Business seeks assurances as election draws near

30th April 2014

By: Terence Creamer

Creamer Media Editor

  

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Five of the main political parties contesting the May 7 election in South Africa debated the best way to grow the economy and create jobs at a function hosted by the Steel and Engineering Industries Federation of South Africa (Seifsa) in Johannesburg on Wednesday.

The African National Congress's (ANC’s) Enoch Godongwana and the Democratic Alliance's (DA’s) Tim Harris both emphasised the importance of accelerating infrastructure investment and improving the country’s economic integration with fast-growing African markets to stimulate exports and growth.

However, Harris described the pace of the investment programme as being too slow, indicating that the DA would upscale, in partnership with the private sector, the three-year investment programme into energy, transport and water infrastructure to R1-trillion as compared with the R827-billion already sanctioned by the ANC-led government.

However, the two were at odds over the Labour Relations Act and ways to remedy the currently hostile labour climate, with Harris describing the system as “broken” and Godongwana suggesting that it was not the law itself that was the cause of the breakdown in relations, but rather a lack of leadership and creativity among business and labour protagonists.

The protracted strike in the platinum sector emerged as a consistent theme of the debate, with the dispute having entered its third month and having already resulted in a loss of more than 2-million ounces of the precious metal, around R15.5-billion in revenues and R6.8-billion in wages. Harris noted that it would also potentially lead to as much as R5-billion in lost tax revenues.

Agang leader Dr Mamphela Ramphele described the current “low wage, low skill” mining model as unsustainable, and said her party was ready to “bite the bullet” and facilitate a modernisation of the sector, which would result in higher levels of mechanisation. To cushion those who lost their jobs Ramphele said there was a need to re-imagine rural development in a way that created jobs and food security through the cultivation of food and industrial crops.

Ramphele and Congress of the People’s Farouk Cassim also argued in favour of an ‘economic Codesa’ to enable government, business and labour to negotiate a new plan to address low growth, high unemployment and economic exclusion and poverty.

Godongwana rejected the idea out of hand saying that South Africa already had a 2030 vision through the National Development Plan and that the priority now was to drill down into various sectors of the economy to fully leverage their respective growth and employment contribution.

The ANC was particularly keen to build industrial capacity around the multibillion-rand infrastructure roll-out through stipulating that foreign suppliers of equipment source 75% of their inputs from domestic industry.

However, a number of Seifsa’s members questioned government’s commitment to local industry, noting that their competitiveness was being eroded by government inaction on the legal and illegal flow of cheap imports from countries such as China.

The Inkatha Freedom Party’s Sibongile Nkomo said there was a need to tighten border control and rationalize the number of ports of entry to deal with the problem of illegal imports and to improve controls over legal flows.

There was concurrence across all five parties present (the Economic Freedom Fighters party was invited, but failed to send a representative) on the urgent need to improve education and training outcomes and to address corruption.

Godongwana admitted that the Nkandla scandal was indicative of the ANC having “dropped the ball” in the area of corruption, while Ramphele argued that good and effective governance was essential to arresting the country’s decline into “mediocrity”.

The Agang leader suggested there was potential to slash government’s R400-billion-plus salary bill by half, which would liberate the financial resources required to accelerate education and training efforts.

Harris, however, emphasized the need to improve the way resources and public servants were managed, while Cassim said a more “people-centered” governance approach was required.

Godongwana concluded by appealing for business to engage more fully with government and the ANC after the election, saying there was little doubt that the party would remain the governing party following the poll.

He even showed a strong willingness to re-engage on legislation that had already been approved by Parliament, in particular on the contentious amendments to the Mineral and Petroleum Resources Development Act (MPRDA), which included a 20% free-carry for the State in oil and gas investments. While the MPRDA amendments had been approved by Parliament, President Jacob Zuma had not yet signed them into law.

Edited by Creamer Media Reporter

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