Budget Speech of the The Hon

A look back from the eventful year of 1994 prompts us to declare with a sense of pride that South Africa has at last occupied its rightful place among the nations of the world. The past ten years will go down in the annals of history of South Africa as a decade that ushered in an era of freedom characterised by the most humane values, at the centre of which stands human dignity. It is, thanks to the clarity of vision and profundity of thought of the immortals of the calibre of Oliver Tambo that today we are able to say in words and in deeds that SA belongs to all who live in it, both Black and white.

To the wonderment of the naive and the shortsighted they declared that the liberation of the oppressed Black majority in SA would free the oppressors too. It was in the cauldron of the struggle for freedom led by the African National Congress that some of the most humane values were nurtured to yield what we all cherish today as our democracy. It is important to remember that the democracy we enjoy did not come on its own. It was a long journey via Dolorosa of agony and some made the ultimate sacrifice with their lives. A failure on our part to treasure and defend this democracy would be a declaration that we do not deserve the future we helped to build.

Mhlali-ngaphambili ngubani na onokukhanyela ukuba uphuhliso olwenzeke kule minyakana ilishumi, lungunobangela wemibhiyozo nemincili? Mazidlobe zidlokove iintlinziyo ngenxa yeminyaka elishumi yenkululeko, neminyaka elishumi yentatho-nxaxheba kawonke-wonke. Masigcadiye, sigcolote sizive ubuntu kwilizwe loobawo mkhulu. Nomhlaba uyamemelela, uyabulela, uyadomboza nemiphefumlo iyandondoza. Ngazwinyesithi. “Nkosi sikelela I-Afrika. Siyavuma sithi, “ Camagu-ilizwe lelethu nomhlaba ngowethu”.

Madam speaker in the labour market too, the past ten years saw history-making developments, ranging from putting new and relevant legislation in place, and an institutional framework capable of putting the economy of SA on a growth path while restoring the dignity of working people by upholding the philosophy of Decent Work. We, as the Department of Labour, take pride at being party to the creation of a new culture in the labour market arena in SA - that of Social Dialogue anchored on reaching consensus among the social partners. The National Economic Development and Labour Council (NEDLAC) was established at the time when adversarial relations between labour and management appeared to be a natural and unchanging phenomenon.

Today SA is recognized the world over as a model to be emulated as far as social dialogue is concerned. As a result of this maturing social dialogue we have realized unprecedented industrial peace in SA. Workdays lost due to industrial action dropped from 2.6 million in 1999 during 107 instances of industrial action to 919 780 in 62 cases of industrial action in 2003. Industrial peace has far reaching positive implications for the country’s economy and the people’s quality of life.

Similarly, our decision to have dispute resolution functions located within the Commission for Conciliation, Mediation and Arbitration, or CCMA, has begun to bear fruit. As a result of improvements in the CCMA’s case management system, almost 116 000 cases were handled by the commission between April 2003 and February 2004, at an average of 553 cases per day.

Mhla saqalisa, Inkqubo yeli sebe equlathe iingongoma ezilishumi elinesihlanu ukusuka kunyaka ka 1999 ukuya ku-2004 sathabatha isigqibo esisezingqondweni sokubambelela kwinqkubo entsha ejonge ekuphumezeni iminqweno yoluntu. Sanika amandla kumaphondo ekunikezeleni iinkonzo eluntwini.

The Department of Labour services the public through 125 labour centres and 529 satellite offices under the jurisdiction of 10 provincial offices. To enhance our drive to reach the people even in the most remote areas, by the end of this year we will establish three additional labour centres. In the rural areas of Limpopo and the Eastern Cape we will set up the Jane Furse and Mount Ayliff Labour Centres respectively and to cater for areas including the Diepsloot informal settlement, another labour centre will be opening in Randburg, Gauteng. In addition, a satellite office will be established in Lenasia before the end of this year. We will render services in the Multi Purpose Community Centres in the areas where no Department of Labour offices exist. To further capacitate these offices we will launch an IT case management system called LESEDI, which will facilitate speedy resolution of complaints and enquiries lodged in our labour centres. This is one of the IT applications in a range of Information and Communication Technology innovations brought about by the Public Private Partnership (PPP) between the Department of Labour and Siemens Business Services (SBS).

Madam speaker, the demand for the services of my department has grown tremendously. We are faced with a "crisis of success". Resultant from our advocacy and education campaign, members of the public have become more aware of their rights, hence the high demand for the Department’s services. It has become apparent that we cannot do our business in the same old way. Thus, before the end of this financial year we will introduce 20 Mobile Office Units whose main target is the most remote areas. For this an amount of R8.5m has been set aside for use in Limpopo, Eastern Cape, KwaZulu Natal and Northern Cape. These four provinces will serve as a pilot before we roll out to other provinces. The irony of our situation is that more than any other communities the rural people are the ones who access government services at a cost higher than those who live in the urban environment. These mobile units are part of a conscious effort to take government to where the people are.

Madam speaker, contribution to employment creation and skills development remains a priority for my department. In the past financial year, the number of unemployed people we trained using the Social Development Funding Window of the National Skills Fund alone increased by 45% to 144 056 trainees. About 79 per cent of these were placed in temporary jobs. For this training the provincial offices spent R 171m during 2003. Women constitute 58% of those who went through this training while 56% of the trainees are below the age of 35 years.

Madam Speaker, Vhutsila - the Department of Labour National Skills Development Strategy covering the period 2001 - 2005 has indeed unleashed a silent revolution. In implementing this strategy we have worked very closely with the National Skills Authority, which is driven by the social partners who nominate representatives through NEDLAC. In October 2003 during the National Skills Conference I tabled a comprehensive report on the implementation of this strategy. I will give a full update on this again in October this year. Allow me, however, to highlight some of last year’s skills development achievements registered by the end of December 2003.

By December 2003, 4.4 million currently employed workers were enrolled in various structured learning programmes, thus exceeding our set target of 3 million. Of these workers 2.7 million have already completed their learning in this programme, which exceeds our target of 2 million. The registration of learnership programmes had reached 640 across all sectors.

The area of small business calls for more attention. In this regard the NSF and SETAs, through SETA Discretionary Funds are currently assisting small enterprises. At the same time the department amended regulations to facilitate small enterprises access to skills development opportunities. Furthermore we have established 21 Employment and Skills Development Lead Employer Agencies and put aside R90m under the NSF to pilot the concept of group training on behalf of the SMEs who are without the necessary infrastructure and these agencies will assume the role of an employer over these learners.

Madam Speaker, skills development is about changing people’s lives, about enhancing their employability and about aligning skills to our economy. To date, for 70 000 young, unemployed people, the Department of Labour has made such a difference. These are the people that have and are participating in learnership programmes. For this monumental achievement, I commend the Sectoral Education and Training Authorities and our social partners, but I must also emphasise that there is no time to rest on our laurels and we must redouble our efforts on this front.

Madam Speaker, in an effort to assist the new entrants into employment we have set aside R446 million to supplement SETA funding towards training 18,298 unemployed learners.
This includes R106 million under NSF to cater for learnerships in the public sector. Similarly an amount of R50m will be allocated to the Local Government SETA from NSF to cater for the training of 2087 Community Development Workers.

I have instructed each SETA to increase their uptake of the learners and each will submit by the end of June 2004, a list of five scarce skills areas to be prioritised in their respective sectors.

Kweyedwarha ngenkomfa yesizwe yophuhliso lwezakhono siyakubhengeza iziphumo ngovavanyo lwale nqkubo yoqeqesho siyisebenzisayo. Olu vavanyo luzakugqala ekusebenzeni nasekuphunyezweni kwale nqkubo, nasekuqwalaseleni impembelelo yayo kwimo yezoqoqosho.

Madam Speaker, in addition to the above may I indicate that we work closely with the Department of Education. Currently we are engaged in the review of the National Qualifications Framework. We have allocated over R21-million to the National Research Foundation to fund postgraduate bursaries in areas of scarce skills namely, accounting, actuarial science, auditing, bio-informatics, biotechnology, chemistry, computer science, demography, earth sciences, engineering, financial management, information systems, management studies, mathematical sciences, microbiology, physics, tourism and transportation.

Over R100-million has been allocated to the National Student Financial Aid Scheme by the Department to fund undergraduate bursaries in the fields of science, engineering, computer science, information system, tourism management and commerce.

We have also allocated an amount of R35-million under the NSF to the Finance SETA. About twelve thousand grade 11 & 12 learners, 1746 educators, 253 university students and 620 school managers benefiting from this Mathematics and Accounting programme.

We have transferred an amount of R20m to cover training of 50 000 ABET learners as part of the Department of Education literacy programme.

Madam Speaker, while we pride ourselves of having registered remarkable successes there still remain challenges to be prioritised if skills development is to have the needed impact on the socio-economic landscape of our country. As the current NSDS is moving towards its end in March 2005 I will be tabling the second National Skills Development Strategy in October, covering the period between 2005 and 2009. Towards finalising the strategy, we are currently undertaking an extensive national consultation process. Honourable members are also invited to participate and to submit comments on the draft by 30 June 2004.

Madam Speaker, as we approach the next decade of Freedom, we are mindful of the fact that the levels of poverty and unemployment are at a stage where we cannot postpone action.
As part of our contribution to empower the citizens of our country to ensure that "Bavuka bazenzele" and to develop skills that can result in sustainable livelihoods our energies in the next eight months will be dedicated towards some targeted issues including the following:

Concluding the NSDS 2001-05 unfinished business in preparation for the new strategy whose implementation starts in April 2005.

We will secure Service Level Agreement with South African Revenue Service and improve the skills levy compliance rate among employers. While embarking on a marketing campaign to sensitise employers about the benefits of embracing skills development we will encourage SARS to step up prosecution of the non-compliant.

We will conclude the renewal process of the SETA certificate of establishment in August 2004 so as to enable the successful SETAs or the merger of some of them, time to plan for the period ahead.

New regulations for Service Level Agreements, Funding Regulations and NSF Funding windows aligned to the new NSDS 2005-09 will be completed by December 2004.

For too long well performing SETAs have suffered the wrath of the public who express their dissatisfaction with the manner in which SETAs execute their responsibilities, unfortunately without differentiating between the good and the bad SETAs. This morning I started using the powers afforded to the Minister under the Skills Development Amendment Act 2003. I issued written instructions to Defence Seta (DIDTETA) and the Local Government and Water SETA (LGWSETA) as they have several areas of under-performance. I have also issued written instructions to the six SETAs that have one or more areas needing attention. These SETAs include, the Public Service, Mining, Tourism, Forestry, Police, Wholesale and Retail.

Madam Speaker, when SETAs perform well we credit the stakeholders, when they mess up Mdladlana is expected to clean up the mess. I take no delight in this tongue lashing exercise. But the reality is to choose whether to sing lullabies to the SETAs who hoard unused billions of rands of skills funds or to take action. My choice is clear, there is no time to dawdle by purposelessly when our people sleep with empty stomachs. However, let me also stress that the remaining 17 SETAs are doing good work and I would like to invite you to visit some of their exhibitions stalls outside.

Madam Speaker, the list of the unemployed is dominated by the youth. The Umsobomvu Youth Fund has an important role to play in this regard. Two weeks ago I appointed a new board to oversee Umsobomvu work. The board’s responsibility is to promote skills development and job creation for youth through:

Information dissemination and advisory services
School to work and youth service programmes
Youth entrepreneurship funding

I have instructed the Board to develop a comprehensive database of unemployed graduates in South Africa by December 2004. Additionally, by the end of this year, I expect them to be operating in all our provinces, mainly through utilising existing Departmental 125 labour centres’ infrastructure, so as to ensure that they are in a position to cost-effectively reach all our young people.

Madam Speaker, this government has put in place innovative strategies to deal with questions of employment and sustainable economic development. A key element of this is the Growth and Development Summit, which we hosted in June last year. The summit, as you will recall, was aimed at delivering on series of focussed and measurable goals. To this end we can claim success and a full report will be delivered after the Nedlac Executive Council meeting on June 29. Some areas that should be noted, include the official launch of the Expanded Public Works Programme by President Mbeki earlier this year, the dynamic and vigorous ‘Proudly South African’ campaign, the finalisation of Broad-based Black Economic Empowerment legislation, the establishment of a Nedlac Employment Equity task team, the successful learnership campaign and Seta governance programmes that I addressed earlier in the speech and the increase in the number of Multi-Purpose Community Centres.

Madam Speaker, the social safety net is often taken for granted. There are countries where Unemployment Insurance and Compensation for injuries and diseases as we administer in SA, are viewed as luxury and a nice to have. I am happy to report that the Unemployment Insurance Fund, which only three years ago was declared technically insolvent has now turned around its finances, put them on a sound footing and is ready to contribute meaningfully to poverty alleviation through effective short term unemployment insurance for qualifying workers. The Unemployment Insurance Act of 2001, together with Unemployment Contributions Act of 2002 changed the UIF into a vibrant organization. Through SARS the UIF has collected contributions amounting to R5.9 billion, thus enabling it to pay benefits amounting to R2.1 billion extending service to over 499,438 beneficiaries. As at 31 March 2004 UlF had accumulated reserves of R6.2 billion currently held with the Public Investment Commissioner.

Furthermore, let us not forget that the successful turn around in the UIF has also seen us take the unprecedented step of incorporating Domestic Workers under its umbrella. To date, 604 525 employers have registered a total of 493 150 workers.

In line with our resolve to cater for all the citizenry of South Africa – including the rural poor – we have entered into partnership with TEBA Bank to enable UIF claimants who have no bank accounts to access their benefits through the TEBA Bank system. In the course of this year we will roll out the TEBA "A-card" Project which will extend this service to cover most pay-points countrywide in a manner that helps the rural poor.

On the other hand, in 2003 the Compensation Fund saw an increase of R300m to R2.2 billion in revenue collection, thus enabling the payment of R493.7m compensation benefits and RI.2 billion for expenditure on medical treatment, while R 346.2m was paid to pensions compensation benefits. In 2003 compensation claims registered were 220 000.

The disparity between medical expenses and compensation benefits is a matter for consideration. The Compensation Board is currently looking into this matter and a report on their findings and recommendations will be presented to me before the end of December 2004. The link between Compensation Fund and Occupational Health and Safety (OHS) has become an urgent necessity. The OHS work place incidents prevention strategy, when the two are linked, will have positive impact on compensation. In this regard a National OHS policy will be debated at NEDLAC before the end of this year.

Madam Speaker, we have carved out for South Africa a place of honour and dignity among the nations of the world by the manner in which we manage social dialogue. However, I would like to emphasize that there is still a lot to be done in the area of employment equity and protecting vulnerable workers. Employment equity talks to the fundamentals towards redressing the ills of our past. Conscious of the sensitivity and the protracted nature of the journey towards the ultimate resolution of this matter we consulted extensively until we agreed on certain principles that remain our lodestar today.

Madam speaker, the dual purpose of the Employment Equity Act is to prohibit unfair discrimination in employment whilst requiring specific measures to be taken to provide opportunities to blacks, women and people with disabilities so that they can be equitably represented across all levels and occupations. The long-term objective is to ensure equitable representation in all levels and occupations, in line with the national and regional demographics of the economically active population. In assessing the attainment of this vision, the Act recognises the constraints such as the available pool of suitably qualified people, labour turnover and the economic circumstances of the employer. In view of these realities, the Act does not impose any mandatory, external quotas and unrealistic deadlines. Instead, it requires that employers should work with their employees or the employee representatives to identify and remove policies, practices and procedures that are discriminatory and to jointly develop plans for redressing the current racial, gender and disability differentials.

Ivili lenkululeko liqengqiwe kunjalo nje libaleka ngesantya esikhulu kakhulu. Ndiyacebisa ke kubachasi izikhwenkxe nabanxaxhi ukuba lingathintelwa kuba ngokwenjenjalo uzibizela nje ingozi. Mela bucala ukhonkothe nje oku kwenkunzi yenja.

There is no short cut, we have to traverse this route and traverse it together. Whatever optimism we may have about the good will of South Africans, experience tells us that there comes a stage where sentiment must give way to the will of the people. Employment Equity, Affirmative Action and Broad Based Black Economic Empowerment are some of the concepts that have emerged out of the realities of the exaggeratedly unequal opportunities in our country. We have just begun to talk to this all-important question of all round equality of opportunity. The journey may be long but it is worth traversing. I therefore call upon the social partners to unlock their innovative thinking towards realization of these ideals. Among other things, alignment of employment equity and skills development strategy is being pursued with a sense of urgency as prioritised in the second National Skills Development Strategy starting next year in April.

Madam speaker, we live in a rapidly changing world and in order to ensure that our labour market policies continue to address the real issues facing the people, it is essential that our understanding of the labour market is accurate. In this regard, we have strengthened the Department of Labour’s research and statistical analysis capacity. In the past year, six research papers were completed on workers co-operatives and employment creation. Similarly the sensitive topic of "casualisation and the changing nature of work" received the attention of the Department of Labour researchers in collaboration with other institutions. The results of this study will be presented to the cabinet before the end of September and thereafter they will be made available to the public. Such studies will help prepare the Department to handle the challenge of vulnerable workers, which remains our priority in the next five years. The outcomes of these studies will shortly be presented to cabinet.

Madam speaker, you will remember that in the not-too-distant past when our inspection services were under severe pressure, I declared that we are willing and we have the capacity to enforce the laws we administer. I am happy to report that the work and visibility of my inspectors have raised awareness among workers and employers to unprecedented levels. The number of inspections conducted by 805 inspectors in 2003 is 187,187 compared to 87, 815 inspections for 2002. These inspections are aimed at both Education and Enforcement such that eventually we reach a stage of self-regulation with the employer and employee both fully aware of their rights and obligations.

Protection of vulnerable workers is close to my heart. We made history when we, for the first time in the history of SA extended worker rights to the farm and domestic workers in the form of the sectoral determinations we proclaimed.

Madam speaker, allow me, in conclusion to quote, the “Silent Thunderstorm”, a poem by a domestic worker.

"Down there on my knees, scrubbing your floor
You dangle me like a puppet
I answer your questions honey-mouthed
Questions 'bout my John and my church
and my children
and my hopes and my dreams
All my business...
But make good use of me
‘cause there ain't no more generations like me coming.
No more who'll bend down and scrub your floor
while you kick them in the arse...”

Allow me torture this circumstance further by quoting the words of a black Brazilian woman, a mother of three children by three different men, an author of the famous book “Child of the Dark”. Her name is Carolina Maria de Jesus. Asked by a journalist about how she felt as an instant celebrity after years of foraging in garbage dumps to keep herself and her children alive. "Tell your readers" Carolina replied, "that I have merely re-entered the human race.”

Fellow South Africans let us allow each and every South African to re-enter the human race.

I thank you