Budget Debate Vote 34: Trade and Industry

By Hon. JA Esterhuizen, MP
Spokesperson on Rural Development
 
Delivered at Parliament in the National Assembly
 
15 May 2018
 
Vote 34: Trade and Industry

Honourable Chairperson,

The World Economic Forum (WEF) index recently indicated that the South African economy is at a standstill, and that erosion of most, if not all institutions in South Africa has occurred mostly due to government instability, crime and theft.

During this year’s debate, as in many in the past and most probably debates of this nature in the future, the issue of the importance of growth and foreign investment appears to be central.

The real issue however is whether this department has the political will, over and above just debating this issue.

How can the country be open for business when by its own admission, policy uncertainty and conflicting government agendas are driving investors away?
Issues of sentiment and political uncertainty are clearly a barrier to a labour-focussed industrial strategy.

Chairperson, we have an economy which maintains its weak levels of economic growth on account of the Government ‘steroids’ which this department provides in the form of subsidies, restrictions of trade and international competition, tariff protection and in promoting dumping from other countries.

We need open and transparent measures ----- of the reasons why certain industries are protected or it will cause the collapse of not only these industries but everything downstream.

Tariff protection was not a silver bullet against steel imports, the poultry industry, which has put up a fight against dumping from Brazil, had to give up……… for this country to be re-admitted into AGOA.

If the Department is of the opinion that the only thing that matters is tariff protection, then we aren’t taking an approach in terms of competitiveness.

Our Port charges are the highest in the world, and the cost of export of value-added tradable goods has for some time been higher than both the cost of export of primary commodities and the import of tradable goods, with no consequences.

We need to create jobs in South Africa, and the government desperately seems to be wanting to do this, - so let’s look at one example as to how the Dti can assist –

Arcelor Mital (AMSA) was given a 10% tariff protection, one of the conditions was that the price of steel must not be increased to the down-stream steel industry, - AMSA has increased steel prices 7 times since then,
This is not helping, it’s destroying the steel industry and creating thousands of job losses.

If we look at household spending, which is one of the pillars of economic growth, this already shows a distinct switch away from durable and even semi-durable purchases towards essentials such as food and drink.
This is mostly because of the high cost of living in South Africa, added together with the lack of service delivery and overtaxed consumers, who will as always be the casualties of government failings.

In conclusion, the IFP will support this budget vote, but only because we are cognisant of the many hardworking and dedicated people in the department who have this country’s best interests at heart, for them we will support this vote.

I thank you.

Hon JA Esterhuizen, MP