Speech delivered at SACCI Annual Convention

Note to editors:  This is an extract of a speech delivered during a panel discussion at the South African Chamber of Commerce and Industry Annual Convention in Johannesburg on Friday, 5 October.

I am delighted to be here to participate in this panel discussion. I would like to congratulate the South African Chamber of Commerce and Industry (SACCI) for the hosting of their national convention on the theme of 'mobilising business to create jobs'.  This discussion is simply critical to the future of South Africa in the global economy. 

Most participants in this convention know well that the South African economy is performing sluggishly. With poor growth, relative to our buoyant peers, and shaky investor confidence, the economy continues to shed jobs. Up to half of all South Africans live in poverty, and income inequality has even surpassed what it was during the dark days of apartheid.

But we are not without hope. When I reviewed SACCI's proposals for job creation, I was struck by how they overlapped with the Democratic Alliance's Growth and Jobs Plan. While I am always alert to ‘group think' in the government I lead, I doubt we can both be wrong. Both documents are products of evidence-based policy making, and non-partisan objectivity. 

‘Business', as the well-known dictum goes, ‘is not the business of government'. But the government does have a major enabling role to play in creating the necessary conditions for job creation and growth to become a reality.

Broadly speaking, the contours of both sets of proposals are to reform regulations to reward work and help create jobs; and, in the long run, to redirect the resources spent on welfare grants towards a platform of inclusive growth. This is so that the ‘outsiders', locked outside of the economy, can become ‘insiders'. This, to me, is a working definition of justice. And, to pre-empt our critics, we will never remove the safety net from the most vulnerable in our society.

Above all this, we agree that education (both investment in and reform of) must be the centre-piece of our proposals. Our education system must be designed to nurture creativity, ingenuity and innovation.  

As an educationalist and a mother, I believe we will look back and see that our biggest policy failure, since 1994, has been our failure to fix our broken education system. We have a moral obligation (an old fashioned sentiment these days) to do so now because we live in a world which defines a person's life chances.  

The first pillar of SACCI's proposals is to deliver, one, high-quality education and, two, training so that job-seekers have marketable skills. Like the DA, you identify that the education system is constrained by both dismal attainment outcomes, and a mismatch with the skills demands of the economy. 

I agree with SACCI that mathematics and literacy skills must be prioritised in the curriculum. In this regard, SACCI's proposal to introduce mandatory Continuing Professional Education Points makes perfect sense to flatten the divergent standards across the country. In my career, I have discovered excellence in the smallest and poorest of communities. I do not believe excellence is place or time bound.   

We cannot expect learners to learn when textbooks are not delivered in time. Moreover, educating our children must be designated as a frontline service, and be freed from trade union disruption. Never again should one child's basic right to an education be held to ransom by striking teachers.    

In the other part of the equation, the DA agrees that businesses need to be actively involved in shaping the curriculum. 

Our educational system has paid scant attention to training in the engineering fields, the sciences, and related business knowledge. Even for graduates, there is no such thing as the ‘job for life' anymore. 

This is why the DA's policy focuses on assisting people to acquire the requisite transferable lifelong skills to enter the job market and stay working. It means constantly upgrading skills, and adapting to change in a world of low predictability. 

We see a role for the public and private sector working together; not in direct opposition. As a leading social commentator put it, "the whole ecosystem in which innovation is housed" requires this kind of co-operation.

We also believe that there is a need to reunite the drive for growth with the original purpose of Black Economic Empowerment. There is a tendency to evaluate them in silos. 

Both the DA and SACCI agree on the need to reduce the costs of B-BBEE compliance, especially to SMEs. The DA augments this by stating that, up to now, the ownership part of the empowerment scorecard has been overemphasised by the government.

This has been to the cost of other B-BBEE criteria. We propose increasing the weighting of the socio-economic development component, and pushing for extra points to be awarded for job creation.

The second pillar of SACCI's proposals is how to address the high cost of doing business in South Africa. Here again there is much agreement between us. 

Both sets of proposals recommend tough, but necessary, reforms to the country's labour laws that will reduce barriers to entry, encourage flexibility and stimulate productivity in South Africa's principal labour-absorbing sectors such as mining, manufacturing and agriculture. Combined with focussed employment incentives and market-driven skills development programmes, our plans detail a radical overhaul of the country's labour market. 

A major factor affecting the competitiveness of businesses in South Africa is the regulatory environment in which they operate. If we are to succeed in growing business and attracting investment, we must reduce the burden of regulation and make it easier to start and operate a business. We are two decades behind most developed countries, from Great Britain to New Zealand, in doing this. 

It is gratifying to note that SACCI cites, for example, the DA's proposal for the introduction of a three-year tax loss carry-back for businesses with a turnover of less than R5 million. I was especially delighted to see that you supported our proposal to establish a business voucher support scheme. This augments the DA's proposal to introduce opportunity vouchers, which have been successful in countries like Sweden and Australia.   

SACCI also propose a one-stop business shop to provide one access point to businesses in their interaction with government on as many issues as possible. We agree, and we are doing it in the Western Cape. 

The Western Cape Government's Red Tape to Red Carpet Programme seeks to achieve two primary goals: to eradicate or reduce legislation that presents an unnecessary hindrance to business; and to improve the efficiency and customer service standards of bureaucratic processes within the provincial government and City of Cape Town.

Through this programme, we have established a dedicated red tape hotline where all businesses, regardless of their size, can register administrative blockages. More importantly, businesses are encouraged to report on national, provincial and local legislation blocking their paths to profitability so that we can investigate amending or removing them. 

Your proposals also touch on a profound insight; namely that a growing economy requires a national work ethic. 

In the end, government can create the best growth environment possible, but the responsibility falls to people to work hard. Lee Kuan Yew, the founder of modern Singapore, speaks of ‘Asian values' to explain East Asia's economic boom.  As I have already said, I do not believe excellence is time or place specific. While I would not recommend people should sleep under their workstations like in post-war Japan, why should ‘African values' not be associated with hard work and productivity?

Issued by the DA, October 7 2012

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