South Africa: Minister Thulas Nxesi - 24th Nedlac Annual Summit

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24th NEDLAC Annual Summit theme: "Creating jobs together as we prepare for the future of work and the 4th Industrial Revolution" keynote address TW Nxesi MP, Minister of Employment and Labour on behalf of the Deputy President: Republic of South Africa

Programme Director

Ministers and Deputy Ministers

Leaders of Business Unity South Africa (BUSA)

Leaders of Organised Labour: COSATU, FEDUSA AND NACTU

Leaders of the Community Constituency

Government officials

Invited speakers

Distinguished guests

Ladies and Gentlemen

Let me relay the regrets of the President and Deputy President - both of whom could not be with us today - which apparently leaves me - as Minister of Employment and Labour - next in line to deliver the keynote address. It is an honour and privilege to address the 24th NEDLAC Annual Summit.

Today, we speak about jobs but, more importantly, that which people do to provide a living for their families. This speaks also to decent jobs - meaning jobs which raise real income, draw people out of poverty and improve their standard of living.

The National Development Plan (NDP), the South African roadmap to a better life for all, states that the country's challenges of poverty, unemployment and inequality can only be addressed through stimulating economic growth and job creation. The NDP envisioned the unemployment rate falling from 25% in 2012 to 14% by 2020 and 6% by 2030. That would require the creation of an additional 11 million jobs and an average economic growth rate of 5.4% per annum. Instead, economic growth has underperformed, and the unemployment rate has increased since 2012.

It is common cause that our unemployment rate has risen to 29% in Quarter Two of 2019, the highest in 10 years.

Programme Director, the bulk of job losses were in the formal sector, which lost 135 000 jobs from the first quarter of 2018 to the first quarter of 2019. In that period, the domestic and informal sectors, by contrast, gained 58 000 jobs.

South Africa's GDP fell by 0.8% in seasonally adjusted terms from the last quarter of 2018 to the first quarter of 2019. This follows two quarters of marginally positive growth in the third and fourth quarters of 2018, which were preceded by a technical recession in the two quarters at the beginning of 2018. These figures highlight continued volatility in economic conditions as well as the general slowdown since the global financial crisis in 2008.

Colleagues, this is the reality we are facing. We can either lament, or we seek the means to recreate and re-engineer our future. Our history is a story of overcoming adversity - a mindset, I hope we all share. Remember, the hopes and aspirations of our people lie with us. We dare not fail them.

We are all in this together for the common good of our people - as government, business, labour and communities - in a spirit of cooperation - with the understanding that the sum of the whole is made up of its individual parts.

That is the kind of commitment that this gathering should engender, a spirit that says we are all winners in this. We are not in a zero-sum game, winning at any cost or embracing the winner takes all philosophy. I believe in our collective capabilities and I am fully persuaded that we can overcome the challenges we face.

Programme Director, creating more and quality jobs, is key to boosting growth, reducing poverty and increasing social cohesion. At the national level, job creation requires a stable macroeconomic framework coupled with structural policies that encourage innovation, skills and business development. And to address these objectives - whilst recognizing the leading role of government - also remains the responsibility of all the social partners.

Let me declare upfront:

that which is broken can be fixed.

Let me also remind you, we are not starting from scratch in dealing with these challenges of unemployment.

Already, through the Presidential Jobs Summit, which culminated in the Framework Agreement, we are hard at work. Allow me to borrow from the Job Summit: Framework Agreement Progress Report, which states amongst others:

Out of 77 commitments, 70% of all projects are on track with activities reported on. Remember that we put in place a monitoring tool to track implementation after the Summit.

The Business Process programme has commenced with a strong partnership between Business and Government. 2,738 jobs were created between 1st October 2018 and 31st December 2018, bringing the total number of new jobs created by the Programme in 2018 to 11,167. A further 3,321 jobs were created between 1st January 2019 and 31st March 2019. Business reports that they are in line with the timeframes and expectations of implementing this project.

The Installation, Repair and Maintenance (IRM) Initiative focuses on four key sectors; namely, Plumbing, Electrical, Automotive and Infrastructure Maintenance. To date, 438 candidates have completed training for IRM roles with 256 candidates placed in workplaces, primarily in SMMEs for work experience, thereby supporting the growth of SMMEs through skills investment. A further 182 candidates are awaiting placements.

A partnership between the Initiative and Ekurhuleni East TVET College will see the rollout of the first cohort of 45 Plumbing Assistant candidates into Plumbing SMMEs from July 2019. Two more TVET colleges are expected to come on stream by yearend to support increased employment creation in the Plumbing Industry.

Business reported that they have exceeded expectations in accelerating the transition of youth not in employment education or training (so-called NEETs) onto pathways for earning income. Project plans have been developed and are well underway. To date, 110 000 jobs and work experiences have been provided to a network of approximately 600 000 work-seekers across the country.

Improved alignment in the Temporary Employee/ Employer Relief Scheme (TERS), formerly known as the Training Lay-off Scheme (TLS), which is now being implemented by the CCMA, and supported by the UIF and SETAs, to assist companies in distress which face the prospect of retrenchments and/or short time or layoffs. 35 applications were received since the Jobs Summit, of which 26 had been approved, 5 are in process. In totality, 3,009 employees have been recommended for support under TERS.

Ladies and gentlemen, I am the first one to admit, these outcomes are not enough to deal with the challenges of unemployment. We need to do more to trigger the economy into the creation of jobs and sustainable jobs.

We are not unaware of the international factors, domestic factors and regulatory hurdles, which serve as an impediment to growth and achieving desired outcomes. Those impediments that are within our control, we shall engage with stakeholders and address them.

If I can give examples of impediments that must be addressed and addressed urgently by Government:

Policy and regulatory hurdles in relation to the immigration regulatory regime;

streamlining the water use licensing application;

decarbonizing the economy through legislative instruments to achieve carbon reduction; and

regulating the pharmaceutical regime.

Other specific regulatory barriers at municipal level, like land use requirements and access to utilities for new sites also impact adversely on the ability of social partners to implement projects agreed upon in the Jobs Summit - and we must and we shall address these barriers.

Another opportunity that needs to be exploited with a sense of urgency is the implementation of the Investment Summit commitments. Experts agree that R290 billion investment pledges have the ability to create and sustain 165 000 direct and indirect jobs over time. Now, you will agree with me when I say that we are not starting from scratch.

Already Government has committed itself to work with all sectors of society to ensure that these commitments are turned into substance and create employment for South Africans. As part of our work we must ensure we unblock the hurdles for the companies that have made these pledges without compromising the principle of decent work.

The Green economy is one of the sectors that presents huge opportunities. Experts have argued that, in South Africa, the green economy presents the country with the opportunity of creating 300,000 green jobs. The challenge is now to manage a 'Just Transition'.

The agriculture sector is another sector that has the potential for job creation. Yes, good jobs in agriculture can be generated, down and upstream. Demand for aggregation, storage, processing, logistics, food preparation, restaurants and other related services are becoming increasingly important in the larger agri-food system and will open up significant job opportunities. We know that many of our people depend on agriculture. With land redistribution, I have no doubt that agriculture can greatly add to employment.

Programme Director, our biggest challenge is the employment of youth, which is also our biggest opportunity. If this country can tap into the potential of its young people by bringing them into the economy, their absorption would further boost the growth of the economy.

As I have said, we don't have to start from scratch. The National Youth Service, introduced last year, will take on tens of thousands of young South Africans, as well as assisting young entrepreneurs working in sectors linked to new technologies.

President Ramaphosa said Government will expand the National Youth Service to take on 50,000 young people a year. Government will support technology-enabled platforms for self-employed youth in rural areas and townships. Government will further expand our programmes to enable young people to gain paid workplace experience through initiatives like the Youth Employment Service, and also facilitate work-based internships for graduates of technical and vocational programmes.

We must also look at the Jobs Fund and its commitment to job creation. The intention of the fund is to encourage the private, public and non-profit sectors to find innovative job creation models that can be scaled-up.

This Fund is an active intervention in the labour market and catalyses the creation of sustainable jobs by adopting a two-pronged approach. We must ensure it plays its role of stimulating demand for labour through enterprise and infrastructure development. Furthermore, this project seeks to improve the skills match between the unemployed work seekers and the needs of employers.

I believe it is time to assess the Fund's performance and impact, as well as challenges and, if needs be, to make the necessary changes.

Government is carefully looking at state-owned entities which are a catalyst for jobs, and in particular Eskom, which is critical. Any economic growth is invariably tied to a competitive electricity price, security of supply and a sustainable state-owned utility that will require significant restructuring.

Colleagues, a failure to fast track necessary changes to Eskom will continue to dampen growth and investment. Therefore, Eskom issues are a priority such as - proposed restructuring, the filling of critical vacancies, an appropriate pricing structure and the role of IPPs.

Central to job creation is skills development for sustainable employment. Job creation needs to be paired with skills development efforts - reskilling our current workforce with portable skills in the labour market. We need to prioritize life-long learning to enhance flexibility in employment opportunities, especially given rapid technological changes.

In addressing the country's unemployment challenges, it is important for us to be forward-looking in our approach. As part of the global economy, we are now faced with the Fourth Industrial Revolution which has the potential to disrupt current work practices. You cannot resist new technology, but we will have to carefully manage the effects - adopting what the ILO (International Labour Organisation) refers to as 'a human-centred agenda to manage the future of work.'

This is happening as we speak - with the conflict in the banking sector and the current case before the Labour Court.

You will agree with me when I say that we must act, not re-act. We must do this quickly to avoid being overtaken by events. We have a responsibility to shape this transition in a way which allows all our people to benefit from it.

We must be decision-makers, not passive recipients of technological developments.

This will require a careful balance of different, sometimes conflicting goals. In particular, we need to consider employment, economic, environmental and social aspects of all policies and programmes. We have no choice but to gear up for a rapidly changing environment or risk stagnating or falling behind our competitors.

Let me conclude by reminding you once again, we don't have to start from scratch.

There is already tangible progress on current initiatives in the pipeline. If we are willing to work within the spirit of give and take, everything and anything is possible.

But it will not be a walk in the park. I was reminded of this yesterday in a robust engagement following my presentation to the BUSA AGM - which raised a host of pertinent issues, including:

the lack of integration and coordination across government;

the fact that vocational training funds had been diverted to bursaries;

the duplication of multiple forums;

the lack of policy certainty from the ruling party; and for our purposes today

the perception that Nedlac was becoming a ritual - and failing to confront the difficult issues.

It is important that we put these - and all other issues - on the table - in the belief that the first step towards addressing problems - is to identify their existence.

That is my pledge to you as the Minister of Employment and Labour:

that we will strengthen Nedlac as a vehicle to re-invigorate social dialogue and the social compact;

the process of filling of crucial vacancies - particularly the Executive Director and the CFO - is underway;

I am seeking the commitment of government to ensure that its collective engagement is at a high and strategic level; and

We will revisit the founding protocols of Nedlac to promote greater inclusivity - so that the organization is truly representative of all social partners.

This, I believe, is vital if we are to address the many challenges we face as a country.

Thank you.

Issued by: Department of Employment and Labour

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