DTI defunds manufacturing incentives while admin budget grows 

8 March 2016

In a meeting of the Trade and Industry (DTI) Portfolio committee today, it was revealed that funding to the Incentive Development Programme will be slashed from R 6.9 billion in 2016/17 to R5.1 billion in 2018/19 in the current MTEF. Hardest hit by the funding cut will be the Manufacturing Competitive Export Programme which comes to an end in 2017/18 as the evidence is in the jobs that will not be created or retained in the manufacturing sector:

New jobs: 2012/13 - 22,085

              2016/17 - 3,600

Retained jobs: 2013/14 - 106,539

              2016/17 – 3,600

This will also have a knock on affect in our export revenue which will plunge from R16 billion in 2014/15 to a paltry R600 million in 2017/18.

Over the same period administration costs for the Department will balloon from R608 million to R788 million in 2018/19.

The DTI clearly has misplaced priorities. It makes no sense that a bloated bureaucracy should enjoy priority over job creation and expanding economic opportunities. Minister of Trade and Industry, Rob Davies, must rectify this as a matter of urgency in order to fulfil his mandate.

In Jun 2015, Minister Davies reported that he was engaging with Treasury to extend the successful Incentive Development Programme, but to date no further actions have been taken. This will be a great loss for the manufacturing sector.

I will therefore write to the Minister urging him to urgently reprioritise its budget to continue support for incentives aimed at growing the manufacturing sector.

I will also be submitting questions to the Ministry asking for an update on the negotiations with Treasury.

A total of 8.2 million South Africans are without work or have given up looking for work. We cannot afford for programmes aimed at addressing this crisis to be reprioritised in favour of supporting government inefficiencies. 

Statement issued by Dean Macpherson MP, DA Shadow Deputy Minister for Trade and Industry, 8 March 2016