COLLAPSING DEPARTMENT
Madam Speaker.
Distinguished visitors and guests.
Colleagues.
I am sorry
to have to tell you that I have no good news for you today.
But they say
it is better to know the truth and deal with it than to live in ignorance until
everything collapses under you. And collapse is what I will be talking about,
because it is my view that the Department of Economic Development in the
Province of Gauteng is on the verge of collapse. And with the DED goes this
government’s hopes of encouraging more jobs in this term of office.
What we have
here is a failure of management and a failure of vision across the board, not
just in the DED but in the Agencies that serve it.
We all know
that the CEO of the DED has been suspended. But that is just the tip of the
iceberg.
A helicopter
view of the DED and its Agencies reveal, behind all the big talk, a very discouraging
picture.
The fact is
the majority of the projects of the DED and its Agencies are not working.
First we
have the collapse of the Y Age project, which in this very House we were
promised would create one million jobs. There are no jobs emerging out of the Y
Age Project, although we are told that a few hundred may be rescued from the
ashes.
Behind the
scenes, we have the failure of the Gauteng Economic Development Agency (GEDA). Unlike
South Africa, the rest of Africa is booming. Opportunities for exports are
enormous. Yet this agency, Gauteng’s premier export development and investment facilitation agency,
is missing the boat. In passing, it is
worth noting that evidence shows that SMEs involved in exporting employ more
people than non exporting ones do.
In the
2011/12 DED Annual Report, the failure of projects by GEDA to produce anything
of substance is reported;
-
The
Gauteng City Region’ facilitation and promotion of investment was not achieved
-
Of
8 Foreign Direct Investment projects targeted, only 3 were completed.
-
During
the last quarter investment facilitation and marketing by GEDA produced a grand
total of zero jobs.
On export
training, we now hear that training in export readiness this year has stopped
entirely because of a failure to find service provider.
The Enterprise
Hub of Winterveld is a farce in the making. As my colleague Jack Bloom points
out, a year after the multi million rand launch, literally nothing has been
done. Now the food is gone, the marquee is gone, and Winterveld is left with a
bare piece of veldt and a big pile of government promises.
Let’s take
another example, the Moringa Olifiera project. This is one of Gauteng’s
flagship Green Economy projects that are supposed to create many jobs in the
province. It is a classic example of how the DED works and of how the DED
reports on its work to us, the people tasked with oversight.
The Moringa
is a tree with a high nutritional value, and with a seed that can be processed
into biofuel. We in the Portfolio Committee have been told endlessly about the
Moringa tree project. It is not a complicated project. You plough the land,
plant the trees and harvest them. Not the DED though. The seedlings were
planted some time ago, the Department claimed in the latest Annual Report. So
where are the trees? Well, they were all killed by the frost, we were told this
week. But new seedlings are being grown, and next spring we will try again.
It makes you
want to weep with frustration.
Instead of
helping small and meduiun enterprises by creating an enabling environment (the
less said about the Gauteng Enterprise Propeller the better), this government makes
it harder for people to run their businesses and to create jobs.
The latest blows
to jobs coming from provincial government are in the proposed new liquor
regulations. The proposed ban on Sunday liquor sales in restaurants is a blow
to the tourism industry, both domestic and foreign. There is no link between
drinking in restaurants as part of your meal and alcohol abuse. The ban makes
no sense, except to a Puritan. And the ban will cost jobs.
Let us now
turn to look at the Third Quarterly Report of the DED, put before the Portfolio
Committee this week. What do we see?
The failure of
the enterprise hubs = now reduced to 3 instead of 6.
But performance
bonuses continue to be paid, according to third term quarterly report.
Don’t believe
me? Then how about this quote on the third term quarterly report by our
researchers: “In terms of service delivery performance, the dismal failure of
the Department to realise job creation targets is of grave concern.”
In general,
when it comes to SMEs and to Coops, there is too much focus on consultation and
training, and too little on the impact and the sustainability of what is being
done.
On the proposed
Media Park – land is being acquired, but progress is slow. In the proposed BPO
Call Centre an MOU with the Joburg Expo has been signed, but no progress on the ground;
On the MOUs yet to be concluded with international companies to move to Gauteng
Smart City complex, no progress at all.
The Department
has failed to appoint a supplier for the Industrial Waste Exchange project.
Green projects in general have ground to an almost complete halt.
The Medical
Waste project has been further delayed by a mix up with appointing Green
consultants.
The Consumer
Protection Office is only working at half pace due to low demand due to
inadequate marketing. Too few consumers know the office exists.
Where there
are successes they are mostly the result of private sector partnerships – AIDC
and e.g. 61 people employed at Ford T6 SMME Incubator,
We all agree
that the role of government is to create an enabling environment for business;
but they are not even doing this properly.
Year after
year, from sizeable SMEs right down to street corner traders one of the main
complaints is government ignorance of business requirements, corruption, over
regulation and an incompetent bureaucracy.
There is almost
a total disconnect between what GPG DED does and unemployment rate in the
province .The DED claims credit when it goes down, but it is very quiet when it
goes up.
Business
environment company SBD released its latest survey on SMEs this week. It shows
that red tape and rising administered prices (e.g. electricity) are now the two
leading problems facing SMEs in South Africa. A heavy compliance burden is
diverting business attention away from doing business and imposing crippling
costs. Red Tape consumes 3-6% of turnover. Fully 74 % of the 500 SMEs surveyed
said it had become more difficult to do business over the past year.
The national
policies of the ANC are not working, and since these set the parameters for
provincial government, including cadre deployment, the GPG DED is doomed to
repeat failures of national government.
In MEC Kolisile
the DED has probably the best leader it could have. But unless government
fundamentally changes the ways that it thinks and acts, we will never make a
real difference to the people of this province.
This term of
office for the ANC government in Gauteng is all but over. The jury has sat, and
the verdict looks grim.
Thank you.
