SPEECH BY EXECUTIVE DEPUTY MAYOR ALDERMAN IAN NEILSON AT COUNCIL MEETING OF 26 OCTOBER

Mr Speaker, Aldermen, Councillors

Molweni, Goeie Môre, Good Morning.

Before we proceed I would like us to stand and to take a moment to express our remembrance of and condolences to the family of Councillor Ariefdien, who passed away last week after a long illness.

Thank you.

Mr. Speaker, it gives me great pleasure to announce formally in this Council that Cape Town has been selected as the World Design Capital for 2014. The announcement was made this morning in Taipei, where the Executive Mayor was present to accept the appointment.

This prestigious designation will help demonstrate how Cape Town is using innovative solutions to transform this city in a year that will bear special significance as the 20th anniversary of democracy in our country. I would like to thank all those involved in our bid.

All of us will work together to change this city for the better and we look forward to welcoming people from around the world during 2014 to share best practice with us and help us grow.

Mr. Speaker, in Cape Town, we are committed to taking the city to the next level. Many people often ask what this means. They want to know whether it is an empty rhetorical device more befitting an election campaign than a government. The meaning is simple. Having established the fundamentals of government in the last five years, we want to use this five year term to advance the city socially, culturally and economically.

We have put all of the essentials in place. Our levels of service delivery have surpassed other metros in the country. What that level of delivery has allowed us to do is to focus on other targets. But to focus on other targets, we must centre our thinking. How can a city achieve such laudable aims as twinned advancement both socially and economically?

We must interrogate what that advancement means. It means placing a certain faith in the private sector to create the growth that we so desperately need. It means providing support where we can, in efficient regulation and through infrastructure, to say nothing of the social and other services we provide that help everyone in this city, especially the poor, to create a growing economy.

Advancement is growth that creates jobs, lifts people out of poverty and ultimately gives us the resources to provide even more to our people. The nexus of a city's development is a deep intertwining of social considerations and economic ones. To ignore one in favour of the other is to walk a perilous path that ultimately leads to stagnation and more poverty.

Those who walk that path are often motivated by the greatest concern for society as a whole. They see the choice between society and the economy as a zero-sum game. It is the most tragic of assumptions, a flawed groupthink that has undermined governments and misdiagnosed problems with the world economy.

The first lesson of this type of thinking is that business is somehow always corrupt. As such, growth and profits are morally suspicious. It is a type of thinking much in vogue currently, New York and London to elsewhere in the world.

The sanctity of this thought has infused the thinking of many state actors. There is a place for anger. There is a place for a desire to see regulation. But those legitimate concerns are ill-served by lazy generalisations.

It is true that, globally, we have seen the dangers of a lack of regulation and unethical behaviour. But the principle of growth is not the problem. Anger is only constructive when it is used to affect change that needs to happen.

It means little when it is carried through on a wave of popular sentiment towards the destruction of economic growth that ultimately helps the poor. What we have seen with this type of thinking is the search for an alternative. If, as incorrectly assumed by some, the private sector is ultimately the greatest enemy, then ordinary people need a champion. That champion is misidentified as the state. It becomes the arbiter of society's morals and when the economy is tenuously linked to morality, to growth and business.

This is the ultimate tragedy and it is the product of self-righteousness masquerading as justice. This investment of undue authority in the state also undermines its role as the facilitator of business and growth. The state must provide social services to people. It must provide infrastructure, support and regulation to the market. But the state is not the market.

These subtleties have been recognised by certain governments around the world. What those governments have in common is that they have either overseen historic growth or they currently oversee the most expansive growth spurt in history.

I think latterly, of course, of the economies of fellow countries in the developing world. Their models of governance differ. Some favour strong central control in aiding business, like Singapore. Some favour strong yet subtle political control over an otherwise rapacious market, like China. Some favour a more diversified supporting administrative role, like India. And some favour strategic limited blocks supporting internal markets, like Brazil.

Their models vary but they are united by the same fundamental principle: only growth can lift people out of poverty. And in their cases, it has. Mr. Speaker, this is a lesson that this administration has learned.

In taking our city to the next level, we have recognised a need to adapt our management structures towards the central priorities of this administration. Those priorities remain: creating the opportunity city; the caring city; the inclusive city; the safe city; and the well-run city.

Having achieved stability and excellence within our own departments, we must now ensure that in delivering, they are always meeting the five priorities of this administration. I am pleased to announce the implementation of our transversal management system to overcome the silo mentalities of delivery that can sometimes become a feature of government.

The essential core of transversal management will rely on the cluster groups in Mayco portfolios that will ensure that cross-cutting issues receive appropriate management follow-through. For instance, under the economic cluster, the grouping will ensure that all corresponding Directorates measure their progress against the imperatives of economic growth, development and inclusion.

In the social cluster, the group will be tasked with ensuring that we create a safe, inclusive and caring city. All issues will have these requirements. And what transversal management will allow us to do is ensure that Directorates talk to each other and that their delivery efforts are coordinated, synchronised and consolidated.

These are some of the steps that we are taking to effect real change in the City. To learn the lesson that other governments who favour growth have learned, we must not rely on platitudes, on empty slogans.

We must transform our way of doing business to ensure that this government operates at maximum efficiency to provide services and support for business. In so doing, we shall aid growth. However, the sad truth that for many governments or their agencies that a commitment to growth remains a rhetorical device is sadly evident in South Africa.

Mr. Speaker, this administration has recently been engaged with the panel appointed by the presidency reviewing State Owned Entities (SOEs). We welcome this opportunity. We welcome the impetus to change how SOEs currently operate and we recognise that many of the employees and leaders of SOEs are seized by the need for change. Because we are still stuck in a rut with SOEs, the result of a mistaken economic outlook and a mistaken moral understanding of state-led growth.

We must not forget that SOEs were a product of a particular type of thinking that tried to position South Africa as an autarky of sorts where the state could support itself in isolation and, through discriminatory labour practices, a minority of people. It was an ossified view of development. While the aims of parastatal involvement in the economy may have changed ideologically to a more expansive democratic vision, the peculiar centralised development modelling has not. We still see SOEs fulfilling national objectives which undermine the growth of regions.

The universal disbursement of the profits of state-led companies from economically producing regions to economic non-producers hampers regional growth. And countries grow by regions, not by some antiquated view of symmetrical development that punishes producers and draws the entire country's development backwards to match the pace of economic under-performers.

This has led to national development plans that undermine regional growth. For instance, while we are trying to position this city as a major economic hub that can strategically connect with the West African coast and unlock the enormous job-creating potential of the Oil and Gas industry, we are undermined by SOEs.

The National Ports Authority (NPA) has proposed to raise tariffs by 18%. The Airport Company of South Africa (ACSA) intends to increase airport tax by 70%. Eskom is increasing electricity by 25%.

These measures are done because these parastatals provide a major source of revenue for the central state, which can then disburse this revenue to other parts of the country. The SOEs management model is also allowing them to access a significant portion of the country's GDP to the extent that resources are limited for the delivery of services outside their mandates.

At the other extreme, Metrorail is seemingly unable to upgrade its infrastructure and rolling-stock, which directly impacts on the majority of our people who rely on rail for transport. In Cape Town, all of these measures have the direct effect of hindering growth. Hindering growth limits job creation. Limited job creation entrenches poverty.

We believe that to aid growth, we must shift the understanding of the state in the economy and the role of the state in development. We have made representations to the review panel that SOEs require regional boards. Such boards will allow the City to shape regional development plans with SOEs and thus encourage this region's development and, in so doing, the prosperity of our people.

We have had some success with stopping plans that hamper Cape Town from national agencies in the recent past, most notably stopping SANRAL's proposed tolls that would have affected some of our poorest communities. We can serve the dual imperatives of the state providing support and services while encouraging growth.

That requires a shift in thinking that sees growth as the ultimate source of a much greater type of delivery for our people. It is a sea-change in thinking that this administration is affecting in our methods of government and that we are proud to lead.

I am also pleased to announce that, in driving our skills plan, the City will train and employ 90 apprentices in the Utilities Directorate. These young people will learn skills that will directly benefit this city and themselves, whether they choose to stay in our employ or move to other jobs in the market.

We are especially pleased that so soon into this administration's term that we are fulfilling yet another campaign pledge in creating skills for our people. Furthermore, last week, the Peace Accord the City signed with the people of Hangberg and other actors became an order of court.

This is a historic moment in South Africa because it is the first time that such an accord has such legal standing. It is also a historic moment for our city as it finally represents the necessary inclusion of the people of Hangberg with the rest of the metro.

I am pleased to announce that 6 of the city's beaches have been awarded blue flag status, the ultimate marker of excellence and safety. They are: Bikini; Strandfontein; Mnandi; Muizenberg; Camps Bay and Clifton 4th.

I am also pleased to announce that next month, on 17 November, the new Harare Library will be officially launched. This library sees an investment of 3 million US dollars from the Carnegie Corporation of New York for books, CDs, DVDs and periodicals.

This long-standing partnership has already allowed for the library to move to its new premises. When launched, it will have extensive resources and cutting-edge ICT infrastructure. We would like to thank the Carnegie Corporation for their investment and partnership.

We have no doubt that the new library will help the people of Khayelitsha and more broadly, the city as a whole, as we continue to provide services to all of our people. Mr. Speaker, I would like it finally noted that we request today that Council supports our recommendation to withdraw our bid for the World Games in 2017.

When we undertook this bid, we did so on the understanding that it would cost, in total, R360 million and with the expectation of support from the national government and national sporting bodies. New financial projections suggest that the real costs would in fact be at least R560 million and likely even more in the face of a weakening currency.

There has also been no external funding from national government or any other external agency committed to this bid, leaving the City to bear the costs on its own. With this new information, we do not feel that it would serve the people of Cape Town to proceed, not least because financial modelling indicates that it would require significant rates increases to support this event.

Unfortunately, those costs are beyond our reach and we would be undermining our own broader efforts at improving service delivery by committing to ever-escalating costs. By making this decision, we are convinced that we are ultimately serving our prerogative of creating the economic enabling environment in which jobs can be created and dignity enhanced.

To make the choices that see growth as the ultimate agent of delivery sometimes require sacrifice. But in our re-orientation as a city doing our utmost to go to the next level, we must be clear in our priorities.

In Cape Town, we have made the choice to give people dignity and improve their lives by seeing the state in its proper role and doing everything we can to support development and growth. As with all strategies, this involves some choices and not others.

But in following the examples of our peers in the developing world, we side with the evidence of their development. We side with policies that support growth. Ultimately, we side with the ordinary people of Cape Town.

Thank you very much.

Issued by: Communication Department, City of Cape Town, October 26 2011

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