity and motivation towards implementation of policy, which ultimately will impact on the ‘bottom-line’ of economy.
The democratic government still faces the challenge of redressing the absence of limited service. We strive to extend services in an equitable way and to upgrade the quality and quantity service delivery. These demands include Health, Welfare, Education, Housing, Water and Transport concerns and forms the core responsibility of our national-democratic state.
These imperatives on the South African state and specifically the Public Service is augmented by economic challenges posed by globalisation, government debt, increasing unemployment and an economy that is slow to register increases in growth.
Other challenges for the Public Service include:
The Economic context of Service Delivery
(source: The 2000 Medium Term Budget Policy, Minister of Finance, 30 October 2000)
Of late, South Africa’s engagement in the international arena has been affected by rising oil prices, declining commodity prices; instability in the African region and the general decline of capital flows to emerging markets which constrained growth in South Africa. Furthermore, the instability and imbalances of major currencies such as the dollar, Euro and the yen have also place pressure on the South African currency.
Notwithstanding, these challenges, we still have an important overarching objective:
From a financial perspective, the stage for service delivery was set this week with the release of the Medium Term Expenditure Framework. Minister Trevor Manual announced a programme geared towards targeting public expenditure focused on developing infrastructure and people in South Africa. This includes restructuring companies such as Transnet, Telkom, Eskom and Denel, which in turn will benefit all South Africans over the next few years. Bringing in foreign investments and contributing to lower prices and better infrastructure service is also key on the agenda. In the long term it should lead to more private sector capital, technology and expertise in the economy. >From these and other developments we could expect more public private partnerships and therefore an expected boost in public service delivery.
Looking at the fiscal policy it is clear that by broadening the revenue base and improving on tax collection it has been possible to look ahead at lowering (substantial income tax relief) tax rates in South Africa. This will lead to effective investments and job creation. Provision has also been made for a 3.7 % increase in public service expenditure, good news for the 2001 budget year.
The Medium Term Expenditure Framework forecasts, a more focused capital and infrastructure expenditure. Specifically in the areas of physical infrastructure development such as transport, communication networks, railways, hospitals and schools. Expenditure will also target building capacity in the knowledge economy, by ensuring that computers and the Internet are more accessible to all. On the level of social expenditure school and health infrastructure will be the focus, and a consideration on the impact of HIV/AIDS. Further, more emphasis will be placed on creating a safe and secure environment, curbing crime and increasing the efficiency of the police service by upgrading physical infrastructure and other related services.
As the largest employee in South Africa, the skills base of the public service is crucial to our economy. For this reason much emphasis has been placed on building the capacity of public servants.
Skill needs for growth of the South African economy in the future
The Human Sciences Research Council did a labour market analysis recently, which indicated that South Africa should focus on the future employment needs of the economy. The forecast predicted that the employment of professionals and managers would increase by 9.6% and 6.2% respectively by 2003. This has obvious implications for the skills mix in the public sector.
Many more professionals will be needed in the public sector requiring that capacity of public servants change to fit the bill of a highly effective service deliverer to a broader population in a globalised environment. This will be done in terms of the requirements in the globalised world.
Skills Development in South Africa
Skill development is one of the major challenges facing our new democracy. It is crucial for the improved living standards, increased productivity levels and a higher competitiveness on the world market. The Skills Development Act promulgated in 1998 by the Labour Department lays the foundation to redress the past by introducing new training systems which place special emphasis on enabling the formerly disadvantaged to actively participate in the country’s economic activities.
This is achieved by establishing an institutional and financial framework, which includes the establishment of the Sector Education and Training Authorities (SETA). The DPSA is currently working on the establishment of the Public Service Sector Education and Training Authority (PSETA), with the scope of coverage being national and provincial departments that perform core public service policy and administrative functions.
Management: The Senior Management Service (SMS)
We are extremely exited by the programme to professionalise the management of the public service called the Senior Management Service (SMS), which will be implemented early in 2001. The SMS includes all managers from Director upwards and technical executives of the public service. The SMS process involves: distinguishing between managers and professionals, rigorous recruitment and selection systems, competency profiling of all new and current senior executives in relation to their jobs, performance assessments systems, training and development regimes, and flexible remuneration systems. Given the pivotal role of senior managers and high-level professionals in the future, the programme will endorse a specific need in the public service.
Service Delivery Innovation
Although ‘Batho Pele’ (People First), a service improvement initiative spearheaded by the Department of Public Service and Administration (DPSA), has made a contribution towards improving the service delivery attitudes of many public servants. This includes involves partnership with private sector, social partners and beneficiaries. Managers have indicated that they need a practical and flexible toolkit to enable them to make meaningful contributions towards improvements in delivering service. Essentially, setting policies and putting guidelines in place are not enough. We have to get out there and work with departments to implement what the country expects out of improved service delivery. We must also be innovative and creative in planning the best route to service excellence and therefore stimulate economic growth.
For this reason the DPSA working with Non-governmental Organisations and its partners, developed a Service Delivery Innovation (SDI) policy framework and guidelines. Service Delivery Innovation is an optimum mix of flexible service delivery mechanisms and tools that can be strategically used to achieve Government’s service delivery objectives either directly by Government or in collaboration with other sectors such as the private sector or through non-government organisations.
To ensure that the Public Service remains on the cutting edge of service delivery innovation in the future we are establishing a Centre for Public Service Innovation, which will:
Information Technology advances in Governance
A key factor in our global world is Information Communication Technology (ICT), which is in fact the platform of globalisation. Human and technical capacity to maximise ICT’s is critical to the development of South Africa.
Procurement of information technology products and services
The State Information Technology Agency has embarked on a "Whole-of-government" IT procurement policy which recognises that the government is the biggest consumer of IT goods and services in the South African market. For this reason the policy seeks to ensure that Government gets value for money out of it’s IT procurement.
Policy objectives include reduced cost of doing business, better industry performance, with emphasis on substantial regional development, socially responsible business practices and promotion of black economic empowerment.
The framework of this procurement policy encourages the IT industry to become strategically focused and to pursue better workplace practices. It will cost the industry less to do business with Government as SITA simplifies tendering and contracting procedures, adopts electronic commerce more widely and works in partnership with service providers.
By placing greater emphasis on the equality of employment opportunities, service providers are required to identify measures to improve workforce diversity. The new procurement policy encourages small and medium enterprises (SMME’s) to compete for Government business on the basis of value for money. SITA’s plans are to leverage the government’s IT economic muscle to improve IT procurement, and to strengthen Information Technology SMMEs and previously disadvantaged enterprises.
A moratorium on the Voluntary Service Packages was announced in April 2000 after realising that it had served its specific role and purpose. A new tool to exit the public service is imperative and will be finalised after the job summit in January 2001.
Public Service and Trade Unions
The context of developing South Africa and its economy has implications for the trade union movement and the nation as a whole. We must remember that the central mission of the public service is the development of the country and provision of services to its people. If this is not achieved, the public service will miss its rationale for existence. The partnerships that we have created in the Public Service must make a difference in the lives of all South Africans. Partnerships that are inwardly focused cannot improve service delivery, they cannot eradicate poverty, or economic growth and they cannot create employment. It is also important for management and labour to recognise their inter-dependence in ensuring that this mission is realised.
I would like to see a public service in which the interaction between the trade union movement and government will be about one common commitment to the improvement and acceleration of service delivery that will lead to a change in the lives of our people and the economy. Public service unions have a crucial role in sharing and realising the government’s vision of service excellence in this sector. Our partnership will strengthen and possibly quicken our goal of achieving a better life for all South Africans.
The way forward
As South Africa engages with the global economy, our government strives to encourage and foster sustainable economic growth and development. Public and private sector partnership in areas such as transport, energy, information technology, environment (to name but few) should continue to be pursued. The Public Service will also be geared towards grasping the opportunities globalisation opens to us. We will continue to pursue economic strategy and fiscal policies aimed at overcoming poverty and inequality through sustainable growth and effective engagement with the global economy. We have a responsibility to invest and develop infrastructure, education and capacity for the future as well as to facilitate the development of skills and knowledge orientated economy.
In conclusion, the focus on umuntu ngumuntu ngabantu clearly shows the need for co-operation in building the nation, we are all partners in developing this country.