THE government will engage business, trade unions and other social partners to remove obstacles that prevent the economy from growing by more than 5% a year, President Jacob Zuma said in his state of the nation address during the opening of Parliament in Cape Town on Thursday evening.
Mr Zuma, who started his speech by apologising for suffering from the flu, said the South African economy was forecast to grow 2.5% in 2012-13, compared with 3.1% the year before. However, the economy needed to grow threefold to create 11-million jobs by 2013.
He said the National Development Plan (NDP), which was approved at the African National Congress’s Mangaung conference in December, outlined the necessary interventions to meet that target.
“The NDP contains proposals for tackling the problems of poverty, inequality and unemployment,” he said. “It is a roadmap to a South Africa where all will have water, electricity, sanitation, jobs, housing, public transport, adequate nutrition, education, social protection, quality healthcare, recreation and a clean environment.”
Mr Zuma added: “We will engage business, labour and other social partners in pursuit of solutions. No single force acting individually can achieve the objectives we have set for ourselves.”
Tax and mining
Finance Minister Pravin Gordhan is to commission a study into the appropriateness of current tax policies, including the mining royalties regime, later this year, Mr Zuma said.
He told MPs the tax review would be to “make sure that we have an appropriate revenue base to support public spending. Part of this study will evaluate the current mining royalties regime, with regard to its ability to suitably serve our people.
“Ensuring that the public services we provide our people today can continue to be provided to our people tomorrow requires that we have suitable tax policies to generate sufficient revenue to pay for these services.
“From time to time, we have commissioned studies into our tax policies to evaluate the extent to which they meet the requirements of the fiscus.”
Mr Zuma said the government had managed to bring about certainty in the mining sector. “The nationalisation debate was laid to rest in December at the ruling party’s national conference,” he said.
Progress and achievements
Reporting on progress made since last year’s state of the nation address, Mr Zuma said that by end of March this year, the government would have spent about R860bn since 2009 on various infrastructure projects around the country.
He highlighted work done and planned on projects such as the Durban-Free State-Gauteng logistics and industrial corridor, the expansion of Pier 2 in the Durban port, construction at Ngqura port in the Eastern Cape and the upgrading of Mthatha airport’s runway.
“I have asked for work in the North West to be fast-tracked further in light of the huge backlogs in that province, especially electricity, schools, clinics, roads and water, in the next two years,” the president said.
On commodities transport, Mr Zuma said the construction of the Majuba Rail coal line in Mpumalanga would start soon, while better transport of iron ore would be achieved following the delivery of 11 locomotives.
“The first phase of the expansion — to increase iron-ore port capacity at Saldanha to 60-million tons per annum — was officially completed in September last year,” he said.
Mr Zuma also touched on other areas of development, including:
• energy, with 675km of transmission lines laid and contracts worth R47bn signed by the government in the renewable energy programme;
• education, with 98 new schools expected by the end of March and construction to start on two new universities in the Northern Cape and Mpumalanga;
• the environment, with an R800m national green fund established last year; and
• basic services, with 315,000 solar water geysers rolled out by January this year and nearly 200,000 households connected to the national electricity grid last year.
“To prepare for the advanced economy we need to develop, we will expand the broadband network,” he said. “Last year, the private and public sector laid about 7,000 new fibre-optic cables. The plan is to achieve 100% broadband internet penetration by 2020.”
Mr Zuma added, however, that the government was cracking down on corruption, tender fraud and price fixing in the infrastructure programme.
“The state has collected a substantial dossier of information on improper conduct by large construction companies,” he said. “This is now the subject of formal processes of the Competition Commission and other law enforcement authorities.”
Mr Zuma also said the past two years had proved that state intervention could turn around ailing industries. “The government can turn around key industries that face external and internal threats, as happened in our manufacturing industries,” he said. “We have seen the revitalisation of train and bus production largely because of the drive for local procurement.”
He used the example of the clothing, textile and footware industry, which had, with the support of government programmes that included some financial support, reversed a 15-year trend of declining employment.
On broader economic transformation, the president said, the revised Broad-Based Black Economic Empowerment Act and codes were being finalised.
“The development of black-owned enterprises and black industrialists will be prioritised,” he said, adding: “The government has several programmes of supporting small business. A key project for the Presidency currently is to get government departments to pay small, medium-sized and micro enterprises within 30 days ... Accounting officers who fail to execute this directive should face consequences.”
The state is to clamp down on violent protests and strikes through allocating specific courts to deal with those arrested and charged on a “prioritised roll”, Mr Zuma said.
“The law must be enforced and it must be seen to be enforced — fairly, effectively and expeditiously,” he said.
He called on citizens to exercise their constitutional right to protest in a peaceful and orderly manner, and urged government departments “at all levels” to work closely with communities to ensure that the concerns of residents were attended to before they escalated.
“That responsibility remains. We are a caring government,” he said.
“I have instructed the justice, crime prevention and security cluster to put measures in place, with immediate effect, to ensure that any incidents of violent protest are acted upon, investigated and prosecuted ... The citizens of our country have a right to expect that their democratic state will exercise its authority in defence of the constitution that so many struggled so long and hard for. We cannot disappoint this expectation.”
Turning to education, Mr Zuma said: “We want to see everyone in the country realising that education is an essential service for our nation. By saying education is an essential service we are not taking away the constitutional rights of teachers as workers, such as the right to strike.
“It means we want the education sector and society as a whole to take education more seriously than is happening currently.”
Experts have said that an ANC proposal that education be declared "an essential service" has no prospect of succeeding. It would be illegal in terms of the Labour Relations Act and unworkable even if allowed, based on the total failure to enforce essential services provisions in other sectors.
Mr Zuma said decent salaries and conditions of service would help attract, motivate and retain skilled teachers. “In this regard, we will establish a presidential remuneration commission that will investigate the appropriateness of the remuneration and conditions of service provided by the state to all its employees ... I have directed that the first priority should be teachers.”
Land and land claims
The government is not meeting its land redistribution targets, Mr Zuma said, and its mid-term review last year revealed shortcomings in the land reform implementation programme.
“First,” he said, “we must shorten the time it takes to finalise a claim.”
The government would now pursue the “just and equitable” principle for compensation, instead of the “willing buyer, willing seller” principle, which forced the state to pay more for land than the actual value.
Second, Mr Zuma said, there were proposed amendments to the Restitution of Land Rights Act 1994 to allow the reopening of the lodgement of restitution claims by people who missed the December 31 1998 deadline. Also to be explored are exceptions to the June 1913 cut-off date to accommodate claims by descendants of the Khoi and San.
“Another key lesson is to provide adequate post-settlement support to new landowners so that land continues to be productive,” the president said. “We also need to provide better incentives for commercial farmers that are willing and capable of mentoring smallholder farmers.
“Another challenge we have faced is the preference for money instead of land by some claimants, which also does not help us to change land ownership patterns.”
The president also said the government continued to wage a war against corruption, with the Special Investigating Unit now counting more than 600 members.
Among successes in the past financial year, 107 officials working within the criminal justice system were convicted. The Asset Forfeiture Unit seized more than R541m-worth of assets, of which R61m-worth have already been forfeited to the state. “The assets are channelled back to fighting crime and corruption through the Criminal Asset Recovery Account.”
Mr Zuma urged the private sector to “also take this fight against corruption seriously so that we tackle it from all angles. To further boost the fight against corruption, we will fill all vacant posts at the upper echelons of the criminal justice system.”
Thursday’s evening event was attended by two former South African presidents: Thabo Mbeki and his wife, Zanele, and FW de Klerk, accompanied by his wife, Elita. Also present were two former deputy presidents, Phumzile Mlambo-Ngcuka and Baleka Mbete.