Hon Speaker, hon Ministers, Deputy Ministers and hon members, the Medium-Term Budget Policy Statement provides the basis upon which the 2011-12 Budget and Medium-Term Budget Expenditure Framework will be funded. The fiscal policy guides government's decisions about revenue spending and borrowing. The South African government's fiscal policy enables it to deliver on its developmental mandate by providing resources in a manner that is sustainable and reinforces the stability of the economy.
As we all know, the budget is a function of economic growth that underpins sustainable developmental goals of governments. Therefore, this Medium-Term Budget Policy Statement has based its proposals on the assumption of how the economy might perform globally and locally. Our starting point is premised on the understanding that the world in which we live in inherently imperfect and that we are part of the same world we ourselves seek to understand.
However, our approach should be underpinned by our understanding that globalisation is not about bridging the economic divide between poor nations and rich nations. Evidence has shown that it has engendered sovereign interests, greed and prosperity for the few rich nations and hence it should not come as a surprise to all of us that big economies such as the US have recently resorted to currency depreciation and pumping billions of US dollars into the market, which will definitely have serious and dire consequences for emerging economies such as ours. One of the key lessons that world policy-makers, particularly from developed countries, have come to terms with in relation to this recent financial economic crisis, is that when money becomes free, even the rational lender will keep on lending until there is no one to lend to. They will lend to people with no jobs, people with no income and sometimes to people with no assets. That is the basis on which we have found the world economy to be today.
The above observation can be attested to by the current currency war debate which has dominated the recovery path of the world economy. Whilst it is important to focus internally on the value of our own currency the rand, in particular, and the exchange rates, coupled with low inflation and slow economic recovery, it is equally important to note that countries such as Brazil, China and India, which are export driven, have chosen to retain their currencies at a low level to stimulate and propel their economic growth, supported not only by exports, but by domestic demand and domestic savings.
Therefore, it is understandable that there is a need in our case to find a balance between external and domestic demand for goods and services we produce on our own. The 2010 Medium-Term Budget Policy Statement indicates that the net capital inflows to South Africa have risen strongly over the past two years, reaching 5,5% of GDP in the first half of 2010, compared to 4,7% in 2009 as a whole. This shows that the positive achievement of our flexible exchange control mechanisms strengthens investor confidence, although short-term speculative investments dominate the current phase of our economy.
The key economic questions that require our immediate attention are as follows: What are the implications of retaining relatively high interest rates as compared to the developed and developing economies in the same space in which we operate? The implications of short-term speculative capital inflows in the long run need to be examined. We also need to ask: Can a weaker currency improve domestic demand and productivity? What is the impact of all those things on foreign reserves?
Considering South Africa's low savings propensity and its dependency on foreign capital inflows to finance its current account deficit and funding requirements, negative perceptions may have serious adverse repercussions. The timing of interventions is of critical importance in our own currency in order to minimise the unintended consequences, for example a negative impact on the cost of investments related to imports, while exports may not recover sufficiently owing to weaker global demand.
As we ponder these questions, we must also remind ourselves that our key priority spending on infrastructure projects such as roads, stadia and social spending, particularly on health and education, were sustained over difficult periods. We must thank the Minister and his team for those achievements. Secondly, key to the responses we give to the above challenges should remain the creation of decent work and youth employment in particular. Despite the positive global economic outlook, the forecasts are that recovery remains fragile and uncertain.
The growth prospects are likely to be negatively affected by the following factors as defined in the Medium-Term Budget Policy Statement: depressed employment and low demand in many countries, particularly in the United States; a threat of deflation in developed economies attributable to low levels of capacity utilisation and weak demand; a threat of rising debt levels in most of the world's largest economies; and the challenge of banking sector reforms in reducing nonperforming banking system assets.
Monetary policy instruments alone are not sufficient conditions to tackle the current economic challenges. Therefore, we must explore other possibilities that emerge from this crisis. This presents us with an opportunity to look into improving our competitiveness and productivity to stimulate our own local economy. The need to integrate regional economies to broaden our consumer base and demand for own products is imperative to the future of the continent and ourselves.
We agree with the Minister that the challenge is not to dwell and yelp about the past, but to focus on what needs to be done to improve the lives of ordinary citizens. As we do so, we must think of the younger generation's prospects to realise employment. For us as South Africans to meet our priorities, the Medium-Term Budget Policy Statement seeks to put us on a new growth path that will propel economic growth from 6% to 7%. Such growth will require serious engagement and compromises by all social partners.
Therefore, we welcome and support the executive for adopting a new economic growth path that will form the basis of engagement with all relevant stakeholders, business, labour, government and the rest of civil society. In entering the space of discussions, we will require people with sober and practical minds - leadership that will not elevate sectarian interests above the interests of the nation as a whole.
The Medium-Term Budget Policy Statement analysis of the global economic outlook and its attendant policy propositions are consistent with the ANC policy of positions regarding South Africa's role in the global economy to better the standard of living of ordinary citizens. On the basis of this, the ANC supports the Medium-Term Budget Policy Statement. I thank you. [Applause.]
Speaker, the Medium-Term Budget Policy Statement details government policy that will inform the national Budget to be announced in February next year. It also sets out the macroeconomic fiscal framework for the next three years, and Budget priorities in the division of revenue between national, provincial and local government.
The numbers on the revised fiscal framework reveal the extent to which our economy was negatively affected by the world financial crisis that started in 2007 and has not yet worked its way through economies across the world, including our own.
Although projections have improved since February - most notably, an upward revision of expected GDP growth from 2,3% to 3% - the rate of revenue increase, given the tax-to-GDP ratio, is lagging. This reflects a possible underestimation of projected revenue. Given successive revenue overruns in the past few years, there appears to be a trend in the estimation of national revenue that results in collection targets being exceeded.
Although projected government expenditure as a percentage of GDP has only increased by 0,1%, this number should be decreasing, and not increasing. As GDP grows, government expenditure as a percentage of GDP should move in the opposite direction. Although the deficit has been reduced, if the projected rate of revenue increase and expenditure decrease as a percentage of GDP remains constant beyond the current three-year projection, our economy will remain in deficit until the 2018-19 financial year. Given government commitment to countercyclical fiscal policy, this is too slow given likely economic uncertainties beyond the medium term. Government debt continues to climb and will reach 41% of GDP in 2012. Relative to many other economies, this does not appear to be excessive, but government debt reflected in the projections does not include municipal debt which would significantly and negatively impact on the overall picture.
Following its deliberations on the fiscal framework, the Standing Committee on Finance recommended that the rate of decline in expenditure should be accelerated, the issues regarding the SA Customs Union revenue-sharing formula should be resolved, and the National Treasury should provide a detailed report on the impact of a zero-rating of VAT on books on the fiscal framework.
The rules of the game have changed significantly under the Money Bills Amendment Procedure and Related Matters Act that enables Parliament to amend the fiscal framework within various parameters. Although Parliament has not yet exercised this power, the time for this to happen is fast approaching. If this Parliament intends to become the active Parliament which it aspires to be, it needs to take the necessary bold and pioneering steps to amend the Budget in a carefully considered and appropriate way. The Act was passed to empower Parliament to not only hear the people's voice, but to also enable us to demonstrate that we are listening, and can and will act in order to exercise our mandate.
In his introduction of the Medium-Term Budget Policy Statement, the Minister of Finance indicated that firm measures would be taken to counter the creeping culture of corruption that has infected our public financial system, especially the procurement process. The DA welcomes this commitment. There has been much talk about apprehending the criminals who feast at the expense of the most vulnerable members of our society. Yet, little, if any, political will has been demonstrated to date.
We look forward to comprehensive details of legislation that will be introduced or amended to implement this commitment. We also look forward to timeframes within which the people can expect to receive the promised protection from the parasites who feed off the leaking bucket into which hardworking South Africans pour significant amounts of their very scarce financial resources.
The Minister was silent on further details of the youth wage subsidy proposals that he promised to table by the end of March 2010. At his subsequent appearance before the committee, the Minister assured members that the proposal had not been shelved, and that a discussion paper was in progress. We know, Minister, that Cosatu is opposed to the youth wage subsidy. They said so during their presentation to the committee. Their argument is that young people aged 15 to 24 should be acquiring education, training and skills, rather than be employed in a workplace where they learn nothing.
When the DA designed its wage subsidy, we targeted it more widely at new entrants to the job market because previously marginalised youth are no longer young, and should not be excluded from incentives to uplift them into economic activity. There is no reason why a wage subsidy cannot be complemented by a programme to encourage remedial skills development.
The DA believes that, instead of funding dysfunctional sector education and training authorities, Setas, employers should be encouraged to provide meaningful training and development on the job. A wage subsidy will attract new entrants into the workplace and improve their future mobility and marketability through skills acquisition. The solution to the current stalemate on the youth wage subsidy lies in the benefit design. The DA, especially the DA Youth, welcomes the Minister's commitment to a wage subsidy and will pursue a programme of action to ensure that his commitment is honoured.
On the subject of mixed signals, the ANC has announced that independent researchers will be employed to report on various models applied to the nationalisation of mines. This is intended to assure investors that the matter will be thoroughly considered before any policy decisions are made. The problem with washing garbage is that it remains garbage.
No matter how the message is packaged, it still simply remains that property rights are under threat and that the ANC seeks to relentlessly extend the role of the state in our economy. If investors doubt the security of their ownership rights, they will simply factor the risk into the price of the transaction or not participate at all, making our economy even less efficient and less attractive to long-term productive investment than it is now. South African taxpayers need an assurance that their hard- earned money will not be wasted on unnecessary research into an unnecessary policy that generates unnecessary uncertainty.
On Monday, following his return from a meeting of the G20, the Minister of Finance announced that a stimulus package would be introduced. It has been reported that this will feature in the national Budget to be announced in February.
Our Budget tip to the Minister is that government intervention should aim at increasing economic activity by easing individual entry to the economy, expanding individual choice, and increasing private-sector participation in our economy - and not the size and influence of government and its associated cronies.
The most important lesson from the world financial crisis is that appropriate regulation is required to ensure that an economy remains as functional and efficient as possible, especially under turbulent conditions. Our economy is now experiencing severe turbulence as developed economies struggle to emerge from recession and the emerging market group: Brazil, Russia, India and China - the so-called Bric economies that we aspire to join - surge ahead. Our growth lags far behind and we grapple with an appreciating currency that restrains our ability to export.
The Monetary Policy Committee of the South African Reserve Bank began its meeting today and all indications point to a reduction in interest rates. We cannot, however, rely on the monetary policy to resolve this imbalance. Quantitative easing will not work but will merely feed inflation. Fiscal policy needs to complement monetary policy and steps need to be taken to cushion the impact of a lower interest rate cycle on the net savers in our economy, especially pensioners who rely on income from interest-bearing investments. Steps are also required to facilitate a more competitive and productive economic environment.
Poverty and unemployment remain by far the greatest problems we face in South Africa today. The DA's vision of an open opportunity society for all, where everybody, irrespective of their circumstances at birth, can achieve their full potential and become everything that they are capable of being, can be achieved.
We need to support those who are already in poverty and develop a road that will enable all our people to emerge from poverty. By so doing, the vicious cycle can be broken and the lives of our people continually improved from this generation to the next, until we are the great, leading nation that we are capable of becoming, given the right policy choices. We just need to make them. Thank you, Speaker. [Applause.]
Mr Speaker, in recent weeks, the world economy has been on a war footing. Ever since Brazil's finance Minister referred to "an international currency war", the global debate has been recast in battlefield terms.
According to The Economist there are three battle fronts. The first is over the unwillingness of China to allow their currency to rise more quickly. The second is over the rich world's monetary policies, in particular to print money to buy bonds - the USA has just embarked on this. And the third is over how the developing countries respond to the extra capital flows.
This is exactly where South Africa comes in and where some role-players want us to enter the currency war. The question is: Can we and should we enter this war?
Since January 2009, as the rand has appreciated, we have seen an adverse impact on export trade, but the negative impact on import values has been of a similar nature, so currency competitiveness is not a sole determining factor within a global and local environment and we all know there are many serious "other forces" at play. We cannot escape this truth.
We were reminded at the public hearings that it was insufficient regulation and greed that dumped us into this recession and in the aftermath we now see "loose monetary policy" with "political interference" and it's clear that nations are starting to look after themselves. Unfortunately, even decisions by G20 countries are pushed aside if they are not in the national interest of a particular country. In 2008, after the Washington G20 meeting, 17 countries went against so-called agreed resolutions.
We are back in the era where economies rely on demand of products, on government interventions and on a climate of currency stability. So the trick is to play within these rules and to recognise the driving forces of these times. We are a small boat with no aircraft in this currency war and not many bazookas mounted on it, so there is no room for mistakes - a free- falling rand, because of mistakes, will be far more negative to our economy and will especially impact badly on food security.
The Old World economies are under pressure - the reality is that the euro and the dollar will remain under pressure; commodity prices, that is energy, will be higher and, unfortunately, the rand is going to be strong. What happened yesterday and what is happening today in the euro zone will impact on us. We cannot escape it. So South Africa's reaction to this set of conditions is vital. It's time for consistency and to be conservative, and the hon Minister must be congratulated on his stance in the policy statement.
We should make sure that our fiscal policy focuses more on savings. We must shrink our current account deficit faster and our interest rates should be low for a while. Our currency should be stable, and we must be more productive and reduce our costs to service debt as soon as possible.
When a country faces enormous challenges, such as poverty and inequality, as we do, the table is set for an active role to be played by the state. The New Growth Path is sort of new, but there are many similarities to the previous plans in it. The question is: Will it work this time?
Time is running out, hon Minister. We do not have another 16 years in which we do not resolve the basic problems in education - maybe we should be bold and make education compulsory until the age of 18. We haven't got 16 years in which we do not resolve infrastructure and maintenance problems and establish a culture of entrepreneurship.
There is no room for populist economists like the Congress of SA Trade Unions, Cosatu. The vengeance of their written presentation at the public hearings addressed specifically to the hon Minister and the Treasury was uncalled for. Cosatu should simply employ better economists.
There are no holy cows in this growth debate and we should not allow them to dictate the debate - if we do not get better "spending performance" and do not up our productivity there will no be money left for the state to intervene.
Hon Minister, by your own forecast, our economy will grow by between 3% and 4%, but, unfortunately, by even mentioning the figure of 7% - a little bit of a pipe dream - and the millions of jobs that will follow that growth, I think you have created some sort of false hope for many unemployed people in South Africa. Let's rather start doing things slightly differently. Let's cut the red tape. Let's address the greed in this country. Let's deal with outrageous chief executive officer salaries and share options that are not sustainable.
The inequality in South Africa is fast becoming a huge stumbling block to growth. Let's deal with the holy cows in this debate and make sure that fundamental changes are being made timeously and not forced upon us, because if that happens, we will create instability in South Africa.
I think it is our time. I think it is time for the emerging markets of the world. I think Europe and the United States have had their time and I think it is Africa's time now. Let's play our role in this region. Let's make sure that the region integrates and let's use this window of opportunity that has been created after this recession. Cope will support the statement. [Applause.]
Mr Speaker, the IFP has repeatedly expressed its concern about the skyrocketing national debt. This concern remains largely unaddressed by the Medium-Term Budget Policy Statement. According to our calculations, by 2015 the national debt will be up to R1,5 trillion. In addition, there is skyrocketing municipal debt, which in the end will need to be paid by the National Treasury. After 2015, the national debt will continue to increase, albeit at a lower rate.
We have repeatedly asked the Minister how he plans to repay the debt, and the only answer we have received is that our debt is lower in proportion to that of the United States of America. To the IFP, our fiscal deficit remains a major critical challenge.
The IFP warmly welcomes the increase in spending on health, particularly for HIV and Aids prevention, the increase in spending on infrastructure, and the R50 million that has been set aside for drought relief. In addition, we welcome the Minister of Finance's plans for better financial discipline in service delivery and improved management of education, health and infrastructure programmes. Furthermore, the IFP recognises that South Africans aren't receiving value for money. As the IFP, we believe that the performance and the reputation of many state departments and public entities leave a lot to be desired in terms of optimal service delivery and benefits to the taxpayer. We don't believe that the answer will be found in throwing more money at these entities, but instead the focus should be on ensuring that the money is effectively spent; which means that we need more accountability and better management.
In addition, productivity, for us, remains a critical concern. Each year when the Budget is tabled we allocate more resources to different areas, but despite this, we believe that productivity is steadily decreasing. The countless service delivery protests nationwide during the past financial year have sent out a clear message that, amongst other things, our policing system, health care system, and education system - despite education receiving the biggest chunk of our budget - remain in a critical condition.
What we would also like to find out from the Minister is how government intends financing the mooted National Health Insurance plan. We would like all the citizens of our country to enjoy acceptable levels of care.
Turning to job creation, the IFP agrees that job creation requires a broad range of policy initiatives, but government's supposedly powerful new economic policy framework lacks details. We believe that the Minister of Finance should provide details on how it plans to supplement the New Economic Growth Path.
The latest figures from Statistics SA show that unemployment is at 25,3%, which is alarmingly high. The IFP has always emphasised that 7% to 8% growth must be the goal that we aspire to. And we agree with the hon Minister that we must aspire to 7% to 8% growth, for this will ensure that many more jobs will be created and that we will have a sustainable economic growth path in the future.
Whilst the IFP believes that government's investment plan in urban centres to help turn cities into engines of economic growth is a step in the right direction, we should not lose focus on the continued development of the rural areas. It is in the rural areas that South Africa's biggest social problems are to be found.
Whilst the IFP welcomes the increase in spending, we agree with the hon Minister of Finance that wasteful and inefficient patterns in state departments and entities and in the use of resources must be rooted out. Again, as in previous years, the hon Minister has promised to root out corruption and inefficiency, but the IFP believes that the time for talking is over. Now is the time for action.
Finally, corruption remains a cancer that is threatening to derail all of South Africa's progress made since the dawn of democracy. And whilst the IFP recognises that government at different levels has put in place many measures to curb the scourge of corruption, they have been largely unsuccessful. It is now time for a concerted, co-ordinated and aggressive campaign against corruption in South Africa.
In conclusion, the IFP supports this Medium-Term Budget Policy Statement of the Minister. Thank you. [Applause.]
Hon Speaker, hon members, comrades and distinguished guests, the present economic growth trajectory cannot meet the country's employment needs. Faster growth is required over an extended period of time to significantly increase labour absorption, reduce high unemployment and achieve a more equitable distribution of income.
To achieve 5 million jobs over 10 years, growth of over 6% a year must be achieved together with measures aimed at broadening participation and inclusive development. This is what the New Economic Growth Path proposes, in order to bring about the marked reduction in poverty and inequality we all seek.
To achieve the developmental aims of the new growth path, there needs to be more rapid job creation through a broad range of policy initiatives. These would include: labour market institutions that must be strengthened; expanding further education and training, and with specific interventions needed to increase both public and private-sector demand for labour, especially for young workseekers; and greater participation of our development finance institutions in co-financing infrastructure projects, enterprise development, housing and farming support.
In addition, in implementing the Industrial Policy Action Plan, together with increased support for small enterprises and local economic development, the following areas are critical in creating decent work and more jobs: greater investment is needed in the electricity, transport and communications sectors; improved economic co-operation between countries in Southern Africa, including financial and trade institutions and transport; improved communications, energy and water networks; and improvements in Public Service delivery and increased filling of vacant posts that are funded in pursuit of agreed service delivery outputs and targets.
Measures to support exporters and manufacturers through trade facilitation agencies, investment in technology and industrial development zones and institutions, such as the Industrial Development Corporation, are all critical in the creation of jobs.
The executive, in a recently convened special Cabinet meeting to discuss the key economic challenges facing South Africa, endorsed a proposed new growth path for the country that will place employment at the centre of government economic policy.
The new growth path is a broad framework that sets out a vision and identifies key areas where jobs can be created. A series of implementation plans for consideration and signing off by the Cabinet is being worked on.
The new growth path is intended to address unemployment, inequality and poverty in a strategy that is principally reliant on creating a significant increase in the number of new jobs in the economy, mainly in the private sector.
The new growth path sets a target of creating 5 million jobs in the next 10 years. This target is projected to reduce unemployment from 25% to 15%. Critically, this employment target can only be achieved if the social partners and government work together to address key structural challenges in the economy. These challenges include: bottlenecks and backlogs in logistics, energy infrastructure and skills, which constrain economic growth and raise costs; low domestic savings and inadequate levels of investment in the productive sectors of the economy; economic concentration and price collusion in key parts of the economy, which raises costs and limits innovation and new enterprise development; an uncompetitive currency that limits employment growth in manufacturing, mining, agriculture and tourism; and a persistent balance-of-trade deficit funded with short-term capital inflows attracted largely by high interest rates by international standards.
At the national general council of the ANC in 2005, council warned that consumption and commodity-led economic growth would, in time, have its own consequences and would lead to the classic economic commodity price boom, which would not result in revenue being sufficiently applied to promote economic diversification and skills development. This form of growth is usually not underpinned by a strong production base.
The global economic crisis of 2008 has posed new challenges for South Africa. The 2008 to 2009 recession led to more than a million jobs being lost in the South African economy. The global economic crisis has also highlighted the emergence of new centres of economic power, with rapid recovery and fast growth in China, India and Brazil, as the chairperson has stated before, backed by decisive action by their governments. This creates new opportunities for South Africa that the new growth path identifies.
The new growth path will now seek to place the economy on a production-led trajectory with growth targeted in 10 "jobs drivers". Thank you, hon Chairperson. [Time expired.] [Applause.]
Hon members, please tone down your conversations.
Hon Chairperson, it's an understatement to say that we live in uncertain economic times. Across the globe we are still witnessing the aftershocks of the financial earthquake that took place in 2007. Countries in Europe are battling with deficit containment while their economies are still not growing sufficiently.
The United States has just lurched to the right politically, and it seems that their small steps to economic recovery could be derailed through major cuts in government spending. Unfortunately, our future economic success is in some ways determined by the cumulative impacts of these global forces.
Having said this, however, the ID believes that we still have a significant amount of power to determine our own economic destiny. Countries in Asia, along with Brazil, which has demonstrated how to reduce both poverty and inequality simultaneously, prove that it is possible. It is time for us to take up this challenge, and this budget statement goes some way in doing that.
We have enormous challenges, though, such as the R1,5 trillion backlog in infrastructure investment that we have accumulated over the past 10 years. This is manifesting itself in our failing water treatment plants, road infrastructure and, most challengingly, our energy sector.
Minister, we are essentially mortgaging the country to provide collateral for Eskom to build new power stations. The country takes the risk while large energy-intensive users reap the rewards. Surely we should rather be looking at engaging in some risk-sharing arrangements with those companies which are going to benefit from our energy expansion.
Minister, the central crux of our challenge is to find ways of reducing our infrastructural and social deficits while reducing our fiscal deficit at the same time. In meeting this challenge, we are going to have to form concrete partnerships with other actors in our society so as to ensure that in the long run we can grow our economy at much higher rates and generate the sorely needed government revenue to fund these activities. The ID certainly hopes that we can finally get this equation right and that we too can enjoy the economic success that other emerging economies have experienced. I thank you. [Applause.]
Hon Chairperson, hon members, as far as the Medium-Term Budget Policy Statement is concerned, the UDM concurs with the hon Minister of Finance's assessment that the economic outlook is grim. Despite marginal improvements in economic indicators, it is definitely not time yet to celebrate the end of the recession.
The UDM welcomes the exchange control reforms and other measures to stabilise the currency. The UDM also welcomes the hon Minister's strong words on corruption. However, in this regard and equally so for the other policy priorities that he identified, we are sceptical about government's commitment and ability to deliver. These sound like the same old promises dressed up in a new language. A prime example of this is the so-called "new growth plan". We have had the RDP, Gear and Asgisa come and go without any impact on the massive rate of unemployment in this country.
As far as the Bill before us is concerned, the Adjustments Appropriation Bill is a regular constituent of the Budget cycle to accommodate the occurrence of unexpected and unavoidable expenditure. Such expenditure is an understandable occurrence since economic fluctuations, consequent changes in tax revenues, as well as the fluctuation of revenue collection itself all impact on the difference between the projected Budget and the actual Budget. It is appropriate that this Budget cycle recognises this and allows for a mid-course correction where necessary. It is also at this point that we often detect the mismanagement or misuse of budgets, which is the other reason why adjustments need to be made.
As the UDM indicated last year, the introduction of newly constituted or reconstituted departments and Ministries has impacted significantly on the overall Budget process and also on these appropriations. The question remains ... Thank you, hon Chairperson. [Time expired.]
The DEPUTY MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES: Chairperson, the hon Minister of Finance succeeded to a large degree in maintaining a balance between financial restrictions caused by the recession and the demands placed on government spending. Where the Minister earlier this year predicted a growth rate of 2,3% for South Africa, the growth rate forecast has now been adjusted upwards to 3%. This is positive and indicates how the country is slowly moving out of the recession.
However, to create five million new job opportunities in the next 10 years, as the Minister had undertaken to do, a growth rate of 6% is required. In the Minister's speech there was, however, no indication as to how the growth rate would double from 3% to 6% in order to accomplish this objective.
Suid-Afrika is besig om al meer 'n welsynstaat te word. Waar die Skandinawiese en Europese lande hiermee kon eksperimenteer, kan ons dit net eenvoudig nie bekostig nie. Tans kry ongeveer 14 miljoen mense uit 'n bevolking van 50 miljoen maatskaplike toelaes van die staat. Dit moet vergelyk word met 'n belastingbasis van 5,3 miljoen tot 5,6 miljoen mense uit die bevolking van 50 miljoen. Dan gaan die ontvangers van staatstoelaes in die toekoms ng groei tot 19 miljoen. Dit is net 'n onvolhoubare verhouding van een belastingbetaler vir elke drie persone wat staatstoelaes ontvang. Die belastingbasis moet vergroot en die aantal toelaes moet verminder. (Translation of Afrikaans paragraph follows.) [South Africa is increasingly becoming a welfare state. While Scandinavian and European countries could experiment in this regard, we simply cannot afford to do so. At present about 14 million people out of a population of 50 million are receiving state grants. This should be compared to a tax base of between 5,3 and 5,6 million people out of a population of 50 million. And in the future those receiving state grants are still going to increase to 19 million. This is just an unsustainable ratio of one taxpayer for every three persons receiving state grants. The tax base must be broadened and the number of grants must decrease.]
The Minister also made provision for the 7,6% salary adjustment of public workers following strikes earlier this year. It is an economic truth in the private sector - but also in government - that where a salary adjustment is higher than the inflation rate, this has to be accompanied with increased productivity to prevent it from pushing up inflation. The only other way to handle this is by scaling down the number of jobs available.
The question is whether the Public Service's productivity will increase. If this does not happen, the number of jobs will have to be reduced in order to prevent government spending on salaries that are increasing unnecessarily. In this regard, the proposed measures to combat corruption in the Public Service as well as the attempts to curb the unnecessary growth of the Public Service through unnecessary administrative personnel are welcomed. I thank you.
Hon members, I want to appeal to you again that the level of noise is very high. It's very disturbing to speakers. Please!
Into ebalulekileyo kolu phuhliso kukuba lulawulwe zintlaka zikarhulumente; inkxaso yayo ingaphumi kwingxowa yelizwe. U-Eskom, nje ngokuba eza kukwakha, aphuhlise aqinisekise ukuba umbane uyafumaneka kwiindawo zonke, asisayi kuphinda sehlelwe sisihelegu sokuba abantu bakuthi bangabinawo umbane ngamaxesha abalulekileyo kubo. UKhongolose uhambisana kakhulu noluvo olubekwe nguMphathiswa apha kule Ndlu, lokunyuswa kwale ngxowa ejongene nophuhlisoculo lwezibonelelo zolwakhiwo kumacandelo ahlukeneyo.
Kodwa, Mphathiswa, sithi masikubeke kucace ukuba singuKhongolose sinokuncwina kakhulu kuba akucaci ncam nokuba le mali ikwaquka ukuhlaziywa kwezibonelelo zolwakhiwo ezikhoyo nezo zizaaleyo eza kusungulwa, kuquka nokuhlaziywa kwayo, kuba ethubeni ukuba asikwenzi oko kuza kufuneka ukuba siphinde sibuyele kuni size kucela inkxaso ngemali.
Siyalwamkela uphuhliso nokukhula kwenkxaso zimali kushishino loluntu oluthe kwakhula nge-15,9% kule minyaka igqithileyo nekulindeleke ukuba iphinde ixhume kunyaka ozayo iye kuma-20%. Amaziko afana no-Eskom, nje ngokuba sesitshilo, nawophehlo- mbane, oololiwe nezokubhabhaiphapho apha kweli lizwe nawo azakuxhamla kanobom kolu nyuso lwezimali. Iingcali zoqoqosho zamandulo ziyibeka icace into yokuba uphuhliso lwe zibonelelo zolwakhiwo lolona luhamba phambilidla ubhedu ekunikezeleni iinkonzo nasekuphuhlisweni koluntu ngokubanzi kwanoqoqosho.
Kungenxa yokuba izibonelelo zolwakhiwo zixandile kwimiba yemveliso, impucuko kunye nemo yemigangatho yentlalo yoluntu. Kumazwe aphuhlayo, afana neli loMdibaniso, uphuhlisoculo lwezibonelelo zolwakhiwo lungundoqo kuphuhliso loqoqosho. Ukuze kubekho uphuhliso kufuneka izibonelelo zolwakhiwo esezingeni eliphezulu, iindlela ezihambekayo, izibhedlele ezamkelekileyo, imigaqo yamanzi, umbane ongenamaginxinxi ofumaneka ngalo lonke ixesha, nako konke okunye ukwenzela ukuba uluntu luphile impilo engcono.
Mphathiswa, nhoko, asiwuqinisi umnqwazi isihelegu sokuba imali ejongene nokuphuchulwao lkwemo yamanzi isuke isetyenziselwe uphando lwemo esele isaziwa phaya koorhulumente basekuhlaleni. Umzekelo, zizigidi ezimashumi mabini anomvo kuMasipala wesiThili saseSedibeng eya setyenziswa kuphando.
Singumbutho ogxalaba libanzi lokuthwala iinzingo zeempula zikalujacu zeli ne-Afrika yonke, uKhongolose lowo, siyakwamkela konke okubekwe ngoNongxowa kule Ndlu. Sinethemba lokuba konke oku kuza kuhamba indima ende kuphuhlisoculo lwempilo yoluntu ngokubanzi. Sicela le Ndlu ukuba ilwamkele uluvo lwesebe malunga nayo yonke le miba ibekwe ngaphambili. Ndiyabulela. [Kwaqhwatywa.] (Translation of isiXhosa speech follows.) [Ms N N SIBHIDA: What is important in this development is that it must be controlled by organs of the state; it must not be supported with funds from the national coffers. As Eskom is going to build, develop and ensure that electricity is available everywhere, we will not experience the horrible situation that our people do not have electricity at times which are important to them. The ANC supports the idea suggested by the hon Minister in this House, that the fund responsible for infrastructure development must be increased in the various sections.
However, hon Minister, we must state categorically that we, the ANC, are not very pleased because it is not clear whether this amount includes the renovation of existing infrastructure together with that which must still be built and its maintenance - because if we do not maintain it we will have to come back to you and request funds for that purpose.
We welcome the development and increment with regard to the financial support which has gone up by 15,9% in the previous years and which is expected to increase to 20% next year. As we have said, institutions like Eskom, electricity generation, trains and aviation in this country will also greatly benefit from this increment. Economic experts put it clearly that infrastructure development is vital in service delivery, community development in general and the economy.
This is because infrastructure development is wide and includes production, development and the standard of living of the general public. In the developing nations, such as South Africa, the upgrading of infrastructure development is the basis of economic development. In order for development to happen there must be infrastructure development of the highest standard: usable roads, hospitals of acceptable standards, electricity supply that is always available and without any load shedding, as well as everything else in order for the community to experience a better life.
Hon Minister, we do not welcome the horrible situation in which finance was allocated for the purification of water but instead was used for research which the local government had known about. For example, the Sedibeng District Municipality spent R21 million on research.
As the party that shoulders all the problems of the poorest of the poor of this country and Africa at large, the ANC, we welcome everything that the Treasury has tabled in this House. We hope that it will go a long way towards developing the lives of the communities in general. We appeal to this House to accept the view of the department with regard to all the issues that were brought to its attention. Thank you. [Applause.]]
Chairperson, the ACDP supports the Medium-Term Budget Policy Statement which sets out government's spending plans for the next three years, based on certain macroeconomic assumptions.
As we expressed our concern at the ballooning budget deficit forecast in February, we particularly welcome the downward revision of the budget deficit from 6,5% to 5,3% of gross domestic product, GDP, for this year; reducing further to 3,2% over the medium term. This is on the back of gradual, yet sustained domestic economic growth, revised upwards from 2,3% to 3% of GDP for the year, resulting of course, in increased revenue collection, which is welcome.
However, despite a relatively healthy fiscal position, the projected economic growth is uncertain and predicated upon a number of economic variables. In this regard, the ACDP has expressed its concerns about the net loan public debt set to reach R1,46 trillion by 2013-14, which is a significant figure. I wonder how many hon members know how many noughts there are in a trillion rand. I would like them to work it out.
The actual outcome will depend largely on the pace of economic growth. In our view, government debt levels, shared by many others, must be reduced to manageable levels. Failure to do so could result in sovereign debt crises similar to those faced in the euro zone. I am sure you would agree with that. In this regard, the ACDP is concerned about the impact that the deepening credit crises of both Greece and Ireland will have on demand for South African goods. Has this been factored into the economic growth projections or is it envisaged that this contagion may spread to other European countries? You are no doubt aware that last night the markets took a hammering owing to concerns about Ireland.
Minister, you have also been vocal in your criticism of the US pumping an additional US$600 billion into its economy. We share your views on this issue and the impact that it will have on strengthening currencies such as ours with the capital inflow.
Lastly, regarding the structural reforms and the Seoul G20 meeting, we would like more information related to sustained global demand, job creation and global rebalancing, or was the meeting, in effect, much ado about nothing? I thank you.
Hon Chairperson, the UCDP agrees with the Minister's statement that South Africa's success in delivering the 2010 World Cup illustrates its ability to unite a nation behind a common goal, and that we as South Africans can draw from this experience and work to transform the country's economy into one that can grow fast enough to create the jobs that we need.
However, in order to reach our goal we have to address the following. We have to increase the performance of public spending, in particular addressing the value-for-money aspect, including tender allocations and management, project management, and prevention of fraud and corruption in departments and entities. And we have to address underspending that usually leads to rollovers and overspending by departments.
It is good that the Medium-Term Budget Policy Statement should reflect revenue that is higher than expenditure. What remains a concern is the scenario in which we continue to applaud the economy for its growth, but growth that does not cater for its citizens. Total employment has declined by more that a million jobs between the first quarter of 2008 and the second quarter of 2010, and the unemployment rate has reached 25,3%.
We welcome the fact that a larger proportion of funds in the Department of Co-operative Governance and Traditional Affairs will go towards disaster management. We hope this will empower municipalities to handle disasters and offer the necessary relief and care when disasters hit.
We expected a significant adjustment to the university education item of Higher Education and Training. Access to higher education by the deserving poor is still an issue that needs budgetary attention. While looking into the allocation to women ... We support the Bill. I thank you. [Time expired.]
Chairperson, in order to raise the level of service delivery, constructive spending patterns are of paramount importance. On the issue of debt:GDP ratio, the MF believes strongly that National Treasury should have come up with a model to reduce it in order for there to be stability.
We are constantly reminded by the Minister of Finance that we are in a globalised world, but that indicates that we are neglecting issues of domestic infrastructure and that the economy is dependent on what is happening in other countries. The movement of currencies between countries does not mean that we have a recession. Therefore, it is imperative that a country should put great emphasis on domestic infrastructure and social priorities.
Grants to municipalities are an area of great concern. Indeed, there should be a constructive oversight monitoring mechanism. Communities continue to fall victim to the lack of better service delivery because of corruption, nepotism and maladministration. The MF welcomes the Minister's commitment and dedication to getting rid of corruption.
Land reform is a very critical issue. Whilst land restitution is a right, land reform is a policy choice. It is sad that foreign industrialists are controlling most of the land in South Africa. Therefore, we must put emphasis on land reform. It is no use saying we are on South African land - on this land - yet know that most of it is owned by foreigners.
Provinces also need to play a pivotal role in revenue collection. We only look at national revenue collection. What mechanisms are in place to bring provinces on board?
The MF welcomes the youth wage subsidy. However, youth unemployment and the skills shortage are structural unemployment problems. The skills that graduates have are not required by the labour market. While South Africa is spending greatly on our education system by hiring educators and building colleges, are we spending on a relevant education system? The MF will support the Bill.
Somlomo, namalungu ahloniphekileyo, uKhongolose usiqhakambisa kakhulu isimo semfundo kuleli lizwe; kodwa ngeke kwenzeke ukuthi ngale minyakana nje embalwa sibusa kuhulumeni wentandoyeningi sibe sesibona ushintsho olukhulu ngoba ku sukela kudala ukuthi abantu babandlululwe kwezemfundo. Ngoba uKhongolose uyaziqhakambisa ezemfundo; ubhekelela kuqala ojahidada emazingeni aphansi kuze kuyofinyelela kulabo asebephothula emazingeni aphansi.
Okubaluleke kakhulu wukuthi njengoba siqala kojahidada sifuna abantwana bazijwayeze ukufunda besebancane, baqhubeke noma sebesemazingeni aphezulu. Yingakho nje inani lokubhaliswa kwabantwana abasebancane ngonyaka wezi-2014 liyobe selifinyelele kwabayikhulu. Yingakho futhi ngonyaka ozayo - ngoba akusenzekanga ngodlule - abantwana bezothola izincwadi zokusebenzela kanye nezokufunda bese othisha bona bethola izincwadi zokufundisa. Sizophinda futhi sibhekisise ukuthi abantwana abafundayo bazohlolwa ebangeni lesithathu, elesithupha kanye nelesikhombisa ukuze bakwazi ukukhuluma kanye nokubala, ngoba kuyinto esemqoka leyo. Akusizi ukuthi siqhubeke nokufundisa abantu abangakwazi ukusebenzisa ulimi. Ngakho-ke sincoma ukuthi isabiwomali somhlaka-27 sikubhekelele ukuphuculwa kwesimo semfundo. Ngqongqoshe kanye nozakwenu, kungayinto enhle ukuthi namakolishi othisha nawabahlengikazi avuleke phela ukuze kuqhutshekwe nokubhekelela imikhakha yokufundisa neyokwelapha.
Uma ngibheka uMnyango Wezempilo, impilo ayibheki isimo somzimba nje kuphela kodwa sibheka umuntu ewonke; emzimbeni, emphefumulweni kanye nasengqondweni. Isabiwozimali sihlahlelwe ngendlela yokuthi kukhona nemali ebhekelele ingculazi, isandulela-ngculazi kanye nesifo sofuba ngoba yizona zifo ezande kakhulu futhi eziqhubeka nokubhebhetheka.
INingizimu Afrika ibulawa wukuthi ikholelwa kakhulu ekwelapheni kunokuvimbela ukugula. Kufanele ukugula sikuvimbele, laba abaphila kahle sibakhuthaze ukuze baqhubeke bephila singakhokhi izimali ezinkulu zokwelapha. Siyakuncoma kakhulu ukuthi isandulela ngculazi, ingculazi kanye nesifo sofuba sekusukunyelwe futhi kuyelashwa ezindaweni eziningi. Kubalulekile ukuthi labo bantu abahlala ezindaweni zasemakhaya, ikakhulukazi abesifazane bafundiseke ngezimo zempilo, nengculazi ngoba yibona abatheleleka ngokushesha ngenxa yesimo sobuphofu obukhona kulezo zindawo.
Siyakuncoma-ke futhi ukuthi nabantu abasebenza kwezempilo bazozithola sebehola kangcono; mhlawumbe lokho kuzobakhuthaza ukuthi basebenze ngokuzikhandla. Kubalulekile ukuthi sisonke la sikhulume okuhle kodwa ngodaba lokuphucula izimpilo zabantu.
Uma sibheka udaba lwempesheni; lapha siqonde zonke izinhlobo zempesheni ngoba siyazi phela ukuthi impesheni lapha eNingizimu Afrika ibhekelele abantu abaningi kusuka ezinganeni ezincane kuya kwabadala, abakhubazekile kanye nabagulayo. Liphezulu kakhulu inani labantu ababhekwe yile mali. Ngeke phela-ke kube nguMnyango wezokuThuthukiswa koMphakathi kuphela obhekelele lesi simo.
Neminye iminyango kufanele ukuthi ingenelele. Yingakho nje sikuncome kakhulu ukuthi uMnyango wezokuThuthukiswa kweziNdawo zasemaKhaya neziNguquko zoMhlaba usuthathe umthwalo wokufundisa intsha ngezindlela zokulima nezokukhiqiza ukudla. Lokho kuzokwenza ukuthi intsha ifunde iphinde ikwazi ukululeka abantu ngokukhiqizwa kokudla bese nomphakathi uphile kangcono ngoba ukudla kuzobe sekwandile. Siyayikhuthaza intsha ukuthi izame ukuthi ilibambe ngazo zombili leli thuba.
UMnyango wezemiSebenzi yoMphakathi unendima enkulu kabi oyidlalayo ngale nje kokuzibandakanya kulezi zinhlelo ezincane. Sathi uma siqala ngonyaka wezi-2005, uhlelo lokukhulisa ezemisebenzi yomphakathi kuyothi ekugcineni kosuku ihlomise abantu ngamakhono azobenza ukuthi bakwazi ukuzimela, nokuzisebenzele bengayanga ukuyofuna imisebenzi kobasi ngoba bazobe sebengobasi bona uma sebethole amakhono. Siyakukhuthaza ukuthi lowo mnyango uzame ukuthi uphushe umsebenzi wawo uze ufike lapho kulelo zinga.
Kuyasiphoxa nokho ukuthi kuba khona lezo zihibe zokungasebenziseki kahle kwezimali kulabo abazokhokhela izimpesheni, nakulabo ababhekelela abantu abazofaka izicelo zempesheni. Siyakuncoma kakhulu ukuthi uNgqongqoshe ukubeke ngale kokuthandabuza ukuthi lezo zimo zizofakelwa amehlo kanti neKhomishane yemiSebenzi yoMphakathi ilokhu iziqaphile lezi zimo. Uhulumeni usezimemezelile ezinye izinyathelo ezithathwayo ukuze le ndlela yokusebenziseka kabi kwemali iye ngokushabalala.
Siphila ezweni elingenawo amanzi kodwa sinamadamu amaningi okufuneka akhiwe aphele; sinamadamu amadala okufuneka alungiswe ukuze abantu bakwazi ukuthola amanzi. Kusenjalo futhi sinezimayini nazo ezibuye zisebenzise kakhulu amanzi agcine engasakwazi ukuyofinyelela kahle kubantu. Yikho-ke uma sikhuluma ngamanzi siye sithi uma kuvuleleka ukuthi abantu bakwazi ukusebenza embonini yamanzi, baningi abantu abayothola amathuba okuqashwa, bathuthukise nekhono labo ukuze nemiphakathi ihlomule ngamanzi ngenxa yamakhono abo. Silushayela ihlombe nalolu hlelo lwemali ehlalele ukubhekelela izimo zamanzi.
Sengiphetha Ngqongqoshe, ngizovumelana nokusho kwakho ukuthi intuthuko ayiyi ngezibalo kuphela kodwa iya ngokuthi izimpilo zabantu ziyaguquka yini ukuze bathole lokhu ababekade bekulangazelele; ukuthi uma sekuphethe uhulumeni wabantu siyophila impilo engcono, nemali esiyikhiphayo siyayilandelela yini ukuthi yenza lokhu ebekufuneka ikwenze. Sihlushwa ukuthi amakhono awakabi mahle kodwa mhlawumbe ngelinye ilanga siyothi uma ngabe singcweka la sikhuluma ngokwabiwa kwezimali, sigxile ekukuthuthukisweni kwamakhono. Siyaluseka lolu xhaso, siyancoma. Ngiyabonga. [Ihlombe.] (Translation of isiZulu speech follows.)
[Ms B T NGCOBO: Speaker, and hon members, the ANC takes education seriously in this country; but we cannot, in these few years of democracy, see much transformation because people were deprived of education during the apartheid era. Because it takes education seriously, the ANC caters for children in the foundation phase and those who are about to finish the foundation phase.
What is most important in respect of the children is that we want them to get used to reading while they are still young, and for them to continue doing so even when they are in senior phases. That is why the number of enrolments will reach 100 in 2014. That is why next year, because it did not happen last year, children will get workbooks and learner books and teachers will get teacher guides.
We will also make sure that children are assessed in Grades 3, 6 and 7 so that they will be able to speak and count, because that is very important. It does not help to continue teaching children who do not know how to use the language. We applaud the fact that the Budget Vote on the 27th considered improving the state of education. Minister and your colleagues, it would be very nice if teaching and nursing colleges were to be reopened in order for the education and health fields to be considered.
Take, for instance, the Department of Health; health does not only refer to the physical state but to a person as a whole - physically, spiritually and mentally. The Budget has been allocated in such a way that funds have been allocated for HIV/Aids and TB because these are common diseases that continue to spread.
South Africa is disadvantaged by the fact that we believe in treatment rather than in preventing sicknesses. We must prevent sickness; those who live healthy lives must continue to do so, so that they can live longer and we will not have to spend more money treating them. We applaud the fact that HIV/Aids and TB have been taken into consideration and that they are being treated in many areas. It is very important for the people who are in the rural areas, especially the women, to be taught about health and Aids because they are the ones who get infected easily due to poverty in those areas.
We appreciate that people who work for the health services will find that they are being paid better; maybe that will motivate them to work harder. It is important for all of us here to speak well of the issue of improving people's lives.
If we look at the issue of grants - here we refer to all kinds of grants - we know that it sustains many people in South Africa, from the children to the elderly, the disabled and the sick. The number of people who are being sustained by this money is very high. It cannot be the Department of Social Development only that takes care of this situation.
Other departments must intervene. That is why we highly appreciated the fact that the Department of Rural Development and Land Reform has taken up the task of teaching the youth ways of planting and producing food. That will educate and enable the youth to advise people about food production so that the communities can live better because food will be in abundance. We encourage the youth to grab this opportunity with both hands.
The Department of Public Works has a very crucial role to play besides getting involved in these small programmes. The programme which was launched in 2005 for developing public works will, at the end of the day, equip people with the skills that will sustain them, and help them create jobs for themselves; which means they will not have to seek employment because they will be employers themselves once they acquire the skills. We encourage that department to push its work until it reaches that level.
It is disappointing to see that there are discrepancies with regard to the mismanagement of funds by those who pay pensions, and those who help with pension or grant applications. We are happy because the Minister clearly said that those situations will be looked at and the Public Works Commission is always on the lookout for such situations. The government has announced some measures to be taken to minimise the mismanagement of funds.
We are living in a country that does not have enough water but we have many dams that need to be built and finished; we have old dams that need revamping so that people can get water. We also have mines that use more water which results in water not reaching people. That is why when we talk about water we say that if it happens that a chance arises for people to work in the water supply industry, many people would be lucky to be employed, and develop their skills so that the community can be supplied with water because of their skills. We applaud the Budget that is intended to take care of issues regarding water.
In conclusion, Minister, I agree with what you said with regard to development not being measured by the statistics, but by whether the lives of people do transform so that they get what they have been longing for; that if the democratic government was in power we would live better lives, and the money that we are distributing is in fact used for what it is intended for. We are set back by the fact that skills have not been acquired well, but maybe someday when we debate the Budget, we will focus on skills development. We support this Budget; we applaud what has been done. Thank you. [Applause.]]
Voorsitter, die Minister van Finansies het oor tyd 'n reputasie opgebou vir 'n redelike geloofwaardige mediumtermyn- begrotingsbeleidsverklaring, MTBPS. Behalwe vir die aanvullende begrotings, is die belangrikste sekerlik die aanduiding van beleidsaanslagte wat impakteer op die Begrotingsrede in Februarie, maar ook die effek op die geloofwaardigheid en aanvaardiging daarvan deur beleggers binne en buite Suid-Afrika.
Ons ekonomiese herstel- en groeipotensiaal is positief, maar baie kwesbaar. Volgehoue ekonomiese herstel hang af van, onder andere, die skepping van volhoubare en netto werksgeleenthede, en die aantrekking van buitelandse beleggings, veral vaste kapitaalbeleggings. Tans het ons genoegsame portefeulje en institusionele beleggings om ons handelstekort te befonds, maar dit skep nie noodwendig werk nie, en dis korttermyn en baie vloeibaar van aard.
'n Negatiewe impak op beleggersvertroue en sentiment kan hierdie fondse oornag laat onttrek, wat ons ekonomie en sy herstel broos en kwesbaar sal laat. Gelukkig het ons 'n omgewing van geloofwaardige beleggings, banke en finansile sektore, en bied ons kompeterende rele opbrengste. Dit benvloed ongelukkig die sterkte van die rand disproporsioneel, wat uitvoere en werkskepping in die geaffekteerde sektore ontmoedig.
Hoewel die Minister positiewe aankondigings gemaak het, is daar kommer wanneer dit ontleed word, en ek raak enkeles aan. Eerstens, die skep van die addisionele vyf miljoen netto volhoubare werksgeleenthede teen 2020, wat net so uit die ambisieuse nuwe ekonomiese groeipad ontleen is, is nie realisties nie. In u eie woorde, Minister, het ons 'n bruto binnelandse produk, BBP, groeikoers van 7% per jaar nodig om 5,5 miljoen poste te skep, hoewel u beleidsverklaring 'n groei van 4,4% teen 2013 voorsien en nadat daar, sedert 1994, slegs sowat vier miljoen poste geskep is. Hoe gaan die vyf miljoen poste geskep word, Minister? Nie net u verklarings nie, maar ook die nuwe ekonomiese groeipad, is uiters vaag hieroor.
Tweedens, ons het kennis geneem van die Aksieplan vir Nywerheidsbeleid, Ipap, en sy groeidoelwitte, veral ten opsigte van die groen- en agrinywerhede, die bevordering van 'n uitvoerklimaat, nywerheidsontwikkeling, die bevordering van plaaslike inhoud, ensovoorts. Die struikelblokke vir die privaatsektor om ekonomiese groei te ontsluit en aggressief werk te skep, is egter legio. Ons nywerheidsektore is nie kompeterend genoeg teenoor ander ekonomie nie, soos byvoorbeeld di van Brasili, Rusland, Indi, China, Bric-lande, met wie ons wil assosieer nie. Ons vergelykbare produktiwiteitsvlakke is ook te swak.
Derdens, beleggers en die privaatsektor wil werk skep, maar dan moet 'n omgewing deur die staat geskep word om dit te bevorder. Minister, ons sal aansporings- en ondersteuningspakkette moet saamstel, wat die globale kompeteerbaarheid van ons ondernemings moet verbeter. Met inbegrip van die rels van die Wreldhandelsorganisasie, is dit nodig om soortgelyke en kreatiewe oorsese subsidies en aansporingsmaatrels teen te werk. Indien daar nie voordele vir ondernemers is nie, sal werk nie geskep en die ekonomie nie ontwikkel word nie. Vennootskappe tussen die staat en die privaatsektor moet hier 'n poging wees waaruit almal kan baat.
Vierdens, die huidige arbeidsregime is egter nie bevorderlik vir werkskepping nie, en daarom is nuwe en kreatiewe benaderings nodig 'n Nuwe beleid ten opsigte van nywerheidsontwikkeling sones moet ontwikkel word, om unieke werkskepping en kompeterende nywerheidsontwikkeling hier aan te moedig.
Werkskepping kan die belastingbetalers tot bo 5,5 miljoen verhoog, en die afhanklikes van staatstoelae tot onder 13,8 miljoen verlaag. Dit sal die staat se inkomstes verhoog, en kan lei tot beter toelaes aan die mense wie dit werklik nodig het, insluitend kinders, ouer mense, gestremdes en werkloses. Hulle koopvermo, "self-esteem" [eiewaardigheid] en die algemene verbruikersvertroue sal hierdeur 'n positiewe uitwerking op ekonomiese groei h.
Ten laaste, laat ek 'n diensleweringsakie aanroer wat my na aan die hart l. Uit skakeling met die Nasionale Tesourie en Sars, was dit my persepsie dat die 2009 verandering aan die belastingwet, spesifiek die gedeelte wat op belastingkortings en -aftrekkings aan persone met gestremdhede betrekking het, ten doel gehad het om dit makliker te maak vir beide Sars en die belastingbetalers om regmatige eise te finaliseer, voldoening aan die Sars vereistes te verseker, en vir die staat om sy maatskaplike verantwoordelikheid teenoor hierdie uiters gemarginaliseerde groep na te kom.
Ongelukkig verskil die toepassing deur Sars en ervaring van belastingbetalers dramaties van die bedoeling, uitgespreek in komiteevergaderings. Was die bedoeling nie opreg nie, of het die amptenare eenvoudig nie die kennis en ervaring om dit te implementeer nie?
Ondanks die oortuiging van sekere amptenare, is daar baie belastingsbetalers wat onbillike diskriminasie en vooroordeel oor Sars se toepassings daarvan ervaar. Die ervaring is ook dat daar nie genoeg empatie betoon word nie, en die verskil tussen die hantering van persone met enkel gestremhede teenoor persone met meervoudige, erge gestremdhede, eenvoudig nie verstaan word nie. Ek kan u verseker dit verskil soos nag en dag. Die moontlike probleme van bedrog met personeel en konsultante by Sars, bring nou mee dat alle belastingbetalers met "excessive medical costs" [buitensporige mediese koste] - dis alle gestremdes - deur Sars in 'n brief, as moontlike bedriers uitgemaak word, met die onus op hulle om Sars verkeerd te bewys, sonder enige prima facie-bewyse.
Die lys van toelaatbare aftrekkings word nou gebruik as redes om eise nie toe te staan nie, eerder as om dit as riglyne te gebruik om voldoening te bevorder. Die jagmaak op die mees kwesbare mense as sagte teikens, is eenvoudig onbillike diskriminasie. U word versoek om in te gryp, sodat die oorspronklike bedoelings reg gemplimenteer word. Ek dank u. [Applous.] (Translation of Afrikaans speech follows.)
[Mr S J F MARAIS: Chairperson, The Minister of Finance has over time established a reputation for producing a fairly sound Medium-Term Budget Policy Statement, MTBPS. Except for the supplementary budgets, the indication of the impact of policy on the Budget Speech in February must surely be the most significant, but also the impact on the reliability and acceptance thereof by investors within and outside of South Africa.
Our economic recovery and growth potential is positive, but very vulnerable. Sustained economic recovery depends, inter alia, on the creation of sustainable and net job opportunities and the attraction of foreign investments, especially fixed capital investments. Currently we have sufficient portfolio and institutional investments to fund our trade deficit, but this does not necessarily create jobs and it is short-term and of a very fluid nature.
A negative impact on investor confidence and sentiment could result in these funds being withdrawn overnight, which would leave our economy and its recovery fragile and vulnerable. Fortunately we have a reliable investment, banking and financial sector environment and we offer competitive real returns. Unfortunately this influences the strength of the rand disproportionately, which discourages exports and job creation in the affected sectors.
Although the Minister has made positive announcements, there are concerns when these are analysed and I would like to touch on a few. Firstly, the creation of the additional five million net sustainable job opportunities by 2010, which was adopted as is from the ambitious new economic growth path, is not realistic. In your own words, Minister, we will need an annual growth rate of 7% in the gross domestic product, GDP, to create 5,5 million positions, while your policy statement predicts a growth of 4,4% by 2013, and this after only about four million positions have been created since 1994. How will the five million positions be created, Minister? Not only your statements, but also the new economic growth path, is very vague in this regard.
Secondly, we have taken note of the Industrial Policy Action Plan, Ipap, and its growth targets, especially with regard to the green and agro- industries, the promotion of a climate conducive to export, industrial development, the promotion of local content, and so forth. However, the obstacles for the private sector to be able to unlock economic growth and to aggressively create jobs are legion. Our industrial sectors are not competitive enough when compared to other economies, such as those of Brazil, Russia, India, China, Bric countries, with whom we would like to be associated. Our comparative productivity levels are also too low.
Thirdly, investors and the private sector want to create jobs, but then an environment should be created by the state to promote this. Minister, we will have to put together incentive and support packages, which must improve the global competitiveness of our enterprises. While cognisant of the regulations of the World Trade Organisation, it has become necessary to counteract similar and creative subsidies and incentives abroad. If there aren't any advantages for entrepreneurs, jobs will not be created and the economy will not develop. Partnerships between the state and the private sector must, in this instance, be an endeavour from which everyone can benefit.
Fourthly, the existing labour regime is not conducive to job creation, however, and therefore new and creative approaches are required.
A new policy with regard to industrial development zones must be established to encourage unique job opportunities and competitive industrial development in that area.
Job creation can increase the number of taxpayers to more than 5,5 million and those dependent on state grants to less than 13,8 million. This will increase the state's revenue and could result in an improvement in the grants for those people who really need them, including children, elderly people, those with disabilities and the unemployed. In consequence of this, their buying power and self-esteem, and consumer confidence as a whole will positively impact on economic growth.
Finally, let me touch on a service delivery matter that is close to my heart. From interactions with the National Treasury and Sars, it was my perception that the objective of the 2009 amendment to the taxation law, particularly the section pertaining to tax rebates and allowances to persons with disabilities, was to make it easier for both Sars and the taxpayers to expedite lawful claims, ensure compliance with the requirements of Sars, and for the state to fulfil its social responsibility to this very marginalised group.
Unfortunately, the manner in which it is applied by Sars and experienced by taxpayers differs significantly from how it was intended, as expressed in committee meetings. Was the intention not sincere or do the officials simply not have the knowledge and experience to implement it?
In spite of the belief by certain officials, there are many taxpayers who are experiencing unfair discrimination and prejudice because of how Sars has implemented it. The experience is also that there isn't enough empathy displayed, and the difference in the treatment of persons with single disabilities compared to persons with multiple, severe disabilities is simply not understood. I assure you that it differs like night and day.
The possible challenges regarding fraud among staff and consultants at Sars have resulted in all taxpayers with excessive medical costs - thus all of the disabled - being made out to be possible fraudsters in a letter by Sars, with the onus falling on them to prove Sars wrong, without any prima facie evidence.
The admissible deductions listed are now being used as reasons not to approve claims, rather than being used as guidelines to assist with compliance. Hounding after the most vulnerable people, because they are soft targets, is simply unfair discrimination. You are requested to intervene, so that the original intentions are correctly implemented. Thank you. [Applause.]]
Hon House Chair, hon members, in today's debate we are charting new ground created by the ANC, continuing along the road of transforming our budget and finance processes to make them more transparent, efficient and effective.
The ANC also acknowledges the teething challenges associated with the implementation of the Money Bills Amendment Procedure and Related Matters Act, Act No 9 of 2009, which will improve with time. The Medium-Term Budget Policy Statement and adjustments delivered six months into the financial year serve as a barometer of the road travelled since the tabling of the main Budget.
It affords lawmakers the opportunity to prepare for the next year and the two outer financial years. This is an opportunity for Parliament to amend the fiscal framework of the 2011-12 budgets if it so wishes. It also takes place within the context of the 12 agreed outcomes. Also crucial to this Medium-Term Budget Policy Statement is the centrality of the people; in other words, the extent to which the Budget addresses the needs of the majority of the people who are poor. It also takes place in the context of the performance agreement signed between the President and the executive. This signals a real paradigm shift in terms of how government business has always been conducted.
This MTBPS spells out clear, measurable objectives as evidenced in the public hearings by different stakeholders such as the Human Sciences Research Council, that agreed "in the challenge of finding the right balances in the economic and development priorities", that unemployment become the top priority; that the cities be recognised as engines of growth requiring more investment in infrastructure to address bottlenecks and backlogs; and, finally, that due attention be given to the rural development and post-school employment opportunities for the youth.
Going forward, the downward revision of agriculture and health spending over the Medium-Term Expenditure Framework, MTEF ... [Interjections.]
Order, please! Continue, hon member.
... would require attention particularly in light of the positive contribution of these sectors to the economy, if we want to defeat poverty associated with underdevelopment and migration to the cities.
The ANC welcomes the introduction of the rural household infrastructure grant which will result in job creation through construction and maintenance of infrastructure in the rural areas. Many houses have been delivered over the past few years. However, housing accreditation for municipalities will go a long way in accelerating housing delivery by the cities, as a start, and other municipalities in the long run.
The Constitution enjoins national and provincial governments to strengthen local government to ensure that resources made available through the municipal infrastructure grants are expended to the benefit of the communities to avoid rollovers. The underexpenditure of R1,8 billion with regard to the municipal infrastructure grant needs to be attended to as a matter of urgency.
On the adjustments appropriation, the Minister of Finance tabled the Adjustments Appropriation Bill together with the MTBPS. Assessing the adjustments against policy priorities, it was encouraging to note that departmental spending was R26,4 billion compared to the same period in 2009. However, the spending is still less than 50% as a benchmark.
Section 30 of the Public Finance Management Act, PFMA, says that national adjustments may only provide for unforeseen and unavoidable expenditure. I'm sure the hon member from the UDM is not very clear on what section 30 says about the adjustments, because what he said has nothing to do with section 30 of the PFMA.
We can confirm as a committee that this clause has, to a large extent, been complied with. However, the issue of salary adjustments could be looked at if it can't be addressed earlier and there could be negotiations to cover a longer period of time than is covered under the current arrangement.
The MTEF budget process gives departments and entities plenty of opportunities to plan. However, there are still challenges around this issue. The committee did not receive any proposals for the amendment of the budgets from the portfolio committees.
May I take this opportunity to thank the finance family, including Minister Gordhan, Deputy Minister Nene, all members and staff of the committee for their support by working tirelessly in ensuring the success of the committee meetings and of the report. I hope they will take a deserved rest and summer holiday. The ANC proposes the adoption of both the MTBPS and the Adjustments Appropriation Bill. I thank you. [Applause.]
Mr Chairperson, I would like to thank all the members who have participated in this debate, but in particular Mr Sogoni and Mr Mufamadi and their respective teams from all political parties for their excellent work.
I know reading is not a popular sport, perhaps, in this House sometimes, but if you read these reports they are extremely valuable. They demonstrate that the portfolio committees have gone into far greater detail than ever before. They have tried to command the facts and the figures; they have asked the right sorts of questions; and certainly they are beginning to discover both the good things that are happening in government and departments and the not so good things that are happening in government and departments. I think the House needs to compliment all the portfolio committees for the excellent work that they have done. Could you applaud them, please? [Applause.]
In the course of their work they have looked at the roles and mandates of departments; they have assessed the strategic priorities of departments and their measurable objectives; they've examined the operational plans and the extent to which they are being delivered. There is a powerful relationship between the executive, the administration, the Appropriations committee, the Standing Committee on Public Accounts, Scopa, and indeed all of the other committees as well.
Now, one of the things that has come through in this debate is the necessity to reinforce what the Medium-Term Budget Policy Statement is. The MTBPS is not the Budget. The MTBPS is here to update you on the economy to undertake certain adjustment appropriations and to give an indication of the fiscal framework which will guide the Budget for the next year and indeed the two years that follow. In doing so, it sets out, as many of you have pointed out, the revenue picture, the debt picture, and the expenditure picture.
What is interesting about the debate and the contributions of the various members and indeed the reports as well is the vast areas of agreement that we seem to have amongst us. We have agreement that the global economy is an unsteady picture; that there are still uncertainties in this environment in which we operate which we need to be extremely vigilant about. We agree that the South African economy is recovering, but clearly the growth isn't reaching the levels that it should reach. We also agree that the current levels of growth or the past levels of growth, and our capacity to create jobs and our ability to reduce poverty are not good enough for the future.
At least we seem to agree that corruption is a problem that all of us need to tackle. We seem to have some doubts in certain quarters about the will or political will of government. Let me, on behalf of government and indeed the ANC, emphasise very clearly that we have no shortage of political will. There is enough demonstration of that in terms of the number of investigations and so on going on in our country - you can clap louder for that one. [Applause.]
We also seem to agree that value for money is a concern for all political parties in this House. All I can say is that through the vehicle of the portfolio committees, can we start interrogating value for money in respect of all the departments and all they are doing on a much more rigorous basis than we do.
We also agree that infrastructure projects are key, whether they are operated at the national or provincial level through municipalities or state-owned entities. We also agree that skills development is a crucial project for our country and, as the hon Ngcobo pointed out, even in areas such as nurses' training colleges, we need to do a lot more to reopen them, re-establish them, and widen their capacity.
Interestingly, in much of what I have heard in the debate, there is also agreement that in a country like ours where poverty is a serious challenge and where development is a serious challenge, the state must be much more active than in other economies where this problem does not exist to the same extent. So, perhaps this is another area of consensus amongst us, and it should not become an ideological debate as it often does. The state must do much more. It must do it with a greater sense of urgency and a lot more efficiently than it does currently.
There is also agreement amongst us that monetary and fiscal policies on their own don't really solve our problems. As we approach the challenges of the growth path, the challenges of creating more jobs in South Africa, and the challenges of meeting the target of five million jobs we need a combination of policies, actions, institutions, and indeed the participation of all our people and actors if we are to deliver. So, more and more we should talk about not which single instrument is going to get us to where we want to get to, but what this package is that we need to put together; and that is what the growth path attempts to do.
In that particular context, the hon Mufamadi and the hon Koornhof made very important comments about the so-called currency wars, about where the world stands at the moment; about how national interests and global interests don't always align in a particular way. We also need to keep a very watchful eye on how South Africa's interests are affected by the actions of other, far more powerful countries than us.
It's a risky business to raise our voices, as I've learnt recently, but nonetheless we've got to speak truth to power and we have to say to those who take policy choices which impact on other countries - or have what the International Monetary Fund and others call a spill-over effect on other countries - what those impacts are and why we should continue to search for alternative ways of doing things which will give us a different set of answers.
With regard to areas that, clearly, you were expecting answers to and in regard to which you didn't receive as detailed answers as some of you would have liked, I want to repeat the message that this is not the Budget and this is not where all our answers and questions will be spelt out. So, on the growth path more details will indeed follow. There is a lot of intensive work being done by the whole Cabinet, and in time those details will become clearer.
Some of you have raised questions about our debt being high. The hon Singh even went to a dramatic extent, I thought - or the melodramatic extent - to say that debt was skyrocketing. We are nowhere near the skyrocketing range in the world, hon Singh, so please do not lose any sleep over this. You know we are really worried about your health in this regard.
The debt is under control. We have a credible fiscal path; we have a credible exit plan; we know exactly where we are going; we are not underspending nor are we overspending; we are underspending to an extent - as the committees have pointed out - in that in certain areas we don't spend the money we allocate to various departments and provinces, and that certainly is an area of concern.
Some colleagues and hon members have raised questions about where the details are of the National Health Insurance. The hon Minister of Health is not here, but I'm the Acting Minister of Health, so let me say on his behalf and mine that this is an area which is being worked on intensely and as soon as the numbers are available, we will certainly make them openly available to all of you.
Similarly, on the five million jobs, many of you have said that it is not clear how these jobs would be created. True, it is not absolutely clear, but I think we are beginning to choose a path that is fairly clear, and a set of strategic choices which are actually saying: firstly, if we continue like this, we won't succeed in creating the jobs - I think we all agree on this. Secondly, we have to do something different - I think we all agree on this as well. Thirdly, we need to put this package together under the title of the growth path and say what it is that we are going to do differently; how we are going to commit our resources; and what other concrete things - not just policy papers - we are going to do which will give hope to the millions of unemployed youth and other unemployed people amongst us.
You mentioned some areas - several colleagues and hon members have done this as well - of concern. There is absolutely no doubt, as the hon Koornhof, the hon Swart and others were saying, that what is happening in the euro zone is certainly an issue of concern. You would have heard us saying from this platform and others that there is no environment at the moment where you can say you can sleep in peace for longer than three days. Because as soon as you think that one set of problems seems to be resolved, another set of problems arises. That is the story of the last two years: that every couple of days there is something new happening - new fault lines, if you like, are being exposed, new imbalances come into play, and different trajectories are being followed in trying to sort out some of these problems.
From a South African point of view, we've got to watch all these developments and keep asking questions as some of you have correctly done: What is the impact of this for us; what are the implications for us; and what proactive or defensive measures do we take in order to ensure South Africans that we are doing the right things and not allowing these things to have a negative impact on us?
We agree with you on the value-for-money question. But, again, as Parliament you have a powerful role to play both as the ANC and as the opposition parties to ensure that our interrogation is far more detailed, the questions that we ask far more probing, and the demands that we put upon departments and officials to deliver value for money far more strident than we've had until now.
The issue of corruption keeps coming up, and whether we have the political will or not and whether we are going to be able to deliver or not. But let me repeat what I've said many times before on this platform: This is not a problem where one brush will eliminate all of the problems that we have.
We have to make this a matter of national conscience and national consciousness where every citizen understands that, whoever the public official might be in a political office or in a bureaucratic office that engages in this kind of activity, it is the public of South Africa that is short-changed at the end of the day. When the masses of our people begin to understand how they are being short-changed a lot more cutely than they do currently, well, those who are engaging in this type of activity had better be careful because that anger is going to come out in quite a ferocious way.
There was a concern raised about rural areas, and I'm sure Minister Nkwinti, if he had an opportunity to address you, would reassure you that we are doing extremely good work in this particular area. The Appropriations committee has also raised other concerns in that, for example, a number of departments have been neglecting section 43 of the Public Finance Management Act, and engaging in virements or shifting of funds outside of the provisions of the PFMA. About 11 departments have been engaged in authorising such shifts of greater than 8%. Again, I hope that Parliament will follow this up as much as Treasury will and ensure that the right things are done.
The other concern raised by the Appropriations committee and the standing committee is improved management of capital spending in government - and some colleagues have also mentioned this. There are areas where we have given money and it has not been spent; there are grants that have been allocated to either provinces or municipalities which have not been spent; and there were hospital revitalisation grants given to provinces, and almost one billion rand may have to be recouped in this regard. In certain provinces, though, excellent work is being done. These are areas which Parliament and the National Treasury as well as all Ministers need to take a lot more seriously.
The committee has also raised concerns about the plethora of funds, agencies and entities that departments seem intent upon creating. We are living in a period in which we need to be a lot more careful about the extent to which we expand our fiscal envelope, but I don't think that consciousness is going through sufficiently. Parliament can help a great deal by exposing some of these things - those departments and entities that want to multiply these, if you like, money-absorbing activities - and try to restrain them in some way.
There has also been some criticism and observations about the MTBPS - if the size of the deficit is too small or too large, whether there are enough details about the growth path, whether the department or financial institutions are active enough or not, and whether the revenue picture is correct or not.
All I want to do in concluding is to commit from the Treasury point of view that we would like to engage with all stakeholders; listen to the views even if we disagree with them; and allow both ourselves and others to put facts on the table and let the facts begin to persuade us as to whether we are pursuing the right track or not.
I want to conclude by echoing what the hon Ngcobo had to say - that development is not about figures, but about how we change peoples' lives. The hon Sibhida made a similar point. The assurance that we need to give the South African public is that we are passionate about making changes which will affect people's lives positively and doing this in such a way that we spend our money wisely and make real differences to people and the conditions in which they live. Thank you very much. [Applause.]
Debate concluded.
Bill read a first time.