Chairperson, when the Minister of Finance tabled the Medium-Term Budget Policy Statement, MTBPS, in the National Assembly on 27 October 2009, we once again reminded Parliament, and South Africans in general, that this was our statement of intent and that this was a policy statement intended to serve as a mechanism for Parliament to begin the engagement in the Budget process.
As we know, there are three stages at which Parliament can engage with the Budget process, namely that of influencing it, that of exercising oversight over it, and that of holding us to account.
The statement sets out the economic contexts and assumptions that inform the following year's Budget as well as the framework in which the Budget is prepared. It has four components. The first is that of the fiscal framework; the second is that of government's spending priorities; the third concerns the division of revenue among the spheres of government; and the fourth contains the tabulation of all the conditional grants to follow.
I want to take this opportunity to thank the NCOP for the thorough and yet speedy manner in which it has deliberated on the MTBPS. I would like to stress, as I have previously indicated, that this is an important process through which the opinions of the public and civil society can be drawn into the Budget process.
I would like to reaffirm our commitment as government to ensuring that, no matter what the situation, we will never compromise on the five major priorities as outlined in the manifesto of the ruling party. I also note that these priorities received widespread support and that the comments by various groups to the committee reaffirm the correctness of the approach.
I would like to repeat what these priorities are. The first is education, where we are focusing on improving the quality of the foundation phase of education. We are going to strengthen further education and training enrolment and we are also going to place a particular emphasis on teacher development and school-building. The second priority is that of health. Here we have focused particularly on fighting HIV/Aids and tuberculosis, the improvement of hospital management and implementing the National Health Insurance.
The third priority is that of creating sustainable jobs, implementing the framework agreement that government adopted with labour in February this year, accelerating the roll-out of the Expanded Public Works Programme, EPWP, Phase 2, and the reorientation of our business and industrial support measures to support job creation and prevent job losses.
The fourth priority is that of rural development. We want to implement a comprehensive rural development strategy that focuses on raising rural incomes, investment in rural infrastructure, supporting farmers and implementing land reform.
The fifth priority is that of fighting crime and corruption. We are going to focus on better integration in the sector, enhanced IT systems and increasing the number of personnel, particularly detectives and forensic specialists. We are also going to focus on better court case management.
This spending is broadly in line with the priorities and we welcome the suggestions made at the hearing as well as those reflected in the reports of both the Finance and Appropriations committees. We note, in particular, that rural development has featured quite high in that report. Land restitution has also been raised. We will also consider these matters in preparing the Appropriation Bill for next year.
We will also look seriously at proposals around water, at proposals around taking the EPWPs to rural areas, and at proposals supporting our municipalities in building capacity and making sure that service delivery is enhanced.
The issue of savings featured quite prominently in our MTBPS and in the reports. It is clear that there is an in-depth process under way. We have only started and we still have a very long way to go. We indicated that we were able, through savings, to identify R14,5 billion in the national departments and R12 billion in the provinces. This was made possible by making sure that we cut the frills and focus on the core functions of each department. It was also made possible by making sure that we root out corruption and all sorts of maladministration.
This process is about culture change. One of the initiatives involves improving the procurement outcomes. Here, centralising the procurement of some large projects was considered. In this regard, an agreement was struck with the Department of Health in which it was established that we are going to deal with their procurement as our pilot project. We want to reiterate that we need the support and the vigilance of Parliament as an institution in order for us to succeed in this quest.
We think the suggestion of the committee to review the conditions of the municipal infrastructure grant, MIG, is very useful. We will liaise with the Department of Co-operative Governance and Traditional Affairs to review these conditions. This process has already begun.
We are also concerned about the issue of land restitution. There is a significant gap between the allocated resources and the cost of completing the land restitution process.
We can assure you that we are working with Minister Nkwinti to find ways to complete this process as speedily as possible, given the resource constraints. Most of us agree that the present model is unaffordable and the Minister of Rural Development and Land Reform is exploring ways to achieve the same objective, but in a more affordable and cost-effective manner.
The latest employment data indicates that we have now lost close to a million jobs since the onset of the crisis. This is about 7% of the workforce and most of the people who have lost their jobs are young people, domestic workers and people in the informal sector.
Let me indicate that signs of a recovery are beginning to be seen but lots of uncertainty lies ahead. Positive signs can be seen in manufacturing and mining data, but consumption remains weak and business investment is still very low.
We pledge to work with Parliament to develop the capacity to process the MTBPS in terms of the new legislation and the Budget. We are also prepared to look at the timeframes for the Budget to make the parliamentary process more robust and useful. We agree that we need more oversight from Parliament in order to monitor the quality of spending and whether departments are taking measures to reduce costs and improve service delivery.
With these words I once again want to thank the committees for having worked on the MTBPS and want to say that I look forward to its implementation. Thank you. [Applause.]
Chairperson, hon Deputy Minister and members, it's a privilege to participate in this debate. On 27 October 2009, the Minister of Finance complied with section 28 of the Public Finance Management Act, which requires the Ministry and the Department of Finance to present to Parliament the multiyear budget projections and also to set out the Budget framework, fiscal policy, revenue projections, spending estimates, borrowing requirements and assumptions concerning debt interest cuts over the period.
The relevant committees of Parliament were assigned to process the Medium- Term Budget Policy Statement, MTBPS, and the Adjustments Appropriation and to present their recommendations and responses, in this case, to the NCOP today. The committee had to perform its duties within a very short space of time, given the parliamentary schedule. Joint meetings were held with the Standing Committee on Finance in the National Assembly. Substantive comments and useful inputs were received from business, organised labour and respected economists.
The committee reflected on the following: the state of the economy, economic policy outlook, fiscal and monetary policies, spending priorities and the Budget deficit. The MTBPS was tabled in the biggest economic downturn since the Great Depression. It is an environment that is hostile to the poor and the emerging economies - and it is not their fault.
The economic downturn has required a co-ordinated global response that focuses on new approaches to governance, regulation and greater recognition of all role-players, including developing countries.
The closure of factories, small farms that fail, people who struggle to get by on reduced incomes - all of these sometimes lead to hunger. When hunger knocks at the door, then human dignity and survival are at risk.
As we speak, the economy is very slow in recovering, but it will take a long time and a tiresome process to come to where we want it. We must do things differently with less money to address our people's needs. This also means taking tough decisions that will sometimes be unpopular.
We must commend the Minister of Finance and also the Deputy Minister on the fact that the country's national framework response to the global crisis is indeed yielding positive results. Economic recovery can only be realised if proper and sound economic policies, with better co-ordination between all spheres of government, are implemented and monitored.
The committee commends the Minister and the Finance team for protecting key priority areas as outlined in the state of the nation address.
With regard to corporate South Africa, a few lessons can be learned about, firstly, unsustainable banking practices to maximise profit and huge bonuses to executives; and secondly, overvalued corporate assets and stock market shares. This led to high levels of debt and more unsustainable transactions in the world economy.
Goethe wrote, and I quote:
Knowing is not enough; we must apply. Willing is not enough; we must do.
And what must we do? We accept the MTBPS as printed and submitted to the committee and to Parliament by the Minister. But what do we do now?
The first thing is the creation of decent jobs. There must be a balance between welfare and work; we are not a welfare state. Do not abandon the inflation targeting now. Get consensus on the fight against corruption. As we sit here, from different political parties and backgrounds, let's fight corruption.
We need qualified and quality teachers, doctors, engineers, chief financial officers and policemen - the people who form the frontline. We need a smaller administration and more operational people. We need to address the structure of the economy and address it seriously - the legacy of the economy we inherited. Progressive thinkers in the world and in South Africa must have a battle of ideas so that they can think and do things differently.
We must be bold and decisive in what we want to do and where we want to go. We must invest in fast-tracking public finance management skills. As parliamentarians, we must, through our various committees, vigorously monitor expenditure patterns in government departments and parastatals, and support Operation Clean Audit.
We should also do our oversight in our constituencies more seriously and thoroughly and address, as a matter of urgency, the mismatch between billions of rands being pumped into provincial coffers and the impact of this on the quality of people's lives.
The focus must be on the core functions. A comprehensive expenditure and service delivery review per department must be done, specifically on education and health, to determine gaps and inefficiencies that must be addressed. We need to strengthen oversight roles and responsibilities through improved planning and tighter monitoring and evaluation.
It is important that interventions improve the performance of provinces as they relate to planning, monitoring and evaluation; and feed into the National Planning Commission and the Monitoring and Evaluation Unit in the Presidency.
Having considered the 2009 MTBPS and also conducted public hearings with the Standing Committee on Finance, the Select Committee on Finance made the following projections and recommendations: Firstly, the setting up of the Parliamentary budget office in the next term in order to support the work of the Finance and Appropriations committees, especially during a value-for- money oversight and accountability exercise. It would therefore be ideal for the director of the parliamentary budget office to be appointed in January 2010.
Secondly, we recommend the strengthening of the working relationship amongst parliament's committees and Statistics SA, the newly established Ministry for performance monitoring and evaluation and the Co-operative Governance and Traditional Affairs department in order to design and implement a co-ordinated approach to value-for-money oversight and accountability.
The committees should be provided with sufficient capacity in terms of administrative, content and research support in order to fulfil their legislative and oversight function.
The parliamentary programme should allow adequate time for parliamentary committees to engage with the MTBPS. The NA and the NCOP should expedite the process of reviewing the current Southern Africa Customs Union, or Sacu, revenue formula. The distribution and transfer of revenue to other member states forms a critical part in terms of the amount of revenue the economy generates.
The new money bills amendment Act requires that members of this House, as a matter of urgency, take a keen interest in the Budget process as it gives Parliament more powers and clarity on how best we can perform our oversight and responsibilities.
Chairperson, I take the opportunity to ask this House to approve and adopt this report in the NCOP. I thank you. [Applause.]
Chairperson, first of all, let me, on behalf of the ANC, join the speakers before me in supporting the report on the MTBPS. Secondly, I want to say from the outset that we have sound economic policies. Our finances are in good hands and, therefore, the ANC, once more, supports the direction which the government is following with regard to economic policies. We are moving forward; we are prospering as a country.
The MTBPS 2009 sets out the policy framework that will inform the 2010 Budget allocation. It is an indication of how fiscal and monetary policies, expenditure and revenue will be structured over the next year. Therefore, the MTBPS represents government's vision and set of priorities by means of which it intends to change the lives of our people.
It is important to note that the MTBPS looks into the following areas: the assessment of the economic climate; revision of the fiscal framework; the containing of government's spending priorities; and the division of revenue among the spheres of government - national, provincial and local. We adopted this strategy in order to make sure that our policy brings certainty and predictability to all spheres of government, in so far as the Budget is concerned.
It is true that these days nobody wonders what the Budget for next year will look like; nobody wonders what the Budget will look like in two years' time, because the ANC government has made sure that Budget reform in this country is taking root and is understood by everyone. Most importantly, everybody in the country is now able to take part in the Budget hearings and make inputs so that their lives can be improved on a daily basis.
It is, therefore, important for us to note that our country is moving in the right direction; the ANC is leading this pack in such a way that we are able to improve the lives of our people. I need to indicate, however, that we are discussing the MTBPS within the context of an economic crisis, as mentioned by the previous speakers.
We have been hit hard by the economic meltdown, but we are pleased to note that our government has already made certain interventions in order to save our economy. This has been explained by the Deputy Minister of Finance, who answered questions on economic development in the country when he alluded to a number of steps taken by our parastatals to assist our communities to relieve their economic plight.
Reduced revenue projections are envisaged for 2009, as a result of the economic downturn. We are also pleased and encouraged that, although this country is projecting a 1,9% growth in the economy in 2009, it will improve by 1,5% in 2010, according to figures supplied by the National Treasury.
China and India are probably two of the few countries that are projecting significant growth over the same period. We have read the documents supplied, again by the National Treasury, in which they are saying that China is projecting 8,5% and 9% growth in the economy in 2009 and 2010 respectively; and India 5,4% growth in 2009 and 6,4% in 2010. We, however, need to learn from the experiences of these emerging economic powerhouses and find out what it is that they have done correctly to realise this kind of growth.
The ANC has, however, looked into this economy and prioritised many areas that have been alluded to by the Deputy Minister and also by the chairperson of the committee, one of which is health. We need to improve the health profile of all South Africans. Access to health should be the concern of all citizens in this country. This matter is so serious that one day we should have a debate on it.
The president of America, President Obama, has succeeded in convincing Americans to adopt his health care plan, including insurance for the poor, something that has never been seen in America. Today they boast an insurance plan for the poor in so far as health care is concerned.
Sadly enough, in this country there are still people who are sceptical about the idea of making sure that health care is accessible to everyone. They go out to people and garner votes, and once the votes have been delivered to their parties, they pursue policies other than those that their constituencies would want to identify with. It is sad that we have such people in our country, in this day and age.
We need to intensify the fight against crime and corruption as alluded to, again, by the Deputy Minister and the chairperson. It is a scourge, and we need to close all the fronts so that criminals do not have a market.
We need to inform the police whenever we see criminal activities in our communities. We need to manage our resources very carefully, so that we can save a lot of money and redirect some of it to other programmes.
We have noted the improved government spending on electricity and infrastructure. If you go around the country, anywhere in the country, you will see roads being constructed and you will see massive road construction projects. Sometimes we come across stop-go controls and we wait for a few minutes in order to make sure that those people doing the work do it properly. We have seen airports and stadiums being built through this massive infrastructure investment in our country. In conclusion, the municipal infrastructure grant, MIG, projects need to be speeded up. Rural development is the cornerstone of the economic improvement of our rural communities. They will, after all, be the main beneficiaries of our hard-earned democracy. I thank you, Chairperson.
Chairperson, colleagues, the finance Minister and his team must be commended for doing an admirable job in a very difficult situation. A R70 million hole in the budget is a tough thing to fill. Unfortunately, it is not yet clear how we will be able to fill it or even if we will be able to fill it
The most alarming calculation in this Budget is that government debt, as a percentage of GDP, is now 30%, but it will rise to 40% in 2012. It hasn't been at these levels since the apartheid administration managed us into a fiscal hole.
Of course, this figure is partially a reflection of the Minister's stated approach to respond to a recession by maintaining the level of state expenditure - a response that the DA has supported in general. I say "in general" because we have serious problems with the fact that a large chunk of this expenditure will be ploughed into propping up poorly managed and often dysfunctional parastatals that should have been privatised long ago. The amounts concerned are staggering. In 2008-09, R200 billion worth of financial aid was provided to state-owned enterprises. Notwithstanding the dubious destinations of much of this government expenditure, we support the maintenance of spending levels during a recession as an important countercyclical strategy. The question is: What happens to the fiscal balance once the recovery kicks in? The answer is that the finance Minister and the Ministry will have to man up to the fact that expenditure growth needs to be seriously constrained from next year.
In this regard, the DA supports the finance committee's reports in general, but cannot support the theoretical proposals in that they are clearly unaffordable. The programming Whip outlined some of them a few moments ago. In this regard, my one regret is that the fine proposals of the chair of the Finance committee were not included in the committee report. I hope he's not nervous of putting forward his views in the sister committee of Appropriations, chaired by our young lion from the North West. This is because the budget deficit has doubled from February's estimates to a massive 7,6% of GDP. This is completely out of line with other emerging markets and is similar to deficit levels in rich countries that have many more resources to cope with higher debt levels. Yes, France has a budget deficit of 8,2%, Japan has 7,7% and the euro area as a whole has 6,5%. But look at Brazil, Poland and Argentina. Brazil's deficit is at 3,2%, Poland's is at 2,3% and Argentina's is at a humble 1%.
We are completely out of line with economies of a similar size and structure as ours. We have neither the natural resources nor the scale to easily work ourselves out of this debt situation, as developed economies do. More alarmingly, we are now the only economy in Africa that is shrinking. Every single other African economy is growing, but ours is shrinking by 1,9% a year. We are now a drag on the continent.
Of course, growth will return to the South African economy in time. With good management and a moderation of expenditure plans, Treasury will be able to see us back onto the path of fiscal sustainability. In the title to the first chapter of the policy statement, the Minister calls this objective "Supporting the Recovery".
That's all very well. But what kind of growth path will we return to? This is a million rand question for this administration. It's a question implied in the second part of that title, which is "Transforming the Economy". This is a question that the Treasury appears to have begun thinking about answering in this policy statement. This is because it is obvious to all that the jobs crisis remains our most pressing priority in South Africa. The old ideas we have rolled out for 15 years are not going to work. We need fresh thinking on creating what the statement calls "a massive expansion of employment".
Firstly, we need thinking like my party's proposals on opportunity vouchers to give young South Africans access to work and skills development. Secondly, we need wage subsidies to lower the cost of employment; and thirdly, we need tax incentives to stimulate job creation.
I am pleased to report that each of these proposals is in this document that we are debating today. If the hon members here haven't read it yet, I encourage them to read it. There are three proactive responses to creating jobs that go far beyond the spin-heavy job opportunities of the EPWP, and the DA fully endorses their development into legislation.
These three policy ideas didn't receive much press coverage, but they were bravely included in the statement by the Treasury that appears to have finally had enough of this country being crippled by an inability to employ our people.
Another brave inclusion was the extraordinary admission on page 23 of the statement - under the section "Global Lessons for Growth" that countries such as Australia and Korea, where prices and wages have adjusted more quickly to weak demand and rising unemployment, have been able to demonstrate a competitive edge.
I enquired about the policy implications of this statement in a question for oral reply that the Minister was meant to answer in this House today, but it was struck from the Question Paper under mysterious circumstances. Chair, you can be assured, as agreed between you and me earlier today, that I will ask the question again.
This is because the answer to this question, which is the reform of our real economy on the one hand, and on the other hand, our labour market to remove rigidities, is the key to a true transformation of our economy.
If the Treasury and other mainline economic Ministries like Trade and Industry, Economic Development, and the Ministry responsible for the planning commission can sort out their differences and appoint someone from among their ranks to drive this reform, then we will finally begin tackling unemployment in our country. I thank you. [Applause.]
UMntwana M M M ZULU: Sihlalo waleNdlu baba Mabhoko, iPhini likaSihlalo, mhlonishwa Ngqongqoshe nePhini lakho uMadlokovu, nabanye oNgqongqoshe abakhona namalunga ahloniphekile aleNdlu. Madlokovu, lesi sikhathi sesabiwomali sokuphela konyaka, yisikhathi esibaluleke kakhulu sokuthi kubhekelelwe thina esihlala emakhaya. Ngikusho lokhu nje ngoba mina ngihlala emakhaya, ezilalini- ezishiwo abaseKoloni. KwaNongoma yilapho ukuhlupheka kudlange kakhulu khona ngakho-ke kufanele nisibhekele impela ngoba laphaya eKhayelitsha babebhekwe kangconywana khona nakuba babebandlululwa nabo kodwa babengafani nathi thina esisemakhaya.
Sikholwa ukuthi ngeke siyithole imisebenzi thina ngoba akukho mafemu angakhiwa le ngakithi, ngakho-ke kufuneka nibheke emkhakheni wezolimo kube yiwona enifaka imali kakhulu kuwo ukuze abantu bakithi bazoba nokudla badle basuthe, bezilimela le emakhaya. Ayikho enye indlela esingabuye senze ngayo ngoba ayikho imisebenzi emakhaya ngoba awekho amafemu.
Ifemu yethu enkulu esiye sithembele kuyo uhulumeni uqobo oyaye asiqashe sibe ngomabhalane emahhovisini akhe. Ngizomshayela ihlombe uhulumeni wakho uma sengibone kahle ukuthi izidingo zabantu ziyafezeka ngokuthi kusetshenzwe ngokuhlanganyela. Kodwa-ke uhulumeni udinga ukulekelelwa ngazo zonke izindlela - ngokuthi uma esebheda, ashaywe kahle agxekwe ngendlela ekahle eyakhayo. Ngoba uma ezogxekwa ngokungakhi, mina njengendoda yakwaZulu angigxeki umuntu kodwa ngingenakho engikubekayo okungcono okungenziwa. Ngiyahambisana nalesi sabiwomali esikhona, kodwa ngicela ukuthi nibhekelele izindawo zasemakhaya. Indaba yamapulazi impela angiyizwa kahle, ngoba asinawo amapulazi ezindaweni zasemakhaya kodwa sinezindawo zokulima. Uma nithi nizobheka amapulazi thina esingebona abalimi nizosenzenjani? Yizinto ezifana nalezo mhlonishwa Ngqongqoshe ekufanele nizibhekelele kakhulu kubantu bakithi. Ngiyabonga. [Ihlombe.] (Translation of isiZulu speech follows.)
[Prince M M M ZULU: Chairperson of this House hon Mabhoko, Deputy Chairperson, hon Minister and your deputy hon Madlokovu, other Ministers present here as well as hon members of this House. Madlokovu, this year-end budget allocation is very important because it comes at a time when we, the people, who are living in the rural areas are supposed to be catered for. I am saying this because I live in the rural areas - ezilalini, as they are referred to by the people of the Eastern Cape. Poverty is rife in KwaNongoma; therefore you need to really look out for us because in Khayelitsha they are better catered for. Although they were also discriminated against, their situation was not the same as that for us who are living in the rural areas.
We think that we will never find employment as factories cannot be built in our area. You therefore need to look into the agricultural sector and you need to allocate more funds to it so that our people can have food to curb their hunger, through ploughing out there in the most remote areas. We have no other alternatives because there are no employment opportunities in the rural areas because there are no factories.
The biggest factory on which we pin our hopes is the government itself, as it appoints us as clerks in its offices. I will applaud your government once I have seen that the needs of the people are being met through working together. However, the government needs to be supported by all means - but it also needs to be called to order and criticised constructively if it is going astray. Because if it is destroyed, I as a man from KwaZulu-Natal will not just criticise someone without coming up with something better. I support this Budget allocation, but I am requesting you to cater for the rural areas. I really do not understand the issue regarding farms, because we do not have farms in the rural areas but ploughing fields. And if you say you are going to consider the farms, what are you going to do about us who are not farmers? It is such issues, hon Minister, that you must look at when it comes to our people. Thank you. [Applause.]]
Chairperson, Ministers and the honourable House, at this time, when people are losing jobs left, right and centre, government's single most important priority should be saving the jobs that are still there and creating new jobs in sustainable industries. With a projected growth of 1,5% in 2010 - the year of the World Cup - very few of the unemployed will find work.
Now is the time for this government to implement a massive solar geyser programme. This will provide work, inject money into the economy, reduce electricity demand, enhance health, help households facing increased electricity bills and protect the environment. An expenditure of such a nature will help 100% of our people and prepare our nation to reach out into Africa with solar solutions for the continent.
Cope advocates an activist state, and this is the first thing we would have done. South Africa has always been identified as a diamond country, yet what are we doing in respect of setting up industries to polish the super diamonds we have in this country? The demand for super diamonds is going to grow by leaps and bounds.
Cope is satisfied with the salary adjustments which are being budgeted for to accommodate occupation-specific dispensation agreements. Our party welcomes the R12 million expenditure.
Of great concern to us, as Cope and the select committee, is the lack of spending on infrastructure in various departments. Respective Ministers and directors-general should have their travel, administrative and personnel budgets for the new year slashed by a corresponding amount. This amount should then be added to the unspent amount to double it. We take a very dim view of departments that do not prioritise spending on infrastructure. This House must find a way of censuring them.
This year, R524,9 million is being given to Public Works. About a quarter of this amount will be used to renovate houses of Ministers and to upgrade their offices. Who will believe that this is unforeseen and unavoidable expenditure? Let us be partners, please, Minister. Let us have the exact details of what is happening.
Now I come to Rural Development and Land Reform. Here the budget was sliced from R4,4 billion to R1,7 billion. As usual, rural development is taking a back seat. This government's failure to promote economic growth in our rural areas will see more people migrating into towns and cities. Most towns and cities cannot meet the service demands of these people.
Honourable House, I now come to Education. As government is pulling back from OBE, it is now going ahead with OBG. [Interjections.] Thank you. [Time expired.]
Chairperson, hon Deputy Chairperson, hon Deputy Minister, hon members, on 27 October 2009 the Minister of finance hon Pravin Gordhan, tabled a Medium-Term Budget Policy Statement, outlining the budget priorities of government for the medium term. The MTBPS was tabled together with the Appropriation Bill. These were later referred to the Select Committee on Appropriations for consideration in terms of its mandate. Among its responsibilities in terms of the MTBPS, the committee is required to consider and report on the following: the spending priorities of national government for the next three years; the proposed division of revenue between spheres of government and between arms of government for the next three years; and the proposed substantial adjustments to conditional grants to provinces and local government, if any.
In his foreword to the MTBPS, the Minister of Finance pointed out that as a country our constitutional vision enjoins us to, and I quote:
... improve the quality of life of all citizens and free the potential of each person as we build a nation based on economic values, social justice and human rights.
This is in line with the ANC's understanding that the most pressing challenges that confront our people today are unemployment, poverty and inequality. It reiterates the party's determination to halve unemployment and poverty by 2014 and to substantially reduce social and economic inequalities. The Minister made sound and realistic assurances and calmed the waters by presenting one of the most balanced policy statements during very difficult times.
The fiscal framework makes available an additional R78 billion for spending. Additional savings of about R14,5 billion at national level and R2,6 billion at provincial level are expected to contribute to financing new priorities. The revised total expenditure estimate for 2009-10 is R781, 4 billion, growing to R834,9 billion the following year and reaching R954 billion in 2012- 13.
It increases baseline allocations for departments, provinces and local government, with departments considered strategic to policy implementation getting a fair share of the cake.
Although this results in deficits for the coming three years, thus putting our country into debt, it is encouraging that most economists agree that, as much as the amount is large by South African standards, it is not particularly large within the current crisis response paradigm.
Even the economists from Idasa support this view by saying that:
South Africa's response remains consistent with that of the G20 countries and envisaged levels of indebtedness are not in excess of that of the majority of these countries.
So the DA should not worry; we are on course.
Chairperson, I stand here to report, without any fear of contradiction, that the budget priorities over the medium term support policy priorities, that is, social spending, infrastructure expansion, the fight against crime, education, health and job creation. This shows that our government is committed to continued spending even if growth is expected to recover slowly and tax revenue even more slowly. It indeed does not have a choice given the poverty, the inequality and the unemployment that continue to mar our democracy.
Both the Adjustments Appropriation Bill and the MTBPS give hope to our people that many promises made by the ANC during the election campaign will be achieved. They firmly and convincingly lead us on a path towards the achievement of commitments made by the President during his May 09 inauguration speech, when he had this to say to the nation and the world, and I quote:
For as long as there are South Africans who die from preventable diseases; for as long as there are workers who struggle to feed their families; for as long as there are communities without clean water, decent shelter or proper sanitation; for as long as there are rural dwellers unable to make a decent living from the land on which they live; for as long as there are children who do not have the means or the opportunity to receive a decent education, we shall not rest, and we dare not falter, in our drive to eradicate poverty.
This policy directive does exactly what the President further said during the state of the nation address, and I quote:
The economic downturn will affect the pace at which our country is able to address the social and economic challenges it faces. But it will not alter the direction of our development.
Since the implementation of our programme will take place in the face of the economic downturn, we will have to act prudently - no wastage, no rollovers of funds - every cent must be spent wisely and fruitfully. We must cut our cloth according to our size.
We should commend the Ministry for being a good example in this regard.
Chairperson, allow me to conclude by saying that the 2009 MTBPS strikes a positive balance of priorities in the wake of the recession. It made a strong policy position to evaluate spending in terms of impact assessment and efficiency in order to ensure value for money and reprioritisation towards higher-impact priorities.
The statement also covers significant areas identified in the Medium-Term Strategic Framework, MTSF. There are, however, some weaknesses within the statement, as identified in the committee report, that require some consideration. It is encouraging to hear from the Deputy Minister here today that they found such committee recommendations useful and are busy considering them.
Hon members, the stage is now set for us as Parliament to play our oversight role, to ensure that departmental budgets are in line with the set priorities, to hold everyone accountable and ensure that where there is deviation, noncompliance, waste of funds, etc, necessary corrective measures are put in place by the executive.
In conclusion, let me remind our opposition partners that as the ANC, we always make sure that we don't forget the people who mandated us to come to this Parliament. As parties in Parliament, the fact that we are representing different people tells a story that our views, approaches and strategies will not always be the same. It is most fortunate that we have chosen this path as the ANC and we believe that we are on track.
Chairperson, on that note I recommend the adoption of the MTBPS. Thank you. [Applause.]
I now call upon the Deputy Minister to respond to the debate. [Applause.] I can see some of you are feeling very cold, but some of you are asleep. [Laughter.]
It's after lunch, Chairperson. [Laughter.] This depends on what some of us do during lunch.
Chairperson, once again let me thank this House, particularly the Select Committee on Finance and the committee on appropriations, for the work they have done on this report. I want to recommit our department to ensuring that we take your recommendations seriously, as the hon Chaane has indicated.
I did indicate earlier that the short time that was given to Parliament to deal with the MTBPS is regretted, and we trust that in future we will be allowed more space. This was indeed a peculiar year. We trust that next year, once all systems are in place, we will be able to deal with this, hon Chairperson De Beer.
We are all aware of the current situation and the current economic climate in which this MTBPS was tabled - the issue of loss of jobs and the issue of the origins of the crisis that we are in. A lot of people have alluded to this. We trust that with our sound economic system, we were better placed to weather the storm. That, however, did not spare us from the wrath and the severity of the storm.
Chairperson De Beer also reminded us of the important point we made in the MTBPS - that of balancing the welfare state and whether we would have the trade-off between welfare and the creation of employment. The issue that needs to be looked at quite seriously is that of addressing the structure of the economy. We would all agree that no matter what we do, because of the skewed nature of our economy, it will continue to widen the gap between the haves and have-nots - even if it grows.
We also thank the committee for their support on Operation Clean Audit. Both Houses in Parliament agree with us and emphasise that we need to tighten oversight, monitoring and evaluation.
As the chairperson has indicated, the issue of the establishment of a budget office is a critical area, as is adequate support for parliamentarians in order for them to discharge their responsibilities.
It is very difficult to say anything after members have all indicated that they are in full support of our statement. Even though Mr Harris pretended not to agree with the MTBPS, he quoted from the statement. He was very accurate in quoting from the statement, except that he said that it is DA policy. So we are finding each other. They say no matter how right-wing you are, you will always find the left wing somewhere! [Laughter.] So, I am pleased, Mr Harris, that you have finally found the left wing.
The other question he raised is that he is not too sure how we are going to finance the deficit we find ourselves in. This is the situation we find ourselves in, and we trust that it is a counter-cyclical measure we have allowed ourselves to get into. You will recall that before we got into this situation, we were in a moderate surplus.
The promise and undertaking we make is that once the economy recovers, we will have to reduce the budget deficit which we find ourselves in. But, at the moment, the trade-off we have cannot be done by reducing the budget deficit at the current time and then compromising our priorities. So, the budget deficit is the only way out.
On the kind of growth path we are going to return to, we have all agreed that if we invest in the productive capacity of our economy, we will be better placed to benefit beyond this recession and even after the Fifa World Cup, which has spurred on a number of the infrastructure development projects we are involved in.
Baba uMageba, Mntwana, izwakele indaba yakho yokuthuthukisa izindawo zethu zasemakhaya. Ngenhlanhla nami ngiphuma khona endaweni yasemakhaya ngakho-ke usizi siyalwazi futhi asiluzwa ngendaba sikhuluma ngoba siphuma kulona thina uqobo lwethu. umehluko phakathi kwethu nabanye abantu esingaphumi nabo ndawonye kulokhu kuba yikho lokho ukuthi umangabe sikhuluma ngentuthuko eyabo iyakekela ifuna ukudla ngalapho kungakhona ukwenzela ukuthi siqhubeke nokunikeza izinsiza lapho esasizifaka khona kuqala.
Nohulumeni ulithathela phezulu udaba lokuthuthukiswa kwezindawo zasemakhaya ikakhulukazi kwezolimo njengoba usho Mageba, sivumelana nawe futhi senza konke okusemandleni. Njengoba ngishilo nakwinkulumo yami ukuthi ukubambisana phakathi koMnyango wethu kanye noMnyango kababa uNkwinti onikezwe uMnyango Wezokuthuthukiswa Kwezindawo Zasemakhaya Nezinguquko Zomhlaba kuqine kakhulu.
Ubaba uMakhubela, impela kona kuyiqiniso. Noma ungahamba uyoze ubuye ngoba phela sikhuluma ulimi olulodwa manje. (Translation of isiZulu paragraphs follows.)
[Mageba sir, Prince, we have heard the issues you raised with regard to rural development. Fortunately, I also come from a rural area, therefore we know about this plight first-hand. We are talking because we have experienced it as well. The difference between us and the others who have not experienced this is that whenever we talk about development, the focus is shifted to their direction so that we continue allocating resources to the same areas that have benefited previously.
The government is also very concerned about the issue of developing rural areas, especially in respect of agriculture, as you have mentioned, Mageba. We are with you there and we are doing our level best. As I have mentioned in my speech, the partnership between our department and that of Mr Nkwinti, who is the Minister of Rural Development and Land Reform, is very solid.
Mr Makhubela, that is indeed true. Even if you go, you will still return because we are speaking the same language.]
I fully agree with you when you say we must embark on a massive solar geyser programme. This just shows that there is no way you will ever develop policies other than the policies from where you come from. This is something that the Interministerial Committee on Energy is looking at. We are definitely going to take this, not just as your advice but also as the fact that you are on the right track. We agree with you.
You also proposed an active state. That's precisely what we are as a developmental state, so I don't understand what the difference is. You are calling for a partnership on the issue of the R524 billion for the implementation of the programme of revamping Ministers' houses and offices. That partnership is there, and your role as Parliament is to exercise oversight. The information will be available to Parliament from time to time. This won't be just a public-private partnership, PPP, but there will be a partnership. This is because if it becomes a PPP, we will then have to probe for your interest in the matter.
I must say I am encouraged by the support we have received from all parties and also the constructive criticism of the statement. We once again want to say that we take it quite seriously. Thank you very much, sir. [Applause.]
Debate concluded.
Question put: That the Report on Medium-Term Budget Policy Statement be adopted.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Report on Medium-Term Budget Policy Statement accordingly adopted in accordance with section 65 of the Constitution.
Question put: That the Report on Medium-Term Budget Policy Statement be adopted.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Report on Medium-Term Budget Policy Statement accordingly adopted in accordance with section 65 of the Constitution.