Vote 34: Trade and Industry
Mr JA Esterhuizen, MP
Inkatha Freedom Party
At the outset the IFP supports this budget vote but would like to raise the following concerns:
Trade and Industry in South Africa, Honourable Speaker, requires more carrot and less stick. Regulations for regulations are not only counter-productive but also complicate the trade environment and deter foreign investment.
The tax benefits for new business operations in respect of companies investing in SEZ’s can flow only over a ten year period which means that if it takes companies 10 years to become fully operational, they derive no benefit.
One significant challenge being the recent global oversupply of subsidized steel which is still crippling our engineering and steel manufacturers in South Africa, must be carefully and comprehensively addressed. Even though the Minister of Trade and Industry has imposed duties on imported steel the benefits are still not being passed on to the value added downstream manufacturing industry.
Then Honourable Speaker in respect of the recent renewal of the US’ African growth and Opportunity Act (AGOA) most of our industries are set to benefit.
Minister Davies did exceptionally well to save AGOA but in the poultry market imported chicken landed at dumped prices and is actually being sold for more than local products, this means Honourable Minister Davies that the poor cash strapped consumer is being further exploited for the sake of protecting meat importers huge profit margins.
If we look towards gold of which South Africa produces 10% of the world’s supply and has 40% of the world’s known reserves. It is estimated that 36,000 tonnes of undeveloped resources and about one third of the world’s un-mined gold still remains.
For these reasons alone it’s my personal opinion that ratings agency Moody’s and Standard and Poor could never downgrade South Africa to junk status as this would affect their own credibility.
Consumer spending, one of the driving forces of the economy is also weak, and with interest rates expected to rise twice this year, 25 basis points probably next month and the same by the end of the year, it looks to grow weaker!
During this year’s debate, as in many of the debates of Trade and Industry in the past and most probably in many of the debates in future, the issue or 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 debating this issue?
I for one believe that there is nothing wrong with the legislation we have adopted in this department to promote and protect investment, the issue seems to be in implementing it!
Corruption has become a way of doing business in this country and can quite simply no longer be tolerated or defended because it seems that the burden of enforcing the law has become greater than the administrative capacity and will dedicated to its eradication.
I thank you.
Mr JA Esterhuizen, MP
083 379 2391
IFP Media, Parliament