Special Adjustment Budget: Dept. of Economic Development and Tourism (Vote 12)

Note to Editors: The following speech was delivered by Minister David Maynier in the Western Cape Provincial Parliament on the 31 July.

1. Introduction

I am pleased today to table the adjusted budget for Vote 12: The Department of Economic Development and Tourism.

The Covid-19 pandemic is costing lives, and costing jobs, and we now estimate that we will lose 10.2% in Gross Value Add and 167 000 jobs this year in the Western Cape.

And so, the Department of Economic Development and Tourism has worked around the clock to support business, and back business, not just to open, but to open safely in the Western Cape.

2. Backing business

We don’t want businesses to just survive through this crisis, we also want to identify opportunities to do things better, to pivot and to adapt to do business in a more innovative way.

This means that we must continue to create an enabling environment for the private sector, and for the markets, so that we are can compete globally when we are ready to open again.

And so, where certain sectors have been able to open safely and responsibly, we have actively engaged with national government to allow them to open and have had considerable success with ecommerce, construction and now the tourism sector.

And we will continue to do so.

In fact, it is critical that a more common-sense approach is applied to restrictions that are preventing the liquor, hospitality and tourism sectors from opening in the Western Cape.

We have repeatedly called for the opening of these sectors, and so we welcome the announcement yesterday by Minister of Tourism, Mmamoloko Kubayi-Ngubane, that accommodation for leisure is now allowed for travel within provinces, and that the curfew has been relaxed to start at 10pm to allow restaurants an uninterrupted dinner service.

While these adjustments to the restrictions will help mitigate the impact of the Covid-19 pandemic on these sectors, they don’t go far enough.

Unless urgent action is taken by national government, we will find ourselves not only in a fight against the Covid-19 pandemic in South Africa, but also in a fight against an even more daunting unemployment pandemic in South Africa.

3. Supporting Business

We have taken a number of steps to support businesses through the Covid-19 pandemic:

We have:

• set up the Covid-19 Content Centre, with our partners at Wesgro and the City of Cape Town, to provide support and advice for businesses during the crisis [supportbusiness.co.za],

We have:

• launched the Covid-19 support finder which helps businesses navigate and access the many financial relief packages available to them [supportbusiness.co.za/covid-19-support-finder],

We have:

• launched the JUMP for entrepreneurs smartphone app which is an innovative one-stop-shop for existing and potential business owners in the Western Cape to get all the resources they need to start, scale and grow their companies [bizjump.co.za] 

And, we have:

• Through our Red Tape Reduction Unit, assists businesses to understand and navigate the many red tape related issues that have resulted from the Lockdown and Alert Level restrictions. [email redtape@westerncape.gov.za]

To date:

• Over 139 000 visitors have used our support business website;
• Over 2 639 queries have been dealt with by the Covid-19 Content Centre;
• Over 6 888 businesses have used our Covid-19 Support Finder; and
• Over 1 248 queries have been dealt with by the Red Tape Reduction Unit.

Last week we also announced the launch of our Tourism Product Development Fund which commits a total of R5 million to support new or existing tourism products and experiences in the Western Cape.

And this week we announced that the first of our five-part weekly webinar series for the tourism sector that aims to provide support and advice on opening safely during the Covid-19 pandemic.

The Tourism Product Development Fund and the tourism webinar series are just two examples of the many ways we are working hard to support the tourism sector, which has been hard-hit by the Covid-19 pandemic and is facing significant job losses in the Western Cape.

4. Opening safely

To ensure that businesses remain open and more people get back to work, it is important that all employers and employees adhere to the critical safety measures to stop the spread of Covid-19 in the workplace.

And so, we have made a number of valuable resources for employers and employees returning to work, which can be found on the Western Cape government’s website.

We have:

• made available health guidelines and information materials on preventing and managing Covid-19 infections in the workplace,

We have:

• assisted businesses to find Personal Protective Equipment (PPE) suppliers through our PPE marketplace, [supportbusiness.co.za/marketplace/]

We have:

• provided employees with Frequently Asked Questions that advise them on how to stay safe in the workplace, and what their employer needs to do to ensure their safety,

And, we have:

• provided employees and customers with the mechanism to report businesses that are not following the necessary health guidelines to stop the spread of the virus in the workplace. [coronavirus.westerncape.gov.za/covid-19-business-safety-complaint-form]

To date, we have received 1,325 complaints of business non-compliance via this online form, of which 960 (72%) have already been resolved.

And we have begun the process of rolling our 11 000 “Covid-19 Business Safety Kits” to small businesses and informal traders across the Western Cape.

5.Allocations and Adjustments

The Department of Economic Development and Tourism will continue to play a critical role in our fight against the Covid-19 pandemic as we help businesses to stay safe and stay open so we can save jobs and the economy in the Western Cape.

The main appropriation of R604,611 million has been adjusted down by R57,071 million to R547,540 million for the 2020/21 financial year.

I will not deal in detail with all the adjustments, which are set out in the First Adjusted Estimates of Provincial Expenditure 2020.

I do, however, believe it is important to highlight some of the initiatives that will help business to stay safe and to stay open in the fight against Covid-19 in the Western Cape.

We have allocated an additional amount of R14 million which includes:

• R3 million to provide professional occupational health and safety support to small businesses,
• R9 million to the SMME Covid-19 Relief and Recovery Fund to support small businesses, and
• R2 million for the screening of passengers at the George Airport.

Just this week in fact, we saw the first flight land at George Airport thanks to significant effort from our Department of Economic Development and Tourism who have worked hard, together with the Airports Company of South Africa (ACSA), the George Airport management, George Municipality and our provincial Department of Health, to put in place the necessary Covid-19 health screening for George Airport to open.

The George Airport is a critical transport link for business travellers working in the Garden Route District, and a critical enabler for the oil and gas sector which is engaged in exploratory drilling off the coast of Mossel Bay.

And so, this R2 million investment not only supports businesses in the Garden Route District, but saves jobs and saves the economy in the Western Cape.

To further support small businesses and the informal sector during the Covid-19 pandemic:

We have shifted:

• an additional R17.93 million to support small businesses who have been negatively impacted by Covid-19,

We have shifted

• an additional R2 million to a Covid-19 small business supplier developer programme which will support 20 small businesses manufacturing cloth masks, hand sanitisers and dispensers, or those providing disinfecting services so they can increase capacity, and

We have shifted

• an additional R2 million to a Community Economic Recovery Project to stimulate the informal sector economy by distributing electronic vouchers to 150 community kitchens who can then redeem them for essential goods at local spaza shops.

Our contribution to the Covid-19 response has been achieved by committing R72,57 million in baseline reductions:

• R4.58 million from efficiencies through cost containment,
• R2.08 million through the reprioritisation of expenditure,
• R35.14 million through the reprioritisation across Public Entity allocations and earmarked allocations 
• R30.74 million through the review of Compensation of Employees

6. Port of Cape Town

The efficient and effective performance of the Port of Cape Town is critical to economic recovery and growth for the Western Cape, however ongoing operational challenges have resulted in poor service levels that are impacting our economy in the Western Cape.

The Covid-19 pandemic has further aggravated the situation to such a degree that three major shipping lines cancelled calls to Cape Town or implemented a Cape Town congestion surcharge.

This required urgent action and interventions, and today I am pleased to confirm that through ongoing engagements between ourselves and the Transnet Port Terminals management, we have recent weeks seen some welcome developments.

Mr Velile Dube was appointed as the new CEO of Transnet Port Terminals; a crew of 20 staff members were brought in from the Port of Durban to temporarily assist and the Port of Cape Town received four new straddle cranes.

The result is that:

• the average crane moves per day has increased from 533 in the week of 25 May, to 1 661 last week; and
   
• the period for berthing of vessels at anchor has reduced from 20 days to 6 days.

The expectation is that two vessels will dock today after a waiting time of only two and one days respectively. This is a significant improvement, and if this performance is sustained during next week and beyond, would mean that the main shipping lines could possibly re-install calls to Cape Town by the second week of August.

There is still much work to be done, and I look forward to engaging with the Minister of Public Enterprises, Pravin Gordhan, and the Transnet management team to implement the permanent structural changes needed to make the Port of Cape Town a globally competitive port.

7. Conclusion

While much of our attention in the last few months has been on supporting businesses to open safely, we are now also looking to the future.

Work has begun on a provincial recovery plan, which includes economic recovery, and will be funded in the second adjustment budget, towards the end of 2020.

In the meantime, we will all continue to pull together, and we will continue to work together, over the coming days, and coming months, to save lives and to save livelihoods in South Africa.

In conclusion, I would like to thank the Head of Department, Solly Fourie, and the entire Department of Economic Development and Tourism team for their continued dedication, professionalism and tireless commitment to the people and the economy of the Western Cape.

I thank you.