Address of the President of South Africa, Thabo Mbeki, on the Occasion of the Budget Vote of the Presidency: National Assembly, 12th June 2007.

Madam Speaker and Deputy Speaker,
Hon Deputy President,
Ministers and Deputy Ministers,
Honourable Members,
Distinguished Guests,
Ladies and Gentlemen:

Thank you very much for affording us the opportunity to address the National Assembly as it considers the Budget of the Presidency. The Deputy President will address the House on the important areas that she deals with, including matters such as her role as the Leader of Government Business, the Moral Regeneration campaign, the Accelerated Shared Growth Initiative of South Africa (AsgiSA), the South African National Aids Council and others, while the Minister in the Presidency will speak on issues of Gender, Children, Disability, Youth and other matters.

As the House is aware, in four days' time we will commemorate Youth Day and once more reflect on the challenges facing our youth today. This occasion will assume particular significance because three months from today will be the 30th anniversary of the death of one of South Africa's young heroes who at the age of 30 years was callously killed by the apartheid security police, thus denying our country the possibility further to benefit from the enormous talent which Steve Bantu Biko demonstrated during the short years of his life.

A month after Steve Biko was killed, on the 19th of October 1977, in an extensive state security crackdown targeting individuals, organisations and the media, a variety of publications were banned in a futile attempt to silence the voice of the masses of our people who demanded collectively that, 'The People Shall Govern!'

Recognising that we have broken with that past, and confident that our democracy fully guarantees freedom of expression, last week the World Association of Newspapers held its Summit Meeting here in Cape Town, meeting in Africa for the first time in its 60-year existence.

Madame Speaker:

Because the role of the Presidency is to provide leadership as well as coordinate, monitor and evaluate the work of government, we have, in the previous Budget Votes of the Presidency spoken about whether the democratic State has the required capacity to discharge its Constitutional mandate of transforming our society and ensuring that there exist the necessary tools to help achieve the objective for which many of our heroes and heroines sacrificed their lives, which is the attainment of a better life for all.

During the presentation of their Budgets, a number of our Ministers correctly referred to the fact that we remain committed to building a developmental state. It is in this context that we must understand the work of the Presidency.

Specifically with regard to the issue of the developmental state, the Hon Geraldine Fraser-Moleketi said in her Budget Speech on the 5th of June:

"In any developing society government machinery is critical in delivering public services and creating an environment in which other societal forces such as business and community can flourish in their own right. In 2005, the World Bank, in its report titled Capacity Building in Africa, underscored the importance of the public sector for a developmental and anti-poverty approach…

"The State is heavily reliant on the strength and capability of the system of government successfully to implement the range of programmes designed to respond to the developmental challenges we are facing. Excellence in performance across and within the three spheres (of government), underpinned by the availability of capacity (skills, human capital resources and systems), attracting and retaining the right capacity, its location and optimal use as well as maintaining an ethos of service become of central concern and importance."

In our presentations to the House on behalf of the Presidency, normally we do not report on our interactions with the individual Ministries. However, to underline the critical developmental role of the state, I would like to draw the attention of the Hon Members to two areas that are of vital importance to our future.

I refer here to the preparations being made by the State Owned Enterprises, under the leadership of the Ministry of Public Enterprises, to respond to what the Hon Alec Erwin referred to as "the rapid increase in global demand for capital goods (which) is resulting in supply constraints." As the Hon Minister indicated, "Through the competitive supplier development programme (CSDP) we aim to facilitate the development of South Africa's manufacturing sector and relieve these supply constraints…by developing local capacity" in the production of capital goods. The importance of this in developing our manufacturing sector and our economy as a whole cannot be overemphasised.

I would also like to refer to the important work being done by our Science Councils and science institutions, under the leadership of the Ministry of Science and Technology, together with the Universities and the private sector, radically to improve our performance as a country in the critically important areas of science, technology and innovation.

Necessarily, because of the importance of these two areas we have mentioned, as well as others, the Presidency will make certain that it works closely with the relevant Ministries to ensure that we achieve the results we need.

The Honourable Members will remember that when I addressed the Joint Sitting of both Houses of Parliament on the 9th February this year, I mentioned that government would continue with its work to improve the capacity and organisation of the state. In this regard, government has implemented several measures to strengthen, especially, the capacity of our municipalities so that these local government structures can contribute to the all-round struggle to defeat poverty and underdevelopment in our country.

We have therefore started implementing the Five-year Strategic Agenda to support the local sphere of government. This Agenda has three strategic priorities, which are:

ensuring practical and co-ordinated hands-on support to municipalities by the national and provincial spheres of government;
refining and strengthening the policy, regulatory, and the fiscal environment of the local sphere of government; and
addressing the structure and governance arrangements in local government.

Madam Speaker;

I am happy to report to Honourable Members that we have already started to make progress in realising the objectives of the Five-year Strategic Agenda.

As the Minister for Provincial and Local Government indicated in his Budget Vote Speech last week, we are beginning to witness some significant improvements in the capacity of municipalities that are being supported through Project Consolidate. For instance, as the Minister indicated, municipalities that are receiving assistance with their Municipal Billing Systems have seen their revenue collection increase by an average of 21.4%. Through Project Consolidate we are also providing technical capacity to some of our municipalities in order to support infrastructure development and already there are positive results because of this intervention.

We owe the successes we are beginning to see in part to the efforts of 29 organisations and nearly 300 individuals with specialist skills who are working together with government to ensure that we strengthen the capacity of our local government structures. On behalf of government, I would like to thank all of them and invite many others to join us in this important partnership so as to transform our municipalities into efficient and effective institutions that will help to change the living conditions of all our people for the better.

I must also express our sincere appreciation to our traditional leaders for their very constructive engagement with government as well as with the challenges that face our people. In this regard, I am happy to congratulate Kgosi Kutama and Kgosi Maubane on their election last month as Chair and Deputy Chair of the National House of Traditional Leaders.

We have agreed with the Minister for Provincial and Local Government that he should create a special directorate within his Department which will focus exclusively on matters that relate to the traditional leaders, further to strengthen the excellent partnership that has emerged.

Madame Speaker:

Government's work to strengthen the capacity of the state also involves recruiting into the public service and retaining individuals with skills. As the Minister for Public Service and Administration reported to Parliament almost a fortnight ago, one of the ways we are trying to achieve this goal is through introducing salary structures that are relevant to specific occupations so that our public servants in those occupations can be appropriately rewarded for the skills they bring to the public service.

Indeed, in the present salary negotiations, among other things, government is proposing the introduction of a new salary structure which would appropriately reward professionals in the medical, nursing and legal fields as well as educators and social workers.

I therefore trust that worker representatives will utilise the existing channels to look closely at the proposals on the table in order to reach an agreement that, inter alia, would benefit the professionals in the public service, and therefore the public whom they are employed to serve.

In this regard, I would like to reiterate our confidence that, in time, government as employer and the public service unions will find one another and bring to a conclusion the current negotiations, informed by the objectives to realise a wage settlement that improves the salaries of employees, ensures appropriate reward for good performance, and acknowledges the unique contribution of public professionals, and is at the same time affordable and therefore sustainable.

I should at the same time express my strongest condemnation, as would all law-abiding citizens, of the irresponsible element that has used the negotiation process to engage in unacceptable criminal activities. All of us should ask ourselves, what kind of society we are building and what moral lessons we are imparting when insults, violence against fellow workers and damage to property become the stock-in-trade during protests of this kind. Undoubtedly society does not benefit from such illegal activities; neither do workers themselves, in whose name these acts of thuggery are committed.

Madam Speaker,

Better coordination and integration of government work across all spheres is critical, particularly because our programmes can make the desired impact only if they are carried out in a manner that obviates duplication and ensures complementarity.

With regard to integrated planning, we have previously stated that the alignment of the National Spatial Development Perspective (NSDP), the Provincial Growth and Development Strategies (PGDS) and municipal Integrated Development Plans (IDPs) is of crucial importance.

To this end, The Presidency launched a series of initiatives.

Firstly, the NSDP, which was originally approved in 2003 by government, has been updated. Secondly, at provincial level the process of aligning the different planning frameworks, started with the development of guidelines for aligning provincial growth and development strategies to the NSDP in 2005. During the last financial year, all provincial growth and development strategies were assessed and, where necessary, reworked to ensure such alignment.

Thirdly, the alignment of planning frameworks was initiated at district and metro level with a pilot project involving 13 districts. While the pilot project will be completed at the end of this month, it is already generating important lessons that will inform the roll-out to the rest of the country over the remainder of the term of the present government.

Lastly, to ensure a common base of reference data for spatial planning, intensive work was undertaken using technical specialists to develop geo-spatial profiles that have been disaggregated to the ward level. These profiles have been made available to districts that were part of the pilot project; but will also be distributed to all other district and metropolitan councils.

Prominent among the lessons emerging from the pilot project is that the nature and quality of coordination and interaction between municipalities and national and provincial sector departments require improvement so that development impact on localities can be maximised.

Further, we have had to speed up the process of regularising our land-use management system. The existence of a plethora of laws regulating land-use across the country results in inefficient and inequitable utilisation of this scarce resource, and perpetuates the spatial patterns inherited from apartheid.

To address these challenges, the Land Use Management Bill will be finalised by Cabinet in the coming few weeks and submitted to parliament.

As part of the effort to maximise the utilisation of state resources and mobilise private sector resources in pursuit of social development, a comparative study of six middle-income countries on national strategic development planning was undertaken in 2006. These countries are Brazil, Chile, India, Malaysia, South Korea and Tunisia. The aim of the study was to investigate processes of strategic planning, the content of such plans, the institutional mechanisms and so on.

The study has been completed and its recommendations will soon be considered by Cabinet. We are also taking forward the scenario building process to examine the possible combination of domestic and global dynamics during the second and third decades of our liberation - towards 2019 and beyond.

Honourable Members,

We have taken various steps in the past year to strengthen the government-wide monitoring and evaluation system. These include the creation of a policy platform for the functioning of the system, led by The Presidency, with specialised contributions from National Treasury, Statistics South Africa, and the Departments of Provincial and Local Government and Public Service and Administration.

Co-ordinated by the Presidency, Cabinet continues to receive bi-monthly reports from the Clusters of Departments on the implementation of our annual Programme of Action. This in turn is published on the government website, the better to ensure that the public takes part in monitoring the work of government.

Following the commitment we made during the Ten Year Review, government will within the next fortnight publish an assessment of progress made during the first half of its term (the mid-term review), based on a set of 70 Development Indicators. The publication will provide an overview of developments in areas such as economic growth and transformation, employment, poverty and inequality, household and community assets, health, education, social cohesion, safety and security, international relations and governance.

Madam Speaker,

Strong monitoring and evaluation capacity within government of necessity also means checking and re-checking the facts in order fully to understand the reality in our country, the better to fashion programmes and responses that help us to move faster to our objective of building a better life for all.

This also entails reference to independently published research from, and interactions with, for instance, academic experts, ratings agencies that advise investors, and market research organisations.

To the doomsayers who have eyes to see but cannot see the strong performance of our economy, we say, check with all these experts and you will discover that they know what most South Africans know, that:

by September this year, the South African economy will have been growing for eight solid years, longer than ever before in the recorded economic history of our country;
our current rate of growth has remained at a steady high level for longer than ever before in our history;
since 2004, real incomes per person, on average, have risen at around 4 percent per year;
more than 500 000 new jobs have been created annually since September 2004;
investment has risen steadily from 14.7% of GDP in the first quarter of 2002 to 19.2% of GDP in the last quarter of 2006; and,
in the last quarter of 2006 investment grew at an annualised rate of 16%, well ahead of our AsgiSA target of 10% per year.

These facts are not contested among experts in the field, except for those who say that we may be undercounting some of these key numbers because the sample frames we use have not kept up with a changing economic structure.

There are also some who assert that many of the jobs created are in cyclical sectors like retail and construction, where job security is tenuous. Others point out that a considerable number of the new jobs created are in the informal sector. Yes, this is true.

But does this mean that we should not celebrate the fact that we are now creating jobs more rapidly than ever before in our history? And should we not be proud of the fact that unlike most developing economies, most of our jobs are created in the formal sector?

Should we be discouraging the millions of South Africans who now believe that a commitment to hard work and getting themselves educated is likely to lead to a more prosperous future?

Of course not!

Indeed, we should celebrate the fact that the overwhelming majority of South Africans believe, from their lived experience, that tomorrow is likely to be better than today, and that their own hard work will help make it happen.

Madam Speaker;

In addition to the report that the Honourable Deputy President will provide on AsgiSA, I would like to indicate that the annual Industrial Policy Action Plan to realise the objectives of the National Industrial Policy Framework will be finalised by Cabinet in the next few weeks, focusing on key sectors of the economy and will indicate how best to leverage public spending for industrial development. The action plan will be incorporated into the government's programme of action from next year onwards.

One of the challenges facing us is the nurturing and development of small, medium and micro enterprises. We have therefore taken measures to stimulate small business development, including alleviating the regulatory burden on small businesses and reducing the tax burden.

A toolkit is being developed to help municipalities reduce red tape around municipal regulations that affect small, medium and micro-enterprises in particular.

As Honourable Members may be aware, Cabinet requested The Presidency, working with National Treasury, to put in place a Regulatory Impact Assessment (RIA) tool, in order to ensure that our regulatory regime in all policy areas facilitates, rather than hamper growth and development. This will be piloted over the next two years.

As Government we continue to intensify the fight against poverty on all fronts. Our initiatives are well known in this regard and for this reason I would like to focus here on one specific task that The Presidency is required to undertake, over and above its oversight function in respect of the Executive.

The House will remember that in 2004 we announced that in order for us to be able properly to target our intervention in the provision of services, we need a better understanding of dynamics in our households. The National Income Dynamics Study (NIDS) will assist us in this regard. A pilot study on specific households will be undertaken in the next few months, and the fieldwork will be undertaken between January and April 2008. The first of the dataset will be available in 2009, creating the baseline against which we will be able to follow up changes in income and expenditure among these households for many years to come.

Combined with the comprehensive anti-poverty strategy about which I spoke during the State of the Nation Address in February, this initiative will help us in identifying specific interventions required in specific households to make the maximum impact.

One such intervention, which deserves special mention, is the provision of income in the form of social grants. The latest figures (as of March 2007) indicate that about 13.2 million people are now accessing these grants, from 2,6 million in 1994 and 6,8 million in 2003. It is as a consequence of this, as well as greater levels of labour-absorption in the economy, that the extent and depth of income poverty has been significantly reduced especially since 2001.

We will continue to consolidate the gains we have already made and look for further innovative ways of complementing this and other poverty eradication initiatives such as job-creation, skills development, provision of finance and other forms of assistance to small businesses.

This we need to do so that we can continue to accelerate the process of pushing back the frontiers of poverty.

At the same time, however, we should acknowledge the fact that while incomes of poor people are improving in real and absolute terms, this is not at the same rate as the improvement in the income of those who are well-off within our society. Thus, we do face the challenge, as a nation, to address inequality.

This task, and the broader challenges of accelerating the rate of economic growth, improving the image of our country abroad, attending to the specific needs of marginalized sectors of our society, promoting value systems of self-respect and community solidarity and strengthening partnerships in the fight against crime, require the forging of partnerships, both locally and internationally, across a whole range of areas.

In this regard, over the past year the President and other Cabinet members have had the opportunity to engage with representatives of various sectors of our society and friends from abroad through the Presidential Working Groups and other councils. With regard to the economic matters we met, as South Africans, through the Trade Union, Black Business, Big Business, BUSA, Commercial Agriculture and Joint Working Groups.

The discussions have concentrated on the need to accelerate economic growth and to ensure that the growth generated is shared so as to meet government's objective of halving poverty and unemployment by 2014. Many important views and concerns were raised in these meetings and government has incorporated these into the Programme of Action, including AsgiSA.

Through these meetings our social partners have made invaluable contributions to the common national effort of building a better life for all. Among other positive developments, business and labour have re-dedicated themselves to accelerate the implementation of the commitments made at the Growth and Development Summit. These commitments include working together as social partners to address the challenge of the skills shortage in the country as well as working together to assist in the growth of the BPO, tourism, agro-processing, and other growth sectors identified in the National Industrial Policy Framework.

Two recent initiatives in this regard deserve special mention. Firstly, a special two-day Trade Union Working Group meeting was held in March this year to discuss globalisation and its effect on employment and worker organisation; and it was agreed that a three-a-side task team would be set up to take the discussions forward and make concrete proposals.

Secondly, towards the end of last year, the Big Business Working Group agreed to a closer working relationship with government on fighting crime and has allocated resources for this purpose through the Business Against Crime initiative.

In our engagement with the Presidential Working Group on Higher Education, we have identified practical ways of ensuring that the Higher Education sector in our country is further strengthened to assert its intellectual leadership role in all areas of our life; to enhance knowledge creation, production and impact through research and innovation; to develop responsive and innovative curricula; significantly to improve throughput and graduation rates; to help to foster "critical consciousness"; and to use knowledge to deepen democracy and speed up social development.

Through the Presidential Working Group on Women we have the opportunity to engage with the cross-section of the leadership of women on the many challenges facing us to improve the lives of women, both in urban and rural areas. Specific issues for follow up in this regard include the proposed Retirement Fund for Women and the provision of Water and Sanitation.

Through the Presidential Working Group of the National Religious Leaders, government and the religious sector have agreed on a Memorandum of Understanding to work in partnership on Early Childhood Development (ECD), Home and Community Based Care (HCBC) especially in the fight against HIV and AIDS, Skills Development and Adult Basic Education and Training, and issues of Social Cohesion with special emphasis on the area of strengthening youth networks and building local partnerships in the fight against crime.

Through the Youth Working Group issues such as the role of the private sector in supporting youth development efforts, evaluating the responsiveness of the national fiscus to youth needs, and the finalisation of a National Youth Policy have been discussed, and specific tasks undertaken to take our work further.

I cite these specific examples in part to underline the fact that, as with the rest of government work, our interaction with social partners is more and more taking the form of identifying specific practical tasks for action, rather than mere reflection on broad policy matters.

The Presidential Panel of Economic Advisers, established last year, assisted us by providing independent and well-informed insights on various public policy issues, relating to the development of our country and its people. The same applies to the content of our engagement with international partners through the International Investment Council (IIC) and the Presidential International Advisory Council on Information Society and Development (PIAC).

Madam Speaker,

We are happy that the Izimbizo campaign has developed into an important and well-established element of our democracy.

This is a catalytic forum that enables communities to be part of united national action to change their living conditions for the better. In the past four years the Izimbizo process has helped us to make a number of interventions that are making a positive impact on the lives of our people. These include:

sharing practical approaches to addressing barriers to the effective implementation of the programme of action;

identifying practical ways in which other spheres of government can assist in implementing municipal Integrated Development Plans;

identifying and addressing challenges of technical expertise and professional skills; and,

strengthening the partnership between government and the people.

Earlier this year we reviewed and reformatted the Izimbizo process to align it through the spheres of government and improve follow-up on issues raised by the people.

Honourable Members:

As you know, later this week, President Sepp Blatter of FIFA will be in our country once again. I am very pleased to say that he will find us well on course with our preparations for both the Federations Cup in 2009 and the FIFA Soccer World Cup in 2010. Addressing the media at FIFA Headquarters on May 15 this year, Sepp Blatter said:

"Back in 1998 I first said that I wanted to bring the FIFA World Cup to Africa…and three years from now, South Africa will host the competition…The South African LOC is well structured and we are continuing to monitor the construction of the stadiums to ensure that all deadlines are met. Plan A is South Africa, Plan B is South Africa and Plan C is South Africa. It's my hope that by the end of 2010, the footballing world will be experiencing the same highs that we experienced at the end of last year's FIFA World Cup in Germany."

I have no doubt that our Local Organising Committee, government at all levels, and everybody concerned will do the necessary work to guarantee that we host a better tournament in 2010 than the excellent 2006 German World Cup.

Madam Speaker,

With regard to the important issue of crime, we are pleased that the business community, the religious leaders and our communities in general are partnering government in a meaningful manner.

We are also deploying the resources available in the criminal justice system to combat especially contact crimes at the places and times they are most likely to occur. We also continue to work to ensure proper coordination throughout the criminal justice system.

Honourable Members:

When we addressed this House last year on the occasion of the Budget Vote of The Presidency, we made the point that the accomplishment of our development goals was inextricably linked to the success of similar efforts in our region, our continent and the rest of the world. Accordingly, we asserted that the discharge of our international obligations would remain an important part of the work of The Presidency as well as the rest of our government.

One of our immediate and continuing challenges is the steadfast pursuit of our African Agenda, and within that the acceleration of the process of the political and economic integration of the Southern Africa Development Community, including progress towards the establishment of a Free Trade Area.

We will also play our role in the implementation of the programmes of the New Partnership for Africa's Development (NEPAD), and ensure that the partnerships agreements that we forge with other countries and regions are translated into practical and tangible programmes that promote real transformation in the lives of the people of our continent.

Further, in this regard, we have agreed to participate in a structured dialogue with our G8 partners over the next two years, as well as strengthen the NEPAD-G8 follow-up mechanisms.

As the Hon Members are aware, the Report of the African Peer Review Panel will be submitted to our Peers during the days when the AU will be holding its Summit Meeting in Accra next month.

In a couple of weeks we will participate in what the AU has described as the "Grand Debate" whose main focus will be consideration of the proposal to advance towards the formation of a united African government. This will offer us an opportunity to address the real challenges that should be addressed to promote African integration and unity.

I would like to take this opportunity once more to acknowledge our sons and daughters in uniform who continue to make a contribution to peace processes in the Democratic Republic of the Congo, Burundi, Sudan and the Comoros. The same appreciation is due to individuals and organisations, both in the public and private sectors as well as non-governmental organisations, who have responded in a commendable manner in offering assistance in the electoral processes and other undertakings in the DRC, Nigeria, Burundi and other countries.

As the Honourable Members are aware, we have been mandated by SADC to assist the leadership of Zimbabwe to find a lasting solution to the challenges that they face. We intend to move with speed in executing this mandate, and are encouraged in this regard by the positive attitude evinced by the protagonists in that country who, we are certain, do recognise that the people of Zimbabwe expect of them nothing less than concrete action to extricate them from the difficulties they face currently.

Our election to the United Nations Security Council as non-permanent member has accorded us the privilege and honour of serving the international community and indeed our continent in the search for peace, stability and a secure environment for citizens of the world. We shall do our best to fulfil the expectations of humanity in this regard, informed by the UN Charter and the aspirations of billions across the globe who yearn for an equitable world order.

Madam Speaker;

These, then, are some of the major programmes that we have undertaken during the course of last year, to meet our mandate as The Presidency to lead the processes of planning and implementation in the Executive and public service. Guided by the Programme of Action of Government, we will continue to strengthen the capacity of The Presidency to discharge these responsibilities. It is in this spirit, Honourable Members, that I commend the Budget of the Presidency to the National Assembly.

Thank you.