Department of Economic Development and Tourism Budget Vote Speech

Speech by Minister of Finance, Economic Development and Tourism, Alan Winde, at the Provincial Legislature

Mr Speaker,
Premier Zille,
Cabinet colleagues and members of the Provincial Legislature,
Director-General and heads of departments,
Our partners in promoting good governance, in departments, in municipalities and in the AG’s office,
Residents of the Western Cape.

I am pleased to present the Western Cape Department of Economic Development and Tourism’s (DEDAT) budget for 2014/15.

DEDAT is the lead department in reaching the Western Cape’s first strategic objective: economic growth and job creation.

We are delivering on this mandate.

According to the latest employment figures from Statistics South Africa, the Western Cape created the most jobs in the country in the last quarter.

In the last quarter of 2013, 98 000 jobs were created in the Western Cape. This province showed the highest employment increases in the country towards the end of last year.

Despite our efforts, we know that one of the critical hindrances in growing the economy is red tape. Nationally, unnecessary regulations cost our economy R79 billion each year. Since establishing our Red Tape Reduction Unit in 2011, we have received 2338 cases, with a resolution rate of 87%.

The red tape unit is changing the brand of the Western Cape and sending the message that this province is a good place to do business.

One of the most common queries the Red Tape Call Centre has received is from residents wanting to know how they can start their own business.

This is testament to the fact that the Western Cape is home to a pool of talented and inspired entrepreneurs who are driving job creation in our province.

We have invested in several initiatives to assist aspirant businesspeople to increase their competiveness and productivity. These include an Enterprise Development Fund which grants financial support to emerging businesses and a Partner Network which has provided business advice to just under 30 000 entrepreneurs in Mitchells Plain, Philippi and Khayelitsha, amongst others.

Over the medium-term, we will open new Partner Network centres in the Eden and West Coast regions.

While we support drivers of economic growth, it is important that businesses trade in a socially responsible environment.

The liquor industry is a lucrative sector. At the same time, alcohol abuse is one of the biggest social ills plaguing the people of this province. To clamp down on irresponsible traders, the Western Cape Liquor Authority has conducted 4 404 inspections at liquor outlets in the past two years. Over the next three years, 6 000 traders will be inspected. Since the 2012/13 financial year, the Western Cape Liquor Authority has reached more than 2 000 people with their awareness programmes.

We also have a responsibility to protect consumers in the trading space. To add to its capacity, the Western Cape Office of the Consumer Protector will this year establish a Technical Export Mediation Panel which will be charged with investigating more technical disputes.

Investment is another driver of growth and jobs. For every R1 million invested, one new job is created.

Since coming to power, we have attracted 80 investment projects into our Province valued at R30.1 billion.

In the 2014/15 financial year, Wesgro will work to secure up to R1.8 billion worth of foreign investment into the Western Cape. In addition, the agency will focus on providing support to 500 local, emerging exporters so that they are able to reach new international markets and employ more Western Cape residents.

We will continue to place strategic focus on our key sectors. These industries are our region’s most significant employers and are delivering new jobs in our economy.

One of the most important sectors is tourism. This past December, the tourism industry experienced its best season yet. In this current financial year, we welcomed 1.3 million international visitors. Over the next three years, through an increased focus on international marketing initiatives, the Western Cape aims to attract 3.6 million overseas tourists.

Our priority industries include the Business Process Outsourcing sector which employs 40 000 people, Agro-Processing, which is estimated to employ 78 250 and ICT, which currently employs 23 162 people.

The ICT industry in particular is poised for major growth as we roll-out our R1.3 billion plan to connect all of the Western Cape residents to broadband. Just this week, I officially launched a pilot free Wi-Fi project which sees residents of Delft, Robertson, Atlantis and George accessing Fee Wi-Fi. Depending on which model works best, we will roll this out to other communities in the near future.

Infrastructure-led growth has been a strong priority of this administration.

Our economic infrastructure is grouped under the Cape Catalyst Unit and our signature initiatives are on track.

Designated last year, the Saldanha Bay Industrial Development is off to a good start. The Saldanha Bay IDZ Licencing Company has already signed non-disclosure agreements with 14 companies.

The IDZ is poised to kick-start a boom in our Oil and Gas industry. To ensure that our youth are able take advantage of these benefits, we established an Artisan Development Programme. In the 2014/15 financial year, 200 young trainee artisans will complete their placement at host companies. In early 2015, a second group of participants will be recruited. The department is aiming to target 1 000 young people.

Like the Artisan Development Programme, the Work and Skills initiative is also aimed at providing opportunities for young, unemployed residents.

Since 2009, 4065 young people have joined the Work and Skills programme and a further 1000 will be placed this year. In addition, we will set up a unit to assist local businesses in accessing the Employment Tax Incentive which was finally launched by the National Government last year after a lengthy delay.

Central to our skills development initiatives is addressing the mismatch between our skills supply and demand in critical sectors of our economy.

The Provincial Skills Forum is tasked with co-ordinating these efforts and bringing stakeholders together to ensure our initiatives are aligned.  This forum is but one example of the power of partnerships.

In this regard, the Economic Development Partnership has laid the groundwork for effective cohesion amongst economic stakeholders in our region.

One of the EDP’s achievements in the past year was the establishment of a Regional Innovation Network. We recognise that we need to embrace innovation to remain globally competitive.

The network is mapping our innovation clusters, analysing the demand for innovation and importantly, developing mechanism where role-players can share information on innovation.

The EDP is encouraging a culture of looking at how we can learn from one another. When we share knowledge, we grow together as a competitive region in a competitive world.

In the 2013/14 financial year, the Department of Economic and Tourism has been allocated R498.047 million to put into action our vision of an open, opportunity society for all that achieves inclusive growth and job creation for its residents.

Programme 1: Administration receives R40.1 million to provide strong, innovative leadership, and to deliver clean, efficient, cost effective, transparent and responsive corporate services to the Department.

Programme 2: Integrated Economic Development Services receives R60.3 million to promote and support an enabling business environment for the creation of opportunities for growth and jobs.

Programme 3: Trade and Sector Development receives R229.5 million to stimulate economic growth through industry development, trade and investment promotion.

Programme 4: Business Regulation and Governance receives R43.8 to ensure an equitable, socially responsible business environment in the Western Cape.

Programme 5: Economic Planning receives R39.9 to provide strategic support to the department in undertaking province-wide cross-cutting economic planning processes to give effect to Strategic Objective 1.

Programme 6: Tourism, Arts and Entertainment receives R45.0 million to facilitate opportunities for the growth and increased inclusivity of the tourism, arts and entertainment sectors.

Programme 7: Skills Development and Innovation receives R39.2 million to facilitate the provisioning of Human Capital skills and Innovation and technology in order to deliver on the economic Human Resources Development needs of the Western Cape.

Conclusion

In closing, Mr Speaker, I would like to issue my sincere thanks to the entire team at the department of Economic Development and Tourism for the dedication they have shown in turning our economy around, changing our business brand, and in creating opportunities for our residents to become employed. They have worked tirelessly over the entirety of my term to meet the vision espoused in Strategic Objective 1. This involved a dramatic change in philosophy and in the way they conduct business. I am proud of the team for navigating through this period, and look forward to an even stronger and more productive five years ahead.

I would also like to thank our partners in our municipalities, in other departments and in the private sector for the willingness that they have shown in partnering with us to achieve a greater good. The Economic Development Partnership has played a particularly significant role here.

I hereby table the budget and Annual Performance Plan of the Department of Economic Development and Tourism for debate by this house.

I thank you.