Democratic Alliance statement by
Graham Gersbach MPL
DA Gauteng Committee Member: Standing Committee on Public Accounts
We recognise the need to create a viable township economy in pursuit of the creation of sustainable human settlements with employment opportunities where people live.
We also recognise the need to use investment in infrastructure to stimulate growth and employment.
However, the creation of yet another state bank is neither a solution to these challenges, nor a viable option.
We already have the Land Bank, Development Bank of South Africa and Industrial Development Corporation which are established sources of funding. In addition, the Post Office has already started the process towards registration of the Post Bank as a state bank with a commercial banking licence.
International research shows that public sector banks have performed poorly according to financial measures such as returns on equity or assets, the extent of non-performing loans, and expense levels.
The provincial state bank of Kwa-Zulu Natal, Ithala Bank, does not fill one with optimism. KZN invested R300 million in Ithala Bank a few years back with virtually no return on that investment. That same investment in an internship programme would have created significant employment through skills development, as we have done in the Western Cape. Ithala Bank is still waiting on a commercial licence, which given its track record I’m sure will never happen.
We therefore oppose the creation of a Provincial state bank.
Rather than focusing on the creation of yet another provincial entity to employ cronies and cadres, we need to focus creating an environment in which we develop township entrepreneurs. This could be more effectively be achieved through opportunity vouchers as seed capital to start businesses or partially subsidise studies. Entrepreneurs create their own employment and employment for others. We can enable these opportunities by supporting entrepreneurs through existing financing channels, not by embarking on more wasteful expenditure.
The Gauteng Provincial Government already undertakes financing transactions and business support through GIFA, GEP, and GDDA – the past performance of which merely highlights the fact that this is not a Provincial Government’s area of specialisation, and that a Provincial state bank would be yet another vanity project. Public-Private partnerships with existing Commercial Banks could achieve the same outcomes through subsidisation of interest rates.
I urge the Premier to consult with the Western Cape on the excellent measures put in place to finance and support entrepreneurs – particularly those in the township economy.
Another area where the Gauteng Provincial Government is failing is in environmental protection. We cannot grow as a province, we cannot industrialise, and we cannot transform without making the environment a priority. Food security, access to drinking water, and a clean living spaces are crucial to the future prosperity of Gauteng.
The quality of life for all residents of Gauteng is negatively impacted by increasing levels of air and water pollution, and a lack of planning around critical issues such as waste management and acid mine drainage. In a water-scarce country, the pollution of our groundwater, rivers and dams is criminal. The silence of the ANC and the GPG in these matters is deafening.
Total change is required if the environment, and the township economy is to thrive. Only the DA can deliver such change.