Mr Speaker, hon President of the Republic, hon Deputy President, hon Minister of Finance, hon members, distinguished guests, it is my honour and privilege to present the committee report on the 2013 Fiscal Framework and Revenue Proposals for debate and adoption by this honourable House.
This report and its recommendations are informed by interaction with various stakeholders and the broader public including, amongst others, organised business, organised labour, tax practitioners and the Finance and Fiscal Commission, to name but a few.
We are also informed by the strategic objectives of the National Development Plan, NDP, the economic outlook, the fiscal framework, revenue trends, tax proposals, the Minister's Budget Speech and overall we are also informed by the Budget Review of 2013.
The NDP enjoins all South Africans, government, business, civil society and other stakeholders to rally behind one common vision to create a true nonracial, nonsexist, democratic and prosperous South Africa in which all shall benefit from the wealth of their country of birth. This is a dream we should all live to cherish and achieve. We should be inspired to achieve this dream, in spite of our limited resources as a country.
The Standing Committee on Finance wishes to highlight that, with the exception of one, all stakeholders who participated in the public hearings not only gave their unqualified support for the National Development Plan, but also expressed and emphasised the great sense of urgency in the need to start focusing on its implementation. While the National Planning Commission has warned in their report that the road will be long and uneven, they have also outlined measurable objectives and targets which should give direction and assist with deliverables.
Prof Raymond Parsons of Business Unity SA said, and I paraphrase: Let us not be preoccupied with pre-NDP discussions and disagreements, because what is now important is to accept that we are in the post-NDP negotiations. Let us move and pay attention to practice.
I fully concur with this sentiment. We can only perfect that which we have tried to practice or have implemented. As the saying goes, practice makes perfect. Otherwise everything remains theory: well-written and documented, but with no measurable outcomes.
The budget proposals before this House are underpinned by a clear vision espoused by the NDP. The fundamental tenet of the plan is the recognition that the key to solving the country's social and economic challenges lies in addressing structural constraints, which include unemployment, a narrow skills base, inequalities, resource bias and skewed spatial legacy.
The issue of the private sector's character of responding to incentive changes which encourage investment is an area to which we have to pay attention. There is a need to increase the capacity of the state infrastructure build programmes with specific focus on planning and project execution.
There is a need to improve the investment climate to support the crowding- in of private sector investment.
There is a need to align policies relating to the promotion of SMMEs and entrepreneurship development, and, lastly, there is a need for a collective, national effort to eliminate wastage in the fiscus, as well as intensify the fight against corruption.
Hon Minister, in your 2012 Medium-term Budget Policy Statement, MTBPS, you forewarned this honourable House of the possible consequences of the persistent negative global economic environment. You said, and I quote:
If the economic environment were to deteriorate, realising government's fiscal objectives would require a reconsideration in spending and revenue plans.
Hon Minister, you have indeed responded timeously to ensure that the budget deficit is narrowed and that the fiscus continues to move towards debt stabilisation by trimming its medium-term spending plans by R10,4 billion on contingency grants. Therefore the context within which the Fiscal Framework Proposal was adopted during the MTBPS remains valid, notwithstanding the revenue decline as a result of labour unrest, particularly in the mining sector, and other global factors.
Whilst both the global and domestic economy display slow but positive signs of recovery, there are still disturbing signs in the US economy. Indeed, one can conclude that the global economic crisis is a mutating problem that started in 2008 in the US with Lehman Brothers and was characterised as a sub-prime lending or unsecured debt problem. It is what George Soros termed "ninja loans" - no income, no job, no assets, but access to resources.
Later on, in 2009-10, it became even more severe as it mutated itself into a sovereign debt problem in the eurozone, and now the US economy has to find a solution to its fiscal cliff or sequestration problem which, in simple terms, is a choice for its Congress between budget cuts and tax increases. Whichever way it goes, this will have an impact on the US economy and will consequently impact negatively on global economic growth.
Economists have issued stern warnings in The Financial Times at the beginning of this month that the automatic budget cuts could shave more than 0,5 percentage points off US growth this year, which may result in 1 million federal workers being put on unpaid leave from April this year. This is a serious development.
If we are to remain on top of our game, as it is displayed in the medium- term spending plans, it will be critical for National Treasury to continue to monitor these developments in the US and eurozone economies.
Insofar as our fiscal policy is concerned, we welcome the fact that government remains committed to funding its priorities within the limited ceiling and, most importantly, has indicated that new policy initiatives will be funded from savings and efficiency gains underpinned by serious and rigorous reprioritisation initiatives in the coming medium-term period.
In brief, despite the fact that growth has been weak and revenue collection has fallen below the projected figures, with the Budget deficit growing to 5,2% in 2012-13, the fiscal policy and its proposals will be underpinned by the contingency reserve being reduced by R23,5 billion over the MTEF period and noninterest expenditure reduced by 0,6%.
Whilst our debt has increased for the 2012-13 fiscal year, it will narrow down and stabilise with growth in the economy.
It becomes important to highlight to this House that, given the predictability, consistency and transparency of our government's budgetary systems over the years, the committee is of the view that these projections and measures will be realised. I declare this knowing that some members of the committee will rise here and seek guarantees from the Minister and ask him to undertake that there will be no deviation from the proposed Fiscal Framework. The only assurance the hon Minister can give is the predictability and consistency of our budgetary systems, which have been proven to be the most reliable in the world to date. [Applause.]
Hon Minister, what has been said before is what has maintained the fiscal stability we still enjoy today. With all due respect, to give guarantees on the US economy or the Eurozone's performance would be completely presumptuous on our part. We would be expecting too much from our own executive.
Asset and liability management is the very backbone of government's strategy to manage its total contingent liabilities, and contributes to fiscal stability. The Budget Review indicates that a total of R377,5 billion of infrastructure roll-out plans in the coming MTEF period will be undertaken and funded from the balance sheet of state-owned companies.
We have also noted that government intends to review some of its investments in these companies, particularly those assets that have not been aligned to service delivery and policy priorities.
Indeed, this is commendable as it is in line with the recommendations of the Presidential Review Commission on SOEs and foreign direct investment, FDI. While we accept that such assets may be disposed of to enhance fiscal stability and revenue generation, we urge government that such disposal processes should be in line with the Public Finance Management Act's provisions to engender the principle of fairness, transparency and cost- effectiveness within state-owned entities.
Secondly, government should satisfy itself that such an asset will indeed not be a necessity for public use in the near future to avoid a recurrence of mistakes of the past where we were tempted to sell an asset only to buy it back later at a higher price.
State-owned companies and their role as outlined earlier require effective management. Therefore, the appointment of senior managers and nonexecutive directors to the boards should be skills-orientated and informed by a common understanding of the challenges that the country is facing today.
It is with great sadness that one is confronted day after day with the reality of the perceived ungovernability of some of government's state- owned enterprises. As Parliament, we cannot only lament this state of affairs but must rise to the occasion. It is this House that appropriates resources to all these institutions. We must rise to the occasion.
On combating corruption, let me start by again quoting the Minister from the Budget Speech. The Minister said:
There are too many people who have a stake in keeping the system the way it is.
The hon Minister further aired his frustration by saying that this matter was not one which could be mitigated by waving a magic wand. The fight against corruption cannot be seen as a one-man battle; it will require a special effort from all of us. All sectors of governance, the private sector, and civil society must be ready to resist corruption from becoming the norm of our life.
Let me borrow from the Chinese philosophy on why old dynasties fell with an almost eerie predictability. Steve Berry, the author of The Emperor's Tomb says the following, and I quote:
Often early leaders are masterful, while later ones are feeble, unmotivated or mere puppets. Inevitably, corruption combines power and money, without the benefit of the law to prevent abuse. In the absence of clear rules, chaos thrives. Government then isolates itself and weakens. The end is never in doubt.
I include this quote because now is not the time for you to give up. There are many men and women out there who believe in you. There are many men and women out there who say, we are sick and tired of corruption; fight it; we are there for you. [Applause.]
On youth unemployment, let me say that we fully support the enhanced policies which seek to broaden job opportunities in the labour market, particularly incentives which seek to strengthen employment and skills acquisition for young people. We are further encouraged by the President's directive to the various constituencies at the National Economic Development and Labour Council, Nedlac, that speedy implementation of the agreements is now long overdue.
In conclusion, allow me to say that the ANC supports the Fiscal Framework and Revenue Proposals as presented. Thank you. [Time expired.] [Applause.]
Mr Speaker South Africa is in a fiscal corner because we are only growing at 2,7%; less than half the rate of our neighbours on the African continent. We face a R16 billion shortfall in tax revenue in this Budget. This means we have had to increase borrowing to pay our bills. This year, our Budget deficit will exceed 5% of gross domestic product, GDP, for the first time since 2009, when we had to respond in the short term to the global financial crisis.
The effect of our larger deficit will be to drive government debt higher over the medium term. In 2016, government debt will top 44% of GDP. This will not mitigate the ratings agencies' concerns about a lack of fiscal space.
We have been in a situation like this before. In the late 90s, debt reached 45% of GDP for several years. What did we do then? The solution was the partial implementation of the Growth, Employment and Redistribution plan, Gear, which saw the then Finance Minister, Trevor Manuel, take advantage of benign global economic conditions to draw down debt levels, reform the budget process and implement consistent monetary policy for the first time. Crucially, Minister Manuel had the full backing of President Mbeki to implement these reforms in the face of the opposition then from Cosatu.
Today, with debt levels approaching similar levels, Minister Gordhan needs to do something drastic to get us out of this fiscal corner but he faces three additional challenges that his predecessor didn't.
Firstly, he has the fall-out from the global financial crisis to deal with, including the sobering fact that South Africa is growing much more slowly than any other emerging markets. They say when the tide goes out you can see who has been swimming with no pants. It is clear that because we did not tackle reforms to our economy or spend enough on infrastructure when times were good, the global economic slowdown has revealed deep structural problems in our economy.
Secondly, he faces a recent history of ANC mismanagement of key elements of the economy. Infrastructure spending from 1996 to 2006 was half of what it should have been. Reforms to collective bargaining have been blocked. The restructuring of state assets has been off the table for a decade and exchange controls remain a huge disincentive to investment.
Thirdly, while he has the National Development Plan, NDP, on the table as a potential reform agenda to drive economic growth and help him draw down debt, it is not clear that he has the support of President Zuma in getting it implemented.
While the Finance Minister has tried to spend less in recent budgets, like on public sector wages, for example, his decision has been effectively overruled by Cosatu and the former Public Service Minister. When he tries to spend more, such as R5 billion on the Youth Wage Subsidy, he is effectively blocked by Cosatu.
The only way through this deadlock is for the President to back his Finance Minister fully, but this President unfortunately spends his time placating the ANC's allies; not taking the tough decisions that leadership requires.
Implementing the NDP is the best way out of this fiscal corner. Let me tell you why. The Minister has three options. First, he can cut spending: Reducing funds for bloated ministries and extravagant ministerial perks; clawing back some of the R30 billion lost to corruption; cutting unnecessary spending on consultants; and freezing spending on the President's home at iNkandla will all help, but we accept that broader austerity would hurt growth.
Second, he could raise taxes but South Africans are already overtaxed and they don't see value from the taxes they pay. Increases in taxes would also hurt growth. This leaves him with the third option - driving growth. This is where the NDP comes in.
If the NDP is implemented, it would drive growth higher, raising more revenue for the state. Gear helped us draw down debt in the 90s. Now the NDP can be our Gear and get us out of this fiscal corner. So, the DA welcomes the fact that this Budget is broadly aligned with the NDP, but it does lack detail on reforms in the plan that would scrap cadre deployment and hold public servants or teachers to account.
If you want to know why these things are left out, you only have to look at what Cosatu says about the NDP. They say: We remain extremely concerned that the conservative and pro-capital National Development Plan continues to receive ringing endorsement from the government. We dispute the assertion of the speech that there is a broad endorsement of the NDP.
This is the ANC's tripartite alliance partner that we are talking about. So, hon Mufamadi is misleading the House to say that all presenters in the public hearings backed the NDP. The National Union of Metalworkers of South Africa, Numsa, a key Cosatu union, was even more aggressively opposed to the NDP before our committee. The government loves to speak as if the NDP is broadly accepted by everyone in South Africa. Well, it is accepted by everyone except, presumably, the 35 members who came to this House under the flag of Cosatu.
What is really alarming about this is that Cosatu has a history of blocking policies that would help tackle our greatest challenges. They have successfully blocked the Youth Wage Subsidy for three years, so we are pleased that the Finance Minister has included it in this Budget in the form of the Youth Employment Tax Incentive, or Yeti. We hope that he has the political capital to implement it this time.
This was one of the highlights for us. The others are: A R2,9 billion tax incentive package for Special Economic Zones, SEZs, which is a key policy proposal; reforms of small business taxation of R360 million; and increased tax deductibility of charitable giving. While these were some highlights; there were also lowlights.
The Minister failed to deal with the fact that planned spending on infrastructure exceeded actual spending by 22% per year on average, for the past three years. In the next three years, we plan to spend only 7% of GDP on infrastructure; well below the 10% targeted by the NDP. Furthermore, we are concerned that the cut in the contingency reserve may be overambitious and leave us exposed.
The DA supports this Budget because the Minister has set out to align the Budget with the NDP, doubled-down on the Youth Wage Subsidy, and adopted key DA policy proposals.
However, we must warn the House: If Minister Gordhan continues to have his policy implementation blocked by Cosatu, then our support will end! Thank you! [Time expired.] [Applause.]
Deputy Speaker, this was a do-or-die Budget; a final wake-up call to everyone to do his bit to make this country work. The big questions remain: Whether a positive domestic sentiment will return; and whether labour will enhance the new vision of the National Development Plan for a prosperous South Africa.
Those two big questions need to be answered. The time to play games is over. The power struggle between this government and Cosatu must stop. We cannot afford this luxury any longer. We are more vulnerable to external factors than ever before. The call by the hon Finance Minister for all South Africans to unite and to do the things we need to do to break the growth rate barrier of 2,5% is a sincere one.
Without a faster growth rate we remain vulnerable to factors outside our control. The fact that the Treasury had to adjust the growth rate downward once again puts us clearly on the low growth scenario of the NDP. This serves not to see the return of positive domestic sentiment.
The success of this tough and conservative Budget is well exposed to factors outside the control of the Treasury. Those within their control, like the seriousness and dedication by all departments to manage and to cut government spending, are sometimes under suspicion. At times you just get the feeling that the officials and Ministers do not take care.
You sometimes get the feeling that, when professionals and businesses do jobs for the state, they take whatever they can take from Public Works' account. The Nkandla project became a disaster simply because of bad management. The Free State website also became a disaster because of no management.
Economic growth does not always mean job growth. For instance, in Singapore, a growth rate of 7% only translated into 3% growth. In Hong Kong, when they grow at 5%, jobs grow at 1%. In the United States, when they grew at 2%, there was growth in jobs. So, if we are really worried about jobs, we should worry more about the agricultural sector.
We should worry more about the smaller companies, and assist them to become drivers of job creation. For how long can we afford not to have a dual labour dispensation: one for big companies, and one for smaller companies? More and more South Africans depend on state grants to put food on their table.
More and more ordinary jobless South Africans just give up and start to believe that it will not help to engage the economy to seek a better life. This is dangerous for political stability. Employment is used to measure social engagement. Our figures for unemployment are high. The unemployment rate for young black women in Marikana is 90%.
There is total disengagement in that society. It only spells trouble, and we have seen it! We cannot be proud of the fact that we are now ranked as the most unequal society in the world. Everyone is saying that Nigeria will soon be the largest economy in Africa, pushing us from the throne! Are we just going to sit back and allow it to happen? We are all in this together.
The role of ordinary South Africans, business, labour and good governance is vital. We must change our attitude to be more proudly South African. Europe and the developed world are worried that they shall not lead us out of our problems. The call to look towards sub-Saharan Africa, the second fastest growing region in the world, must succeed.
Less than 15% of all trade in Africa is among African countries. That is bizarre. The red tape to trade in Africa and here must be cut and the mobility for citizens to move and to work must be streamlined. Minister, you have done your part. Only time will tell whether the rest will follow to embrace the goals of the NDP or not, so that our long journey back to recovery will start in all earnest this year! There are no short cuts; there are no silver bullets! Time is not on our side. We must start this year. If we fail, tax hikes must be on the cards. Let's try to avoid this and first do what must be done. Cope shall support the Fiscal Framework. [Applause.]
Deputy Speaker, Minister, it would seem as if I am going to speak as an adversary and opponent. I don't wish to do so. I have great respect for the Minister. Minister, we all recognise that you are trying very hard. I read attentively what you say in between the lines of your policy speech. I think that history, when properly written, will recognise your warnings and efforts and what you contribute to this Republic.
But nonetheless, my job is to call a spade a spade and to look into this Budget. The impression that one gains is that this talk about alignment with the National Development Plan, NDP, is nothing more than talk. I do accept, Minister, that that is not your talk because in your Budget speech you have been careful in stating that it is moving in that direction but that it has not been done. The committee has taken it one step back and made the statement that it is implementing the NDP. Why? How? It all remains to be seen.
The way it would seem is that we have the basic, same budget structure where legislature after legislature wears a different frock over a body which is becoming larger and more out of shape. The first frock was the RDP, which then became Gear, then the New Growth Plan, and now the NDP.
The nature of this body is that of a welfare state struggling and aspiring to become a developmental state. We all endorse the notion of a developmental state but we must look at things the way they are and not how we wish them to become.
The reality is that the bulk of our budget goes into sustaining an ever growing number of people who by necessity or incentives of the budget are becoming dependant on the state - 18, possibly 20 million people. The reality is that the machinery of the state is transferring ever greater measures of resources from the state to the industrial apparatus and is forcing consumers to transfer ever greater measures of their own resources to the industrial apparatus.
It is economic growth driven by government subsidies, private subsidies, forced in an environment in which government alters the rules of free- market enterprise, and artificially increases the prices of goods and services in the South African market.
The hard solutions are available. And it is not with greater taxes, surely not with the carbon tax - the window tax of our time. It is with cutting budgets, promoting real efficiency within government. The solutions are obvious, at least to someone like me. Get rid of the Department of Public Works and Public Enterprises, privatise South African Airways, sell off Denel and break up Transnet into two competing companies. Break up the Infrastructure Company, Infraco, into two competing companies, so that we can finally have some proper internet access at a comparable rate, as in any of the other countries in the world - one on the east side and one on the west side.
It is not the way of creating ... [Interjections.] I wish Mr Jeffery were not so annoying. It is really difficult to concentrate. Minister, you are going to have a constitutional problem in taxing people within one area on a different level. It is ... [Time expired.]
Mr Speaker and hon members, the 2013 Budget was delivered at a time when South Africa's economic growth outlook is moderated by a number of risks. Recession in the Eurozone, coupled with slow economic growth in some of the major economies and concerns about political stability here at home have negatively affected our economic performance.
Nowhere is this more evident than in South Africa's current poor economic performance, such as the 2,5% gross domestic product, GDP, growth, budget deficit of 5,2%, current account deficit of approximately 6% and government debt of nearly 40%.
These important macro economic performance indicators demonstrate that there is very little room for government to manoeuvre. To embark on fiscal consolidation, government will have to walk the talk in rooting out corruption and wasteful expenditure.
One of the things that government has to do is to deal decisively with the overreliance of state departments on consultants and independent contractors.
It also has to work hard to create an environment that is conducive to both international and domestic investors. This it can do by addressing concerns about political stability in the country and perceptions of heavy-handed government interventions in the private sector.
We do, however, commend the Finance Minister's emphasis on keeping the budget deficit in check and the measures he has taken to reduce the rate at which public expenditure was escalating. Millions of our youth bear the brunt of poverty and unemployment. In this regard, we welcome the Minister of Finance's proposed youth employment tax incentives scheme which seeks to expand work opportunities for young people.
We also welcome the R840 million allocated to the Municipal Support Infrastructure Agency as this will help struggling municipalities in rural areas to improve the quality of their infrastructure service delivery and therefore, the quality of life of previously disadvantaged communities.
We are pleased with government's renewed focus on intra-Africa trade and consolidating South Africa's position as the port of entry to trade on the continent.
We once more call on the Minister to root out corruption and wasteful expenditure in every sphere of government in order to ensure value for money for the people of South Africa. The UDM supports this fiscal framework. Thank you.
Agb Adjunkspeaker, die enigste hoop wat vir Suid-Afrika oorbly, is die Nasionale Ontwikkelingsplan. Dit is dan ook wat die regering van die dag vir die toekoms vir die mense van Suid-Afrika aanbied.
Ek is bekommerd dat die ANC-regering Suid-Afrika se enigste oorblywende hoop in die praktyk gaan opvoeter. Hoekom s ek so? Kyk na die Nasionale Ontwikkelingsplan en daar is 'n groot deel wat basies om die ontwikkeling van die infrastruktuur van Suid-Afrika sentreer. As ons na die syfers kyk, klink dit baie indrukwekkend. In terme van die totale ontwikkeling van di infrastruktuur, praat ons van 'n bedrag van ongeveer R4 miljard! (Translation of Afrikaans paragraphs follows.)
[Mr P J GROENEWALD: Hon Deputy Speaker, the only hope that remains for South Africa is the National Development Plan. And this, then, is what the government of the day has to offer for the future to the people of South Africa.
I am worried that the ANC government is going to muck up in practice the only remaining hope for South Africa. Why do I say so? When we look at the National Development Plan, a large section is centred around the development of the infrastructure of South Africa. Looking at the figures, it sounds very impressive. In terms of the total development of this infrastructure, we are talking about an amount of about R4 billion!]
In English that is R4 billion.
Minister, ons kan al hierdie projekte h, maar as ons nie die kundigheid het om dit in die praktyk te kan deurvoer nie, gaan dit 'n mislukking wees. As ons kyk wat tans in die arbeidsmark gebeur, en ons kan maar net na die Medupi-aanleg kyk, dan is daar ernstige probleme wat voorl.
As ons na die verslag van die Staande Komitee oor Finansies kyk, sien on hy maak spesifieke aanbevelings. Ek wil hier spesifiek stilstaan en aanhaak by aanbeveling 9(8), waar u as agb Minister van Finansies met u kollegas moet praat en vir hulle moet s dat hulle minder van konsultante gebruik moet maak.
Hoekom word daar so baie van konsultante gebruik gemaak? Dit is omdat u die kundigheid weggejaag het uit die Staatsdiens. As gevolg van u regstellende aksie het u ges u wil nie die kundigheid h nie, want u wil hierdie land kom bou op 'n rassebasis. Dit is die probleem.
Ek wil vanmiddag 'n aanbod maak aan die agb Minister van Finansies. Die VF Plus wil help om van hierdie toekomsplan 'n sukses te maak. Ek s weer eens dit is al hoop wat nog vir Suid-Afrika oorbly. Ons bied vir u kundige mense aan wat u kan help om minder van konsultante gebruik te maak.
Die VF Plus het 'n webwerf, SA Talent. Dit word gedryf deur die nasionale jeug van die VF Plus. Dis waar professionele mense hulself aanbied in terme van hul kwalifikasies, want hulle wil 'n bydrae lewer vir Suid-Afrika. Hulle wil hulle kundigheid aanbied, maar die regering wil dit nie altyd h nie. So ek daag die agb Minister uit om met die VF Plus te skakel, sodat ons vir u die name kan gee van die kundige mense wat wil help om Suid- Afrika op te bou, want dan kan ons 'n goeie toekoms vir almal h. Ek dank u. (Translation of Afrikaans paragraphs follows.)
[Minister, we can have all these projects, but if we do not have the expertise to put them in practice, it will be a failure. If we take a look at what is currently happening in the labour market, and we only have to look at the Medupi plant, then there are serious problems ahead.
Looking at the report by the Standing Committee on Finance, specific recommendations are made. I want to pause here and link up with recommendation 9(8), where you as hon Minister of Finance must address your colleagues and tell them that they must use consultants less.
Why are consultants used so often? It is because you have chased the expertise away from the Public Service. As a result of your affirmative action you have said that you do not want the expertise, because you want to build this country based on race. That is the problem.
I want to make an offer to the hon Minister of Finance this afternoon. The FF Plus wants to help make a success of this plan for our future. I say again that this is the only remaining hope for South Africa. We offer you skilled people who can assist you to make less use of consultants.
The FF Plus has a website, SA Talent. It is run by the national youth the FF Plus. This is where professional people offer their services in terms of their qualifications, because they want to make a contribution to South Africa. They want to offer their expertise, but the government does not always want it. I therefore challenge the hon Minister to contact the FF Plus, so that we can give you the names of the skilled people who want to help build South Africa, because then we can have a good future for all. I thank you.]
Deputy Speaker, Ministers and Deputy Ministers, hon members, finance family, hon Minister Pravin Gordhan and Deputy Minister, sanibonani [good afternoon]. Delivering his closing address at the ANC's 53rd National Conference, President Zuma ended his speech by observing that "there will certainly be no easy walk to socioeconomic freedom, ngoba yinde lendlela esiyihambayo." [because the journey we are taking is long.]
Echoing these sentiments in 1992 in the Ready to Govern blueprint, the ANC noted that it is essential that problems be looked at in an inclusive way, with a broad national vision, employing talents and know-how of all those with experience in the field. It is also important that we plan development on a step-by-step basis, concentrating our resources on realisable targets at each stage.
The challenges need a national development plan that the DA does not approve of, the plan on which hon Harris says Mr Mufamadi, the chair of the committee, is misleading the House - which is not true. The plan will always remain a plan. You cannot expect effective outcomes of the implementation of the plan while you are still planning.
One would expect the outcome of the plan towards the end of the implementation. You first of all need to put the tools and the machinery of the plan together and make it work. It is therefore this plan that will provide, strengthen and accelerate growth and job creation while it broadens social development and economic participation.
The 2013 Budget marks the beginning of a process through which government departments and agencies will align their planning and expenditure with the National Development Plan. The NDP will shape up whether the DA likes it or not; it will shape up the resource allocation over the next two decades but will not determine the annual budgets.
The 2013-14 Budget reflects an increase in expenditure on comprehensive social grants over the three-year budget period. This is a welcome development when one takes into account the ruling party's important observation that as at June 2012 the country's social grants had reduced the poverty gap to 63%.
The massive infrastructure programme is targeting the improvement of public amenities, which will improve the lives of the poor. Investment in infrastructure is laying a solid foundation for economic growth with an effort to provide water reticulation; construct roads, railways, and houses; build clinics and universities; and eliminate mud schools. The ANC government is creating jobs through this infrastructure plan. Currently there are about 145 000 people who have been employed through the state infrastructure plan.
Attempts have been made to help struggling municipalities or districts. Integration of municipal infrastructure projects is geared to develop national capacity in order to assist the 23 least resourced districts.
The 2013 allocations to the social wage include a large component of social assistance and welfare services. In a country with such enormous levels of poverty and inequality government continues to recognise the need to assist vulnerable communities with an unreliable source of income.
The ANC-led government policies have facilitated an entrance of no fewer than 13,6 million beneficiaries of social grants between 1998 and today, 2013. Indeed, this is a living testimony that the ANC is pro-poor, and we will continue to ensure that unemployment, poverty and inequalities are reduced.
The ANC policy guidelines for a democratic South Africa, 1992 observed that the ANC, in keeping with its general commitment to an egalitarian society, rejects the dictum that the poor will always be with us. It believes that poverty is created by society and it can be eliminated by society. People are the fundamental resource of the country since they have the capacity to develop personally and are central to the development of the economy and the nation as a whole.
It is because of this consciousness that the ANC believes in progressive initiatives to reduce dependence on the fiscus and to bring back opportunities that will enable individuals to earn an income, and thus restore their dignity. The ANC appreciates and acknowledges the allocation increase for municipalities, science, technology and other sectors.
The government is now giving expression to a historic aspiration of the ANC, which declared that advances in science and technology cannot be achieved unless grounded on a sound education and researched policies, which have as their aim the maximum utilisation of the full potential of all human resources in our country, and will allow creativity in scientific and technological research and design. All these commitments by the ANC-led government are basically saying: Give the girl-child from eNkumba a break. Let her no longer wake up at 4 o'clock in the morning to fetch water from the river before she goes to school. Let the boy-child and girl-child be children.
The ANC believes that the state has the central responsibility for the provision of education and training. Only the state is in a position to ensure that the present inequalities are redressed. More generally, given the importance of education for social and economic development its provision cannot be left to the market as has been the case in the past, especially in relation to industrial training.
We are looking forward, hon Deputy Minister, to the implementation of the National Health Insurance, NHI, pilot project. Before concluding, hon Deputy Speaker, I would like to try and correct the hon Harris - if he is still in the House.
You know, I am sure that where you are, hon Deputy Minister, you are confused when hon Harris from the DA proposes that you are to raise taxes, but in the same breath he is saying: South Africans are experiencing high taxes. Now, I don't know which one you have to adhere to.
Secondly, for him to actually say, within the committee, that it was the alliance that did not approve of the NDP is not true, because Mr Mufamadi did not say what he says he said. The NDP is a plan, and it has been acknowledged like that. Yes, indeed, there are concerns, but because it's a plan, it's a work in progress.
In conclusion, we acknowledge that the social wage has more than doubled in real terms since 2002. It has a direct impact on lowering the cost of living for the poor and working class. It is achieving a progressive redistribution of income and opportunities through the fiscus. On that note, the ANC supports the Budget 2013. Thank you. [Applause.]
Deputy Speaker, hon Minister, the ACDP is on record as commending the Minister on his prudent Budget, given the very difficult global and domestic economic environments. It was generally well received. Even the World Bank has commended the government for providing fiscal policy certainty.
The widening of the 2012-13 Budget deficit to 5,2 % was regrettably unsurprising, given the lower than forecast global and domestic economic growth last year, with an estimated revenue shortfall of R16,3 billion.
However, the Finance Committee is on record as expressing concerns about increasing government debt levels. The size of the Budget deficit at present results in debt service costs rising faster than any other category of spending over the medium-term. This, of course, crowds out spending on developmental priorities.
On the other hand, the ACDP understands the need to stimulate economic growth in the short-term to create more sustainable jobs. It is imperative that if government wants real economic growth, it must create an environment to make South Africa more competitive, efficient and productive. We thus welcome a shift in spending from consumption to the productive side of the economy with a massive infrastructure development programme.
The ACDP particularly welcomes the alignment of the Fiscal Framework with the National Development Plan, NDP, which proposes a social compact to reduce poverty and inequality, and raise employment and investment. The plan needs to be implemented as a matter of urgency - those issues that can be implemented - and those trade unions that are opposed to it need to be encouraged to come on board.
The trade-off of the increased Budget deficit was, of course, the fact that corporate and personal tax rates were thankfully not increased. In fact R7 billion of personal tax relief was granted. This is significant, as the commitment to reduce the Budget deficit to about 3% by 2015-16 remains. And this, we believe, should satisfy ratings agencies.
One of the ways to address the Budget deficit is, of course, to decrease the amount of wasteful, irregular and corrupt state expenditure, and the Minister spent a lot of time on that.
We are pleased as the ACDP that our recommendation to increase the capacity of law enforcement agencies such as the Hawks, the National Prosecuting Authority, NPA, the Special Investigations Unit, SIU, and the Asset Forfeiture Unit, AFU, was accepted, and we believe that in this way millions, and possibly billions of rands could be saved.
Last year, the ACDP suggested that faith communities should be approached so that they can encourage members of all religions to say no to corrupt practices. We wish to commend various nongovernmental organisations, NGOs, and church leaders who launched their Exposed Campaign last night. This is an international campaign aimed at challenging global churches, business and government to highlight the impact of corruption on the poor. It is a call against corruption, greed, secret deals and abuse of public influence. We commend this initiative, and as Members of Parliament, MPs, we should encourage and build on this and other similar campaigns to fight corruption.
We will not be able to address systemic poverty until we address systemic corruption. The ACDP will support the Fiscal Framework and Revenue Proposals. I thank you. [Applause.]
Madam Deputy Speaker, with the slow growth and falling revenue, the deficit continues to grow despite the fact that we said it would decrease. With unemployment shrinking and the social grants increasing, we are very likely going to run into problems very soon. We must be reminded about the budget principles of intergenerational equity. Surely, we don't want our future generation to pay for what we are spending on.
Hon Minister, even though you have acknowledged that the economy is not growing enough, and 2,5% growth is not enough to create more jobs, government has been the main employer, and shifting reliance on the private sector to create more jobs is of great concern. The MF strongly believes that the unemployment issue, which currently stands at 33%, has not been thoroughly thought through.
It is evident that the private sector has not played a major role in creating jobs; we don't see that changing. We need a lot more growth. More emphasis, indeed, must be placed on advancing the agricultural fraternity and indeed more focus must be directed towards the small, medium and micro- sized enterprises, the SMMEs, and the informal sector.
However, the MF welcomes the Budget being aligned to the National Development Plan, the NDP, and all departments have a role to play, according to the mandate, to ultimately reach the goals of the NDP. It is not only imperative to state the relevant policy, but to work towards meeting the objectives of the policies is crucial.
We are concerned about the secondary and tertiary tax, and pensioners must not be unfairly taxed. In this regard, the Budget Review does not say how that is going to work. It leaves some unanswered questions; perhaps Treasury should indicate what it entails.
Changing the old-age grants policy, particularly dropping the means test and the adjustment to the secondary and tertiary rebates, is a concern. How will this be implemented? Pensioners must not be disadvantaged.
The MF welcomes the fact that the hon Minister is not running away from our problems and he is dealing with the facts as they are. His creativity of acquiring more tax is overwhelming.
The fact that the expenditure, this year, has already started to decrease, and government's budgets have been cut, shows that the Minister is undoubtedly on the correct path. The strategy to provide a solution to create more revenue is noted. However, we must be mindful that we don't hurt our citizens, especially the vulnerable groups.
Parliament is here to represent the people. As much as we want revenue, we must ensure that the people have a decent level of lifestyle. The MF will support the Budget. I thank you. [Applause.]
Hon Deputy Speaker, the 2013 Budget was tabled at a time of challenging economic conditions both globally and domestically. We have to acknowledge that the slowdown in trade and investment has also affected our economy. The result of the slowdown is therefore that levels of business and investor confidence in South Africa are currently at a low ebb, and business is rightfully worried about South Africa's fiscal deficit and the debt burden.
The year 2012 was disappointing for South Africa's economic performance for both external and internal reasons.
The Gross Domestic Product, GDP, growth was 2,5% last year, and a tale of two deficits emerged; both fiscal and trade. This is a real risk that important fiscal ratios could deteriorate to a point where a further downgrade in South Africa's credit rating is possible.
The Finance Minister has been forced to run a Budget deficit of 5,3% of the GDP for the first time since 2009 because he has been faced with a R16 billion shortfall in tax revenue.
The effect of the larger deficit will be to drive government debt high over the medium-term, and when contingent liabilities are included, government's indebtedness now extends beyond 50% of the GDP. Servicing this debt, and I think that is the problem, will amount to in excess of R100 billion per year. South Africa will therefore remain on a fiscal tightrope for the foreseeable future.
The government has a point in asking for more investment from the private sector, and we hope it can be done. However, business is not investing because of the uncertainty in the policy environment, especially with regard to the unions and the low levels of growth.
The World Bank's latest ease of doing business rankings indicate that South Africa is only rated 39th, and Mauritius beats us by being rated in the 19th position.
Last week, Bidvest's chief executive officer, CEO, Brian Joffe, complained about the following: that a lack of co-ordination between labour, business and government still exists, resulting in a drowning in red tape in securing access to natural resources such as water and electricity. And my colleague, Lance Greyling, has indicated the very low reserve margins in terms of electricity and also that above-inflation wage increases are negative for business confidence.
Improving the capacity of the state, sir, and restoring confidence in our economy will require a careful balancing act - something you have tried to do in the Budget - a balancing act that will have to consider the impact of corruption on business and investor confidence. The cancer of corruption - let's talk about the cancer of corruption - eats away at growth; steals from the poor; enriches the unworthy and will, if unchecked, wreck the National Development Plan, NDP.
Minister, we agree with the planning, which is in the newspapers today, that the Public Service - the engine room - must be fixed by hiring skilled people; employees must be barred from trading with government and corruption must be dealt with.
Advocate Paul Hoffman, from the Institute of Accountability, made a calculation that since 1994, we have lost R675 billion due to corruption in the public sector. It is estimated that corruption in the public sector is costing the country R30 billion per year. There is much talk of restoring business and investor confidence. The only problem is that one cannot simply instruct business to have confidence, as it has to be built by taking good decisions over a long period of time.
Mr Gordhan, with regard to policy stability, promoting economic growth and predictability, the National Development Plan has gone a long way towards instilling greater private sector confidence. However, sir, Cosatu, remains opposed to the NDP.
Hon Dubazana, the plan that the DA supports is the NDP. However, two days ago, which was on Sunday morning, the secretary-general of the National Union of Metal Workers of SA, Numsa, Irvin Jim, threatened that the implementation of the National Development Plan would be undermined by public protest action and that action would be taken to the streets.
On the contrary, sir, a good start would be to acknowledge that the private sector is central to solving our economic woes. It is therefore important that government engages with business on its participation in one of the main drivers of South Africa's economic growth, namely the national infrastructure build.
And it was mentioned that we have a R1,5 trillion backlog in infrastructure, that we do spend 20% less in terms of what was budgeted for and that spending on infrastructure is well below the 10% of the GDP targeted by the National Development Plan. Those are the important indicators and I think we should stick to them.
In conclusion ... Thank you, Madam. [Time expired.] [Applause.]
Hon Deputy Speaker; hon Minister of Finance and hon Deputy Minister of Finance, hon Pravin Gordhan and hon Musa Nene respectively; hon Chief Whip of the Majority party, and all hon members of this august House, I am tempted ...
... khe ndihambele apha kweli lungu landula ukuhlala phantsi naphaya kwilungu elihloniphekileyo le FF Plus,... [... to respond to the hon member who is the last speaker and the hon member of the FF Plus ...]
... perhaps if I were to be given a chance, once I have finished up the presentation that is coming from the ruling party and the only one, the