Budget speech 2009/2010: Extract from Department of Economic Development and Tourism Speech (Vote 12)

Over the MTEF period an amount of R906-million has been provided to Vote 12, with a mandate to develop the economy. A provision of R276.4-million has been set aside for the current fiscal year.

We will spend the voted funds to:

• Develop our Industries and Economic Sectors
• Facilitate and recruit new investment
• Facilitate and recruit new trade opportunities
• Market the Western Cape as an exciting destination for tourism, and an exciting place to do business
• Develop the skills and increase the productivity of our workforce
• Enhance the global competitiveness of our firms and citizens
• Promote innovation
• Help citizens and investors to establish new businesses
• Help firms to grow and develop
• Assist municipalities to develop their local economies
• Empower our citizens to participate fully in a single, integrated economy
• Create jobs as a consequence of all of the above
• Undertake research
• Regulate the Liquor Industry
• Offer services to protect consumers.

The Trade and Sector Development Programme, which is one of two programmes dedicated entirely to developing economic sectors, has been allocated R53.5-million, which is 9.2 percent more than last year.

It deals directly with 9 sectors:

• The Oil and Gas Services and Support Industry
• Boatbuilding
• Information and Communications Technology
• Business Process Outsourcing
• Agri-Processing
• Tooling, Metals & Engineering
• Clothing, Textiles and Fashion
• Aquaculture
• Furniture

We will assist the Furniture and Aquaculture industries to establish sector bodies.

As a result of the overfishing of our waters, and global depletion in wild stocks, our Aquaculture industry has the potential to grow from being relatively small, supplying just 0.01% of the world's total production, to one which employs 44,000 people, and adds R2.5 billion to our economy. Last year for the first time, farmed fish supplied more produce to the world market that wild fish, and we cannot be left behind. The Western Cape, with our intervention, has the potential to supply 44% of the growing South African output, and so, in conjunction with the Ministers of Agriculture and Environmental Affairs, we will look at finding ways to promote this industry, while bearing its environmental and tourism impacts in mind. The department is putting R1.1-million into this initiative for the coming year, and this amount will likely grow in years to come.

Some R72.8-million, about 11.8 percent more than last year, has been set aside for the Tourism, Arts and Entertainment programme.

R38-million of this amount, has been earmarked for Cape Town Routes Unlimited, our tourism destination marketing organisation, in the run-up to the FIFA World Cup in 2010. This represents a more than 40 percent increase on last year's amount. Alderman Purchase and I will elaborate more on this later.

The biggest infrastructure development project on which we are engaged is the attempt to breathe life back into another tourism icon, the Outeniqua Choo Tjoe.

So far we have finalised feasibility studies for the commercialization of the George-Knysna and the George-Mossel Bay lines. In the next few days we will meet Transnet, the line operator, in an attempt to put together an attractive set of investment possibilities which we hope business and the local and affected tourism communities will take up together.

In order to fast track the development of the Commercial Arts & Entertainment Industries, R8.2-million has been set aside for this sector, part of which will co-fund Runway Studios.

This year's budget sets aside R81.5-million for skills development, enterprise development, local economic development and economic empowerment. This represents a 19 percent increase over last year's budget. Skills development has been allocated a R19.5-million share of this amount, an effective 38 percent up on last year's baseline figure.

Programmes will be financed in most sectors with amounts of R2.6- million earmarked for training in the Oil & Gas Services & Support Industry, R1.8-million in film and R1.1-million in Boatbuilding.

In addition, we have R12-million available to launch an exciting new intervention, called Work & Skills for Youth. Under this scheme, vouchers for R1000 per month will be rolled out to employers willing to intern youths at their place of business for a calendar year. At the end of the period, the employer should either give employment to the intern, or have ensured that he or she is employable elsewhere.

For this programme to succeed, we need the full commitment of the Private Sector to become involved. And so, in the next few weeks, I will be appealing publicly to Western Cape businesses to join this Government in creating such opportunities for our Youth.

I will also be calling on those who are willing to donate their time, to mentor and assist participants to set up and run their own businesses.

We are investigating the establishment of a project called the Legacy Mentorship Programme.This programme will be aimed at attracting people with skills who have time to join us in creating a thriving economy, while ensuring that they individually leave a legacy and know that their investment in the future of the targeted emerging economy doesn't go unnoticed.

Our enterprise development interventions are organised under the banner of the Real Enterprise Development or RED Initiative which has been allocated a budget of R38.2-million, 28 percent up from last year. Its foundation is the RED Door Offices, which cost a lot of money to set up. They were formed to provide a place where people with ideas can bring their dreams to, a place where their dreams can be transformed. At present, no follow up support is given to enterprises that are assisted by RED Door. When they fail, their operators feel a keen sense of disillusionment and disappointment, and this has to change: We need to add to it by creating a back end to take it further than it currently goes. We also need to link the Legacy Mentorship Programme into it, and link in an interface for venture capitalists to fund and grow good ideas.

Funding for local economic development, at R12.8-million, is nearly twice that of last year. This amount will fund direct assistance to:

1) Municipalities to refine their Integrated Development Plans

2) Die Plek Plan

3) The Rural Economic Assistance Fund.

This year's budget provides R20-million for the establishment of a new Liquor Board.

The new Liquor Act will bolster our efforts to rid the Province of the scourge of illegal and irresponsible trading in liquor by shutting down illegal outlets. We will shortly be embarking on an education campaign in this regard, in which, amongst other inititatives, brochures will be distributed in line with the one provided in your media pack.

The Act will be promulgated soon. At this time, we are in the process of changing a single clause, as requested by the National Minister of Trade and Industry, so that the new legislation is aligned to the Schools Act.

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