Afrikaanse Handels Instituut (AHI)
LABOUR BUDGET VOTE NO 22: AHI'S REPRESENTATIONS
1. The AHI wishes to thank the Portfolio Committee for the opportunity to participate, through its representations, in the debate concerning the Department of Labour's budget.
2. As in the past, it is the AHI's intention to constructively participate in the deliberations concerning this budget.
On at least 2 previous occasions the AHI has suggested that the process should be more transparent. It makes it extremely difficult to participate in the deliberations if the information given is very limited.
It is suggested that labour and business be invited to a briefing by the Department of Labour on their budget prior to the debate in the Portfolio Committee. The Department of Labour should at that briefing supply business and labour with information that will enable them to constructively make representations to the Portfolio Committee.
It will be extremely useful to, inter alia, have sight of the following documents:
Any report by the Auditor General concerning the Department or any performance audit carried out by the AG.
Copies of the financial statements of the unemployment Insurance Fund, as well as the Compensation Fund.
Detail about the personnel of the Department. Personnel is the largest expenditure (63.5%) of the Department and should therefor receive the attention of the Portfolio Committee in any deliberations concerning the budget.
3. It concerns the AHI that the increase in the budget is 18.31%. This needs to be carefully analysed and contextualised.
4. Dissaving by Government is probably one of the biggest threats to our economy at this moment in time. To increase expenditure beyond the inflation rate is contributing to the bigger economic problem and not to the solution of the problem.
5. In studying the budget of the Department, various questions come to the fore. Some of them may have simple answers, but due to the lack of information these questions are raised in this document. The Portfolio Committee may find these questions of assistance in their deliberations concerning the budget.
B. PROGRAMME 1
1. Serious consideration needs to be given to the nature of wage increases as increases of this nature will affect the labour costs and in turn job creation and unemployment.
2. The creation of new posts need to be properly motivated given the government's stance of reducing the size of the public service.
3. In view of press reports that the industrial court ordered the Minister to pay R1 million for an unfair labour practice claim against the Department, it would be interesting to know how much money has been spent on litigation and legal matters during the previous five years in comparison to what is budgeted for this year? (See the provision made for an increase in the rendering of legal services. It is also noted that increases in legal services are included under various headings of the sub-programmes in Programme 1).
4. Where the aim of the programme is to conduct the overall management of the Department, a question that begs answering is how much is being done to enhance productivity in the Department and the labour market in general?
5. Where have new labour centres been established and what criteria were used to determine the establishment of labour centres?
6. What control mechanisms are in place to secure sound administration in the decentralisation of the Provisioning Administration System?
C. PROGRAMME 2
1. The programme manager of this program must be congratulated in keeping the increase below 10%.
2. The programme manager is further congratulated for focusing on research and training.
D. PROGRAMME 3
1. It is trusted that where the Government has not budgeted for an increase in its contributions to the Unemployment Insurance Fund, that employees and employers will also not be expected to budget for an increase.
2. As stated above, it is difficult to contribute to the debate on the budget of this programme if the budgets for the Unemployment Insurance Fund and the Compensation Fund are not tabled simultaneously.
3. On all the previous occasions that the AHI have made representations to the Portfolio Committee, the question has been put as to why the Department of Labour should carry the contributions of the civil services to the Compensation Fund? This has to do with the administration of the State and should not be the responsibility of one of the Departments of State. The same argument is applicable in respect of medical expenses carried by this programme.
E. PROGRAMME 4
1. The AHI fully supports the increase in expenditure for Human Resources Development.
2. It was with some dismay that we notice that the Department has already budgeted for Sector Education and Training Authorities (SETA's) whilst the debate as to the appropriate vehicle is still continuing between Government, labour and business.
3. It would be interesting to know how much was actually budgeted for the regulation and administration of the Training Levy Scheme. It would be of further interest to business to know how this budget is compiled. In its comment to the Department concerning this matter, the AHI gave the following comment "...to test the viability of these proposals by conducting a cost analysis/affordability study before embarking on what seems to be a very expensive system to implement and to maintain."
The AHI is still of the opinion that this is an extremely expensive system and would like to comment but could not do so due to a lack of information.
We believe it is important to know whether a portion of the levy, as intended by the Skills Development Bill, 1997 is going to be used to finance the SETA's. It is strongly recommended that the Portfolio Committee should fully investigate the budget concerning the financing of the SETA's.
4. The AHI supports the schemes for the training of the unemployed and other persons. How to spend this money constructively and productively is a subject of its own. It is suggested that the Portfolio Committee should satisfy itself as to the detail of the schemes, control measures and evaluation measures for the schemes.
5. As far as we know, the Manpower Centres in the former Bophuthatswana are centres of education. Where the Department is responsible for training we cannot support the idea that the money should be budgeted on the vote of the Department of Labour in order to transfer these centres to the Education Departments where they rightly belong. Those Departments must budget for these centres and manage them.
6. A question that arises is why did the Department wait so long before they budgeted sufficient money for the support of the provincial offices of the Department to improve the control over the spending of money by these offices. It is suggested that the Portfolio Committee should be given information as to how the money was spent in the past and why it has now become necessary to increase this budget provision by 170%. What happened to the money in the past? In view of the large amounts of capital invested through this programme, the AHI would strongly recommend that the Portfolio Committee requests a performance audit on this programme by the end of this financial year. It is our respectful submission that it is essential that the Department create the environment for the private sector to train and enhance the skills of the economic active population of the country. In the past too much money has been spent on actual training without a market for the skills in respect of which training was given. It is a concern of the AHI that the budget under this programme may lead to the same negative consequences. Again due to a lack of information, it is extremely difficult to make constructive recommendations in respect of this programme.
F. PROGRAMME 5
1. Sub-programme: Collective Bargaining. It is not clear why this programme has now been divided in two sub-directorates.
2. It is also not clear why the Government should pay for the republication of all existing agreements in terms of the LRA. These are bargaining council
agreements and it is suggested that they should pay for the republication of their agreements.
3. The Department and the CCMA should be complimented that they are able to carry the case load and only increase the CCMA's budget with 14%. The
AHI's members still have fairly serious complaints about the ability of some of the people employed by the CCMA. It is suggested that this should be investigated. To have efficient people could save money
We would like to suggest that the sub-programme "Strengthening Civil Society" is a misnomer. It should be "Strengthening of Trade Unions". The question arises whether it is productive only to finance trade unions and to increase their capacity to negotiate more effectively. If you have well trained union officials negotiating with unskilled small entrepreneurs, it is our experience that because of the lack of knowledge and/or skills with the small entrepreneurs, unnecessary disputes occur. It is strongly recommended that consideration is given to allocate some of this money to the training of small entrepreneurs. (SMME's)
5. Except for the above, the programme manager of programme should be complimented on the budget prepared by him.
G. PROGRAMME 6 - LABOUR POLICY
1. This is now the 3rd year that a substantial amount of money has been budgeted for this programme. The AHI has seen very little of the results flowing from this programme. The question that arises is whether the Department should not consider making available the information and research to business and labour.
2. If the information contained in the memorandums accompanying the various Bills submitted by the Department to Parliament flows from this programme then there is a concern within the AHI in respect of the quality of the research conducted in terms of this programme. Again it is suggested that a performance audit should be conducted.
3. We strongly support the additional amount budgeted to enhance productivity. As indicated above, we are of the opinion that this should be a theme throughout all the programmes and should not be limited to a contribution to the National Productivity Institute.
H. PROGRAMME 7 - AUXILIARY AND ASSOCIATED SERVICES
1. The manager of the Work Centres for Disabled and Workshops for the Blind should be congratulated for his/her ability to manage these organisations more efficiently.
2. The AHI supports the study on poverty and inequality in the South African labour market. It is, however, our respectful opinion that should the study only concentrate on the history and background of poverty and inequality, it will be money wasted. It should concentrate on viable solutions as well.
It is trusted that the above is of some assistance. The perception is however that the budget is a fait accompli when it reaches the Portfolio Committee. This is based on the fact that we have seen no changes to the budget in the past flowing from the deliberations of the Portfolio Committee. We are looking forward to some bold steps by the Committee and that some of the issues raised above receive the attention they deserve.