Economy take centre stage in the new administration

Posted On Wednesday, 18 June 2014 14:50 Published by
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President Jacob Zuma says expanding the economy will take centre stage in the new administration.

Jacob Zuma

Delivering the State of the Nation Address (SONA) in the National Assembly on Tuesday night, President Zuma said there was a need for "far-reaching" interventions by government, business and other social partners to bolster growth and create decent jobs.

The President -- who was re-elected into the highest office following a robust election campaign -- said while the country was a better place to live in compared to 1994, more still needed to be done.

The President said this as the country was hit by low growth in the first quarter of 2014, with Stats SA announcing that the seasonally adjusted Gross Domestic Product (GDP) at market prices had slumped at an annualised rate of 0.6%.

"As we enter the second phase of our transition from apartheid to a national democratic society, we have to embark on radical socio-economic transformation to push back the triple challenge.

"The economy takes centre stage in this programme. It remains our strong belief that the most effective weapon in the campaign against poverty is the creation of decent work, and that creating work requires faster economic growth.

"We have set a growth target of 5% by 2019. To achieve this, we will embark on various measures and interventions to jump-start the economy," he said.

The President said the growth target was set at a difficult period, where the economy had grown below desirable levels over the past three years, with households also feeling the pinch.

He said the low economic growth was caused by the global economic slowdown and domestic conditions – the protracted and at times violent strikes – and a shortage of energy.

Deputy President to head mining talks

The lengthy strike in the platinum sector has hampered production and has almost brought the country to its knees, with threats on jobs knocking on the door.

The President said given the impact of the labour relations environment on the economy, it was critical that social partners meet to deliberate on the violent nature and the duration of the strikes.

He said Deputy President Cyril Ramaphosa, who has a wealth of experience in both labour and business stretching back many years, would step in to lead social talks.

"Deputy President Cyril Ramaphosa will convene the social partners dialogue, within the ambit of NEDLAC [National Economic Development and Labour Council].

"The social partners will also need to deliberate on wage inequality. On our side as government, we will during this term investigate the possibility of a national minimum wage as one of the key mechanisms to reduce the income inequality," he said.

President Zuma also said that government would play its part in the implementation of the landmark Framework Agreement for a Sustainable Mining Industry entered into by labour, business and government last year -- a process that was led by former Deputy President Kgalema Motlanthe.

President Zuma said he would take over the process himself.

"We will implement the undertaking to build housing and other services to revitalise mining towns, as part of the October 2012 agreement between business, government and labour.

"The focus is the mining areas of Motlosana, Emalahleni, Sekhukhune, Lephalale, West Rand and Matjhabeng.

"An Inter-Ministerial Committee on the Revitalisation of Distressed Mining Communities has been established under the leadership of the Minister in the Presidency responsible for Planning, Performance Monitoring and Evaluation, Mr Jeff Radebe."

President Zuma said government would play the role of big brother to ensure that mining companies meet the Mining Charter targets in order to improve the lives of mineworkers.

"Companies are expected to convert or upgrade hostels into family units, attain the occupancy rate of one person per room and also facilitate home ownership options for mine workers.

"We urge the companies to meet the 2014 deadline for these targets and extend this right to dignity to mine workers," he said.

President to meet business to boost investment

When President Zuma announced his new Cabinet last month, he also revealed the creation of a new Ministry of Small Business, aimed at eliminating red tape that hampers businesses from developing.

He said low investment was a key constraint to economic growth and that government would work with the private sector to remove obstacles.

"We will continue to engage business in promoting inclusive growth and to build a more prosperous society.

"In this regard, I will soon convene a meeting of the Presidential Business Working Group.

"After the last meeting of the Working Group last year, six work streams were established and these have been discussing solutions to various obstacles to doing business in South Africa," he said.

He said captains of industry had raised some of these concerns that make it difficult to do business in the country.

Youth development to be prioritised

The President said there will be an increased focus to ensure that the creation of jobs for youth was accelerated.

"We will expand the number of internship positions in the public sector, with every government department and public entity being required to take on interns for experiential training.

"The private sector has responded positively to the introduction of the employment tax incentive. In only five months, there are 133 000 employees who have benefited and 11 000 employers who have participated in the incentive scheme," he said.

He said the majority of young people have been employed in wholesale and retail trade, manufacturing and finance sectors.

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