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Cape Town – Relaxing the country’s labour laws would not have helped the country escape its poor economic growth in the first quarter, President Jacob Zuma said on Wednesday.

Answering a question from the opposition in the National Assembly on whether with the country’s 0.9% Gross Domestic Product (GDP) growth in the first quarter - he intends to reduce labour regulation - Zuma said the low growth was primarily due to output losses in the manufacturing sector, disruptions in the mining sector and global economic factors beyond South Africa’s control.

“It is a misconception that our economic growth in the first quarter was heavily adversely affected by our country’s labour regulations,” he said.

He said the crisis in the agricultural sector emanates from unequal relationships between employers and employees and the high levels of poverty as opposed to the country’s labour laws.

“The challenges in the mining sector, as we have explained before, are also not as a result of our labour regulations and these are being attended to in discussions facilitated by government,” he added.

Given the temporary nature of the disruptions in the economy, he said he expected a rebound in manufacturing activity during the current second quarter of this year.

He said it was important to look at South Africa’s unique history – which made it important to deracialise the economy – when one made comparisons with what economic measures other countries were taking.

“I think taking that into consideration we are making progress,” added Zuma, who pointed out several initiatives that the government had recently taken to lower the cost of business and improve competitiveness.

These he said, included the recent signing of Section 6 of the Competition Amendment Act of 2009 with amendments that give the Competition Commission powers to conduct a market enquiry and give the commission search and seize powers and the power to summon firms to present information.

Plans are also afoot to set up special economic zones (SEZs), with the SEZ Bill currently before Parliament and Zuma said SEZs will provide a range of incentives aimed at attracting investment, reducing red tape and increasing competitiveness.

The SA Revenue Service’s (Sars) customs modernisation programme – which has moved customs procedures from paper-based to electronic processes – has enhanced the flow of goods and has improved the turnaround times while reducing trading costs.

Added to this, Zuma said the turnover threshold for Graduated Tax for Small Business Corporations had been increased from R14 million to R20 million, which would create a more favourable tax environment for small businesses.

New military rapid reaction force

In response to a question from the opposition on the reasons for establishing a new military rapid reaction force proposed by Zuma in May, the President said the task force would help correct the constant shortcoming by Africa to respond to crises, such as Mali, rapidly.

He said there was no fixed date as yet as to when the African Standby Force would begin operations.

On a further question on whether Western countries will be requested to assist with training, equipment and financial contributions to the task force, he said the general view of most AU member states is that this should be an African initiative.

“However the matter is still being discussed by the AU and specific recommendations will be tabled at the right time,” he said.

He said presently the different regions on the continents were busy setting up standby forces, at the level of a brigade.

The Southern African Development Community (SADC) was also busy setting up its own standby force, he said.

Zuma and the Leader of the Opposition Lindiwe Mazibuko on Wednesday also spoke out against the injustice of the Land Act of 1913, which was passed by Parliament under the old government 100 years to the day. –