Full 2012 Budget speech by the Minister of Finance, Pravin Gordhan.

Honourable speaker

It is my privilege to introduce the third budget of President Zuma’s administration.

Mister President, you have given us a clear and historic challenge to “write a new story about South Africa – the story of how, working together, we drove back unemployment and reduced economic inequality and poverty.”

This budget has been crafted at a challenging but hopeful time. We have to say to our people that economic uncertainty will be with us for some time, yet we have a programme of economic change that can steadily roll back unemployment, poverty and inequality.

We have demonstrated excellent resilience during the post-2008 crisis. We now need to introduce a new dynamism among all South Africans.

It requires an extraordinary national effort from all role-players, committed not just to identifying the barriers to progress, not just to proposing solutions, but also working together, over the long haul.

Our new story, our period of transition, is about building modern infrastructure, a vibrant economy, a decent quality of life for all, reduced poverty, decent employment opportunities. It is a story that must be written by all of us. Not just by government.

Not just by business. Not just by unions. By all of us, South Africans from all corners of this country.

The legacy of our past is not only that of difficulty and despair. We can draw pride from the celebration of the ANC’s centenary, and build on this past to get things done today. The idea of unity in action, working together to realise practical goals, must be revived. The idea of an active citizenry, drawn into motion by dedicated activists and inspired by a compelling vision of the future, has to be renewed.

Every one of the last hundred years has seen our nation overcome obstacles that seemed insurmountable. Some may have been beyond our control, the result of changes to the environment to which we were compelled to adjust. Some were the result of our failure to act, even when the solutions were known to us. Others were the unintended consequences of our own successes.

A towering leader of our movement, Walter Sisulu, wrote from his prison cell on Robben Island, “In a certain sense, the story of our struggle is a story of problems arising and problems being overcome. It is understandable that many of the problems should generate much controversy and emotion. However cool and detached we may strive to be in our analysis, the fact remains that we are deeply involved and interested parties and the solutions we adopt are solutions we ourselves have to implement.”

We will not turn away from our challenges. We must confront them boldly, and with hope. In harnessing all the resources at our disposal, we have to do more, with less; we have to work smarter and harder. South Africans must focus on our strengths and opportunities, to identify and activate the levers of economic and social change at our disposal.

Mister President you have given effect to the wisdom of Walter Sisulu; through the work of the Planning Commission this country now has a 20 year vision, through your initiative we now have a massive infrastructure programme also extending over 20 years, which will increase the growth and job creating potential of our economy.

 

Overview of the 2012 Budget

We remain steadfast in addressing the challenges of creating jobs, reducing poverty, building infrastructure and expanding our economy.

In brief, Mister Speaker, today’s budget advises the following:

The global environment remains highly uncertain. While there are signs of a revival in the US economy, much of Europe is in recession, and significant financial risks cloud the global economic outlook.

South Africa’s finances are in good health. A budget deficit of 4.6 per cent of GDP is projected in 2012/13. We plan to reduce the deficit to 3 per cent of GDP in 2014/15, and public debt will stabilise at about 38 per cent of GDP.

An expansion in infrastructure investment is one of the central priorities of the 2012 Budget.

Special emphasis is given to improving competitiveness in industry, investment in technology, encouragement of enterprise development and support for agriculture.

Total spending will reach R1.1 trillion next year, representing some 32 per cent of GDP.

Education, health and social assistance will remain the largest categories of expenditure, sustaining and expanding the social wage over the MTEF period ahead. Investment in people is at the centre of our growth and development strategy.

The budget continues to support job creation, with a particular focus on unemployed youth.

The budget provides for personal income tax relief of R9.5 billion, with further measures to increase tax compliance.

Measures are proposed to invigorate household savings.

We will strengthen financial management in the public sector, pursue value for money with the greatest possible vigour and ensure that taxpayers’ money is well used.

Fraud and corruption will be combatted through changes to procurement policies and practices and tough enforcement of the law.

Giving the budget practical effect cannot be a project of government alone. In Setswana, we say “Mabogo dinku a thebana” meaning “we have to work together to achieve more”. Government has supported the recovery from the 2008 recession, but as we expand infrastructure investment over the period ahead we have to see business investing in our future as well. Government has expanded social assistance to households over the past decade, but employment and economic growth have to be the main future drivers of income growth and poverty reduction. Government is responsible for developing effective municipalities and broadening access to services, but business, civil society and organised labour have to be partners in building cohesive communities and promoting social solidarity.

And so Mister Speaker, in tabling the 2012 Budget we have to say: this is what we undertake to do, not just as government, but as a nation. Our development requires every one of us to ask – what can I do for my country, my people, our future!

The global environment

Allow me to reflect briefly, Mister Speaker, on the global environment and the historic shift in economic power that is taking place.

In 2012, global output is projected to expand by 3.3 per cent. Advanced economies are expected to grow 1.2 per cent, while developing Asia will grow by 7.3 per cent during 2012, and Sub Saharan Africa by 5.5 per cent.

Negative growth is forecast for the Euro area, impacting on trade in many other economies.

In the last 5 years, the Chinese economy has expanded by 60 per cent and India by about 45 per cent. Advanced economies barely show positive growth. A recent World Bank study argues that “new growth poles are redefining the global economic structure”. This study predicts that emerging economies will grow on average by 4.7 per cent a year, while advanced economies will grow by about 2.3 per cent between 2011 and 2025.

The speed of transformation is unprecedented and places emerging economies at the centre of the global economy. Emerging market multinationals are playing an ever increasing role in reshaping global industry, including marked increases in South-South investment and foreign direct investment.

The evolving world we face presents us with both challenges and opportunities.

Financial commentator Martin Wolf recently wrote: “Shaping this new world into a cooperative and flourishing order is going to prove extraordinarily challenging. History suggests that such times of transition, however inevitable and however just, are fraught with conflict and instability. Today, the western dominance of at least two centuries is under severe challenge. This period of transition is unlikely to be any less fraught than those that preceded it.”

To succeed in this environment, we have to seize the opportunities presented by this changing world.

As a major mining economy, we should be benefiting more from the continued buoyancy in commodity markets internationally. We also need to take advantage of rising demand for agricultural and manufacturing goods. Some 85 million manufacturing jobs in China will shift to other countries over the years ahead. Do we have the right policies, conditions and boldness to enable South African businesses to gain from these immense shifts in the patterns of production and trade?

There are expanding opportunities on our own continent. Africa is the second fastest growing region in the world. This growth is sustained by high commodity prices, but also reflects a youthful, increasingly educated population, rapid urbanisation and a new entrepreneurial spirit. Ten years ago there were fewer than 10 million internet users on the continent. Today they number almost 100 million.

As well as developing South African business interest in the continent, we should use the strength and sophistication of our financial system to turn our country into a true gateway for investment into, and development of, Africa.

Both the National Development Plan and the New Growth Path recognise that to compete in the global economy requires flexibility, innovation and leadership, in government and the private sector. We have to build a more adaptable economy. This requires more effective and dynamic partnership between government, the private sector and civil society.

At the same time, the crisis and its aftermath have revealed intractable problems in the old system. Growing inequalities in income and wealth have undermined economic growth and social well-being. The difficult task of moderating and reversing inequality requires active government intervention. Unregulated capitalism is clearly in crisis.

Economic outlook

In building partnerships that will take us through this crisis, Mister Speaker, we have to implement a strategy for faster and more inclusive economic growth. We are not doing well enough in growing our economy and creating jobs for our young people.

The South African economy has averaged about 3 per cent growth a year since 2009. Against the background of the slowdown in the global economy, real GDP growth is likely to fall to about 2.7 per cent in 2012.

We expect a recovery to 3.6 per cent and 4.2 per cent growth in 2013 and 2014, but these are modest rates of expansion relative to the social and developmental challenges we face and the opportunities that our mineral wealth and human capabilities offer.

On present trends, the deficit on the current account of the balance of payments will widen from 3.3 per cent in 2011 to 4.4 per cent GDP in 2014.

There was a welcome recovery in job creation during 2011, but employment has not yet returned to its 2008 peak and the unemployment rate remains high at 23.9 per cent.

Vision for the economy in 2030

Mister President through your leadership we are able to say to South Africa and the world that we have a vision for our country and our economy – where we want to get to in the next 20 years.

Our New Growth Path recognises that special employment initiatives have to be a priority in our present circumstances, while in the longer term growth in agriculture and manufacturing, and investment in a knowledge-based economy must be prioritised.

The draft National Development Plan identifies several key objectives:

Lowering costs for both households and business

Increasing public infrastructure spending

Growing our manufacturing and agricultural sectors

Raising mining output

Improving the functioning of the labour market, particularly to help young people access work; and

Raising competitiveness and exports.

In each of these areas there are steps proposed over the three-year period ahead.

Our development strategy requires a capable state, and active citizens. We need parents to work with the state to deliver quality education, community leaders that will help protect neighbourhoods; business leaders and trade unions to grow the economy; investors to create jobs. In isiZulu, “Uzothola kanjani hleli ekhoneni” meaning how far will you get if you are sitting in your corner.

The levers of economic change

Mister Speaker, if we are to succeed in putting our economy on a more rapid and inclusive growth path to 2030, we need to effectively direct and manage the levers of change – levers that activate both public and private sector energies and capabilities.

These include:

Our public-sector infrastructure programme

Support for industrial development and special economic zones

Investment in science and technology

Support for emerging farmers and land reform beneficiaries

Expansion of employment programmes

Improvements in further education and skills development.

The fiscal framework

A sustainable fiscal framework, based on the principles of counter-cyclicality, debt sustainability and intergenerational equity underpins our growth strategy.

Mister Speaker, we can be proud of the collective wisdom and will of our government in making the tough decisions that have kept our fiscus on a sustainable track.

Reprioritisation, savings, haircuts – these have been executed with singular determination.

The consolidated resources available to the state over the MTEF period amount to some R4.5 trillion, taking into account the investment plans of state enterprises and development finance institutions. Key features of the budget framework include:

Real growth in non-interest expenditure averaging 2.6 per cent over the medium term, bringing spending in line with long-term revenue trends.

Additional allocations of R55.9 billion over the next three years, including R9.5 billion for an economic support package.

Tax revenue stabilising at about one-quarter of GDP.

A reduction in the budget deficit from 4.8 per cent in 2011/12 to 3 per cent in 2014/15.

A public-sector borrowing requirement of 7.1 per cent of GDP in 2011/12, declining to 5 per cent in 2014/15 before rapidly rising again as the infrastructure programme of government accelerates.

By phasing in our fiscal consolidation over the medium term, we avoid the social and economic dislocation associated with more rapid adjustments, while still stabilising the fiscal position without burdening the economy and future generations with excessive debt.

Funding of infrastructure

The Presidential Infrastructure Coordinating Commission has made considerable progress in identifying projects and clarifying long-term investment plans to drive economic change.

The Budget Review lists 43 major infrastructure projects, adding up to R3.2 trillion in expenditure. Over the MTEF period ahead, approved and budgeted infrastructure plans amount to R845 billion, of which just under R300 billion is in the energy sector and R262 billion in transport and logistics projects.

These projects are funded in various ways:

The fiscus meets the costs of public-service facilities such as schools and courtrooms, hospitals and rural roads.

Public entities such as Eskom and Transnet finance their investments from internally generated surpluses and borrowing from the capital market. This means they have to generate sufficient revenue from tariffs and charges to repay debt over time, and cover operating and maintenance costs.

In some cases, a mix of tax finance and cost recovery is appropriate – we make budget contributions to the costs of commuter transport services and electricity and water service delivery to low-income communities, for example.

Private sector investment plays a substantial role in several sectors. Access to telecommunications services is financed by private operators, and our airlines industry has several private sector players. The first round of over 1 200MW of renewable energy projects was recently successfully tendered to independent power producers. Private sector capacity can also be through construction and operating concessions, for example in the management of industrial development zones, freight logistics and ports operations.

The Development Bank of Southern Africa will play a coordinating role in raising finance, in partnership with multilateral finance institutions, foreign investors and other investment funds. The Industrial Development Corporation similarly invests directly in income-generating projects, in partnership with other investors.

South Africa has deep and liquid capital markets, through which long-term capital can be raised at competitive rates by government, state enterprises and the private sector.

Our development finance institutions are capable of raising capital and co-financing investments of the private sector, state entities and municipalities. These are considerable strengths – they mean that we do not have to rely on expensive external finance or complex structured arrangements.

But the key consideration, Mister Speaker, is the impact and economic viability of our infrastructure investments. The PICC will ensure expert project assessment, subject to appropriate standards of review and public accountability – a critical requirement before investment decisions are taken.

No good project will be short of funding.

Infrastructure implementation

We are aware of several weaknesses in the state’s infrastructure capacity. In the past, spending has lagged behind plans. Our estimate is that in 2010/11, R178 billion was spent out of a planned R260 billion, or just 68 per cent. We have to do better than that – state enterprises, municipalities and government departments all need to improve their planning and management of capital projects.

In addition to long delays, we have often experienced significant cost over-runs in infrastructure projects. So we shall step up the quality of planning, costing and project management, so that infrastructure is delivered on time, and on budget.

This means that government departments and municipalities that do not spend, under-spend or misspend their allocated funding, will be at risk of losing the allocations. The relevant officials will also be held liable for such misdemeanours. National Treasury will be pro-actively monitoring the spending of grants to ensure value for money, adherence to Expanded Public Works Programme (EPWP) targets and implementation of operational and maintenance programmes.

Several measures are in place to improve infrastructure project implementation and build management capacity.

Within state-owned entities, development finance institutions and the private sector, considerable capacity is already mobilized in project planning and management.

The Infrastructure Development Improvement Programme assists national and provincial departments, focused largely on education and health projects and support for provincial public works departments. The Construction Industry Development Board has played a key role in developing standards and procedures for government tenders.

A new Cities Support Programme will get under way this year, initially in eight metropolitan authorities, focused on improved spatial planning, public transport systems and management of infrastructure utilities.

The Municipal Infrastructure Support Agency will be established by Minister Baloyi this year, focused on rural municipalities that lack planning capacity.

Technical assistance to municipalities is also provided through the neighbourhood development programme, which supports over 220 projects aimed at catalysing business investment in township partnership projects.

The infrastructure skills development grant supported 150 graduate interns in engineering and spatial planning in 2011/12, and will be extended to a further 43 municipalities over the period ahead.

Special attention will be given to the procurement processes for major infrastructure projects, to ensure both value for money and development of local suppliers and support industries.

Training and mentorship programmes have a critical role to play in addressing capacity constraints of departments and municipalities. But professionalism, hard work and commitment to value for money are preconditions for successful project delivery.

There can be no compromise on the basic principles of sound financial management in ensuring that resources are mobilised efficiently to serve our people.

A capable state focussed on delivery requires a passionate and patriotic public service – without those few individuals whose only desire is to profit from the state.

Revenue estimates and tax proposals

I turn now, Mister Speaker, to the revenue estimates and tax proposals. The underlying principles are that the tax system should be fair, efficient, transparent certain – and, where possible, uncomplicated.

Tax revenue recovered during 2010/11 and 2011/12, following a decline in 2009/10 during the global recession. Although tax revenue is slightly lower than our estimate in February last year, the revised estimate for 2011/12 of R739 billion is R10 billion higher than projected in last year’s Medium Term Budget Policy Statement.

This year’s tax proposals are as follows.

Personal income tax relief

Personal income tax relief of R9.5 billion is proposed, which takes account of inflation and provides modest real tax relief.

Tax treatment of medical expenses

As from 1 March 2012 the tax credit for contributions to medical schemes will be introduced, at a rate of R230 a month for the first two beneficiaries and R154 each for additional beneficiaries. Taxpayers 65 years and older and people with disabilities will be included in the second phase of this reform, which will be implemented in 2014.

These reforms will significantly improve the fairness of the personal income tax system.

Retirement funding and savings

Reform of the tax treatment of contributions to retirement funds is also envisaged, to take effect in 2014.

To encourage voluntary savings, consideration is being given to the introduction of tax-exempt short and medium-term savings products. The proposal is that individuals should be permitted to save up to R30 000 a year, with a lifetime limit of R500 000, in registered savings or investment products that would be free of tax on interest, dividends or capital gains. The current tax free interest income thresholds will be reviewed and possibly phased out as part of this reform.

Full details of the proposals are in the Budget Review.

Dividends tax

The secondary tax on companies will be terminated on 31 March 2012 and a withholding tax on dividends will be implemented on 1 April 2012. This will align South Africa’s tax treatment of dividends with that in most other countries. Pension funds will benefit from this transition as they will receive dividends tax free. The dividend tax will be introduced at 15 per cent.

Capital gains tax

The introduction of capital gains tax in October 2001 was an important step in broadening the tax base.

In order to reduce the scope for tax arbitrage and broaden the tax base further, the CGT inclusion rate for individuals and special trusts will be increased with effect from 1 March 2012 from 25 to 33.3 per cent, and for companies and other trusts from 50 to 66.6 per cent. To mitigate the impact on middle-income earners, the various exclusion thresholds are increased.

Relief for small businesses

Mister Speaker, I am pleased to advise that there will be further tax relief for small businesses and micro-enterprises.

The tax-free threshold for small business corporations is increased to R63 556, the 10 per cent rate is reduced to 7 per cent and the threshold up to which this rate applies is increased to R350 000. For taxable income above R350 000, the normal 28 per cent corporate rate applies.

With effect from next month, qualifying micro-businesses (within the R1 million turnover limit) will be able to pay turnover tax, VAT and employees’ tax twice a year. This means that the number of returns and payments a year will be reduced from about 18 to just two.

Corporate tax measures

Several measures are set out in the Budget Review to improve the corporate tax environment, Mister Speaker:

Further steps will be taken to limit excessive debt financing

Amendments to the mark-to-market taxation of foreign currency and other financial instruments will be phased-in

The governance and tax treatment of property loan stock entities will be aligned with the present treatment of regulated property unit trusts

Tax relief is proposed for housing developers and employers who provide housing below R300 000 a unit.

Special economic zones

The Minister of Trade and Industry has published draft legislation to provide for the creation of special economic zones. Tax relief is under consideration for businesses that invest in these zones, including a reduction in the corporate income tax rate and support for employment and training expenses.

Carbon tax

A revised policy paper on a carbon tax will be published this year for a second round of public comment and consultation. As set out in the Climate Change Response White Paper approved by Cabinet in 2011, the need to price carbon emissions and the phasing in of a tax instrument for this purpose are accepted.

Electricity levy

The levy on electricity generated from non-renewable sources will increase by 1c/kWh as from 1 July 2012 and will replace the current funding mechanism for energy-efficiency initiatives such as the solar water geyser programme. There should be little overall impact on electricity tariffs.

Fuel levies

The general fuel levy on petrol and diesel will be increased by 20c with effect from 4 April 2012, and the Road Accident Fund will increase by 8c to 88c/l.

Square Kilometre Array

Members of the House will know that under the guidance of the Minister of Science and Technology, South Africa is bidding to host the Square Kilometre Array (SKA), an international collaboration to build the world’s largest radio telescope. I am happy to confirm that the project will qualify for VAT relief, which will surely give Minister Pandor the winning edge in this contest.

Tax on gambling

Following the 2011 Budget proposal on gambling, it is proposed that a national tax based on gross gambling revenue should be introduced effective from 1 April 2013, as an additional 1 per cent levy on a uniform provincial gambling tax base. A similar base will be used to tax the national lottery.

Excise duties on tobacco and alcohol products

Dhiveshan Naicker has offered the following tip, Mister Speaker: “Raise the tax on alcohol and cigarettes so that people will stop drinking and smoking too much”. This is good advice. The increases in duties on tobacco products will be between 5 and 8 per cent this year.

In respect of beer and spirits, an increased benchmark tax burden is proposed, to be phased in over two years. The excise on spirits will increase by 20 per cent to R36 for a 750 ml bottle this year, the tax on beer goes up by 10 per cent to R1.01 for a 340 ml can and wine will contribute 8 per cent more to the fiscus.

Tax on financial transactions

South Africa has a financial transaction tax on securities transfers, at a rate of 0.25 per cent. It is proposed that the current exemption for brokers should be abolished. Transactions for the broker’s benefit will be taxed at a lower rate. The inclusion of financial derivatives in the base of the securities transfer tax is also under consideration.

Ad valorem excises

With effect from October this year, an ad valorem excise duty at a rate of 7 per cent will apply to small aeroplanes and helicopters with a mass below 5 000 kg. A duty of 10 per cent will apply to motorboats and sailboats longer than 10 metres.

Tax administration

Mister Speaker, whereas several nations around the world are confronting severe austerity measures and significantly higher taxes, we are able to propose tax relief of R2.3 billion overall, in part because of the strength of our tax policy and administration, and in part because millions of South Africans pay their taxes and duties in full and on time.

The recent Voluntary Disclosure Programme has attracted approximately 18 000 applications, and has yielded almost R1 billion in additional tax so far. It has also provided useful insights into areas of non-compliance that will receive focused attention, including:

Under-declaration of income such as rental and foreign income and capital gains

Claiming of excessive income deductions

Under-declaration of VAT outputs and inflating of VAT inputs

Abuse of share incentive schemes by corporate executives

Abuse of benefits granted to foreign persons employed in South Africa

Non-payment of PAYE and failure to submit PAYE returns by employers.

Poor tax compliance is also apparent in respect of trusts and in parts of the construction sector, and the role of tax practitioners and other intermediaries will come under scrutiny. Analysis of compliance among the country’s 34 000 tax advisors shows practitioners owe over R260 million in outstanding taxes and have more than 18 000 income tax returns outstanding in their personal capacity. If that is their attitude to their own tax compliance, one shudders to think what advice they are giving to their clients!

Within the trade environment, customs officials will continue to focus attention on under-valuation of imports, especially in textiles, using a reference price database which industry is helping to update. During the current financial year, SARS has already confiscated 3.4 million articles of clothing and footwear valued at almost R580 million.

In addition SARS has seized drugs worth R139 million and 683 million sticks of cigarettes valued at R180 million. Since April over 230 taxpayers have been successfully prosecuted for a range of tax-related offences resulting in sentences totalling 370 years and nearly R5 million in fines. A further 1 500 tax-related cases are awaiting prosecution with the National Prosecution Authority.

Since 1 April 2011 SARS has issued over 700 000 taxpayers with administrative penalties for failing to submit an income tax return on time as required. These and other measures have helped increase the proportion of on-time submission. SARS received almost 5 million returns during the most recent tax season – a 23 per cent increase over the year before.

The Tax Administration Bill has been approved by Parliament. It incorporates the common administrative elements of current tax law into one piece of legislation, and makes further improvements in this area. The bill is expected to be promulgated and most of its provisions brought into force in 2012.

During 2012, South Africa will establish a dedicated ombud for tax matters. The office is intended to provide taxpayers with a low-cost mechanism to address administrative difficulties that cannot be resolved by SARS.

Nedlac consultation

Mister Speaker, in preparing for the budget, various consultations occur (including a wide range of tips from the public). This year, a pre-budget consultation was held with the Nedlac constituencies. Issues raised included:

The need to shift expenditure towards investment, rather than consumption activities

Sustainability of increases in the public-sector wage bill

Rapid increases in administered prices

Reinforcing taxes on luxury goods and more effective taxation of the super-rich

Budgetary support for rural development and more effective strategies for eliminating poverty

Financial transactions tax

Improving financial management

Support for the community works programme

Responding to rising food prices.

Many of these recommendations find resonance in the contents of the budget and our spending proposals.

Medium-term expenditure proposals

In our spending recommendations, Mister Speaker, we have taken advice from Amanda Mzulwini. “I think that you should spend money on things that matter, like improving healthcare, building more schools in the rural areas and building clinics”.

Job creation

Job creation is a central priority of government. An additional R4.8 billion over the 2012 MTEF period is provided for the expanded public works programme, bringing its allocations to a total of R77.8 billion.

The community work programme receives an additional R3.5 billion, which gives it a total of R6.2 billion, enabling the number of people employed to increase to 332 000 in 2014/15 from 90 000 in March 2011. We will continue to increase allocations to this programme over time.

Working for Water and Working on Fire receive an additional R1.1 billion (a total of R7.7 billion) providing for a total of 135 000 jobs over the medium term.

The non-state sector programme receives an additional R345 million (a total of R1.1 billion).

The National Rural Youth Service Corps receives an additional R200 million (a total of R900 million) over the next three years

R300 million is added to the arts and culture sector for job creation.

Education

Spending on education will grow from R207 billion in 2012/13 to R236 billion in 2014/15. Additional allocations of R18.8 billion over the medium term are accommodated, including equalisation of learner subsidies for no-fee schools and expanded access to grade R. An amount of R235 million is added to the baseline of the national department over the three-year spending period to extend the national assessments system. An additional R850 million is allocated to improve university infrastructure, including student accommodation facilities.

Health and social protection

Medium-term priorities in health spending include hospital infrastructure, the comprehensive HIV and Aids treatment and prevention programme, and expanding health professional training. Progress in these areas will strengthen the public health system, paving the way for the introduction of national health insurance.

The health sector is allocated an additional R12.3 billion over the next three years. R1 billion is allocated for national health insurance pilot projects and increasing primary health care visits. To improve health infrastructure, R450 million has been provided to upgrade about 30 nursing colleges. A further R426 million is allocated for the initial work on rebuilding five major tertiary hospitals. To accommodate provision of antiretroviral treatment at the CD4 threshold of 350, an additional R968 million is made available over the medium term.

Social welfare priorities include early childhood development programmes and the Isibindi childcare and protection programme. These are initiatives which have strong community-based employment benefits, and they are allocated an additional R1.4 billion over the MTEF.

Expenditure on social grants will grow from R105 billion in 2012/13 to R122 billion in 2014/15. At present, nearly 16 million South Africans receive social grants. With effect from April:

The monthly state old age pension and the disability and care dependency grants will rise by R60 a month to R1 200, or R1 220 for pensioners over the age of 75,

Foster care grants will increase by R30 to R770,

The child support grant will increase to R280.

We are mindful that these increases may need to be reassessed if inflation continues to rise.

Transport, Energy and Communication

The budget for transport, energy and communication services increases from R84 billion in 2012/13 to R98 billion in 2014/15, rising by an annual average of 8.4 per cent. A devolution of public transport services to metropolitan municipalities will be phased in over the period ahead, allowing for better integrated public transport networks including rail and bus rapid transit systems.

An additional R4 billion is allocated to the Passenger Rail Agency of South Africa to begin purchasing new coaches. The agency also receives R1 billion to build three depots and upgrade signalling in Gauteng, KwaZulu-Natal and the Western Cape.

Sentech will receive funding over the MTEF period for the dual illumination of analogue and digital television, and for digital broadcasting infrastructure.

In energy, the focus is on demand-side management to address the impact of limited supply until new generation capacity comes online. An additional R4.7 billion is allocated to complete the installation of one million solar water geysers. R600 million goes to municipalities to install low-energy lighting and equipment. R300 million is rovided for the electrification of informal settlements.

Human settlements and community amenities

Investment in municipal infrastructure and human settlements will grow from R120 billion in 2012/13 to R139 billion in 2014/15. Additional allocations of R9.9 billion over the medium term are proposed, including informal settlement upgrading, a wastewater treatment plant in Sedibeng, bulk water systems in Sekhukhune and water systems in the OR Tambo district.

Financial support for housing development is expanded over the period ahead, additional funding is allocated for the finance-linked individual subsidy programme, and further capitalisation of our housing finance institutions is proposed. A mortgage support facility is under consideration.

Economic services and environmental protection

Additional allocations of R15.8 billion are provided over the MTEF period for economic services and environmental protection.

The Department of Trade and Industry receives the bulk of this funding – R5.8 billion for the manufacturing competitiveness enhancement programme and R2.3 billion for industrial development and special economic zones.

Additional funds go to SANParks for tourism infrastructure, and to the National Metrology Institute for equipment.

An additional R1.9 billion goes to the Department of Agriculture, Forestry and Fisheries to improve agricultural support services. The Land Bank receives R1 billion to conclude its recapitalisation. R150 million is made available for provincial and municipal agricultural colleges. The Department of Rural Development and Land Reform has prioritised the settlement of 4 000 restitution claims over the MTEF period.

Science and technology

Total expenditure on science and technology increases over the MTEF period to R12.1 billion in 2014/15. Additional funding is proposed for the Agricultural Research Council for vaccines research and support for extension services, and for science council initiatives in support of industry and mining development.

General public services

The Department of Home Affairs receives additional funding for an integrated information technology system and upgrading border post infrastructure and housing.

An amount of R350 million is earmarked for transfer to Alexkor for the finalisation of obligations to the Richtersveld Community joint venture.

Defence, public order and safety

Spending on defence, public order and safety has increased by 9.7 per cent a year from 2008/09 to 2011/12, and will grow from R140 billion in 2012/13 to R158 billion in 2014/15. The sector receives additional funding of R7.6 billion over the MTEF period

to cater mainly for improved conditions of service, additional personnel and infrastructure.

Additional funding of R300 million is allocated for court infrastructure, including new high courts in Polokwane and Nelspruit. The Office of the Public Protector and the Independent Police Investigative Directorate are allocated additional funds to expand capacity. Funds are provided to the defence force to increase personnel deployment for border protection. The budget includes R700 million in 2012/13 to recapitalise Denel Aerostructures.

National health insurance

National health insurance is to be phased in over a 14-year period beginning in 2012/13. The new system will provide equitable health coverage for all South Africans. Over time, the new system will require funding over and above current budget allocations to public health. Funding options include an increase in the VAT rate, a payroll tax on employers, a surcharge on the taxable income of individuals, or some combination of the above. Alongside options for increased tax revenue, the role of user charges is also being investigated.

It is expected that an additional revenue source will be needed in 2014/15 amounting to about R6 billion in that year, which is not currently provided for in the MTEF.

Achieving an appropriate balance in the funding of national health insurance is necessary to ensure that the tax structure remains supportive of economic growth, job creation and savings. A discussion paper will be published by end-April 2012.

Gauteng Freeway Improvement Programme

Mister Speaker, I am mindful that the introduction of tolling to finance the Gauteng Freeway Improvement Programme has caused considerable public reaction. We have listened carefully to the various suggestions and appreciate the difficulties that might be faced.

The total debt associated with the project is R20 billion. In order to contribute to a further reduction in the toll burden, a special appropriation of R5.8 billion is now proposed, to be included in 2011/12 expenditure. This will reduce the debt to be repaid through the toll system, and will make a steeper discount possible for regular road users.

It is important to remember that road-user charges also serve an important demand management function on roads that are heavily congested. Users benefit through lower vehicle operating costs, time savings and improved safety. In addition, improved maintenance of regional and provincial roads is made possible by the additional revenue that our toll roads generate.

Going forward, government will carefully evaluate future road infrastructure funding. In addition, the further development of efficient and cost-effective public transport systems will receive the urgent attention of the Department of Transport.

Financial management and combating fraud and corruption

Following on the announcements made previously to introduce measures to improve financial management and help combat corruption, I can report that there has been progress on several fronts.

The National Treasury has already issued new regulations which require departments to submit annual tender programmes, limit variations to orders, and require disclosures of all directives.

Significant progress is being made in identifying and dealing with those who have abused the system and whose activities fall within the category of priority crimes. The JCPS made an announcement on priority crimes and corruption statistics earlier this week. I want to thank Ministers Mthetwa and Radebe for the cooperation of departments and agencies under their control. Our joint multi-disciplinary approach to investigations is bearing fruit.

I also want to express support for the Cosatu initiative, CorruptionWatch. We call on ordinary South Africans not to sit back and accept bribery when you come across it, whether in the public or the private sector. Contact the hotlines in government departments. Contact CorruptionWatch. Don’t accept bribery. Don’t become part of corruption.

There are further steps National Treasury will soon take to improve our procurement capability.

We will strengthen fragmentation in the system and strengthen the national procurement architecture.

National Treasury will appoint a Chief Procurement Officer who will have overall responsibility for monitoring procurement across government.

We will review the competencies and capabilities required to perform the procurement function and as said by the President, there will be strict vetting of all the procurement officers to be appointed.

National Treasury plans to develop a national price reference system, to detect deviations from acceptable prices.

The tax clearance system will be strengthened to ensure that those who have defrauded the state cannot do business with the state.

The Minister of Public Works and I have agreed to undertake a joint review of the validity and cost effectiveness of all government property leases.

Steps will also be taken to improve the ability of departments to set the specifications for tenders.

Provincial interventions

During the past year, Mister Speaker, it has been necessary to take steps to address financial management weaknesses that have undermined service delivery and put financial sustainability at risk in several provinces.

The interventions in all three provinces are underway. The cash crises have been averted, I hope. We shall continue to work hard at building institutions and systems where weaknesses have been identified. We must do this in order to restore the trust of our people in our capacity to govern.

There are several lessons of general application from these interventions. We need stronger rules, as government, to ensure that legitimate creditors are paid within the legally prescribed 30 day period. We need better procedures to ensure that staff appointments are not made without the necessary budget allocations, and we need to reduce administrative staff in favour of frontline teaching, nursing and service delivery personnel. We need to improve financial management capability across national and provincial departments. We need stricter oversight of supply chain management processes.

I wish to acknowledge the efforts of Cabinet colleagues who are addressing these challenges in their respective areas of responsibility, in collaboration with provincial MECs. They will report further on progress in their respective budget votes.

Financial sector development

Mister Speaker, I am pleased to report that progress is being made on several financial sector reforms.

There is now agreement between stakeholders on enhanced targets for empowerment financing and access to financial services. A revised financial sector charter code will be gazetted shortly for public comment by the Minister of Trade and Industry.

More appropriate and balanced capital adequacy and liquidity standards are being phased in for banks, and similar reforms are planned for the insurance sector.

As announced last year, we intend to shift towards a twin peaks system for financial regulation, where we separate prudential from market conduct supervision of the financial sector. Consultations will continue this year, with a view to tabling legislation in early 2013.

Proposals will be published for simplifying and modernising procedures for cross-border investments in and out of South Africa. After taking public comments, treasury recognizes that some of the barriers identified also apply to domestic investors; we intend to consult further to explore how we can lower costs and barriers to all investment in South Africa.

A series of discussion papers will be released this year on promoting household savings and reforming the retirement industry. Consultation with the industry, employers and trade unions will take place on these reforms.

Among the issues are improved governance over pension funds, including more effective interventions to eliminate corruption and fraud and ways to improve preservation of retirement fund assets to ensure higher levels of income in retirement.

Fees for many products in the financial sector remain too high. High costs in savings products undermine the national objective of getting our people to save more. The financial industry must take more urgent steps to reduce costs and introduce more appropriate and transparent saving and investment products, including annuities.

There is also much to be done to improve market conduct practices in the financial sector. The “treating customers fairly” initiative will be accelerated to protect customers more vigorously.

Our financial institutions should also recognize the important role of women in our economy. This progress needs to be more transparently reported.

We must all invest in our future. Vele hande maak ligte werk.

Support for business sector growth

Allow me to return briefly, Mister Speaker, to the central policy challenges we face – growth of our economy, more rapid job creation and reducing poverty.

Initiatives in progress to strengthen support for business sector growth include the following:

Small enterprise financing has been consolidated is a new subsidiary in the Industrial Development Corporation. In October 2011, a Procurement Accord was signed with business and labour. Government procurement rules include incentives for both black economic empowerment and designated local supply sectors.

The tax regime for small businesses has been simplified.

A new competitiveness enhancement programme has been initiated as part of the industrial policy action plan, building on existing production incentives in the automotive and clothing and textile sectors. A support programme is being developed in the capital goods sector, leveraging large state procurement programmes.

The National Tooling Initiative is under way, in support of accelerated apprentice training.

A draft policy framework and legislation have been published for special economic zones.

Technology investment is supported both through partnerships between science councils and industry and through R&D tax incentives.

A venture capital incentive is available for junior mining companies. Recognising that assistance to the private sector goes beyond the provision of incentives, government is looking at wider interventions to lower the cost of doing business. Improvements are being made to economic infrastructure such as ports, roads and electricity generation to cater for the needs of business. In addition, operational efficiency in ports and rail has been prioritised. There is a review of the regulatory regime and its effect on businesses in a number of sectors, as well as interventions in some institutions to speed up the issuing of licences and to improve transparency in government processes. Various strategies are also in place to deal directly with sector-specific issues.

Given the current global economic context, there is understandable caution in the business sector about investment and future growth prospects. Many firms have accumulated large cash balances instead of investing them or distributing to shareholders. The time has come to confront uncertainty – from government’s side, we are committed to an environment that will encourage business investment; from the side of business, we seek investment for the long term, enhanced competitiveness and training commitments.

Support for job creation

In respect of job creation, a wide range of government programmes and policies have come under scrutiny over the past year. Expansion of further education and skills development is a key long-term priority, alongside improving the quality of basic education and broadening access to adult education programmes.

At this time last year, funding was allocated to a new Jobs Fund, aimed at supporting innovative public or private sector projects with potential to create sustainable job opportunities. The Fund began operating in June, and received over 2 500 applications in its first call for proposals. Project allocations of over R1 billion have been committed, and a second round of project applications will be announced shortly.

We released a discussion paper proposing a youth employment incentive last year. It is under discussion at Nedlac, where the labour constituency has expressed reservations. In our view these concerns can be addressed in the design and implementation of the incentive. We would all like to see greater urgency in resolving this matter.

There are many ways in which job creation for young people might be accelerated. Last year I asked the Nedbank/Old Mutual budget speech competition winners to participate in a second mini-contest, on the question how we might reduce youth unemployment. Several great ideas emerged. Salma Kagee argued that students should be offered practical internships as part of their curriculum, to narrow the gap between education and the work place. Mpho Mashishi suggested using communities to arrest youth unemployment by revitalising townships through gyms, sporting teams and leagues, tutoring projects and clean-up operations. Ian Mrozek offered an interesting variation on the idea of a youth subsidy – he proposes that it should go to new business start-ups as a tax incentive, which would encourage entrepreneurs and business innovation.

It is right that we should look for many ways of supporting enterprise development, in many different settings and circumstances – in urban and rural areas, in agriculture, manufacturing and service sectors. We have to move beyond debate, and find the policy levers that will make a difference to the pace and dynamics of job creation across the whole of our economy.

Addressing poverty and inequality

Reducing unemployment is the centrepiece of our approach to reducing poverty, Mister Speaker, but it is not the only measure.

Social spending comprises 58 per cent of government expenditure next year, up from 49 per cent a decade ago. The budget provides social grants to almost a third of the population, it pays for largely free services at public health facilities and no-fee schools for 60 per cent of learners, and it pays for housing, water and electricity in poor communities. The average value of the “social wage” for a family of four in 2012/13 is about R3 940 a month. This represents a substantial investment in household living conditions, financed through a broadly progressive tax structure.

Social security reform and the phasing in of national health insurance will improve the effectiveness and coherence of redistribution through the fiscus. But of course, redistribution is not a substitute for economic growth and job creation. And so the quality of the poverty reduction we achieve over the decades ahead will depend on our success in broadening development to include historically disadvantaged sectors and communities, as envisaged in our New Growth Path and draft Development Plan.

Conclusion

Mister President, we have a budget that gives effect to the challenges you have set us – to accelerate growth, expand investment, support economic development and confront poverty and inequality.

My profound appreciation goes to President Zuma and Deputy President Motlanthe for their support and wise counsel in finalising the Budget and throughout the year.

I thank Cabinet colleagues for their backing, even when further haircuts have been proposed. The Budget is our collective statement, and it has benefited from many constructive contributions.

Members of the Ministers’ Committee on the Budget have engaged with the policy choices that had to be made with vigour and wisdom. This has been a great team effort.

Deputy Minister Nene has taken on an expanded set of responsibilities over the past year, and is an indefatigable Deputy!

I am grateful for the efforts and support of the MECs for Finance, who oversee over 40 per cent of our spending. They know they have much to do!

Our thanks also go to:

Governor Gill Marcus and the Deputy Governors of the South African Reserve Bank, for steadily managing the mandate of the Bank.

Commissioner Oupa Magashula and the staff of the South African Revenue Service, for the excellent work they continue to do to sustain our fiscal sovereignty.

Jabu Moleketi, chair of the DBSA, and CEO Paul Baloyi, who have a major contribution to make to the infrastructure programme.

The Financial and Fiscal Commission and its acting chair Bongani Khumalo, for their useful advice.

The leadership of the Public Investment Corporation, the Land Bank, the Financial Services Board, the Financial Intelligence Centre and the Government Pension Administration Agency.

NEDLAC, its Managing Director, Alistair Smith, and representatives of the business, labour and community constituencies on the Public Finance and Monetary Chamber.

The Honourable Thaba Mufamadi and Charel de Beer who chair the Standing and Select Committees on Finance respectively, and the chairs of the Appropriations committees, the Honourable Elliot Sogoni and Tebogo Chaane, who continue to maintain rigorous oversight and encourage very constructive public participation.

Our new Director-General Lungisa Fuzile, of Mnqanduli who has provided refreshing and frank leadership during his first budget!

The National Treasury team, whose hard work makes the high standards of our budget documentation remain our pride.

Staff of the Ministry who work absurd hours with unfailing good cheer. Allow me also to thank my family, whose support is invaluable!

My sincere appreciation also goes to the many South Africans who provide the encouragement, criticism and ideas that keep us alert, and assist in making government work better and differently!

In former President Mandela’s words, “The future of our country is in your hands. It will be what you make of it today. In the competitive international market place to which we are opening our economy, success and even survival of the nation will depend on you”

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South Africa: State of the Nation Address by President Jacob Zuma, 12 Feb. 2012

9 Feb 2012

Honourable Speaker of the National Assembly,
Chairperson of the National Council of Provinces;
Deputy Speaker of the National Assembly and Deputy Chairperson of the NCOP;
Deputy President of the Republic, Honourable Kgalema Motlanthe;
Former Deputy President FW De Klerk,
Former Deputy President Baleka Mbete,
Honourable Chief Justice of the Republic, and all esteemed members of the Judiciary;
Honourable Chairperson of the SADC Parliamentary Forum and Speaker of the
Parliament of Zimbabwe; Mr Lovemore Moyo,
Honourable Ministers and Deputy Ministers,
Honourable Minister of International Relations of the Republic of Angola, Mr Rebelo Chikoti,
Honourable Minister of Foreign Affairs of the Republic of Mozambique, Mr Julio Baloi,
Distinguished Premiers and Speakers of our Provinces;
Chairperson of SALGA, and all local government leadership;
Chairperson of the National House of Traditional Leaders;
The Heads of Chapter 9 Institutions;
The Governor of the Reserve Bank;
Leaders of all sectors from business, sports, traditional and religious leaders,
Members of the diplomatic corps;
Special and distinguished guests,
Fellow South Africans,
Dumelang, good evening, goeie naand, molweni, thobela, abuxeni!

I would like to extend warm greetings to all on this important day.

It is an honour to speak to South Africans in this House and in their homes and viewing centres around the country.

I also extend a warm welcome to Ambassadors and High Commissioners representing 146 countries, with which South Africa has diplomatic relations. We value your presence in our country.

Compatriots and friends,

This State of the Nation Address takes place during a significant year in the history of our country, the centenary of the ruling party, the African National Congress.

In marking this occasion we are recognising the work of all South Africans in bringing about a truly free, non-racial, non-sexist, democratic and prosperous country.

We wish to single out the former presidents of the ANC who led our struggle for liberation and of creating a better life across generations. We salute John Langalibalele Dube, Sefako Makgatho, Zac Mahabane, Josiah Gumede, Pixley ka Isaka Seme, AB Xuma, JS Moroka, Chief Albert Luthuli, Oliver Tambo, Nelson Mandela and Thabo Mbeki.

We welcome the families of the former ANC Presidents who are our special guests this evening.

We also recognise other components of the liberation movement – the Black Consciousness Movement which was led by Mr Steve Biko, whose son Samora is also our special guest, and the Pan-Africanist Congress which was led by Mr Robert Sobukwe.

We acknowledge too, the contribution of the late former MP, Ms Helen Suzman, who was a lone voice in this very House, speaking out against oppressive laws.

Honourable Members,

Compatriots and friends,

The year 2012 is also special because it marks the 16th anniversary of the Constitution of the Republic, which gives full expression to our democratic ideals.

The Constitution is South Africa’s fundamental vision statement, which guides our policies and actions. We reaffirm our commitment to advance the ideals of our country’s Constitution at all times.

Compatriots and friends,

At the January Cabinet lekgotla, we decided to undertake a mid-term review, looking at progress from 2009 till now instead of the usual annual review.

The mid-term review indicated steady progress in various areas such as health, education, the fight against crime, human settlements, energy, water provision, rural development and others.

However, the triple challenge of unemployment, poverty and inequality persists, despite the progress made. Africans, women and the youth continue to suffer most from this challenge.

Somlomo nosihlalo abahloniphekileyo,

Njengekhabhinethi kazwelonke sithathe isinqumo sokuthikufanele senze ngokwedlulele, ukukhulisa umnotho wezwe, ukuze siqede lezizinkinga zokwesweleka kwemisebenzi, ubumpofu kanye nokungalingani ezweni.

Ilezo zinto ezintathu esizobhekana nazo ngqo, kulonyaka naseminyakeni ezayo.

Compatriots,

When freedom was attained in 1994, South Africa inherited a problem of structural unemployment which goes back to the 1970s. Employment continued to deteriorate in the 1990s and the early 2000s due to slow growth and declining employment in gold mining and agriculture.

Although jobs grew rapidly during the boom of 2003 to 2008, unemployment did not fall below 20%.

Employment received another setback in the recession of 2009.

Fortunately, Government entered the 2008-2009 recession with healthy public finances, and a comparatively low level of debt.

This allowed for a flexible response to deteriorating economic conditions.

For example, we increased spending on social security and on infrastructure development to stimulate the economy, mainly through the 2010 FIFA Soccer World Cup build programme.

Informed by some of these difficulties and the need to move away from piecemeal planning, we took a decision in 2009 to establish the National Planning Commission and asked them to produce a national development plan for the country, informed by the Constitution of the Republic.

The Commission released the first draft of the National Development Plan for consideration, which looks at where we want to be in 20 years’ time.

The Plan also directly addresses the elimination of poverty and inequality as critical points that must be attended to.

The solution for the country therefore, is higher growth and job creation to reduce and ultimately eradicate poverty and inequality.

As a developmental state that is located at the centre of a mixed economy, we see our role as being to lead and guide the economy and to intervene in the interest of the poor, given the history of our country.

Informed by this responsibility, in2010 we launched the New Growth Path framework and identified our job drivers as infrastructure development, tourism, agriculture, mining, manufacturing and the green economy.

We declared 2011 the year of job creation, and mobilised our social partners, namely business, labour and the community sector, to work with us in implementing the New Growth Path.

The results are encouraging, although we are not out of the woods yet, given the global economic situation.

The fourth quarter figures released on Tuesday, indicate that the rate of unemployment has come down from twenty-five percent to 23.9% as a result of new jobs.

During 2011, a total of 365 000 people were employed. This is the country’s best performance since the recession of 2008.

What is also important is that all the new jobs are in the formal sector of the economy, in sectors such as mining, transport, community services and trade to name a few.

There are two main things that we did right in 2011 which are contributing to this joint success.

Firstly, we mainstreamed job creation in every government entity including state owned enterprises.

Secondly, we strengthened social dialogue and cooperation between government, business and the community sector.

The Accords, signed by government, business and labour on procurement, skills development, basic education, and the green economy, confirm our common purpose and determination to build this country.

Government alone cannot solve the challenges faced by the country, but working together, solutions are possible.

Compatriots,

Let me take this opportunity to report back on the undertakings made in the SONA last year.

The Job Fund which we announced last year began operating in June. Over 2 500 applications were received in the first round. Project allocations of over one billion rand have been committed.

We had also announced 20 billion rand worth of incentives under Section 12(i) of the Income Tax Act, designed to support new industrial projects and manufacturing, and seven projects with an investment value of 8,4 billion rand were approved.

The procurement regulations empowering the Department of Trade and Industry to designate specific industries where local content is prescribed came into effect in December.

The sectors include clothing textiles, canned vegetables, leather and footwear.

Progress has also been made in amalgamating small business institutions, and a new entity will be launched this year.

We had announced 10 billion rand to be set aside by the IDC for job creation.

To date, about one point five billion rand was approved for 60 companies to promote job creation.

Compatriots and friends,

The mining industry, one of the job drivers in the New Growth Path, plays a critical role in the socio-economic development of the country.

As part of addressing the triple challenge of poverty, inequality and unemployment, government has developed a beneficiation strategy, which seeks to provide opportunities in the downstream part of the minerals sector.

We remain committed to the creation of a favourable and globally competitive mining sector, and to promote the industry to attract investment and achieve both industrial growth and much-needed transformation.

Honourable Speaker,

Honourable Chairperson of the NCOP,

The work done last year indicates that if we continue to grow reasonably well, we will begin to write a new story about South Africa—the story of how, working together, we drove back unemployment and reduced economic inequality and poverty.

It is beginning to look possible.

We must not lose this momentum.

For the year 2012 and beyond, we invite the nation to join government in a massive infrastructure development drive.

Baba Somlomo noSihlalo,

Sizoqala umkhankaso omkhulu wokwakha izingqalazizinda ezweni lonke. Lokhu kuzophakamisa izinga lomnotho, futhi kuveze amathuba emisebenzi.

Compatriots,

We will use the project management expertise gained during the 2010 FIFA Soccer World Cup to make this project a success.

The infrastructure plan will be driven and overseen by the Presidential Infrastructure Coordinating Commission, (PICC), which was established in September, bringing together Ministers, Premiers and Metro Mayors under the leadership of the President and the Deputy President.

The PICC has identified and developed projects and infrastructure initiatives from state-owned enterprises as well as national, provincial and local government departments.

These have been clustered, sequenced and prioritised into a pipeline of strategic integrated projects.

We have chosen five major geographically-focussed programmes, as well as projects focusing on health and basic education infrastructure, information and communication technologies and regional integration.

The projects are as follows;

Firstly, we plan to develop and integrate rail, road and water infrastructure, centred around two main areas in Limpopo: the Waterberg in the Western part of the province and Steelpoort in the eastern part.

These efforts are intended to unlock the enormous mineral belt of coal, platinum, palladium, chrome and other minerals, in order to facilitate increased mining as well as stepped-up beneficiation of minerals.

Using the developments in Limpopo as a base, we will expand rail transport in Mpumalanga, connecting coalfields to power stations.

This will enable us to decisively shift from road to rail in the transportation of coal, which has caused a deterioration of the roads in Mpumalanga.

The eastern parts of the North West province will also benefit from the greater focus on infrastructure connected to mining and mineral beneficiation.

Secondly, we will improve the movement of goods and economic integration through a Durban-Free State-Gauteng logistics and industrial corridor.

This project is intended to connect the major economic centres of Gauteng and Durban/Pinetown, and at the same time, connect these centres with improved export capacity through our sea-ports.

In this regard, I am pleased to announce the Market Demand Strategy of Transnet, which entails an investment, over the next seven years, of three hundred billion rand in capital projects.

Of this amount, 200 billion rand is allocated to rail projects and the majority of the balance, to projects in the ports.

Amongst the list of planned projects, is the expansion of the Iron Ore Export channel from 60 million tons per annum to 82 million tons per annum.

It also includes various improvements to the Durban-Gauteng Rail corridor and the phased development of a new 16 million tons per annum manganese export channel through the Port of Ngqura in Nelson Mandela Bay.

The Market Demand Strategy will result in the creation of more jobs in the South African economy, as well as increased localization and Black Economic Empowerment. It will also position South Africa as a regional trans-shipment hub for Sub-Saharan Africa and deliver on NEPAD’s regional integration agenda.

We have also been looking at the necessity of reducing port charges, as part of reducing the costs of doing business. The issue of high port charges was one of those raised sharply by the automotive sector in Port Elizabeth and Uitenhage during my performance monitoring visit to the sector last year.

In this regard, I am pleased to announce that the Port Regulator and Transnet have agreed to an arrangement which will result in exporters of manufactured goods, receiving a significant decrease in port charges, during the coming year, equal to about 1 billion rand in total.

Thirdly, we will develop a major new South Eastern node that will improve the industrial and agricultural development and export capacity of the Eastern Cape region, and expand the province’s economic and logistics linkages with the Northern Cape and KwaZulu-Natal.

In the former Transkei part of the Eastern Cape, we are committed to building a dam using the Umzimvubu River as the source, in order to expand agricultural production.

In addition, the implementation of the Mthatha revitalization project, which is a Presidential special project, is proceeding very well.

Work is at an advanced stage to improve water, sanitation, electricity, roads, human settlements, airport development and institutional and governance issues.

Fourthly, in the North West, we will expand the roll-out of water, roads, rail and electricity infrastructure. Ten priority roads will be upgraded.

Fifthly, we see enormous potential along the west coast of the country and need to improve infrastructure to unlock this potential.

Our plans include the expansion of the iron-ore rail line between Sishen in Northern Cape and Saldanha Bay in the Western Cape, which will create large numbers of jobs in both provinces.

The iron-ore capacity on the transport-side will increase capacity to 100 million tons per annum.

This will allow for the expansion of iron-ore mining over the next decade to feed the developing world’s growing investment in infrastructure and industrial activities.

Compatriots,

We have also identified critical social infrastructure projects. These include projects aimed at laying the basis for the National Health Insurance system such as the refurbishment of hospitals and nurses’ homes.

A total of 300 million rand has been allocated for the preparatory work towards building new universities in Mpumalanga and Northern Cape.

Another infrastructure project with great potential is South Africa’s bid to host the Square Kilometre Array radio telescope in partnership with eight other African countries. The winning bid will be announced next month. We urge you to support the country’s bid.

Lastly, our infrastructure work extends beyond our borders. South Africa champions the North-South Road and Rail Corridor, which is part of the African Union’s NEPAD Presidential Infrastructure Championing initiative.

Work in this regard, comprises various inter-related projects that cover roads and railways, border crossings, energy and information and communication technologies.

Compatriots,

The massive investment in infrastructure must leave more than just power stations, rail-lines, dams and roads. It must industrialise the country, generate skills and boost much needed job creation.

I will convene a Presidential infrastructure summit to discuss the implementation of the plan with potential investors and social partners.

Honourable Speaker, Honourable Chairperson of the NCOP,

I would now like to discuss matters relating to the extension of basic services, addressing inequalities, peace and security and social cohesion.

I received a lot of valuable correspondence in the run-up to this SONA. Such interaction enables us keep in touch with our people and their needs.

I received an email relating to a housing problem from Mzukisi Mali, a public servant from the Fingo area in Grahamstown. He wrote;

“In 1994 my income was too high to get an RDP and too low to get a

bond, this continued until to date.I have three children and my

wife is not working.

“When I apply for an RDP I am told that I do not qualify and cannot get a bond because I am risky to the banks…’’

Fortunately we have gone some way to address the problem facing Mr Mali and many others.

In 2010, we announced a one billion rand guarantee fund to promote access to loans.

We are pleased to report that this fund will start its operations in April, managed by the National Housing Finance Corporation. The scheme will enable the Banks to lend to people who are in a similar situation as Mr Mali.

In addition, from April, people earning between three thousand five hundred rand and

R 15 000, will be able to obtain a subsidy of up to R83 000 from Provinces, to enable them to obtain housing finance from an accredited Bank.

Ungalilahli ithemba Mr Mali nabaningi abanye, kuzolunga ngenxa yalomxhaso ozotholakala kohulumeni bezifundazwe, kanye nalomshwalense omusha ozokwenza kubelula kumabhange ukuthi aniboleke imali.

Compatriots,

There is an ongoing concern from business and communities about high electricity costs.

I have asked Eskom to seek options on how the price increase requirement may be reduced over the next few years, in support of economic growth and job creation and give me proposals for consideration.

We need an electricity price path which will ensure that Eskom and the industry remain financially viable and sustainable, but which remains affordable especially for the poor.

However to achieve sustainability, a pact will be required with all South Africans – including business, labour, municipalities, communities and all customers and suppliers.

We must save electricity.

For the next two years, until the Medupi and Kusile power stations come into operation, the electricity system will be very tight.

We should all play our part in order to avoid load shedding.

To increase energy capacity we will continue searching for renewable energy sources, especially solar electricity and biofuels as we implement the Green Economy Accord with economic stakeholders.

To date we have installed more than 220 000 solar geysers nationwide.

The Government target is one million solar geysers by 2014-2015.

Honourable Members,

Compatriots,

Government continues to extend access to basic water supply. However, clearly, water access is still a challenge in some areas.

An email from Mmatsheko Pine from Hammanskraal is a case in point.

The writer says; “There is the area called Ngobi near Hammanskraal, under Moretele Local Municipality, the people residing in the area are now old, aged and mostly sick.

“The area has been without water for the past two years. People rely on rain to harvest water.

There are water pipes and machines installed but the problem is said to be pressure to pump water. Could your office kindly assist with the powers that be?”.

I have asked the Minister of Water and Environmental Affairs to investigate this matter with a view to finding an urgent solution.

Water expansion has been delayed in some parts of the country due to a lack of infrastructure.This is being attended to. For example, five new water augmentation schemes are on schedule.

These are Olifants River Water Resource in Steelpoort in Limpopo Province, the Vaal River Eastern Sub-System in Secunda in Mpumalanga, Komati Water Augmentation Scheme in Nkangala in Mpumalanga, the raising of Hazelmere dam in KwaZulu-Natal and the Clan William Dam in Clan William in the Western Cape. In addition, nine out of 25 dams have been rehabilitated.

In relation to the announcements we made during the United Nations COP 17 climate change conference, an amount of 248 million rand is to be invested over next two years to deal with the issue of Acid Mine Drainage in Witwatersrand.

Let me take this opportunity to congratulate the inter-ministerial committee on COP 17 for making the conference a huge success

The final outcome of COP 17 was historic and precedent setting, ranking with the 1997 conference where the Kyoto Protocol was adopted.

Building on the success of COP 17, South Africa will participate in the Rio plus 20 Summit in Brazil, which marks the 10th anniversary of the World Summit on Sustainable Development.

Honourable Speaker and Honourable Chairperson,

Our intensive focus on education is paying off.

We are pleased that the matric percentage pass is on an upward trend.We congratulate the teachers, learners, parents and the communities for the efforts.

We will continue to invest in producing more teachers who can teach mathematics, science and African languages.

Compatriots,

Our call to teachers to be in school, in class, on time, teaching for at least seven hours a day remains pivotal to success. We thank the teacher unions for supporting this campaign.

A major achievement is the doubling ofGrade R enrolment, from 300 000 in 2003 to 705 000 in 2011. We appear poised to meet our target of 100% coverage for Grade R by 2014.

To fight poverty and inequality and to keep learners in school, over 8 million learners attend no-fee schools while over eight million benefit from government’s school feeding scheme.

Last year, national government instituted a Section 100 (1)(b) intervention in the Eastern Cape, to assist the department of education to improve the delivery of education.

Problems included non-delivery of textbooks, non-payment of scholar transport, excess teachers and a general poor culture of learning and teaching.

The implementation of the intervention will continue and we are working well with the province in this regard. Sizimisele ukwenza immeko yemfundo ibengcono eMpuma Koloni. We call on all stakeholders to work with us to make this turnaround a success.

Compatriots,

During the 2010 FIFA Soccer World Cup, we resolved that the South African legacy would be to promote universal access to education.

School attendance in the country is now close to 100 percent for the compulsory band, 7-15 years of age.But we remain concerned by the report of the General Household Survey in 2010 that just over 120 000 children in that band are out of school.

Grade 10 drop outs appear to be a problem, particularly in the rural and farm areas of the Western Cape.

The national Government will work closely with the Western Cape government, to trace these learners and provide support so that they do not lose their future.

With regards to higher education, we are exceeding targets. Close to 14 000 learners were placed in workplace learning opportunities over the past year, and over 11 000 artisans have completed their trade tests.

Siyajabula ukubona ukuthi liyanda inani lentsha efunda amakhono kulamakolishi abizwa phecelezi ngama-Further Education and Training Colleges.

Siyaninxusa bazali ukuthi nigqugquzele izingane zifunde kulamakolishi. Akufanele zicabange ukuthi imisebenzi ifundelwa emanyuvesi kuphela.

Siyawadinga amakhono atholakala kulamakolishi.

To expand access to tertiary education as per our announcement last year,200 million rand was utilised to assist 25 000 students to pay off their debts to institutions of higher learning.

Compatriots and friends,

We congratulate the health sector as well as the South African National Aids Council led by the Deputy President of the Republic on the success of the HIV and AIDS programme.

While we are doing well with regards to treatment and the prevention of mother to child transmission, general prevention efforts must also be accelerated.

We also wish to encourage South Africans to live healthier lives to reduce the impact of non-communicable diseases such as diabetes, heart disease and hypertension.

Compatriots and friends,

The year 2013 will mark the centenary of the Natives Land Act of 1913, which took away 87 percent of the land from the African people.

The Constitution requires that the State must realise the restitution of land rights for those who were dispossessed by the 1913 law.

We have only distributed 8% of the 30% target of land redistribution for 2014 that we set ourselves. The process is slow and tedious and there is general agreement that the willing buyer- willing seller option has not been the best way to address this question.

That is why have introduced a new policy framework, the Green Paper on Land Reform.

We urge the public to participate in the process of improving land redistribution and reform to reverse the impact of the 1913 Act.

Honourable Speaker,

Compatriots,

On economic transformation, we are amending the Broad-Based Black Economic Empowerment Act. The amendments amongst other things, establish a statutory Commission that would deal with non-compliance and circumvention.

The proposed law will also criminalise fronting and other forms of empowerment misrepresentation.

With regards to issues of disability, we have directed all government departments to ensure that we meet the target we set several years ago of having 2% of people employed in the Public Service to be disabled persons.

We are also working towards a

Women Empowerment and Gender Equality Bill, to promote compliance in both government and the private sector and to provide for sanctions in the case of non-compliance.

Meanwhile, the NEDLAC Process on the Atypical Forms of Employment and Labour Broking has now been completed.

Government seeks to eliminate all forms of abusive practices inherent in labour broking, in order to strengthen the protection of vulnerable workers. We trust that common ground will be found this year on this matter.

Compatriots,

In 2009 we made a commitment to accelerate the fight against crime and corruption.

The crime statistics for the period 2010/2011 indicate that our country witnessed a decline of 5% in the number of reported serious crimes compared to the previous year.

We will however, not become complacent. We are continuing to implement our programmes of making South Africans feel safe and to be safe.

We also continue to improve the performance of the state in various ways, including the fight against corruption.

The Multi-Agency Working Group on procurement led by the National Treasury, SARS and the Financial Intelligence Centre is reviewing the entire state procurement system to ensure better value for money from state spending.

Initiatives include the vetting of supply chain personnel in government departments.

To further improve security, the Department of Home Affairs, signed a Memorandum of Understanding with the banking industry, to roll out the online fingerprint verification system in all participating banks, to assist in fraud prevention and detection.

Compatriots and friends,

We are working with various provinces to improve governance, systems and administration.

These include Gauteng to improve health service delivery, the Free State on transport and roads and Limpopo to improve governance and financial administration in five departments, including the provincial treasury.

We welcome the launch of Corruption Watch by COSATU, as well as the recent agreement between government and business to implement anti-corruption programmes.

These interventions will complement the work of government in combating corruption.

Compatriots and friends,

As part of promoting social cohesion, this year we will undertake and continue many heritage projects.

Museums and centres to be unveiled will include the 1980 Matola Raid museum in Maputo, the Ncome museum in KwaZulu-Natal, phase 2 of the Freedom Park museum and the Steve Biko heritage centre in Ginsberg in King Williamstown.

We have also prioritised thehomes and graves of former ANC Presidents and other national heroes including Thomas Maphikela, Lillian Ngoyi, Walter and Albertina Sisulu, Griffiths and Victoria Mxenge, Robert Sobukwe and others.

Memorial sites to be prioritised include that of the Pondo Revolt, the sites of the Frontier Wars, the 1913 revolt by African women in the Free State, the 1957 anti-pass revolt by women in Zeerust, the Rocklands Civic Centre in Mitchells Plein where the United Democratic Front was formed and the Gugulethu Seven monument in Cape Town.

We are also in the process of purchasing and rehabilitating the Winnie Mandela house in Brandfort, the Dr. Moroka house in Thaba Nchu and the Bram Fischer house in Westdene.

Additional projects include the launch of the Dube Tradeport and the unveiling of the statue of John Dube at King Shaka International Airport next month and renaming the Kings House presidential residence in Durban after Dr Dube.

The Presidential Guest House in Pretoria will be named after Mr Sefako Makgatho and the Diplomatic Guest House in Pretoria after the late prolific diplomat, Mr Johnny Makatini.

Government will also table the National Traditional Affairs Bill which makes provision for the recognition of the Khoi-San communities, their leadership and structures.

It is important to remember that the Khoi-San people were the most brutalised by colonialists who tried to make them extinct, and undermined their language and identity. As a free and democratic South Africa today, we cannot ignore to correct the past.

I discussed this matter extensively with the Khoi-San community when I met with them in Cape Town last year and we agreed to work together to redress the injustices of the past.

Compatriots,

Next year 2013, the seat of government, the majestic Union Buildings, will mark 100 years of existence and planning will start this year to mark the centenary.

Fellow South Africans,

We must perform better in sports this year! Our star performer, Oscar Pistorius has set the standard for the year by winning the 2012 Laureus Sportsperson of the Year with a Disability Award.Congratulations for this achievement.

We also congratulate the national women’s soccer team Banyana Banyana for qualifying for the London Olympics for the first time. With our support, they will do well.

We have been given the honour to host the Africa Cup of Nations next year, replacing Libya as they are unable to do so.

Compatriots,

Allow me to use this opportunity to extend heartiest congratulations and good wishes to Mama Rebecca Kotane, wife of former ANC treasurer general, Moses Kotane and SACP general secretary, who will turn 100 years old on Sunday the 12th of February.

The Young Men’s Guild of the Methodist Church of Southern Africa, Amadodana aseWesile, is also celebrating 100 years this year.

Another centenary celebration is that of Omama Besililo of the United Congregational Church of South Africa.

We wish them all successful celebrations.

Compatriots,

We have outlined a busy infrastructure implementation programme for now until 2014 and beyond.

I would like to appeal to all our people to join hands as they always do, as we deal decisively with the triple challenges of unemployment, poverty and inequality. Nobody will do this for us, it is in our hands. And we are all equal to the task.

As we get back to work tomorrow, let us internalise the words of ANC Women’s League founding president Charlotte Maxeke who said in her Presidential address to the National Council of African Women.

“This work is not for yourselves — kill that spirit of self, and do not live above your people, but live with them. If you can rise, bring someone with you’’.

I thank you.

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Letter on: Article on Manny vs Floyd in city? Friday,January 13th. (Cape Times)

Dear Editor

The lead article in today’s Cape Times, Manny vs Floyd in City? (Cape Times, January 13), refers to the event as a “dream fight” for the Cape Town Stadium. The article lauds the two boxers, Floyd Mayweather Jr and Manny Pacquia Friday as “the world’s top two glamour fighters” and Grant Pascoe, Mayco member for Cape Town tourism, events and marketing, is quoted as remarking: “It would be a major coup for the city should the fight materialize as it would be major exposure for the city.” The article also reports that Floyd Mayweather Jr is to serve a 90-day sentence for domestic violence in June this year.

We ask, why is it that the Cape Times, the City of Cape Town and the general public think it is acceptable to valorize a man convicted of domestic violence? Why should we want an abuser in a boxing ring in South Africa, and why should we treat him as a “glamour fighter,” thereby holding him up as a role model for young people?

In December every year, during the 16 Days of Activism Against Gender Violence campaign, we wring our hands and politicians clamour to be seen to be making grand statements about what needs to be done to prevent violence against women, but then rapidly go back to ignoring and/or trivializing the problem.

The Cape Times’ report normalizes domestic violence, subordinates it in importance to the glamour of a contact sport and belittles domestic violence survivors’ experiences. It seems the very least that we can do, if we are serious about combating violence against women, is to say no thanks to Mr Floyd Mayweather Jr and his ilk, and to call on the Mayco to stop this glorification of an abuser.

Phyllis Orner and Leslie London

Observatory

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Grahamstown Police brutality *happened a few hrs ago*

URGENT from Unemployed
People’s Movement and Students for Social Justice:

Ayanda Kota Beaten up by police and arrested Unemployed People’s Movement Press Statement Ayanda Kota Assaulted in the Grahamstown Police Station – Under Arrest

About 40 minutes ago Ayanda Kota was seriously assaulted by a group of police officers in the Grahamstown police station. He was dragged, bleeding from at least two wounds, and with his clothes torn from his body, to the holding cells.

For some months he has been under open police surveillance and at times has been threatened and insulted by the police. The police have been watching his mother’s house and have searched it looking for him. Their behaviour has been very rude, threatening and aggressive.

Today Ayanda was summoned to the police station. He popped out of a meeting organised by Masifunde and the Rural People’s Movement with his six month old son and a comrade. He was called to the police station because a lecturer at Rhodes, who has publicly engaged in strange and aggressive behaviour on a number of occasions, laid a charge of theft against Ayanda after he misplaced a book that she had leant him. Ayanda did not steal the book – he mislaid it. This is something that happens all the time to people that share books. Perhaps another comrade picked it up and forget to return it. Perhaps it was left in a taxi. These things happen. Ayanda has made it quite clear that he is willing to replace the book.
As soon as Ayanda met Constable Zulu, the officer that had summoned him to the station, Constable Zulu said that he was taking him straight to the cells. Ayanda said that he wanted to show the officer text messages on his cellphone to the lecturer at Rhodes offering to replace the book but the officer insisted that Ayanda was going straight to the cells. Ayanda then asked to be able to take his son home first. At that point Constable Zulu lunged at Ayanda very aggressively. Ayanda raised his arm in an instinctive gesture of defence following which Zulu began to assault him with blows to the head. Three or four other police offices then joined the assault. Ayanda was on the floor for most of the duration of the assault which went on for some minutes. This happened in the presence of his six year old son who of course was traumatised.

The assault was brutal, entirely unnecessary and accompanied by, in Constable Zulu’s case, an obvious sadistic delight. A police secretary who witnessed it all burst into tears.One of the police officers made a sarcastic remark about Ayanda being the newsmaker of the year in the local paper. This was plainly no ordinary arrest.

This is a bogus charge that most certainly does not justify arrest. There was nothing to justify the assault. This is a simple attempt on the part of the police to misuse a ridiculous charge laid by someone well known for strange and erratic behaviour in order to intimidate an activist and the movement that he represents.
The police are not here to protect society. They are here to protect the ruling party from popular dissent. This is not an isolated incident. Poor people’s movements have been constantly subject to this sort of behaviour at the hands of the police for many years now.

UPM will try to visit Ayanda in the holding cells and will mobilise to get him medical attention tonight and to support him in court tomorrow. The movement is currently looking for a lawyer. Of course civil and criminal charges will be laid against Constable Zulu and all the other police officers who joined this assault.

For more information please contact Xola Mali on
+27(0)72 299 5253

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SPORT & RECREATION CO-ORDINATOR: YOUTH CENTRE IN MASIPHUMELELE

The Desmond Tutu HIV Foundation (DTHF) is a registered non-profit organisation focused on the pursuit of excellence in research, treatment and prevention of HIV and related infections inSouthern Africa. 

 

We invite applications for a 1 year contract post as the Sports & Recreation Co-ordinator at the Youth Centre in Masiphumelele

 

PURPOSE OF THE POSITION

 

The Recreation Co-ordinator is responsible for planning, implementation & co-ordination of Sports & Recreational programmes & management of all recreation facilities at the Youth Centre  in order to provide clean and safe opportunities for sport and recreation and promote a healthy lifestyle for all participating young people.

 

Requirements:

  • Minimum Grade 12 education
  • Relevant Sport & Recreational Management qualification
  • 3 years’ experience in co-ordinating sports, drama & music programmes for young people
  • Lateral creative thinking & detail orientated
  • Supervisory, decision making and analytical skills
  • Willingness to take on new responsibilities & challenges
  • Passion to work with youth and provide a youth friendly environment
  • Reliability, dependability and a well-developed work ethic
  • Valid driver’s license & PDP

 

Responsibilities:

  • Develop, plan and implement age & gender specific sports, drama & music programmes at the Youth Centre
  • Co-ordinate Partner facilitators & volunteers to run relevant sports & recreation programmes
  • Find and foster relationships with new local partners, facilitators and volunteers
  • Manage maintenance of  sports & recreation facilities and equipment
  • Co-ordinate sporting competitions and recreational field trips
  • Promote sport & recreation programmes in the local communities
  • Co-ordinate programmes with Education Co-ordinator & Medical Research Co-ordinator
  • Maintain discipline and safe healthy practice by participants
  • Perform other duties as assigned

 

 

If you meet the criteria as set out above and are interested in the position please send a covering letter and concise CV (no certificates) which includes contact details of 2 referees to Jobs@hiv-research.org.za or fax  021 633 0182 (indicating the name of the position that you apply for). You can also drop them off at the Desmond Tutu HIV Foundation youth centre in Guinea Fowl Road opposite Masiphumelele High school by 20 January 2012.

 

NB: only short-listed candidates will be contacted. We are committed to equity in our employment practices. It is our intention to appoint individuals with the aim of meeting our equity objectives. We reserve the right not to appoint if no suitable candidates are identified. If you have not heard from us within two weeks after the closing date please consider you application as unsuccessful.

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Open Letter to Black Grade 12s from BLACKWASH

The statement below was first published in the City Press in December 2009. The issues it raises are still very relevant.

Hi Black grade 12s

Look, there is a very big chance you will fail the 2009 Grade 12 examinations. Each year, thousands of black learners who write these exams do not make it and an even bigger number never even get to Grade 11 or 10. A large percentage of those who do pass, do not have good enough results to go to university or simply cannot afford the fees. So there is clearly a problem, yet each year prayer meetings are held and ‘good luck’ messages are sent in the hope that all matric students will pass, but none of these confront the simple reality that black learners in this country are likely to fail. This is a hard truth we can no longer ignore, in the same way that we cannot ignore the fact that the majority of white learners are guaranteed to pass.

But why is this the case? Why is it that white learners can be sure of passing Grade 12 while most blacks who are in township schools are more likely to fail? Is it because white learners are naturally smarter and harder working than black learners? Are the blacks in Model C schools perhaps cleverer than blacks in township schools since they also pass well and have better chances of going to university to further their studies. Or maybe this has nothing to do with individual blacks and individual whites at all, but with how the South African system favours whites to blacks in all situations. But what exactly do we mean by this?

We all know that during apartheid blacks had to study under Bantu Education which was an inferior form of education compared to what whites got. Black people were oppressed in all forms of life and Bantu Education was just one of the many ways of ensuring that they would remain oppressed and work for whites. Under apartheid, black schools had bad text books or none at all, no stationary or libraries. The schools were also overcrowded because the white government simply refused to build more schools for blacks while white classes were small enough for each learner to get the necessary attention they needed. Black schools also didn’t have enough sports facilities or extra mural activities while white schools provided activities such as chess, music lessons, swimming, debating, drama, art classes etc etc. All of these things cost money to provide and the white government put more money into white schools than into black schools as a way of oppressing blacks. And this money they used to build better schools in white areas was mostly from gold, diamond and platinum mines which black people worked on while earning peanuts. In other words, black people worked as slaves on farms and mines so that white kids could get a good education. And the white government was right to look after white learners because it was in power at the time; in fact it would have been foolish not to do so. We must ask ourselves though why these conditions persist even after a black government has been put in power.

In the last fifteen years of democracy, nothing much has changed. Township schools are still getting a type of Bantu Education that results in very low pass rates amongst black learners. (Even if this education is given all sorts of names like OBE, it remains Bantu Education for blacks). Most of the teachers in township schools were also educated under apartheid and do not have the necessary skills that white teachers have. And so the reality is that even though we now live at a time when blacks and whites are supposed to get equal opportunities, blacks who are in township schools have little opportunities or skills. For example, a Grade 7 learner in a white school is more likely to have better mathematics and literacy skills than a black learner in matric. So black learners fail Grade 12 because they have been systematically underprepared from Grade 1. Even those who manage to pass and go to university often fail their first year because they don’t have good reading and writing skills. This means that out of all the Grade 12 learners who wrote the 2009 exams, a very small number of black learners have a chance to get good jobs in three to four years time. Many of them will join the unemployed blacks who are trapped in townships and struggling to make ends meet.

But each year the Department of Education promises that things will get better and that they need more time. While young people wait for things to get better the country builds expensive stadiums that we don’t need and the children of our government ministers go to fancy schools where they are guaranteed to pass.

In countries where the government is serious about making sure that blacks are not oppressed, education is always made a priority. In Haiti, for example, the pro-black government of President Aristide, reduced illiteracy levels by a large percentage in less that four years.

In Burkina Faso too, Thomas Sankara was president for only four years before he was killed but he had managed to put in very good education programmes for the black poor and was very unpopular with the white world for doing this. Both of these countries are much smaller and poorer than South Africa but their leaders were revolutionaries who wanted to see the end of white power.

After this year’s results are announced many individual black learners in rural and township schools who did exceptionally well will be praised for their hard work and dedication. We will be told by the newspapers that all black learners in townships who work hard can also do well. But this is a lie. The majority of white learners pass well whether they work hard or not and black learners also fail either way. If you fail you may blame yourself, see it as a personal failure and be depressed as a result even though you have been set-up to fail by forces beyond your control. Some parents might also think they are personally responsible for their kids’ bad results even though the responsibility lies with our government which continues to make life a breeze for whites and a living hell for blacks.

As the revolutionary leader Che Guevara said, “An uneducated people is easy to deceive”. We must not allow ourselves to be deceived into believing that this is the best that we deserve and demand a better education. The youth who fought the Apartheid government in 1976 didn’t die for things to be like this. Its time to take action. Vuka Darkie!

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Open Letter to Black Grade 12s from BLACKWASH

The statement below was first published in the City Press in December 2009. The issues it raises are still very relevant.

Hi Black grade 12s

Look, there is a very big chance you will fail the 2009 Grade 12 examinations. Each year, thousands of black learners who write these exams do not make it and an even bigger number never even get to Grade 11 or 10. A large percentage of those who do pass, do not have good enough results to go to university or simply cannot afford the fees. So there is clearly a problem, yet each year prayer meetings are held and ‘good luck’ messages are sent in the hope that all matric students will pass, but none of these confront the simple reality that black learners in this country are likely to fail. This is a hard truth we can no longer ignore, in the same way that we cannot ignore the fact that the majority of white learners are guaranteed to pass.

But why is this the case? Why is it that white learners can be sure of passing Grade 12 while most blacks who are in township schools are more likely to fail? Is it because white learners are naturally smarter and harder working than black learners? Are the blacks in Model C schools perhaps cleverer than blacks in township schools since they also pass well and have better chances of going to university to further their studies. Or maybe this has nothing to do with individual blacks and individual whites at all, but with how the South African system favours whites to blacks in all situations. But what exactly do we mean by this?

We all know that during apartheid blacks had to study under Bantu Education which was an inferior form of education compared to what whites got. Black people were oppressed in all forms of life and Bantu Education was just one of the many ways of ensuring that they would remain oppressed and work for whites. Under apartheid, black schools had bad text books or none at all, no stationary or libraries. The schools were also overcrowded because the white government simply refused to build more schools for blacks while white classes were small enough for each learner to get the necessary attention they needed. Black schools also didn’t have enough sports facilities or extra mural activities while white schools provided activities such as chess, music lessons, swimming, debating, drama, art classes etc etc. All of these things cost money to provide and the white government put more money into white schools than into black schools as a way of oppressing blacks. And this money they used to build better schools in white areas was mostly from gold, diamond and platinum mines which black people worked on while earning peanuts. In other words, black people worked as slaves on farms and mines so that white kids could get a good education. And the white government was right to look after white learners because it was in power at the time; in fact it would have been foolish not to do so. We must ask ourselves though why these conditions persist even after a black government has been put in power.

In the last fifteen years of democracy, nothing much has changed. Township schools are still getting a type of Bantu Education that results in very low pass rates amongst black learners. (Even if this education is given all sorts of names like OBE, it remains Bantu Education for blacks). Most of the teachers in township schools were also educated under apartheid and do not have the necessary skills that white teachers have. And so the reality is that even though we now live at a time when blacks and whites are supposed to get equal opportunities, blacks who are in township schools have little opportunities or skills. For example, a Grade 7 learner in a white school is more likely to have better mathematics and literacy skills than a black learner in matric. So black learners fail Grade 12 because they have been systematically underprepared from Grade 1. Even those who manage to pass and go to university often fail their first year because they don’t have good reading and writing skills. This means that out of all the Grade 12 learners who wrote the 2009 exams, a very small number of black learners have a chance to get good jobs in three to four years time. Many of them will join the unemployed blacks who are trapped in townships and struggling to make ends meet.

But each year the Department of Education promises that things will get better and that they need more time. While young people wait for things to get better the country builds expensive stadiums that we don’t need and the children of our government ministers go to fancy schools where they are guaranteed to pass.

In countries where the government is serious about making sure that blacks are not oppressed, education is always made a priority. In Haiti, for example, the pro-black government of President Aristide, reduced illiteracy levels by a large percentage in less that four years.

In Burkina Faso too, Thomas Sankara was president for only four years before he was killed but he had managed to put in very good education programmes for the black poor and was very unpopular with the white world for doing this. Both of these countries are much smaller and poorer than South Africa but their leaders were revolutionaries who wanted to see the end of white power.

After this year’s results are announced many individual black learners in rural and township schools who did exceptionally well will be praised for their hard work and dedication. We will be told by the newspapers that all black learners in townships who work hard can also do well. But this is a lie. The majority of white learners pass well whether they work hard or not and black learners also fail either way. If you fail you may blame yourself, see it as a personal failure and be depressed as a result even though you have been set-up to fail by forces beyond your control. Some parents might also think they are personally responsible for their kids’ bad results even though the responsibility lies with our government which continues to make life a breeze for whites and a living hell for blacks.

As the revolutionary leader Che Guevara said, “An uneducated people is easy to deceive”. We must not allow ourselves to be deceived into believing that this is the best that we deserve and demand a better education. The youth who fought the Apartheid government in 1976 didn’t die for things to be like this. Its time to take action. Vuka Darkie!

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