Tau puts industrial policy at centre of economic development strategy

Minister of trade, industry and competition Parks Tau says up to 70% of the department’s budget allocation will be channelled towards investment incentives, sector support programmes, and localisation and transformation efforts.

Tabling his maiden budget vote in parliament on Tuesday evening, the minister said that as he planned to place industrial policy at the centre of the department’s economic development strategy, the medium-term expenditure framework period would see R30.1bn allocated to his department.

“Our biggest portion of the budget is allocated to the incentives programme, receiving 48.7% of the budget, followed by the sector programme and transformation and competition receiving almost 30% of the budget,” he said.

He said the department has concluded eight sectoral master plans for sectors like auto manufacturing, clothing, steel and poultry. These master plans support localisation, investment, exports and job retention, he said.

“This administration will focus on integrated implementation mechanisms, deploying a government-wide set of tools. We have to ensure that industrial opportunities resulting from policy, regulatory or private sector decisions are maximised to manufacturing-led growth.”

He said local procurement would create early-stage demand in targeted sectors and the department would have to play a more active role in identifying procurement opportunities, advocating for local content requirements, monitoring implementation and evaluating impact.

“We have industrial capabilities as a country. We must stop exporting jobs. In identified industries, including infrastructure build programmes, we will work with relevant SOEs and industry to support local manufacturing of our key products and create jobs.”

He added that SA’s 11 designated special economic zones (SEZs) have generated investments amounting to R19.6bn and provide an ongoing revenue stream to the national government through ongoing corporate taxes, pay-as-you-earn tax and VAT payments.

“These contributions to tax revenue across more than 100 firms located in SEZs far outweigh the initial establishment costs. Following from our TASEZ (Tshwane Automative SEZ) success story, the Namakwa SEZ launched on May 29 2024 has more than R29bn invested.”

ANC MP Mzwandile Masina said while the largest party in parliament welcomed Tau’s budget vote, a “paradigm shift in industrialisation, transformation and job creation” was needed, warning that the government “could not continue doing the same thing and expecting different results”.

DA MP Toby Chance said at the dawn of democracy, SA’s entrepreneurial class was co-opted into a “flawed deal” for SA’s economic development. He said this new deal added barriers to SMME development and locked black entrepreneurs out of the prospects of generational wealth.

MK Party MP Mnqobi Msezane said the third-largest party in parliament rejected the budget vote, saying it fell short of assisting the economy and uplifting the landless and unemployed masses of the country.

EFF MP Mbuyiseni Ndlozi said the party rejected the budget as the country’s unemployment crisis required “a revolutionary approach to developing SA’s productive sectors” which was absent from the budget vote’s commitments.

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