Learning Unit 4 Part 2 The Macro Environment

Characteristics of SA Government Constitutional democracy – 3-tier system: National Provincial Local 3-Tier system: Executive authority for each Defined in Constitution as “distinctive, interdependent and interrelated Advisory bodies from SA’s traditional leaders

Characteristics of SA Government Country run on co-operative governance Parliament has legislative authority President elected by National assembly Executive Head of State Leads the Cabinet Not serve 2x 5 year terms in office

Structure of the SA Parliament South African Parliament (Situated in Cpt) National Assembly (350-400 members for 5 year term) National Council of Provinces (Achieve co-op governance and democracy)

SA economic system Open economy: What G&S to produce What price to charge How to use resources Start business of own choice Choose how to divide profits

On par with developed countries On par with basic infrastructure SA economy On par with developed countries On par with basic infrastructure

SA economy Transportation best in Africa. Primary sector well developed. Manufacturing Services Mining Agriculture SA is productive and industrialised. Labour divided into formal and informal sector Uneven distribution of wealth and income

SA economy 3 Fundamental problems to solve: What should be produced in the economy? Quantities to produce, spending on housing and HIV? How should production be organised? Employment, location, buy or lease? For whom should production take place? Equal distribution?

Doing business in SA Must comply to ‘rules of the game’. Major rules: Corporate Governance Labour Laws BBBEE Basic tax

Corporate Governance Act as ‘responsible citizens’. Corporate Governance = Good citizenship for business organisations Business integrity Ethical values Professionalism

7 Characteristics of Good Corporate Governance Discipline Transparency Independence Accountability Responsibility Fairness Social Responsibility

Labour Law - Basic Conditions of Employment Act Regulate employment conditions: Leave Working hours Contracts Records Deductions Pay slips Overtime Termination

Labour Law - Compensation for Occupational Injuries and Diseases Act Information with regards to injury on duty.

Labour Law - Employment Equity Act Applies to employers and workers. Protects workers and job seekers from unfair discrimination. Framework for implementing affirmative action.

Labour Law - Unemployment Insurance Act UIF Jobless or retrenchment Temporary compensation

Labour Law - Labour Relations Act Support labour peace. Support democracy. Support worker decision-making in the workplace.

Labour Law - Skills Development Act Develop the skills of SA. Improve life-quality of workforce. Improve prospects of work. Improve productivity in workplace. Improve competitiveness. Improve self-employment.

Broad-based Black Economic Empowerment (BBBEE) Objectives: Facilitate transformation: Enable meaningful participation of black people. Promotes fair percentage of racial ownership and management for existing and new enterprises Black people = Generic term for Africans, Coloureds and Indians. Also includes women, workers, youth, disabled people and people in rural areas.

Broad-based Black Economic Empowerment (BBBEE) Strategies to ensure BBBEE: Increase # of black people that manage, own and control. Equitable representation on all levels of the workforce. Preferential procurement. Investment in organisation owned/managed by black people.

SA Tax system Main income source of government. Pays for services: Education Healthcare Infrastructure Research Development

Business support in SA SMME’s play big role in SA economy and development. Gov target SMME’s for economic empowerment of previously disadvantaged. SMME’s receive investments and attention. Through DTI National Small Business Act of 1996 = Establish supportive structures

Government initiatives to support SMME’s CSBP, Khula Enterprise Finance Industrial Development Cooperation, Women’s Entrepreneur network NAMAC trust + Ntsika = SEDA = DTI agency BRAIN: Online initiative with info and links