Hon Chairperson, hon members and representatives of provinces and the SA Local Government Association, Salga, thank you very much for your comments and, generally, your support for the fiscal framework. I know that this is the House where you also invite shop stewards from the provinces and municipalities. So, we welcome the comments of the shop stewards. I suppose they have to ensure that they support their own environments in looking at this particular Budget.
However, as several of you have pointed out, let us remind ourselves that this Budget is being framed at a time when there are indeed serious economic difficulties around the globe. Those economic difficulties are not going to be resolved in the near future and many of those difficulties might well persist for some time to come.
It is therefore important, whether we are from municipalities, provinces or national departments, and whether we are in legislatures or holding executive office, that we take serious account of the circumstances in which our fiscus has to be managed, how taxpayers' money has to be spent, and the efficiency and value for money in our expenditure guaranteed both to ourselves and, more importantly, to our people. I don't think that we are there, just as several hon members have in fact pointed out.
You are all, regardless of the party you come from, committed to rooting out corruption. This is not only because the wrong people put money into the wrong pockets, but because, at the end of the day, corruption impacts on and causes a lack of service delivery to the very people we claim to represent - the poor of this country. Corruption actually results in a very small minority benefiting by having money in their own pockets. Corruption happens not only in the Public Service or just in the ANC but is, in fact, widespread, and is practised by people - from various political and social backgrounds - who do business with the state. The commitment to root out corruption - that we see here from everyone concerned - is very important to make.
I would encourage the hon members - because none of you seem to have made reference to this - to keep reminding ourselves and the South African public about our fiscal guidelines: that, when times are bad, the state must engage in countercyclical policy; when times are good the state must hold back a little and build up its resources because, in the kind of economic environment in which we live, we will have another crisis sooner rather than later.
Secondly, we need to ensure that we have debt sustainability. Hon De Beer, hon Lees and others have made reference to this, and I can assure you that what we have in this Budget is in fact a very sustainable approach to fiscal management.
The third issue, of course, is to ensure that the way in which we undertake our expenditure management and debt management doesn't impose on future generations of South Africans.
It is on the basis of these three guidelines, plus the fact that we are trying to maintain the right kind of balance between fiscal consolidation over the medium term and support for growth through the various programmes that you all have outlined, that we believe we have created a sound platform for the rest of the country to begin to participate in an important process of generating growth and jobs on the one hand and reducing poverty and unemployment on the other hand.
It is also in this context, as hon De Beer pointed out, that the Deputy Prime Minister of Australia and I wrote a paper and a letter to members of the Group of 20, G20, in which we say that joblessness and the challenge of creating jobs, particularly amongst young people, is not a problem unique to South Africa. Today, it is a problem for both developed and developing countries.
We are saying that, in the work of the G20 and in trying to give concrete meaning to a very important concept that was developed in Pittsburgh by our leaders of the G20, the framework was strong, sustainable and offered balanced growth. We need to put jobs and job creation at the centre of that programme. We will continue to remind the world that engaging in technical rebalancing, as they might call it, is not going to be sufficient; that what we require is a social consciousness amongst global leaders; that unless we solve the problem of growth that creates jobs, growth that reduces inequality, and growth that reduces poverty, particularly in developing countries but in developed countries as well, we are creating the wrong kind of recipe for the globe at large.
Hon De Beer correctly took us back to 1994. The amount of R112 billion looks very small. It's less than the education budget today; I think it's half the number, if I'm not mistaken. The tax revenue that we will be working with for the coming year will be R826 billion, and our expenditure, as he correctly pointed out, over a trillion rand. Crucial to what many of the hon members have said is the challenge of changing the composition of spending in South Africa, meaning that, both in terms of consumption spending and the wage bill, more generally, we need to shift resources to investment. So, we are talking about investment in municipalities, investment in provinces, and investment at the national level. One self-criticism that we can all make is that we need to meet this challenge far more aggressively than we have done until now.
On the capital side, municipalities underinvest at the moment. Certainly, in the smaller municipalities too much of the capital expenditure disappears into operational expenditure. Provinces that have adequate resources to invest in infrastructure - whether it is building schools or roads or anything else - underspend. It is anticipated that at the end of this financial year the total fiscus might well have underspent by over R6 billion. We will, of course, only learn the true numbers in about six or eight weeks' time.
But, we can't, on the one hand - with respect, Chairperson - ask for a better formula, a different formula, a better approach to either the vertical slicing or horizontal slicing in respect of the equitable share, and, on the other hand, not spend the money that we have efficiently and not put a stop to glamour projects in our provinces and municipalities, and not take greater care about the types of cars we buy and the kind of expenditure in which we engage. This House, I believe, has an important role to play in ensuring that expenditure of the right type is happening. We can't ask for more money for municipalities when, at the same time, some of our mayors are engaged in purchasing luxury cars when they could have bought a bakkie and made do with it under the current circumstances.
So, on the question of equitable share, I think we must state categorically that the formula that we have currently does take account of changes in demographics, economic profiles and other characteristics of provinces. The formula, as you know, is developed by the Financial and Fiscal Commission, which is an independent commission. Nobody in government dictates to them in terms of what they need to come up with. If there are useful ideas about how that formula can be modified, the MECs of finance attend meetings of the Budget Council several times a year and the Budget Forum also convenes at least twice a year, at which times these contributions can be made and the process taken further.
Hon Lees, of course, says that we have abandoned the unemployed youth. Now, that's not true, hon Lees. We, in fact, have various programmes. One of the most successful ones is run by Minister Nkwinti of the rural development Ministry, in which already 8 000 youth are engaged, employed, trained, and given technical and other skills. More effort needs to be made for this process to move on. We would, certainly, agree with you that in the National Economic, Development and Labour Council, Nedlac, process we need to have greater co-operation and a sense of urgency from our social partners in processing the youth wage subsidy. This would not necessarily be in its current form, because there are clearly concerns from organised labour that we need to take on board which state that this subsidy could result in the displacement of existing workers who are experienced within the work environment. We believe that, if we can get into a constructive discussion, the incentive can be redesigned to accommodate those concerned and still make a serious dent in unemployment in South Africa.
I thought hon Lees, Mr Chairperson, made a fascinating confession and a concession that it is decades of colonial misrule that have brought us to the point where we are in South Africa and given us the South Africa that we inherited in 1994.
Now, what that should tell us is that centuries of misrule by colonial and apartheid powers can't be wiped out in 18 years, nor can a new, developmental, capable state be built in 18 years, given all the legacies of the past. So, state building is an important national project of ours. It's a project which we should not make into a political football. We should all be asking ourselves how we can create a much more efficient, a much more capable, and a much more skilled state which draws on the skills of all South Africans, in order for us to leave behind a legacy for future generations that says that we have, in fact, done our bit to build this state.
We've gone through his claim that we want to move towards a welfare state; that is not true. This government is absolutely clear that creating jobs for people is the best way to get people out of poverty. It's the best way to give people dignity. It's the best way to give people their independence, and that is the programme to which this government is absolutely committed.
He talks about me finding myself in this government. I mean, finding myself! I've been a member of the ANC for over 40 years; I don't find myself here, hon Lees. [Laughter.]
Hon Jonas, the leading shop steward of the provinces, thank you for your contribution. I think that the thoughts that you've put forward about the initiatives to get greater efficiency going in the Eastern Cape are most welcome. You know you will have to allow us to be a little bit sceptical until we see the evidence that these plans are actually working. The Eastern Cape has massive challenges that it needs to meet, and government at the national level fully supports the attempts to meet these, and each of the things that you have outlined can make a substantial difference towards improving the living conditions of people in the Eastern Cape.
The hon Memela correctly points to deficiencies in the health system and the urgency with which we need to approach the question of transforming the health system and introducing the National Health Insurance, NHI, programme over the next 14 years. At the same time, let us admit that what has been happening within the health system is a decline in morale, a decline in the culture of caring, and a deterioration of the professional ethics with which our hospital and the clinic staff should approach our people. Brick by brick, we will have to build this NHI system, not only in the sense of having a new clinic and having new equipment and having the necessary medication but, above all, in having a new attitude to our people and how we care for them. So, a fundamental change in culture is going to be required.
One of the most regrettable things, Chairperson, that I am fascinated with and greatly disappointed by is the amount of corruption that goes on in the health sector. This is the sector which is meant to care for people, where money - every single cent of it - should be spent optimally, to ensure that the beneficiary is a South African citizen or somebody living in South Africa. Yet, there are officials, there are politicians, there are businesspeople, above all, who are doing the best they can to derive benefits for themselves, rather than ensure that our people benefit at the end of the day. This is a huge disappointment that we are facing.
Hon Mohai has made many observations and I'm sure he's going to raise those in the next Budget Council meeting. It is safe to say that the Free State should be careful about asking for more money for roads, otherwise I might raise certain sensitive issues. [Laughter.]
Hon Plaatjie talks about e-tolling as something that is nasty and ill- intended. I will invite him to take a more patient view on this particular matter and acknowledge that there are toll roads and that there have been toll roads in South Africa for a very long now. I'm sure you happily pay your tolls as you travel interprovincially on all the roads.
Government has done its best on this particular issue: it put in R5,75 billion; it put a cap of R550 to bring down the small vehicles charge to 30 cents and to give discounts of 20% to freight hauliers in nonpeak periods and many other things. But, at the same time, we have had to ensure that we guarantee the sustainability of the SA National Roads Agency Limited, Sanral, and give confidence to the investors that the state is behind this institution, that the state stands by the debt that has been incurred in this process, and that we want everybody to enjoy the roads rather than take the kind of approach that hon Plaatjie has been taking.
He talks about the social wage and that people are getting poorer. He might want to be reminded that 58% of our Budget this year - which, a decade ago, was 49% - goes into a social wage of one kind or another, such as support to schools, school nutrition, or school transport. You can list a whole lot of those. These add up to R3 940 a month per South African citizen. That is a substantial contribution from the state, but, given what hon Lees talked about concerning our legacy and our colonial and apartheid past, that is clearly not adequate to wipe out the couple of hundred years of legacy that we have inherited.
Hon Mothupi makes some very valuable points. I would like to thank him for his articulation of the social wage question as well and the importance of strengthening the public health system.
Hon Pillay, the Salga shop steward, also makes some very useful points and I can fully understand his need to focus on what we can do for municipalities.
The Minister for Co-operative Governance and Traditional Affairs and I have agreed that we will get our officials to begin looking at the smaller municipalities that constantly seem to be in financial distress and come up with a longer-term answer in terms of what we do with such municipalities.
At the same time, provinces and municipalities have a very critical role to play in ensuring efficient delivery of infrastructure. It is true, and he points to the fact that more must be done to improve capacity of municipalities. But, you know, when we ask for more to be done, it's not necessarily always by others. It's also a question of what we can do and what Salga can do as an organisation. Where are its programmes to actually build capacity amongst municipalities? Are we approaching this in a single- minded enough way and with a sufficient degree of urgency to make sure that we overcome some of the incapacity issues faced by municipalities?
Now, the one thing that we need to make absolutely clear is that any appeal that says, do not take away the money we haven't spent, leave it or transfer it somewhere else - given the context that we find ourselves in both globally and fiscally - just won't work. We either spend money efficiently or it will be spent efficiently elsewhere. We either have proper budgeting, proper planning and proper implementation plans and deliver on those implementation plans, or the funds will be transferred elsewhere or to another agency that can deliver to the same population or the same area a lot more effectively than the institutions of government are able to do.
So, we all need to lift our game, raise the bar and ensure that we can improve the conditions in which our people live and, generally speaking, ensure that informal settlements actually become decent places for people to live in. We must ensure that people in rural areas get the services that they deserve. Above all, we must do a lot more than we might be doing at the moment to ensure that there is support for economic activity and entrepreneurship through the work that municipalities and provinces do.
In conclusion, let me thank all the hon members for their contribution and recognise that, whilst we are living in a tough environment at the moment, South Africa, as hon De Beer has pointed out, has a lot going for it through its membership of the Brazil, Russia, India, China and South Africa group, Brics, and through its existence on the African continent. The question that we all need to ask ourselves is how we can use the opportunities that are available to us whilst keeping an eye on the risks that we face in order to raise growth, reduce poverty and create jobs for South Africans. Thank you very much. [Applause.]
Question put: That the Report be adopted.
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.