input to the parliamentary portfolio committee on labour 9 may 2007

Input to the Parliamentary Portfolio Committee on Labour 9 May 2007

The presentation is divided into four sections;

Section 1: The workings of Nedlac

Section 2: Work programme for 2007/8

Section 3: Budget allocations

Section 4: Key challenges

Section 5: Way forward

LABOUR

GOVERNMENT

COMMUNITY

OVERALL CONVENORS

BUSINESS

Dennis GeorgeGeneral SecretaryFEDUSA

Mahlomola SkhosanaGeneral SecretaryNACTU

Zwelinzima VaviGeneral Secretary COSATU

Ruth Bhengu Laura Kganyago Mike Ka Toni Blade Nzimande

SANCO WNC DPSA FSCC

T Didiza T Manuel M Mdladlana M Mpahlwa

V Mkosana E Patel R Parsons S SheziGovernment Labour Business Community

NEDLAC PRINCIPALS

SECTION 1

WORKINGS OF NEDLAC

OUR VISION

The constituencies of Nedlac - government, business, labour and community re-affirm their commitment to social dialogue and working together to address the economic and development challenges our country faces.

The constituencies also commit themselves to a common vision for promoting rising levels of growth, investment, job creation and people-centred development.

The Nedlac social partners will focus on;

Building an enduring partnership – Promoting a shared vision of South

Africa’s growth and development strategy to frame sector and developmental

agreements and lay the basis for partnerships in action.

Addressing urgent challenges – Selecting from many possible interventions

those which old the promise of the greatest possible impact in the shortest

possible time for accelerated investment, job creation, improved efficiency

and productivity, greater social equity, and a fairer distribution of economic

opportunities and rewards, while undertaking serious social

dialogue on broad policy frameworks.

Lending a hand – Securing the commitment and active participation of all

constituencies in those areas identified for prioritised action in ways that build

on lessons learnt from development programmes

OUR MISSION

Strategic Objective

Strategic Objective

Strategic Objective

Strategic Objective

Strategic Objective

Tackling the urgent challenges facing the economy and build an enduring partnership that would help build a prosperous SA.

Negotiations that aim to deliver formal consensus-based agreements on the economic and social policy.

Building sustainable partnerships that deliver on the key challenges facing the country on the social and economic fronts.

Selecting from many possible interventions those which hold the promise of the greatest possible impact in the shortest possible time

Nurturing the common vision which seeks to make South Africa the leading emerging market and destination of first choice for investors whilst retaining and expanding social equity and fair labour standards

To meet these objectives, the representatives of organised business, community, labour and government engage in:

Negotiations that aim to deliver formal consensus-based agreements on the economic and social fronts.

Consultations that aim at developing policy prior to it being tabled for negotiation or implemented.

Information sharing, workshops and seminars that report on and assess the implementation of social and economic policies.

Research that guides the formulation and implementation of social and economic policy.

Resolving socio-economic disputes in terms of section 77 of the LRA.

MODUS OPERANDI

6 Labour6 Government6 Business

6 Government6 Business6 Labour

6 Labour6 Government6 Business

6 Labour6 Government6 Business6 Community

PUBLIC FINANCE AND MONETARY POLICY CHAMBER

DEVELOPMENT CHAMBER

LABOUR MARKET CHAMBER

Lead Govt Dept - Trade and Industry

Lead Govt Dept - Labour

Lead Govt Dept – National Treasury

Lead Govt Dept - DPW

•Section 77 Standing Committee•Demarcations Standing Committee

•Standing Committee on TradeAgreements (Teselico)

STANDING COMMITTEES

Trade and Industry Chamber

WORK PROGRAMME – 2007/8 PER WORK STREAM

SECTION 2

LABOUR MARKET POLICY WORK STREAM

KEY FOCUS AREAS

KEY FOCUS AREA OUTPUT KEY PERFORMANCE INDICATOR

STATUS STRUCTURE

Demarcation Decide demarcation issues tabled with the committee

Consider applications as and when forwarded by the CCMAto the secretariat

Issues Driven Demarcation Standing Committee

Companies Bill: Ch 6 Business Rescue Model

Nedlac report with maximum areas of agreement

Consider the Business Rescue Regime in respect of companies as proposed by the DTI

Engagements have commenced

Insolvency Technical Task Team

Insolvency Bill Nedlac report with maximum areas of agreement

Consider the Bill presented by the Department of Justice with the focus on insolvency of individuals, partnerships and trusts


Insolvency Technical Task Team

Changing Nature of Work in Nedlac report with maximum areas of agreement

To analyse and evaluate the trends, determinants and policy implications of atypical forms of employment

Engagement in Nedlac agenda has been set out and

Negotiations have commenced

Manco Atypical Forms of Employment Task Team

Social Plan Review Nedlac report with maximum areas of agreement

To consider the need to review the existing social plan in accordance with the Review Report


Social Plan Review Task Team

KEY FOCUS AREA OUTPUT KEY PERFORMANCE

INDICATOR

STATUS STRUCTURE

Superior Courts Bill To reach agreement with the Department of Justice and Parliament to retain separate Labour and Labour Appeal Courts.

Meeting with the President. Interaction with the Department of Justice and with Parliament

A meeting with the Minister of Justice and Constitutional Development has been scheduled.

Task Team

Medical Schemes Amendment Bill

Nedlac report with maximum areas of agreement

Consider the Bill, specifically how it would impact on employers and employees.

Constituencies are finalising their comments on the Bill.Engagement with the Minister of Public Service and Administration is being planned to address sequencing of issues as the Bill went to parliament without first being tabled in Nedlac

Nedlac Overall Convenors

Single Public Service Nedlac report with maximum areas of agreement

Consider and deliberate on the draft policy Bill with a view of influencing and steering the process to accommodate the society at large

After the request from Nedlac the DPSA presented the draft policy in Nedlac. DPSA still to indicate if they would be tabling the Bill for consideration in Nedlac.

Task Team

KEY FOCUS AREA OUTPUT KEY PERFORMANCE INDICATOR

STATUS STRUCTURE

Labour Market Policy Review To engage in Negotiations with a view to reach Agreement on the key areas that justifiably require revisiting on the Labour Market Policy front

Producing a Nedlac agreement Two Ministerial roundtable discussions held with the Minister of Labour, however Govt has table considered position on the matter

Manco Task Team

Employment Equity To enhance reporting and monitoring process and possible training courses in employment equity.

Increase awareness on matters pertaining to employment equity, giving attention to longer term initiatives in the employment arena.

The Task Team is currently looking at the aspects as described in the output. With the incorporation of Workplace skills plan into employment equity initiatives. Further the Task Team would design the long term plans.

Employment Equity Task Team

Jobs Impact and Monitoring Consider ways in which to give effect to the GDS Agreement on jobs impact

Finalise Nedlac position on recommended measures to implement jobs impact monitoring

Ongoing

TRADE AND INDUSTRY WORK STREAM

KEY FOCUS AREAS

Key Focus Area Key Performance Indicator

Measurement Status Structure

Enhancing the role of

women in business

Coordinate a process to assess

impact of BEE

Assess implications of the

BBBEE Codes, particularly on

women in business.

Assess how the Codes will be

aligned with the relevant

policies.

Produce a Nedlac report on BEE

that emphasizes developing

women in business

The standing committee on

Trade is engaging on these

issues.

Teselico and the Chamber

Infrastructure development Examines the linkages between

infrastructure development and

manufacturing growth, logistics,

reducing the cost of business,

regional development, State

Owned Enterprise activities

Produce a Nedlac report that

clearly highlights policy linkages

between the different areas.


Trade is engaging on these

issues

Teselico and the Chamber

Industrial Policy & Strategy The process to finalise the

country’s Industrial Policy and

Strategy is fast tracked

To produce a Nedlac agreement

on the issue.

Constituencies made initial

comments on the policy and

awaiting announcement by the

Minister of Trade and Industry

Policy sessions with the Minister

and Deputy Minister Davies

Trade and industrial policy Coordinate a process to

strengthen links between the

Trade and Industrial Policy is set

in motion.

Production of Nedlac reports that

reflect this link

Constituencies made initial

comments on the policy and

awaiting announcement by the

Minister of Trade and Industry

Policy sessions with the Minister

and Deputy Minister Davies



BBBEE Set up a process to examine

cross cutting issues that impacts

on SMMEs and Cooperatives

Assess implications of the

BBBEE Codes on small

business.

Assess how the Codes will be

aligned with the relevant policies

Agreed instruments to mitigate

the unintended consequences of

the BBBEE policy framework

The Chamber is setting up the

task team to engage with this

issue.

A waits the report from the

government exercise on this

issue.

.Task Team

Promotion of SMME’s Investigate obstacles to SMMEs

development and examine ways

to address them.

Finalisation of new measures to

remove the obstacles

Awaits the report from the

government driven review

process

Task Team

Prioritised sectors; (BPO,

tourism, metals and

engineering, construction,

Clothing and Textile,

Chemical, Agri-Business,

regulatory impact

assessments, pre-impact

assessment of BBBEE,

employment strategy,

livelihoods,)

A process to identify strategies

to unlock the value on the

prioritised sectors commences.

A Nedlac Agreement is

produced.

Completion of sector summit

agreements for construction,

metals and engineering and

initiation of sector summit

processes for BPO, tourism,

clothing and textile and agri-

business.

Continued input into CSPs

Continued monitoring and

evaluation of CSP processes

Task Team



Services The task team to lead with

services negotiations and the

multilateral (WTO) and bilateral

trade negotiations is set in

motion

Examine the implications of the

collapse of the Doha Round

A nedlac agreement is produced

for consideration by the

Chamber and Manco

respectively.

Come up with an agreed

country’s approach to multi-

lateral trade system in the light

of the challenges within WTO.

The task is engaging on the

issues.

Teselico Task Team on

Services

WTO-NAMA Coordinate process to interact

with Government on the

outcomes of the Hong Kong

Ministerial talks and the recent

developments within the WTO.

Final Nedlac position on market

access for industrial goods (at

the WTO negotiations)

The standing Committee on

Trade is engaging on the issues


Trade

SACU negotiations with EFTA Coordinate interaction with

stakeholders on trade

negotiations

Nedlac reports to be adopted on

trade negotiations with EFTA,




Trade

SADC mid-term review Coordinate process to review

SADC trade protocol and

technical barriers to trade (tbt’s)

Develop Nedlac report on trade

protocol.




Trade

SA-EU-TDCA Fast track the process to

develop the Country’s approach

to SA-EU-TDCA review

An agreed position is finalised

for consideration by MANCO.




Trade

KEY FOCUS AREA KEY PERFORMANCE INDICATOR

MEASUREMENT STATUS STRUCTURE

SACU-India Prepare the list of products of

export interest for consideration

by the committee.

An agreed list is agreed and

tabled in MANCO for

consideration and sign-off.

Negotiations are on track Standing Committee on

Trade

SACU-China Subcommittee engages on the

merits and demerits of

formalizing trade arrangements

with

A house view is developed and

agreed. It is tabled in MANCO

for consideration.

Analysis of all available studies;

identification of areas for further

study and further study

commissioned; identification of

threats and opportunities,

strengths and weaknesses.

Negotiations are on track Standing Committee on Trade

Chemical Sector summit Convene a conference to

officially launch the Chemical

Sector Partnership Strategy

Chemical Sector summit state of

readiness report is tabled in

MANCO for consideration and

sign-off

The report has been signed off

by Manco. The Agreement

awaits signature by the

constituencies.

Standing Committee on Trade

ICT Sector Coordinate a process developing

programmes to implement the

ICT Sector Declaration

A programme of implementation

of the declaration is tabled in

MANCO for consideration and

sign-off.

Reconvening of ICT Sector

Summit Steering Committee to

chart way forward.

DEVLOPMENT CHAMBER WORK STREAM

KEY FOCUS AREAS



Expanded Public Works Programme (EPWP)

Building linkages with the social

dimension of the Expanded Public

Works Programme.

Agreement on specific projects that

takes forward the social dimension

of the EPWPs.

Engagements ongoing Chamber

Comprehensive Social

Security

Engaging with the various

government interventions on social

security including key aspects of the

Taylor Commission

recommendations and the

government proposals to set a

national poverty line for SA.

Finalising a Nedlac

agreement/report on social security

and the National poverty line as

tabled by National Treasury.

Commenced engagement Manco Task Team

Housing Agreement on the policy

framework regarding Farm

worker and Occupier Housing

Assistance Programme.

Engagement in the Development

Chamber

Awaiting government to table the

revised draft policy.

Task Team

Transport Nedlac social partners to develop an

agenda that highlights gaps in the

current transport national policy

Government to table the

draft policy for

consideration at Nedlac

Awaits input from Government Chamber



Local Government Develop guidelines on how to

strengthen social dialogues at

local level

Address the legacy of apartheid

planning which undermines

social and economic integration

and employment in order to

achieve broad socio-economic

integration Implement poverty

alleviation and local economic

development programmes

including extending basic

service, whilst creating adequate

social safety nets to protect the

most vulnerable in communities.

Engagements ongoing Chamber

Promotion of Co-operatives Create and develop income-

generating activities, savings

and investment, develop human

resource capacities, improve

social and economic well-being

and establish and expand a

viable and dynamic distinctive

sector of the economy which

includes co-operatives, that

responds to the social and

economic needs of the

community.

Awaits the finalisation and

implementation of the co-

operatives strategy and the

cooperatives Bank Bill

Awaits the finalisation of the

cooperatives bank bill

Task Team



Energy To develop a broad

framework of universal

access to electricity that takes

into account environmental

implication.

Produce a Nedlac agreement

on the Universal access to

electricity and the

environmental implications

Constituencies to input on the

redistribution aspect of

electricity.

Chamber

PUBLIC FINANCE AND MONTERAY POLICY CHAMBER- FOCUS

AREAS



Social Security and Retirements Fund Reform

Develop a Nedlac Agreement on

Government Policy proposals on

Social Security and Retirement Fund

Legislative Framework

Address the legacy of

apartheid planning which

undermines social and

economic integration and

employment in order to

achieve broad socio-

economic integration

Implement poverty

alleviation

The Minister of Finance has

tabled a policy discussion

document on Social Security and

Retirement Funds provisions for

consideration by Nedlac.

Engagement has commenced on

the social security framework.

Manco Task Team

Budgetary Processes including MTEFP

Create and develop income-

generating activities, savings and

investment, develop human resource

capacities, improve social and

economic well-being and establish

and expand a viable and dynamic

distinctive sector of the economy

which includes co-operatives, that

responds to the social and economic

needs of the community.

Realigning the Nedlac

Stakeholders engagement

on the Government budget

cycle.

Two high level policy sessions

with government were held. The

recent engagement was held on

23 February 2007.

A new programme of

engagement is being finalised.

Chamber

Performance of SETAs To agree on a framework to support

SETA work and to develop an early

warning system.

Regular engagement with all

SETAs in the finance sector

with a view to provide

support on an informed

basis.

The chamber has had its second

engagement engaged with the

SETA in the Insurance sector.

Chamber



Implementation of the

Financial Charter Summit

Decisions. (Charter Council)

(The Charter Council has 21

members representing,

business, black professionals

in the industry, labour,

community and Government.)

Ensure progress in the

implementation of the Financial

Sector Summit by getting regular

reports from the Finance Charter

Council.

Monitor progress on the

implementation of the

Finance Sector Summit

agreements

The Principal Officer of

the Finance Charter

Council reported on the

activities of the Charter

council as at the end of

2006 period.

Manco Task Team

Cooperatives Banks Bill Reach agreement in Nedlac on

key policy aspects of the

cooperatives banks Bill.

Creating an enabling

environment for the

promotion of

Cooperatives

development in South

Africa

Nedlac finalised engagements

on the policy aspects of the

Bill and a report sent to

Government.

The Bill awaits fine-tuning by

the National Treasury

Chamber

Administered Pricing Develop a framework that links

administered prices to job creation

and the eradication of poverty

Agree on a framework

that aligns management

of administered to

economic growth and

social development.

The study on administered

prices is near completion.

Fridge and the Chamber

Economic Performance

Calendar year 2003 2004 2005 2006 2007 2008 2009

Actual Estimate Forecast

Percentage change unless otherwise indicated

Final household consumption 3.5 6.7 6.6 7.0 5.7 4.8 5.0

Final government consumption 6.3 6.3 5.2 5.6 4.5 4.6 4.5

Gross fixed capital formation 9.1 9.6 9.6 12.0 10.7 10.9 11.1

Gross domestic expenditure 5.2 7.9 5.9 7.9 5.1 5.8 6.1

Exports 0.1 2.9 8.0 3.9 7.3 6.3 6.4

Imports 8.1 14.5 10.7 14.3 7.9 8.4 8.5

Real GDP growth 3.1 4.8 5.1 4.9 4.8 5.1 5.4

GDP deflator 4.6 5.8 4.8 5.8 5.8 4.9 5.4

GDP at current prices (R billion)

1,260.7 1,398.2 1,539.3 1,709.1 1,893.8 2,087.3 2,318.1

CPIX (Metropolitan and urban, average for year)

6.8 4.3 3.9 4.6 5.1 4.7 4.5

Current account balance(percentage of GDP)

-1.1 -3.2 -3.8 -5.5 -5.3 -5.7 -5.9

National Treasury

SECTORAL TRENDS

90

100

110

120

130

140

150

160

170

Ind

ex (

2000

=100

)

Overall GDP

Construction

Transport

Finance

Wholesale & Retail

Manufacturing

Mining

Agriculture

Growth in non-agricultural sectors remains strong

Fast growing sectors include construction, financial and transport

Growth and Development Summit Agreements

GDS Peer Review

Seta Performance Review

Co-operatives Strategy Evaluation

Decent Work Country Programme

Research into Employment Trends in the Agricultural

Centre

Retirement Fund Trustees Conference

Labour Market Policy Review

SMMEs regulatory Review

Service Delivery Review

SMMEs Tax Review

Study on the Employment Trends in the Agricultural

Sector

KEY PROJECTS

SECTION 3

FINANCE

INCOME BASELINE 2007/8 2008/9 2009/10

Grants received (Department of Labour)

12 712 000 13 348 000 13 959 000 14 657 000

Rental income (PSA)

363 000 400 000 440 000 484 000

Interests 50 000 50 000 51 000 51 000

Total income 13 125 000 13 798 000 14 450 000 15 192 000

EXPENDITURE BASELINE 2007/8 2008/9 2009/10

Capital expenditure 603 000 235 000 100 000 110 000

Communication &

Special Projects 4 890 700 5 263 600 5 464 000 5 602 900

Capacity Support 1 095 000 1 446 000 1 590 000 1 749 000

Administration 2 346 200 2 403 400 2 421 000 2 519 000

Staff Cost 4 190 100 4 450 000 4 875 000 5 211 100

TOTAL EXPENDITURE 13 125 000 13 798 000 14 450 000 15 192 000

Capital Expenditure

Baseline 2007/8 2008/9 2009/10

Computers and printers

60 000 40 000 20 000 25 000

Furniture and fittings

200 000 50 000 40 000 45 000

Office equipment

13 000 15 000 20 000 20 000

Software 30 000 30 000 20 000 20 000

Building refurbishment

300 000 100 000 - -

Total 603 000 235 000 100 000 110 000

COMMUNICATION AND SPECIAL PROJECTS

BASELINE 2007/8 2008/9 2009/10

Publications 270 000 300 000 300 000 320 000

Annual Report 180 000 200 000 220 000 240 000

Website and internet 70 000 90 000 70 000 95 000

Public Relations 15 000 20 000 25 000 30 000

Travel 1 390 500 1 429 600 1 450 000 1 510 000

Accommodation 99 600 89 000 93 000 96 000

COMMUNICATION AND SPECIAL PROJECTS

BASELINE 2007/8 2008/9 2009/10

Venue and refreshments

265 500 280 000 200 000 200 000

National Summit 500 000 604 000 650 000 760 000

Research 381 000 400 000 450 000 300 000

Subscriptions 22 000 25 000 25 000 31 000

BUDGET – EXPENDITURECOMMUNICATION AND SPECIAL PROJECTS

BASELINE 2007/8 2008/9 2009/10

GDS 1 368 900 1 404 000 1 420 000 1 528 900

Statutory obligations 100 000 100 000 100 000 100 000

International meetings

160 000 200 000 300 000 300 000

Promotion of Social Dialogue

68 200 122 000 161 000 92 000

Total 4 890 700 5 263 600 5 464 000 5 602 900

BUDGET – EXPENDITURE

CAPACITY SUPPORT

BASELINE 2007/8 2008/9 2009/10

Community 438 000 573 000 630 000 699 500

Labour 438 000 573 000 630 000 699 500

Business 219 000 300 000 330 000 350 000

Total 1 095 000 1 446 000 1 590 000 1 749 000

BUDGET – EXPENDITURE

ADMIN BASELINE 2007/8 2008/9 2009/10

Administration costs 2 346 200 2 403 400 2 421 000 2 519 000

Total 2 346 200 2 403 400 2 421 000 2 519 000

STAFF COST BASELINE 2007/8 2008/9 2009/10

Staff costs 4 190 100 4 450 000 4 875 000 5 211 100

Total 4 190 100 4 450 000 4 875 000 5 211 000

SECTION 4

KEY CHALLENGES

CHALLENGES BROADLY

Labour Market Policy

Skills development Employment Equity Institutional capacity Insolvency legislative reforms Polemics of Labour market policy

Trade, Investment and Industrial Policy

Reclaiming the developmental agenda (WTO) Creating a balanced Investment environment Leveraging Public Investment Initiatives Leveraging the National Industrial Policy Framework

Fiscal and Monetary Policy

Exchange rate Tax regime (SMMEs) Uitilising the current Fiscal space – Budget surplus

Challenges for Social Dialogue

Poor relationship with Government Depts outside of Labour, Trade, Public Works and Treasury.

Growing numbers of new entrants into the labour market.

Poor relationship with Parliamentary committees outside of Labour, Trade, Public Works and Finance.

Policy co-ordination.

Late tabling of issues at Nedlac or not at all in some cases.

Mandates obtained from cabinet too tight to allow space for trade offs in the Nedlac processes.

Tight timeframes to finalise issues and no flexibility from some government departments.

Sequencing of processes sometimes undermines social dialogue.

SECTION 5

WAY FORWARD

Way Forward

Adherence to the protocol for tabling issues at Nedlac

Implementing the agreed recommendations of the Nedlac Review report.

Building relationship with Government policy formulation instruments

Improve policy coordination

Build capacity at all levels of policy making

Strengthening statutory bodies

input to the parliamentary portfolio committee on labour 9 may 2007

Documents

social policy

social fronts

implementation of social

economic policy

economic fronts

greater social equity

serious social dialogue

nedlac social partners