SPEECH BY LN SISULU MINISTER OF HOUSING DURING THE IMBIZO OF THE NATIONAL COUNCIL OF PROVINCES

Limpopo

3 November 2005

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Chairperson,
Invited guests
Ladies and Gentlemen: 

The March 2005 Labour Force Survey by Stats SA indicates that recently the employment rate, in the country generally, improved slightly in that the number of people employed increased from 11,4 million in March 2004 to 11,6 million in September 2004 and 11,9 million in March 2005. The period between September 2004 and March 2005 in particular showed an increase in employment opportunities of over 250 000. However, unemployment remained high generally. In terms of the expanded definition that includes those who had been discouraged to seek work the unemployment rate still stood at more than 40 percent. The survey showed that of the 13 334 000 persons that were not economically active as many as 4 956 000 (37 percent) were scholars. This situation was made worse by job losses in industries such as construction, which lost 11 000 jobs within the same period.  

Here in Limpopo, the trend has manifested itself in a slight increase in the rate of unemployment from 31,2 percent in March 2004 to 32.4 percent in March 2005. Its proportion of the working age population that fell in the definition of expanded unemployment was 21,9 percent – three times greater than well to do provinces such as, for example the Western Cape where the proportion of discouraged job seekers remained at 6,3 percent. Predominantly, in addition, here in the province and in the country generally, those that are mostly discouraged from seeking work are women.  

This is the brief picture, statistically, that present our overall challenge as government: unemployment, particularly among the youth and women. It is a picture being presented here in this province, Limpopo.  

For service delivery generally and housing in particular what the challenge present is the inevitability that those who are unemployed will greatly focus their eyes for housing assistance on government. On the other hand, unemployment greatly influences poverty levels. And this is the reason why as government, and as the Department of Housing, in particular we have taken a very keen interest in alleviating this challenge.  

We have taken a conscious decision to enhance efforts that are aimed at employment creation for we understand that simply because of poverty unemployment tends to be higher in poorer households. The reasons for this have as a result of our increased understanding of the challenge of unemployment become clear: conditions of informality create lingering poverty traps even in instances where employment opportunities have been created.  

This is the underlying principle in wanting to eradicate all informal settlements by 2014. We want to eradicate the conditions that create and sustain dependency by our people.  

In doing so the Comprehensive Plan on Sustainable Human Settlements which was approved by Cabinet, last year, would utilise the opportunities created in housing delivery such as the installation of infrastructure, the actual construction of houses, the construction of social/economic infrastructure and the management and maintenance of housing stock, to create jobs. It prescribes labour intensive construction methods in the building and the development of human settlements including the facilitation of job creation through the establishment of on-site housing materials production activities. In the delivery of top structures in the current financial year for 2004/5, for example, the construction of houses created over 30 000 job opportunities nationally. 

Since Small, Macro and Medium Enterprises are recognized for their potential in job creation the Plan commits government, the Department of Housing in particular, to enhance and develop the capacity of this sector. Local governments in this regard are allocated the specific responsibilities of developing plans that will achieve the objectives I have talked about.     

In addition, housing’s contribution to fighting unemployment comes also in the form of the Extended Public Works Programmes. Nationally a total of R2, 037, 847, 043 has been budgeted for the programme. For Limpopo 5 projects that are estimated to cost R32,104,088 have been identified. Government estimates that these will provide 1, 325 job opportunities with 359 being give to the youth, 269 to women and 13 to the disabled.  

Because of housing’s contribution to employment creation it has therefore been necessary to enhance the role of the private sector in the construction of housing. Hence the creation of a conducive environment for the private sector and the construction industry, in particular, to maximise its capacity to build houses. Through the Comprehensive Plan, we have, in other words put in place some measures that will boost the performance of housing sector to enable government to achieve the objectives of its programme of action. Among other things, in this regard we have increased funding in relation to subsidies and broadened the band. We have reduced from 8 to 5 years the limitations regarding the selling of a state-subsidised to create more demand in the housing market. In general we are confident that the demand for residential property generally will boost the construction industry and thereby create more job opportunities for both the semi-skilled and the unskilled.  

On 30^th March we concluded a Memorandum of Understanding with the Banking Council of South Africa as part of the work on the Financial Services Charter. Through the Memorandum of Understanding the Banks pledged to invest a target of R42 billion by 2008 in the form of various options of housing finance for the lower middle income sector. This will enable increased home ownership for those sectors of our society that had been excluded previously by the banks in lending, a development that in turn should increase construction activity. The same outcome is expected to be achieved following our signing on the 23^rd of September 2005 of a “Social Contract for Rapid Housing Delivery” with the private sector and NGO partners.  

The business confidence index that has shown increases recently from 82 points in the second quarter to 86 in the third quarter, with the building sector increasing its confidence from 90 to 94 points, gives us confidence that our efforts are bearing fruit.  

As government, and housing particular, it is our intention to strengthen the performance of this industry to ensure the creation of jobs. We want however to also encourage schooling and the attainment of qualifications by our people in property development as well as construction. It is clear to me that unless the challenge of unemployment is confronted in a multifaceted and the integrated manner that includes the participation of communities, our approaches will still not be sustainable for the long-term. Hence, my appeal for support in the goal of eradicating all informal settlements by 2014. I urge in particular to make sure that once a house is constructed that there is no shack put next to it. 

In addition, this province was chosen recently by the National Youth Commission for the implementation of the Youth Letsima Project. The project will be implemented in the Bela Bela municipality. This is a project to help the youth attain training to get employment by developing skills in various aspects of construction. For its first phase the project is being implemented in this province and will thereafter go to the Western Cape and Mpumalanga. It is focused on unemployed young people. I am informed that the Commission is already mobilizing around the province for this. I urge you all to come on board of even this project.