President Ramaphosa calls for new social compact

President Cyril Ramaphosa addressses members of the media at the Union Buildings on measures agreed upon by Cabinet to reignite growth, stimulate economic recovery and secure confidence in sectors affected by regulatory uncertainty and inconsistency. President Ramaphosa is supported by Ministers Ebrahim Patel, Nhlanhla Nene, Pravin Gordhan, Zweli Mkhize, Maite  Nkoana-Mashabane and Tokozile Xasa. South Africa. 21/09/2018. Siyabulela Duda
24 Jun 2019

Delivering the State of the Nation Address in parliament, president Ramaphosa called for a new social compact in South Africa.

Durable partnerships needed to be forged between government, business, labour, communities and civil society.

Spelling out the responsibilities of each partner, the president declared that government must create an enabling environment and use public resources wisely. Business needs to keep the country’s national strategic objectives in mind when taking decisions, labour has to advance the interests of workers while promoting business sustainability and job creation, and civil society is tasked with holding government to account while participating to achieve common goals.

The president announced that the sixth administration will focus on seven priorities:

  • Economic transformation and job creation
  • Education, skills and health
  • Consolidating the social wage through reliable and quality basic services
  • Spatial integration, human settlements and local government
  • Social cohesion and safe communities
  • A capable, ethical and developmental state
  • A better Africa and World

He confirmed that all government’s “programmes and policies across all departments and agencies will be directed in pursuit of these overarching tasks.

The National Development Plan will also be restored “to its place at the centre of our national effort, to make it alive, to make it part of the lived experience of the South African people”.

Over the next ten years, progress needs to be made in tackling poverty, inequality and unemployment so that no person in South Africa will go hungry, the economy will grow at a faster rate than population growth, two million young people will be employed, every ten-year old will be able to read for meaning and violent crime will be halved.

In the health sector, the president announced that the Presidential Health Summit Compact, designed to address the crisis in clinics and hospitals, was being finalised.

Steps were also being taken to prepare for the implementation of National Health Insurance (NHI).

“We are far advanced in revising the NHI detailed plan of implementation, including accelerating quality of care initiatives in public facilities, building human resource capacity, establishment of the NHI Fund structure, and costing the administration of the NHI Fund,” he said.

The president also indicated that government will intensify its work to implement the 90-90-90 strategy to end HIV as a public health threat, including increasing the number of people on treatment by at least another 2 million by December 2020.

As regards Eskom, the president declared that the power utility’s financial position remained a matter of grave concern.

He revealed that Eskom currently has sufficient financing to meet its obligations until the end of October 2019.

A default by Eskom on its loans will cause a cross-default on remaining debt negatively impacting on the fiscus.

As a response, the president announced that a Special Appropriation Bill will be tabled in parliament on an urgent basis to “allocate a significant portion of the R230 billion fiscal support that Eskom will require over the next 10 years in the early years”.

The finance minister will provide further details on the proposed legislation in due course.

Other developments at Eskom include the appointment of a new CEO and a Chief Restructuring Officer tasked with repositioning Eskom financially with careful attention to the mix between revenue, debt and cost structure of the company.

The president also confirmed that the communications minister will, within the next month, issue the policy direction to ICASA to kick-start the spectrum licensing process.

“This process will include measures to promote competition, transformation, inclusive growth of the sector and universal access.”

In terms of the National Minimum Wage, the president revealed that the National Minimum Wage Commission is expected to conclude research on the impact of the minimum wage on employment, poverty, inequality and wage differentials by the end of September 2019.

To drive expansion in the productive sectors, the president indicated that master plans drawn up with business and labour will be implemented in sectors such as clothing and textiles, gas, chemicals and plastics, renewables, and steel and metals fabrication.

Government also wants to double international tourist arrivals to 21 million by 2030 by renewing the country’s brand, introducing a world-class visa regime and focusing on Chinese and Indian markets and air arrivals from Africa.

In the realm of land reform, the president confirmed that the report of the Presidential Advisory Panel on Land Reform and Agriculture had been received and will be tabled before cabinet for consideration.

In the short-term, government will speed up efforts to identify and release public land suitable for smart, urban settlements and farming and funding for emerging farmers will be prioritized.

See also: Powers, Privileges and Immunities of Parliament Act in effect

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
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