Department of Trade, Industry and Competition Minister (dtic) Parks Tau’s budget vote for the 2024/25 financial year, yesterday came under an onslaught of criticism on its lack of detailed attention to reviewing the entire tariff structure; the ocean economy with its 58% contribution to the economy; industrialisation; and the lack of sustained strategies to sustain growth targets and job creation.
The ANC, DA, EFF and MK said the budget was lofty and called on Tau to come up with more concrete plans to address industrialisation, and job creation in particular.
“We have a 51% expanded definition of unemployment… There is need for a revolutionary approach but instead government in creating an incentive assembly scheme where multinationals will come with no downstream impact, no jobs that come out of it,” the EFF’s Mbuyiseni Ndlozi said.
Tau said over the over the current financial period, R30.1 billion had been allocated to the dtic and its biggest portion of the budget was slotted to the incentives programme, receiving 48.7% of the budget.
This, he said, was followed by the Sector Programme and Transformation and Competition receiving almost 30% of the budget.
He said the industrial policy was a centre piece of the economic development strategy, mobilising an all of government and all of society-approach.
“Our industrial policy is the anchor around which this administration will align and deploy trade instruments, incentives, tools and regulations in areas such as new energy vehicles, green industrialisation, and high-value service sectors such as Global Business Services,” Tau said.
“We will build on the sector partnerships that have evolved over time in a number of prioritised sectors.”
He said the dtic’s concluded Masterplans in the automotives, clothing, steel, poultry and others will focus on integrated implementation mechanisms, deploying a government-wide set of tools.
He said the dtic urged that South Africa find a common wavelength with trade partners in the Brazil, Russia, India, China, South Africa (BRICS), African Continental Free Trade Area (AfCFTA), the African Growth and Opportunity Act (AGOA), and the Economic Partnership Agreement (EPA) with the European Union (EU).
Tau said spatial equity is therefore non-negotiable in ensuring that people found work close to their place of origin, hence the importance of the 11 designated Special Economic Zones (SEZs), nine of which were supported by the SEZ fund.
“These SEZs have generated investments amounting to R19.6bn. In addition, these SEZs provide an ongoing revenue stream to national government through ongoing corporate, PAYE and VAT payments. These contributions to tax revenue across over 100 firms located in SEZs far outweigh the initial establishment costs,” he said.
MK Party's Mnqobi Msezana said the dtic’s planned reduction of total expenditure of R10.7bn to R10.5bn by 2027 was alarming, with inconsistent expenditure growth rate across programmes.
“There is a lack of substantiated strategies to sustain growth targets including R350bn in pledges and support for 1 billion jobs… We urge the department to develop a clear roadmap for achieving the R400bn in export targets including sector-specific strategies and partnerships with key African markets,” Msezana said.
“The ocean economy contributes R57bn towards GDP, 58% of the economy is trade-based with 98% of trade volumes contributing 3.5% to global seaborne trade. We need to know how that sector will be developed,” he said.
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