KZN Provincial Legislature Budget Debate: Vote 4 – Economic Development and Tourism

ADDRESS BY HON O.B KUNENE, MPL
TUESDAY, 30 JULY 2019

Honourable Chairperson, Honourable Leader of the Official Opposition

The budget we are debating today has important and wide consequences to key economic sectors of this Province. The release of the first quarter 2019 GDP figures, served as a wake-up call to government to do something to address unemployment and poverty through key economic drivers.

Of particular concern are the declining growth numbers in the very key economic drivers, namely manufacturing, retail, banking and agricultural sectors. The decline has been largely driven by the increase in automation of jobs- limiting the need for human input, shrinking GDP, water shedding and a further loss in investor confidence in our unstable economy.

Therefore, it stands to reason that the budget allocation of R3.2 billion is not adequate to address economic challenges facing this Province especially unemployment which now rests at 25.1% in KwaZulu-Natal as announced by Stats SA’s latest Quarterly Labour Force Survey for 2019.

Some graduates have long given up on any prospects of ever finding employment. Their qualifications are gathering dust. Many young people are discontent; hence the increase in crime, drug and substance abuse, aggravated robbery, vehicle theft, high rate of Youth committing suicide, debt, homelessness, family breakdowns, severe mental sicknesses, increased social isolation, erosion of confidence and self-esteem among young people.

The IFP proposes that the government introduces social assistance for unemployed graduates and job seekers to assist them during job search. This is a crisis that requires the involvement of other stakeholders including the private sector. Job creation requires the active involvement of the private sector while the government should create a conducive environment for the private sector to create the jobs we so desperately need in our Province.

A. YOUTH SKILLS
The IFP applauds the existence of the KZN Youth Technical Skills Training and placement project, however, there is a need to expand this initiative to spread within the Province so that Youth could acquire skills which will help them participate in growing the economy of the Province.

We are pleased to know of the existence of the informal economy development initiative (IEDI) within the Department. The partnership with municipalities through this initiative as outlined in the APP for the 2019/2020 financial year will assist to grow this important sector of economic activity which will contribute to growing the economy of the Province.

B. UNEMPLOYMENT YOUTH REGISTER
The IFP proposes that the Department should partner with Municipalities in order to compile the register of unemployed Youth in every Municipality in order to ascertain the skill levels that the Youth possess in each Municipality with an aim of aligning the demand and supply of skills needed by the job market in each municipality.

C. SUPPORTING SMME’s
The IFP welcomes the funds allocated for SMME’s and co-operatives to the tune of R57 Million. The Department needs to ensure that this support reaches all small enterprises across the Province. We propose that more SMMEs should receive technical training in dress making, furniture manufacturing, artisan training in areas such as welding, boiler making and plumbing. It will be good if SMME’s are empowered with capital in order to assist them in their formative stages.

We also commend the Department for partnering with Technical Vocational Education and Training (TVET) colleges to train co-operatives in technical, business management and co-operative governance skills. More SMMEs needs to be assisted to register their business entities with the CIPC. It is vital for SMME’s and cooperatives to be equipped and up-skilled for the 4th Industrial Revolution. We cannot emphasize enough the critical role that SMME’s play in job creation. It is important therefore, that they be assisted so that they may contribute in growing the economy of the Province.

D. CO-OPERATIVES
We commend the placement of 48 graduates who completed the B. Com degree within co-operatives in all Districts to provide the skills and knowledge necessary to manage co-operative business enterprises but we hope more graduates are still to be placed.

We call upon the Department to speed up the skilling of Youth in rural areas and townships and also to expedite the establishment of co-operatives and SMMEs in order to create jobs, eradicate poverty and redress economic imbalances.

E. LOCAL ECONOMIC DEVELOPMENT
The IFP applauds the funding towards equipping and training of LED practitioners across the Province. Research shows that LED initiatives have contributed in assisting co-operatives and SMMEs in rural areas, however many people still lack information on how they can get support from stakeholders and government institutions in order to grow and develop both socially and economically.

Therefore, there is a need for the Department to partner with Local Municipalities in order to strengthen local economic development units within Municipalities. LED can play a dominant and vital role in alleviating poverty and creating employment opportunities within municipalities both urban and rural.

F. INCLUSIVE ECONOMY
The IFP believes in social and economic justice for all, we believe in inclusive economic growth with sectoral focus and that the development of an inclusive economy should be an absolute priority. This is about human dignity, we need to get our nation working to alleviate poverty, reduce inequality, empower families and fulfil the rightful aspirations of all our people and future generations.
The Operation Vula and the Radical Economic Transformation programmes as proposed by the Department should be implementable and yield realistic and achievable turnaround plans that will be outcome-based and measurable and aimed at creating vast economic opportunities for all our people.

The concern that we have is that these sectors that the department will be targeting (textile and trucking/logistics) are not new, they have been struggling due to influx of textile and clothing imports from China. We however, applaud the efforts to revive and empower them. The government and the private sector need to redouble their efforts to ensure that this investment yields desired outcomes.

G. TOWNSHIP/RURAL ECONOMIES
We say there is a need to develop rural communities and develop township economies. The strategic framework for the Revitalisation of Townships and Rural Economies must be urgently implemented and should cover issues of shareholding by local people, mall tenancy by local small entrepreneurs, localisation and the general empowerment of local communities.

The IFP also believes in the revitalisation of corner shops and other economic centres which collapsed after the political violence and the establishment of malls. The IFP believes that communities must be empowered to rely on themselves and not be dependent on government grants. This should be done through building of capacity at a municipal level in order to expedite the processing of small business licences to locals and to facilitate ease of access to do business.

H. CONSUMER PROTECTION
The Department needs to develop a more aggressive approach towards zero tolerance on non-compliance by businesses in failing to adhere to rules, regulations, laws, and standards which are designed to protect consumers.

There has been a rise of counterfeit goods and expired food that have been confiscated during raids, with health practitioners warning communities from consuming such items. This has been due to a rise in mushrooming of unregistered and uncomplying corner shops in many parts of the Province where some unscrupulous spaza shop owners operate backyard factories keeping a constant supply of dangerous and unhealthy products that end up in unsuspecting consumers. These backyard factories put people’s health at risk to foodborne diseases from food contaminated with bacteria, viruses or parasites and harmful colourants.

The IFP believes that the Department should prioritise consumer protection services in order to ensure that consumers do not find themselves exploited by unscrupulous business people. This can be done through consumer education programmes and eradication of illegally operating shops.

I. TOURISM SECTOR
The IFP proposes that the Department should deal with activities that threaten the safety of tourists within our Province. We must ensure that tourists feel safe all the time when they visit our Province. Incidents of crime and instability in our Province will scare away tourists and create a negative perception that our Province is not a safe destination to visit.

The government needs to intensify the eradication of illegal firearms in our Province as a way to ensure that crime is dealt with decisively thus ensuring that visitors are safe.

The Department should also reduce the onerous and often unnecessary bureaucratic red tape that tourists have to face when they intend to visit our Country and our Province.

J. SEDA eThekwini
The IFP calls upon the Honourable MEC to prevent the closure of SEDA eThekwini. Such a vital agency in our SMME’s and Tourism sector should be rescued. Therefore, we propose that this important agency that has equipped and supported many SMME’s in this Province be saved so that it will continue to service the SMME sector.

K. FOREIGN DIRECT INVESTMENT
We note that the Dube Trade Port Special Economic Zone has managed to attract 35 operational investors with an investment value of R1.5 billion, creating a total of 3 246 direct jobs. If we are serious about attracting investors and creating sustainable jobs, then we need to remove unnecessary red tapes in issuing permits, we need to speed up processes associated with environmental impact assessments and the issuing of licences. Many multi-national companies do not want to wait while it takes long to issue them with trading licences. The IFP believes that more should be done to encourage foreign direct investment for other sectors as well.

L. PUBLIC PRIVATE PARTNERSHIPS
The IFP believes that the Department should strengthen public private partnerships with a focus on state owned enterprises and government services.

The IFP notes the implementation of Sakhinzuzo project which supports small-scale sugarcane growers in areas such as King Cetshwayo, iLembe, uMkhanyakude, Mandeni and Jozini. And that Tongaat Huletts plans to plant 1,203 hectares of land in the 2019/20 financial year.

We also note KwaMajomela Manufacturing centre in Nongoma, aims to support local business with trading spaces, equipment and shared facilities for capital equipment incubation.
These investments must be more visible and beneficial in creating more sustainable jobs and helping to grow our struggling economy. It will be appreciated if more of these initiatives are spread in areas where unemployment levels are high. The Department needs to fodge partnerships with the business sector and create conditions that will encourage and enable investors to view the Province of KwaZulu-Natal as a destination of choice.

M. IN CONCLUSION
While we, as the IFP support this budget, we call for careful spending and a commitment to create sustainable economic opportunities by the Department. We also call for an end to wasteful expenditure and urge the Department to ensure proper utilisation of this budget.

I thank you