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22 June 2006

Comrade Speaker and Deputy Speaker,
Honourable Premier,
Colleagues in the Executive Council,
Honourable Members of this House,
Heads of our Agencies,
Ladies and gentlemen:

Introduction

The Soweto Uprisings of 16 June 1976, whose 30th anniversary we celebrated about a week ago and the subsequent militant action by youth across our country marked an intensification of the role of youth in the national liberation struggle. Youth brought new hope to the oppressed that one day the cause of national liberation would triumph. They ensured that liberation was achieved in our lifetime.

Equally the historic women's march to the Union Buildings at which women across the length and breadth of our country boldly declared that they will not rest until total liberation for the people of South Africa has been attained, was an important milestone in the struggle to liberate our country.

To those who dared to confront the might of an oppressive regime for us to be liberated, we owe a great debt of gratitude. In honour of their bravery and sacrifices we must deepen the gains of our democracy and continue building a better country.

As we mark the 30th anniversary of 16 June and the 50th anniversary of the women's march to the Union Buildings, we must strengthen our effort aimed at expanding access to economic opportunities for our youth and women.

Collectively we have a responsibility to continue creating opportunities for women and young people to participate meaningfully in the economic mainstream. They too must benefit from the progress we are making in growing and developing our economy.

Economic environment

Comrade Speaker, given Gauteng's position as an economic engine of our country and a significant economic player in the southern African region and the continent it is necessary for us to keep an eye on developments at a macro economic level as well as in the global economy.

In this regard we are encouraged by the strength of our national economy which has been growing consistently over the past six years. In the first quarter of 2006, the economy steamed ahead registering a Gross Domestic Product (GDP) growth rate of 4,2 percent. The current strength of our economy points to the success of the macro economic interventions made by the African National Congress (ANC) government shortly after our liberation in 1994.

Though impressive the growth of our economy remains unbalanced fuelled largely by rampant consumer spending that is unmatched by domestic production. This has led the now existing current account deficit. Pockets of poverty, the skills gap and income inequalities still persist and remain areas of concern. We also note that the current volatility in international financial markets can have an impact on us an emerging market.

Despite this, Speaker, we remain confident that our country's favourable macroeconomic, fiscal and monetary mix will sustain the resilience of our economy.

At a provincial level we draw comfort from the knowledge that provincial economic growth continues to be healthy and that our province has the highest per capita income in our country.

Equally impressive is the emergence in our province of new centres of economic activity in areas such as Soweto and some parts of the Johannesburg Central Business District. This trend has led to growth in the tourism, retail, transport and telecommunication sectors in these areas. More importantly it has led to employment creation, wealth and income generation.

These areas have broken with their past, characterised by being on the fringes of the economic mainstream.

The emergence of new centres of economic activity in our province can be attributed to the massive infrastructure investment that has gone into these areas. This proves once more that investment in infrastructure can and does stimulate economic activity. We expect this trend to gather momentum as we invest in the improvement of infrastructure in more townships as part of the twenty priority townships programme.

As we make progress in promoting the shared growth of our economy, we are mindful of the challenges that lie ahead. We are concerned about the persistent levels of inequality, skills shortage and the high levels of poverty and unemployment in our province.

These challenges place on our shoulders the enormous responsibility to work even harder to deepen and spread our economic gains. This we must do in order to sustain the spirit of optimism that characterises the ‘Age of Hope’ that Gauteng like the rest of our country has entered into.

Review of the 2005/06 financial year

Comrade Speaker, allow me now to highlight some of the programmes we have undertaken in the past financial year as part of our overall commitment to accelerating the shared growth of our economy, job creation, fighting poverty, developing skilled and productive people, building an effective and caring government, deepening democracy and entrenching the constitutional rights of our people.

One of our ongoing tasks is to facilitate the implementation of the provincial Growth and Development Strategy (GDS). We are delighted to report that implementation of the GDS took off in the 2005/06 financial year with the launch of the Gauteng Enterprise Propeller and the establishment of the GDS fund capitalised to the tune of R1,3 billion over the next three years.

During the 2005/06 financial year, a total of R134,4 million was allocated to various departments to fund GDS commitments. These include the agro processing project of the Department of Agriculture, Conservation and Environment as well as the Gauteng Provincial Governments' Contact Centre.

We also drafted a provincial Broad Based Black Economic Empowerment (BBBEE) strategy which after extensive consultations with stakeholders was launched in April this year. This strategy will enhance our efforts to broaden participation in the mainstream economy thus promoting the shared growth.

We began consultations with stakeholders with a view to develop a policy framework to support cooperatives in Gauteng. We expect to complete this process by the end of the current financial year.

Furthermore, we developed a Provincial Spatial Development Perspective (PSDP) with a view to foster a common understanding of the spatial location of development potential and poverty in the province. This perspective will also assist us to align investment and development planning in the district and metropolitan municipalities.

We also strengthened our ability to monitor, evaluate and support departmental agencies. All our agencies completed a review of their strategies and have aligned them to provincial priorities.

We continue to improve turnaround times for the processing of liquor licenses and our consumer protection and awareness programmes have reached new heights.

Comrade Speaker, the total budget for the Department of Economic Development for the current financial year is R572 million. Allow me now to elaborate on how it will be allocated among the various units of the Department.

Governance
Liquor licensing

Over the past few months, developments relating to the issuing of shebeen permits and in particular the quantities of liquor that these establishments are required to sell have been the subject of much media attention.

We welcome the decision of the Constitutional Court on this matter and we will implement it without delay. In addition, we wish to reiterate that we regard shebeens as an import sector within the liquor industry.

Historically shebeens have provided a source of employment and income to many households. Even today many of our people rely on income generated from shebeens to put food on their tables.

Our interventions in the liquor industry are aimed at creating an enabling environment for expanded participation in this industry and to ensure that its economic benefits are shared. Our interventions are also aimed at protecting the interests of the broader public and to prevent incidences such as the selling of liquor to minors.

We have no intention of stifling the development and growth of shebeens. On the contrary, we wish to see those who operate in this sector grow their businesses into sustainable entities. We expect them to take advantage of the many economic benefits provided by the liquor and related industries such as tourism.

It is against this background that we are currently reviewing the provincial Liquor Act. We expect to complete this process by October this year.

Our liquor licensing unit will also pay attention to raising awareness about the benefits of responsible trading in liquor.

Consumer affairs and business regulation

The consumer affairs and business regulation unit will continue its work of promoting fair business practice and the protection of consumer rights. This we will do as part of our contribution to deepening our democracy and entrenching the constitutional rights of our people since it is our belief that consumer rights are human rights.

We take pride in the work done by the Gauteng Consumer Court. It resolved well over 80 percent of cases referred to it and has significantly reduced the work load of other courts in our province. We will this year reduce the response time for complaints referred to the office of the Consumer Protector.

The design of consumer education learner support material to grade 10 learners will also receive attention.

Comrade Speaker, the total budget for the governance unit which includes agency support, monitoring and evaluation is R269,4 million.

Economic and development planning

As directed by the Premier during the State of the Province address we will this year accelerate the implementation of the GDS. This will contribute to the achievement of the overall objectives of the Accelerated and Shared Growth Initiative for South Africa (AsgiSA).

We will identify projects that will contribute to our objective of stimulating sectors identified by the GDS as critical to the growth of the provincial economy. We will also pay attention to the monitoring and evaluation of progress made in the implementation of the GDS.

In October this year we will convene a GDS forum. This forum will bring together all stakeholders in the Gauteng economy to take stock on the implementation of the GDS. We hope to emerge from this forum with a joint programme of action to consolidate the gains we have made in the implementation of the GDS and to further accelerate its implementation.

We will also support municipalities in the implementation of uniform land use management systems. In doing so, we will focus on the development of appropriate policy positions in respect of zoning schemes. The processing of land development applications will also be fast tracked.

We will continue to identify further interventions aimed at accelerating the shared growth of the provincial economy and addressing the challenges of the second economy in our province.

Comrade Speaker, the economic and development planning unit receives R45,7 million.

The Gauteng Tourism Authority (GTA)

As we have said before, tourism has become our "new gold." Its contribution to the GDP now surpasses that of the gold mining industry. It is a sunrise industry that holds numerous benefits for our country and our province.

Tourism is uniquely positioned to create opportunities for the participation of small, medium and micro enterprises (SMMEs) and can contribute massively to the development of local economies.

We believe that the GTA is positioned properly to maximise the benefits of tourism to our province. Partly through the work of GTA numbers of international visitors who come to our province show a positive increase.

The challenge going forward is to increase these numbers and ensure that tourists who come to Gauteng not only land and do business here but that they spend more time experiencing Gauteng's unique tourism offerings.

We also rely on the GTA to accelerate transformation in the tourism industry and to ensure expanded participation.

GTA receives a total of R33,5 million. The agency's strategic plan is currently under review and once approved, its Medium Term Expenditure Framework (MTEF) budget will also be reviewed.

The Gauteng film office

The Gauteng film office will implement a Public, Private Partnership (PPP) to establish a Broad Based Black Economic Empowerment (BBBEE) Film and TV Fund. Our private sector partner in this project has committed itself to investing R250 million in the local film industry.

We will this year develop a policy framework for the implementation of the film city concept. In addition, we will continue to build the capacity of the Gauteng film office to implement its mandate. This will include amending legislation governing the Gauteng film office, a process we will complete in November this year.

Comrade Speaker, the Gauteng film office receives R3,5 million. Additional funding over the MTEF will be considered in line with the film office's new strategic plan

The Gauteng Enterprise Propeller (GEP)

The establishment of GEP marked the beginning of a new dawn for the growth and development of SMMEs and cooperatives in Gauteng. GEP remains at the centre of our efforts to grow the economy, create jobs and expand participation in the economic mainstream.

Since its establishment in April 2005 GEP has assisted over 1 000 SMMEs through its business development support programmes. This has led to the creation and retention of 400 jobs. In partnership with the National Productivity Institute (NPI) and Business Skills South Africa, GEP is providing business training to unemployed graduates across Gauteng.

During this year GEP will roll out two funds whose purpose is to provide financial assistance to SMMEs and cooperatives in Gauteng. It will also establish satellite offices in previously disadvantaged areas of Soweto, Alexandra, Soshanguve and Themba.

Comrade Speaker, GEP receives R80 million for the current financial year.

The Gauteng Gambling Board

The Gauteng Gambling Board will continue to be a significant collector of revenue for the provincial government. We expect the board to collect revenue in excess of R365 million for the provincial government in the current financial year.

The board will also intensify its work of promoting responsible gambling. Corporative governance within the board will also be strengthened. Furthermore the board will enhance the implementation of BBBEE within the gambling industry.

The Gauteng Economic Development Agency (GEDA)

In line with its new and expanded mandate, GEDA will pay attention to the facilitation of foreign and local investment into our province. We have set for ourselves a target of attracting investment to the value of R1,6 billion during the current financial year.

GEDA will also focus on building multilateral and sisterhood agreements with special emphasis on South to South relations and the African continent. The agency will actively support local economic development initiatives and enhance BBBEE in all export and investment promotion activities. It will also pay attention to the promotion of the call centre industry in Gauteng.

GEDA receives a total budget of R32,5 million. Its MTEF budget will be reviewed in line with its new strategic plan

Blue IQ

By investing in strategic economic infrastructure, Blue IQ has contributed to the creation of a conducive environment for accelerated and shared growth of the provincial economy.

Thus far we have invested over R2 billion in improving economic infrastructures in our province. This has had the desired effect of "crowding in" private investment in targeted sectors of our economy, establishing new nodes of economic activity and contributed to our urban renewal programme.

Phase one of the implementation of Blue IQ projects which started in 2001 has been completed. The task going forward is to attract further private sector investments into these projects.

Comrade Speaker, inspired by the success of Blue IQ initiatives, there may be a need to consider further high impact projects that will ensure that we register new gains in our ongoing effort to grow the economy. These projects must be designed such that they contribute to the creation of a conducive environment for accelerated growth of the provincial economy.

For the current financial year, Blue IQ, receives R79,2 million. Further funding to allow Blue IQ to continue its work of improving the economic infrastructure of our province will be made available from the GDS fund.

Special projects

Dinokeng and Cradle of Humankind World Heritage Site

These projects have an important role to play in promoting tourism in our province. Visitor numbers to Maropeng at the Cradle of Humankind show a positive increase. In addition, the number of tourism developments around the Cradle of Humankind and Dinokeng is on the rise. This has contributed to economic growth and job creation in areas near these developments.

The development of the Dinokeng Game Reserve will go a long way towards promoting conservation based tourism in our province. We expect that the game reserve will be opened for business in December this year.

Comrade Speaker, the Cradle of Humankind and Dinokeng receive R46,3 million R93,5 million respectively.

The Gauteng Provincial Government (GPG) precinct

One of the goals of the GPG precinct is to improve service delivery to our people. This will be done through providing a rewarding working environment for public servants, improving contact between provincial departments and facilitating easy interaction between the provincial government and the people of Gauteng.

The precinct will also contribute to the rejuvenation of the inner city of Johannesburg and will lead to job creation and promote investment. It will further assist in changing prevailing negative investor perceptions of the property market in the Johannesburg central business district (CBD).

Comrade Speaker, we have allocated an amount of R70,7 million for the GPG precinct.

Conclusion

In conclusion, I wish to assure this House that the Department of Economic Development is ready to make its contribution towards building a better Gauteng and sustaining the mood of optimism among many of our people. We will continue to honour the sacrifices of those who fought for us to be a free nation. We will ensure that the ideals they fought for are realised.

Let me take this opportunity to thank the Premier for his firm and decisive leadership in ensuring that we deliver on our objectives, my colleagues in the Executive Council (ExCo) for their collective wisdom and support, the honourable members of the Department of Economic Affairs Standing Committee led by comrade Mondli Gungubele, Ms Bongi Kunene our HOD, heads of our agencies and senior management within the Department.

Let us all work together towards accelerating the shared growth of our economy for a better Gauteng.

Thank you!

Issued by: Department of Finance and Economic Affairs, Gauteng Provincial Government
22 June 2006