Hon Deputy Speaker, let me firstly thank all the parties for their support for the Fiscal Framework and Revenue Proposals. I suppose the fact that we didn't have any increase in taxes has made it possible for you to do so, but whatever the reason, thank you for the support. Hon members, it is useful for us to remind ourselves about some of the basics which underlie the fiscal framework which this government presented to this House and the nation.
This Budget in 2013 was about national development and fiscal sustainability. It is the first Budget in which government's plans to implement the National Development Plan, NDP, are beginning to take shape. The plan expresses the central priorities of public policy; eliminating poverty - as many colleagues have pointed out - reducing inequality, with the focus on lowering costs of living and doing business; increasing exports; creating more jobs; and making economic growth more inclusive.
Government departments will increasingly align their planning and expenditure to meet the objectives of the NDP and related plans. At the same time, growing collaborative dialogue between government, the private sector, trade unions and civil society will help to make this plan a reality. Let us also remind ourselves of five things: Firstly, the fiscal framework tries to achieve a few objectives. It supports economic recovery even with the difficulties that we have, both globally and within South Africa. It secures, once again, fiscal sustainability. For those of us who tend to be alarmist, let's remind ourselves that at the most, our debt will still be below or around 40% of the gross domestic product, GDP. Both the Southern African Development Community, SADC, and the Organisation for Economic Co-operation and Development, OECD, limits are 60%. So, we are well short of that, but your concerns are valid - which is the next point. We need to stabilise our level of public debt, particularly, if we can't demonstrate increases in economic growth and revenue. It finances government's ambitious infrastructure programme, both on-budget and off- budget; slows the growth of consumption spending; and continues the process of the bias towards investment spending.
Secondly, much of this Budget is also about supporting the economy. We are still striving for increased infrastructure spend and as many of the processes in the Presidential Infrastructure Co-ordinating Commission, PICC, come to fruition, we will certainly see an increase in that. We support job creation programmes and increase in particular, the community works programme allocations, and other allocations that encourage public works programmes. We support manufacturing competitiveness in this Budget and the Department of Trade and Industry's, implementation of special economic zones.
Thirdly and clearly, in order to secure fiscal sustainability, it is not just about reducing debt, debt service costs and trying to cut expenditure without regard to the growth and social responsibilities that we have. In our case, the message that we need to send out - as many colleagues have done today - is that whilst we moderate the growth in spending, there is still a lot of room in South Africa to improve the quality of our spending. This implies - as many have already suggested at this platform - that public servants in particular need to have a lot more regard to being smarter, working harder at getting more value for the tax that our people pay; and to do more with less, particularly on the consumption side of our expenditure. We have undertaken very bold measures as government, not as just the Treasury, to ensure the spending projections of national departments have been trimmed.
We have undertaken bold cuts to the contingency reserve in the hope and optimism that we can recover some of that lost ground as revenue increases with growth. Departments have been asked to review their spending and some R50 billion has been shifted to key priorities of government. All of these are bold decisions made by an ANC government to ensure that we both deliver on the one hand and sustain our fiscal position on the other hand.
On the question of public debt, I think valid concerns have been raised, some of which I have addressed. High levels of debt will certainly put pressure on interest rates and can begin to affect growth and investment in the economy. I don't think we are there at this point in time. As hon Ross pointed out, the rise in debt inevitably leads to a rise in debt service costs. The fact that we are now reaching R100 billion and beyond in the coming financial year in respect of debt service costs, means that we are cutting out expenditure both on the consumption side, particularly on the social wage, and indeed on the capital side as well.
Our objective over the next few years, as many have pointed out, has to be the rebuilding of fiscal space that we had achieved prior to the recession. Remember, we had reached a point where we had over one percent surplus in our Budget. We need to make every endeavour, both through very creative ways of increasing growth in South Africa, and ensuring that we manage our spending properly, to get back to that particular point.
In concluding the introductory part of what I have to say, the real focus that all of us need to place - and here the role of the parliamentary portfolio committees is absolutely crucial, Deputy Speaker - is on improving the quality of spending in the next year or two in respect of what departments do. We hope that both the executive and parliamentarians can work together in order to ensure that we eliminate wastage in goods and services budgets; the expenditure reviews will give us a better understanding of where some of the fault lines are in the way we spend money; the tax review will give us a better idea whether it's possible to increase the revenue base; and the long-term fiscal plan will ensure that we have a 20-year plan to manage the historical tasks that this generation has been given.
I want to thank, in particular, the Chairperson of the Standing Committee on Finance, Mr Mufamadi, for his stewardship in getting this process through the parliamentary committees in addition to the constructive role that the parties have played, and also his counterpart in the NCOP. He made a very valid point that, we need to monitor the global situation carefully, have a collective effort to fight corruption, and do a lot more in respect of youth employment.
The hon Harris - I think he is not in the House - issued a very stern warning here. I stand in some trepidation of him. Warnings by the DA need to frighten all of us quite a lot. But, I think the key point is that there is little that the DA can offer, Deputy Speaker, by way of constructive criticism of the fiscal stances we have taken. What that means is something that we have said on this platform before, that they should continue to mimic ANC policy and they'll do well. [Applause.] The hon Koornhof made a valid point in terms of cutting and managing the way in which officials spend money. He emphasised the importance of Africa and intra-African trade, which is going to be crucial in terms of our own prospects as well; and the focus on the agricultural sector and small businesses that many hon members have pointed to. He said that we need to be careful, that if we can't act collectively to address some of our issues, we might have a different tax regime next year. I thank hon Ambrosini for his constructive approach in the debate and for calling a spade a spade, which is what I thought we did in the Budget presentation as well. We will certainly take into account some of the wisdom that he has to offer.
Hon Groenewald, as hon Luyenge has said, you and I have known each other for a very long time and I'm sure that if there is constructive help on offer, you are welcome to contact me. But, I think that some of the assumptions that you made in order to attract some attention for the forthcoming elections, are not a very useful way of offering help. If you seriously want to offer help, you don't announce it at this podium. You can come and let's have a talk about it, but politics is second nature to you. So, I understand that.
The hon Dubazana made a very important point, hon members, about the importance of the social wage in South Africa. We often underplay that, we talk about how few taxpayers support large numbers of grant-receiving people, but if we take the 57% to 60% expenditure on the social wage in South Africa, that is a very important contribution that all of us make to ensuring that the disadvantaged people of South Africa can live with some decency until we radically change the environment, conditions, and prospects with which they live.
The hon Swart made very important points on shifting from consumption to the productive side of the economy. We agree with him on the need to reduce wasteful expenditure, to increase the capacity of law enforcement agencies, and in particular the role that faith communities and organisations could play in guiding us through this difficult period that we face. Thanks to all the political parties for their support. Thank you, Deputy Speaker. [Applause.]
Debate concluded.
Hon Deputy Speaker, I move:
That the House adopts the Fiscal Framework and Revenue Proposals, and the Report of the Standing Committee on Finance on the Fiscal Framework.
Motion agreed to.
Fiscal Framework and Revenue Proposals, and the Report of Standing Committee on Finance accordingly adopted.