The Budget Vote speech of the Department of Labour presented by Minister Membathisi Mphumzi Shepherd Mdladlana

At the twilight of the Middle Ages, Francis Bacon declared “knowledge is power”. Little did he know these seemingly innocent words would unleash a revolution that liberated humankind from the darkness of the Middle Ages.

These words shook no less than some of the teachings of the man who, three centuries before Christ was born, had accumulated so much information and knowledge that he is now recognized as the father of almost every field of investigation or study we follow today, namely Aristotle.

Madam Speaker, as we look at the past years and prepare ourselves for years that lie ahead we can not but be inspired by the manner in which our fore-mothers and fathers, sustained by the power of knowledge, managed to build the future we enjoy today based on the past they endured then.

Imbongi yesizwe jikelele u ESK Mqhayi uthi:

“Phindela phesheya nto kaDube!
Phindela phesheya Mafukuzela!
Nkamel’ethwal’iinzingo zeAfrika;
Ithwal’iingxakeko neembandezelo zayo,
Ikhe yathwal’ezinye yaziphumeza,
Yathwal’ezinye, ezinye, kwanezinye;
Thole lenkunzi yaseMpumalanga,
Bath’ukuyibiza nguMafukuzela.

Phindela phesheya mfo wakwa Senzangakhona;
Ndibev’apha isimbonono;
Bathi, “Kwathi kwathi Afrika mayibuye,”

Mqhayi dedicated this poem to Dr John Langalibalele Dube, the first President of the African National Congress (ANC), one of those who remained optimistic that beyond the dark days of colonial oppression there is better life for South Africans. It is on the shoulders of the giants of the calibre of Mafukuzela, Sol T Plaatjie and others, that today we are able to say we are a free people. We owe it to their memory that we too make our contribution in this era of knowledge society.

Madam Speaker, never before had knowledge been as indispensable as it is today. Allow me to look back at the year that just ended and share with this house some of the exciting moments we experienced and challenges we encountered.

In search of knowledge from those who do not source it from books and websites I undertook a campaign of imbizo and visited eight provinces where I met the most amazing people of our country who through our programmes saw their quality of life improved. One such project is the Paprika Project in the Free State where a disused mine land was used to produce various fresh produce for local and export market, in which young people are involved.

This has proved to be a great source of information on how the government services impact on the lives of the people. I am pleased to say today some of those people we are working together with in some of the projects we sponsor have honoured this day by their presence here.

Allow me to mention a few of these:

In partnership with Further Education and Training (FET) and Higher Education (HE) institutions, we initiated the Thuthuka Project facilitated by FASSET, the SETA in the finance and accounting sector and South Africa Institute of Chartered Accountants (SAICA).

This project aims to accelerate the rate of transformation in the sector by increasing the number of black and women chartered accountants. The project is currently being implemented in the Eastern Cape, KwaZulu-Natal and the Limpopo provinces. Through this project our skills interventions have assisted and continue to assist:

* 152 B Comm undergraduates from the University of Fort Hare, 40 of whom have graduated this year and are pursuing a career as Charted Accountants (CA)
* 19 200 students in the Eastern Cape schools received extra tuition in mathematics, accounting and English to help prepare them for entry into university programmes in financial accounting and other financial management fields
* Another 19 200 learners follow the same path in the provinces of KwaZulu-Natal and Limpopo
* 209 undergraduate B Com students AT the University of Limpopo are being prepared for A CA career through extra interventions in partnership with University of Johannesburg (formerly RAU),
* Up to 7 200 educators will receive capacity building to improve their skills in the area of mathematics and accounting.

In my view, this project is indeed an example of fruitful partnership in action. The significance of this project is in that here we are dealing with one of those areas we have identified as scarce skills. We have also deliberately prioritised the children of these predominantly rural and poor provinces. In so doing we are reversing the stereotype that children from the rural areas can only do subjects outside commerce, science and technology.

As part of pursuing the National Skills Development Strategy (NSDS) and Joint Initiative for Priority Skills Acquisition (JIPSA) goals, we have initiated a process to identify scare skills needed in the Accelerated and Shared Growth Initiative for South Africa (AsgiSA) projects that have been identified. This process involves the development of a database that will include the number of jobs to be created and scarce and critical skills required.

We are also pleased with the results of yet another special project, namely the Uitenhage-Despatch Development Initiative (UDDI) Regional Skills Pool funded by the National Science Foundation (NSF). In this project we trained 1 000 unemployed youth in basic automotive and engineering skills over a period of two years. 934 learners completed their training and of these 850 were employed by Volkswagen South Africa (VW-SA). Some of these young people are here today and are seated at the gallery. This is an example of how partnership between labour and business can help address the problem of shortage of technical skills that the economy so needs. I want to acknowledge the outstanding and full support of VW-SA in this project.

In addition, we will this year review and increase our course fee to accommodate provider costs in line with inflation. We will also for the first time, introduce a trainee daily allowance to cater for the travel and meal costs in these programmes.

My Department in partnership with other departments in the Western Cape also embarked on an ambitious project called Building Maintenance Preventative Pilot Project (BMPPP) in the Cape Metropolis. We spent an amount of R3.052 205 to develop the skills of 2 000 unemployed persons: 1 500 in Garden Maintenance and another 500 in Handyman General Building Maintenance.

After six months of training all the trainees completed their training and all were placed. I also want to acknowledge the presence of some of those learners in the gallery.

In the past year we collated the results of the National Skills Development Strategy (NSDS) phase one (2001-2005). During this period we registered 170 926 learners into learnerships and apprenticeships, of these 109 674 (64 percent) were unemployed learners while 36 703 were apprentices, contrary to the perception that apprenticeship is dead. 71 percent of the learners were placed either in income generating projects, employment or further training within three months after training.

If this trend can be sustained we would contribute meaningfully to reduction of unemployment and poverty. In 2005 we set a target to register at least 50 000 learners in the scarce skills field. We ended up with 116 425 learners registered. The SETAs have heeded the government call to make AsgiSA – JIPSA succeed hence this overwhelming response. One of the challenges that we will have to address with our colleagues in the National Treasury is a matter relating to the disparity between tax allowance payable to employers who take on apprentices vis à vis the allowance paid when they take on learnerships.

My visit at Indlela a fortnight ago brought home to me the importance of having to ensure that theoretical training always goes with practical training. The theoretical training that our colleges continue to churn out to artisans surely has to be reviewed.

Apprentices that register with Indlela to be assessed on their skills are failing dismally. Some end up being referred back for further training on both the practical and theoretical side as they often know very little.
If this trend is left to continue at our Further Educattion and Training (FET) and private institutions, then our plans for Jipsa are in trouble. It is little wonder we have so many fatalities of collapsing building structures. It says a lot about the calibre of training that our artisans are receiving.

That is why I instructed Indlela to explore the “training of the trainers” as this will also ensure that we get the FETs to at last utilise the equipment that has been lying unused and gathering dust for a very long time.

Madam Speaker, the turnaround strategy of Unemployment Insurance Fund (UIF) saw processing of claims payments improved from 70 days delay to five minutes. Payments are no longer done once per month but daily. Payments are done electronically. UIF has a cost saving of about R16 million on bank charges, thanks to the IT solution – Siyaya; employment equity on line enabled 320 companies to submit their equity reports on line in September 2005; the Lesedi solution is assisting in inspection and enforcement and labour centres are linked to Head Office through plasma screens.

This allows dissemination of important information to our staff and members of the public who visit our offices countrywide and our 20 mobile units are electronically enabled and their presence in the remote areas of the country have improved access to DoL services. An amount of R16,4 million Re-investment Fund has been generated as a saving to be utilised within the broad parameters of the contract.

While we are achieving a lot in the UIF, we acknowledge that there are problems in the Compensation Fund (CF) that require intervention. The problems include serious backlogs in terms of claims, calls not being returned and late payment of doctors.

Soon I will be appointing a new commissioner whose mandate is to help correct all the wrongs that have been identified with the aim of turning around the CF.

Madam Speaker HIV and AIDS threat is looming large in the labour market arena. It is costing business in terms of work hours lost and training and development of those who come in to replace the deceased. The cost incurred by families is sometimes hard to measure but impact is devastating when the bread winner dies and children have to fend for themselves at a tender age. Prompted by this picture my Department commissioned an HIV prevalence study. This is aimed at measuring the magnitude of the problem and to enable us to develop a strategy to deal with the affected and infected staff. We have deployed qualified wellness champions to play an active role in this regard. Prevention is imperative if we are to contain the danger of HIV and AIDS problem.

On the international front our relationship with the International Labour Organisation (ILO) has been enhanced by our re-election to serve in the ILO governing body as a titular member for the period ending in 2008. During 2005 we were assigned the responsibility of chairing the African Union (AU), labour and Social Affairs Commission and we convened a session of this commission in Johannesburg in April 2005.

We convened the Southern African Development Community (SADC) Ministers of Labour as a first step towards revival of the SADC Employment and Labour Sector which collapsed during SADC restructuring. Response from my counterparts in the SADC region has been overwhelming. We feel that we need this forum in order to address our common challenges collectively.

Madam Speaker, 2005 achievements prompted more challenges for further development. The rate at which the economy is growing has prompted a question as to whether we have the capacity to sustain it. The aim is to meet the Millenium Development Goals (MDG) set by United Nations (UN) and improve the living standards of our people.

It is in this context that the cabinet has mooted the idea of AsgiSA for implementation under the able leadership of our Deputy President. JIPSA as a component part of AsgiSA is challenging us to ensure that scarce skills needed by the economy are prioritised. Working in close partnership with business, sister departments and SETAs we will develop a scarce skills list and quotas for recruitment from outside South Africa when a given skill is unavailable.

Among the priorities for this year we will develop an Employment Services System which will facilitate the matching of job seekers with the employers electronically and through our labour centres throughout the country. This system will further assist in tracking people with various scarce skills and ensure vacancy registration, job matching, counselling, career guidance and placement services.

Recently there has been an amount of disquiet about rigidity of our labour laws, anecdotal as it may be, we feel that this cannot be ignored.

In this regard Cabinet took a decision that Department of Labour (DoL) should conduct a labour market review which among others will focus on how labour laws impact on economic growth and small business development. In the Sub-Saharan Africa more than 90 percent job creation is through Small and Micro Enterprises (SMEs) and the opposite holds true in our country. This cannot be left unattended if we are to deal decisively with the second economy challenges. Towards this a number of actions have been taken including the commissioning of research papers with special focus on labour market and small business development.

My Department has facilitated the interrogation of these research papers from University of Cape Town (UCT) academics and others with the aim to identify gaps for further research or lift issues for implementation where there is agreement among the social partners. This consultation will culminate at National Economic Development and Labour Council (NEDLAC) with social partners putting forward their views on the issues raised in these papers and the ensuing debates.

I have approached the Director-General of International Labour Organisation (ILO) to help us with the review of our labour market. As a true friend of South Africa, Mr Somavia has agreed to take this task. The importance of this review is that it will provide a reliable source of empirical evidence upon which discussants in the labour market can argue their viewpoints. Currently we mainly rely on secondary and long re-cycled information.

Madam Speaker, labour inspection has noticeably improved its work in the past three years after we put in place Inspection and Enforcement Strategy (IES). However there are weaknesses and challenges to be addressed. We have in the past deliberately focused on visibility of inspectors to raise awareness. Equally we focused on quantity in terms of how many inspections we conduct per annum. This year we will begin to focus on the quality of inspections with prioritisation of the high risk areas. The slant towards quality will entail training of inspectors and exploring ways to put labour inspection on a professionalised footing.

Furthermore, we resolved to enhance the productivity of our inspectors by providing them with tools of trade and by creating a special corporate identity. Recently, we sent a group of inspectors to Cuba to exchange experiences with their counterparts.

To further strengthen our inspection services, employment equity will receive special attention of the inspectorate as we move from procedural compliance to substantive compliance as entailed in the Director General (DG) review system. Similarly, we will implement the award system to recognise those who do outstanding work in compliance with the law. The first awards will be given to the deserving employers in 2007, but assessment starts this year. Currently I am unhappy with the level of compliance and the lackadaisical approach adopted by some employers on this matter. Let there be no illusion the more we delay implementation of this act the more it will remain with us until we implement it.

“I have stated in the past and I will continue to repeat the fact that our government inherited a country with disparities in the employment force and income within the national labour market. Those disparities have for years disadvantaged the majority of black South Africans and could not be redressed by only repealing the discriminatory laws.”

“Furthermore, the ANC government felt it necessary to legislate the Employment Equity Act so as to eliminate unfair discrimination in the workplace and also to ensure that the effects of discrimination are redressed for the common promotion of the country’s economy and efficiency in the workplace. On this matter let me repeat asithingazi asijiki koko sijonge phambili.”

Madam Speaker, social dialogue is one of those areas whose value is hard to measure until crisis arises with industrial action. This year we will publicise the results of Nedlac reviewal which is currently being done with the assistance of the ILO. At a risk of pre-empting the results of the review, let me state this reality. Our model of social dialogue and the manner we implement has become an envy of the world. Requests we receive from different countries the world over tell us that there must be something worth emulating in what we are doing. Sometimes in search of excellence we become hard on ourselves. There are instances when I am stopped in Geneva, ILO Head Quarters and reminded of some of the humble contributions we have made to the benefit of the world.

The occupational health and safety accord we signed with the social partners in 2003 is an envy of the world. Our codes of good practice both for HIV and AIDS and disability were used as models by other countries. We take pride at this.
We will enhance our capacity to reach levels of excellence in social dialogue and share our experience with, first and foremost, our sister states in Africa and the world, if resources so allow.

Our co-operation with ILO under the distinguished leadership of Judica Makhetha, who is in charge of ILO in this region, is encouraging indeed.

In the course of this year we will consolidate decent work, country programme with ILO. This will consolidate projects currently run in South Africa with the assistance of ILO and identify future areas of co-operation.

Lastly we are convinced that decentralisation of our services to the labour centres will ensure better access to the Department by the members of the public. We took this decision after sharing some experiences during our imbizo campaign I referred earlier on. I have no doubt in my mind that the problems of inaccessibility experienced by the claimants of the compensation fund will partly find solution in getting our services closer to the people we serve.

The decentralisation I am talking about is not a hollow decentralisation where functions are devolved while resources and authority remain centralised. The labour centres will have power to decide on matters affecting clients in their locality. A leaner and strategically focused Head Office will be the result of this process. I know this will not go without challenges but I am convinced that at the heart of it are the deepest interests of our people including the DoL staff.

Madam Speaker I take this opportunity to thank all those who collectively contributed to the successes we highlighted above. A special mention should be made of the Chairperson and members of the Portfolio Committee on Labour, the Chairperson and members of on the National Council of Provinces, Select Committee on Labour and Public Enterprises.

Lastly I thank the entire staff of my Department from labour centres up to Head Office.

I have no doubt that working as a team there are no challenges we cannot conquer as we advance to the future that lies ahead.

I thank you

Issued by: Department of Labour

17 May 2006