Media release

Statement on Cabinet meeting of 6 October 2004

06 October 2004

6 October 2004

Cabinet today received a comprehensive report on administered and regulated prices which covers price-setting processes in six sectors: electricity, communications, transport, water, health and education. The review focussed on processes of determining prices rather than the absolute prices themselves. Among other conclusions, it was observed that there might be excessive prices in some sectors (e.g. telecommunications), unsustainably rapid increases in others (e.g. health insurance), and in yet other sectors, inadequate cost recovery (e.g. water resource management).

It was agreed that a system would need to be put in place to address these issues, including:

  • strengthening of regulatory capacity, where applicable, with better analytical expertise and reliable and timely information;
  • price-setting should take into account inflation targets for the period ahead, as well as efficiency, equity objectives, long-term demand and supply and other policy considerations; and
  • there should be a regular review of underlying costs and productivity trends, and monitoring of service delivery outcomes and financial performance of public utilities.

An "administered price index" to monitor trends in this component of the consumer price index will be introduced, and in due course StatsSA will make the necessary announcements in this regard.

The meeting welcomed the manner in which the recent Imbizo Focus Week was conducted, which included 427 events across the country. The enthusiasm shown by the people confirms the importance of this interactive form of governance. The issues raised during iimbizo are being processed to ensure follow-up and monitoring of feedback.

Cabinet accepted a request for South Africa to assume the position of Presidency of the Financial Action Task Force (FATF), an independent international body with de facto responsibility for setting standards against money laundering and terrorist financing. The Secretariat for FATF is housed at the OECD. Professor Kader Asmal has been selected to hold the position of Presidency from July 2005 to June 2006.

The meeting also approved the following appointments:

  • Interim Boards and Council Members of six Playhouses - State Theatre, Arts Cape, FS Performing Arts Council, KZN Playhouse Company as well as the Market Theatre and Windybrow Centre in Gauteng;
  • Extension by nine months of the term of the Board of the Industrial Development Corporation (IDC);
  • Board of the new Small Enterprise Development Agency;
  • Nine Deputy Directors-General in the Departments of Transport (2), Minerals and Energy (1), Home Affairs (3) and Public Enterprises (3);

Cabinet received a report on research into changes in long-term weather patterns in our country, as well as the causes and consequences thereof. Proposals on measures to respond holistically to this challenge were adopted, including intensified implementation of decisions already taken and new initiatives, all of which form part of SA's National Climate Change Response Strategy.

The meeting noted a report on Phase I of a Tourism Global Competitiveness Study and agreed on further work aimed at improving the contribution of the tourism sector to the economy. Further, in order to speed up the process of grading various accommodation and tourism sites in the country, government departments have been urged to procure accommodation only from establishments graded by the Grading Council.

The following Bills were approved for submission to Parliament:

  • SA Abattoir Corporation Act Repeal Bill, which confirms the liquidation of ABAKOR;
  • Amendments to the National Small Business Act which provide for the setting up of the Small Enterprise Development Agency (SEDA) which is a merger between Ntsika and National Manufacturing Advisory Centre; and
  • Amendments to the Close Corporation Act which provide for issues of liability and accounting officer responsibilities.

The meeting reaffirmed South Africa's availability to serve on a restructured UN Security Council, and emphasised that this offer would be pursued in co-operation rather than competition with other countries on the continent. It also approved the submission of the UN Framework Convention on Tobacco Control to Parliament for ratification; and the accession by SA to International Maritime Organisation conventions for the Suppression of Unlawful Acts against maritime navigation and fixed platforms.

The meeting welcomed the successful hosting of the second session of the Pan African Parliament by our country, and resolved to draw lessons from this experience so in future we can provide even better conditions for the work of this body.

Cabinet also noted reports in the media regarding the oncoming trial pertaining to a secondary contract in the arms procurement process.

Government wishes to reiterate that the issues to be canvassed in this court case do not detract from the integrity of the procurement process in so far as it involved government. Neither does it raise suggestions of influence by anyone on government's decisions which dealt essentially with the primary procurement process. It should also be emphasised that charges and allegations by investigators cannot be the basis of presumption of guilt, without due process.

With regard to matters relating to the Deputy President in particular, government has noted his public response to the allegations, and it takes him at his word. It is hoped that the media will respect the dignity of the office of the Deputy President - and judicial institutions - and not impugn his integrity on the basis of allegations not proven in a court of law.

Cabinet also noted the orchestrated campaign regarding the issue of electoral systems appropriate for our country. The meeting noted that this issue did not arise in any of the iimbizo with the mass of the people during the course of last week. As such, while government will implement the decision to review this matter before the next national and provincial elections, the timing thereof will be determined by the priorities government has set itself, first and foremost, to implement concrete socio-economic programmes aimed at improving the quality of life of all South Africans.

Joel Netshitenzhe
Cell: 082 900 0083

Issued by: Government Communications (GCIS)


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