Deputy Chair and hon Deputy Minister of Finance, it is a historic occasion to table the statement of the fiscal framework and revenue proposals of the Budget of 2010-11 in this House, also because the fiscal framework under consideration and the Budget proposals contained in the Division of Revenue Bill and Appropriation Bill to be deliberated are the first to be processed under the new Money Bills Amendment Procedures and Related Matters Act. After the Budget was presented, the Speaker of the National Assembly and the Chairperson of the National Council of Provinces referred the fiscal framework and Budget to the different committees on finance and the Select Committee on Finance, and these committees, in a joint meeting, had public hearings, deliberated on the report, considered the report and supported the fiscal framework and revenue proposals.
The release of former President Nelson Mandela in 1990 was a historic event. Through him, we epitomise the dignity and pride of the heroic and relentless struggles of the people in the fight for political and economic liberation. In reality, political freedom will remain meaningless and incomplete without economic power. Given the current economic challenges, what we need is a growth path underpinned by a coherent industrial strategy, with clear sector programmes aimed at the creation and retention of quality jobs and employment opportunities via a process of retooling skills.
The proposed fiscal framework and revenue proposals are a base and foundation on which the Appropriation and the Division of Revenue Bills will be considered by this House. The new Money Bills Amendment Procedures and Related Matters Act provides an ideal opportunity for the broader public and Parliament to engage in long-term trends and economic fiscal policies.
Compared to the Medium-Term Budget Policy Statement presented in October 2009, the first observation we make is that this Budget is premised upon the backdrop of a slightly positive economic outlook, which remains fragile, to the projected recovery of the global financial markets and addresses two main policy challenges.
Firstly, it addresses the transformation of the South African economy to realise sustainable growth, accompanied by employment creation, and a responsive public sector to meet the expectations of our population and the broad objectives of a developmental state. These proposals are borne out of our experience of the last decade, which justifies a new way of doing things: to do more with less. We can safely say, without fear of contradiction, that we now know what has worked and what needs to be adjusted.
Of critical importance in this Budget Speech is an admission by the Minister of Finance that the current economic growth path has not adequately responded to the challenges of growing statistics of joblessness, and income inequalities, as well as wealth redistribution. In the same spirit, the Minister has used the public platform to invite all stakeholders to a national dialogue, particularly between government, business and labour, to chart a common developmental economic growth path with practical solutions for the challenges confronting ordinary people on a daily basis.
Deputy Chair, the fiscal framework recognises that half of our young people are unemployed. This must be viewed in a very serious light. In fact, we must treat it as an emergency. Young people need to be exposed to an environment that will assist them in realising their goals. The proposed subsidy by the Minister will play a big role in responding to the negative impact of young persons with no education and entrepreneurial skills. The onus is on us to act in a responsible manner, cognisant of the fact that there are capable men and women who, in the past decade, have lost hope of having any job prospects.
As leaders, as we sit here, irrespective of our political affiliation, we have a responsibility to engender entrepreneurship and skills development in young people who, in turn, will be capacitated to restore hope. The proposed methods to promote youth employment through employer subsidies should be carefully considered. Just like any other new initiative, there will always be serious challenges in the implementation of the proposed employer subsidy. Our response to these challenges will determine the success or failure of this noble idea. All the parties should view this as the beginning of a potentially fruitful process. In enriching it, let us come forward with more ideas, because together we can definitely do more.
The need to encourage the private sector to give young people experience and meaningful employment should be commended and supported vigorously. For this initiative to succeed, maximum co-ordination between economic clusters, Ministries and their departments is paramount and, importantly, the matter should be thoroughly canvassed with a labour representative.
Taking experience as our best teacher, we must guard against employers turning this into a scab labour scheme, with real jobs conveniently replaced by this state intervention of temporary jobs. We need to be careful of employers who might seek to turn the good intentions of government into a get-rich-quick scheme to boost their profit margins.
The question is: What are the road map and the growth path ahead? This brings us to the next point and observations with regard to the national response to the economic crisis. What carried our economy in these trying times was largely the government's countercyclical fiscal policy, particularly on public and economic infrastructure. It is also evident from the Budget presentation that our economy is on a recovery path, and this can be attributed to the partnerships between the private sector, labour and government.
Notwithstanding the success of this state intervention, there is the indication that not all sectors of the economy have responded positively to government's offer, particularly when we assess the training layoff programmes in the clothing and textile industries, transport industry and metal fabrication. We must commend government spending, particularly in the public and economic infrastructure and the automotive industries, and commend BMW and Renault, in particular, for taking full advantage of the layoff programme incentives. This has achieved wide success in mitigating retrenchments.
Given that not every opportunity given to the private sector has been maximally utilised, the impact of the economic recession has been more severe, hence 900 000 jobs have been lost in a period of less than a year. We urge that the private sector fully participate in the layoff programme. In fact, there is a need to maximise where the economic recession was not used, in certain instances, as an excuse to lay off workers. This matter requires the attention of the National Economic Development and Labour Council, Nedlac, and other relevant stakeholders.
Depending on the reason for borrowing, a deficit can be bad but can also be good when properly managed. From the Budget presentation it is clear that to meet our expenditure priorities, we will have to increase our debt level over the next three years. What is comforting is that this borrowing is not meant to sponsor the current account, and there is a clear indication of the fiscal stability around 2014. Our role, as Parliament, and as members here, is to ensure that there is value for money.
For us to achieve this, we will have to ensure that our Public Service is properly geared to deliver on the mandates of a developmental state. We must further strengthen the efforts by the executive in the fight against corruption by mobilising all our communities to reject any corrupt tendencies wherever they are.
We acknowledge that the fiscal statement, as stated before us, is presented under difficult economic conditions, which indicate positive signs of slow recovery, and yet it has taken into consideration the five priority areas as indicative of steps in strengthening the three arms of government. Therefore, it is a good basis and foundation of the Division of Revenue Bill and the Appropriation Bill.
The committee recommends, therefore, that the National Council of Provinces considers the following: that National Treasury should develop a clear strategy on how it plans to manage the new levels of total debt, if the economy is recovering as forecasted, including the fiscal stability pact; that the Performance Monitoring and Evaluation Unit in the Presidency should consider the effectiveness of the fiscal stimulus package; the SA Reserve Bank, in consultation with National Treasury, should develop clear guidelines on how they plan to maintain price stability; that the House should review the parliamentary programme to allow all committees to engage fully with future Budget processes; and that the Parliamentary Budget Office, when it is established, will advise the Select Committee on Finance on the VAT treatment of essential items, such as books, with a view to the implementation of a zero rating on these items.
Deputy Chair, I therefore urge the House to support the fiscal framework and revenue proposals, as presented by the Minister of Finance. Thank you. [Applause.]
Debate concluded.
Question put: That the Report be adopted.
The question is that the report be agreed to. As the decision is dealt with in terms of section 65 of the Constitution, I shall first ascertain whether all delegation heads are present in the House. In accordance with Rule 71, I shall first allow provinces an opportunity to make their declarations of vote if they so wish.
We shall now proceed to the voting on the question.
Have all the provinces voted? Thank you. Voting is closed. Could the Table staff submit the results?
The Northern Cape has abstained, and the rest have voted in favour. If any province has made a mistake, I now give them a chance to rectify that. We will give you a form to fill in. [Interjections.] Proceed.
Chairperson, I think what just happened here now is an indication that there is a serious possibility that Mr Mokgoro, the leader of the delegation, is considering joining another party. [Laughter.]
You are out of order. [Laughter.]
Yes, but Chairperson, on a serious note, the Northern Cape delegation wasn't consulted in terms of how to vote, and I just want to put it on record. Thank you.
Chairperson, hon Sinclair is completely out of order, however jokingly it was said. Mr Mokgoro has a mandate from the province to vote on its behalf.
Mr Sinclair, please bear with us. Sit down. [Laughter.] Mr Bloem?
This is a serious point of order, Chairperson: I want the chairperson of the committee to consult me outside, because I have a secret to tell him, when we are outside, about this voting.
Mr Bloem, can you sit down and let us proceed, please? The mistake has been corrected, so nine provinces voted in favour. [Applause.] I therefore declare the question agreed to and the report adopted in terms of section 65 of the Constitution. IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Report accordingly adopted in accordance with section 65 of the Constitution.