Hon Speaker, hon Ministers and Deputy Ministers, hon members, and distinguished guests, on 23 October 2013 the Minister of Finance tabled the Medium-Term Budget Policy Statement. My task today is to present the analysis of the Revised Fiscal Framework, after the Standing Committee on Finance concluded its public hearings on the proposed Medium- Term Budget Policy Statement.
The fiscal path over the last 19 years has proved to be credible, reliable and predictable. As such it has always served as a basis to assure millions of South Africans that the South Africa of tomorrow will always be better than the South Africa of yesterday, and to ignite new confidence in the investor community, as was demonstrated in the course of the committee's interactions with various stakeholders during our public hearings.
Allow me to take this opportunity to invite all hon members to congratulate our Minister of Finance, hon Pravin Gordhan, for being named by emerging markets as the Finance Minister of the Year for 2013 in sub-Saharan Africa. [Applause.] This is not new, and it is not something that should surprise us.
Since 2006 the Open Budget Index performance initiative has always rated South Africa as amongst the top five in the area of budget transparency and openness. In 2008 we were rated second; in 2010 we were rated first; and in 2012 we were rated second. We are and will continue to be a good example to many, in both the developed and the emerging economies. Hon Ministers, this is a part of the narrative that we are not telling but which we should tell, in order to continue to inspire confidence locally and internationally, and to sustain the investor confidence we need so much under these difficult global conditions.
Indeed, since the advent of democracy the ANC and its government have ensured that fiscal stability and sustainability remain the bedrock of our economic foundation: to achieve sustainable and inclusive growth; to create jobs; and to eliminate poverty and inequalities.
Minister, you have consistently raised a concern about the kind of narrative or story we are telling about ourselves, as individuals and as organisations, both domestically and internationally. Let me bring to your attention something which you might be aware of. Only yesterday Business Day reported that the Chief Executive Officer of one of South Africa's largest gold-mining companies, Neal Froneman, said that the government "seems to despise the industry." He went on to say that government had to create the right platform for the mining industry whether they liked it or not. They had to create the right platform at the moment. We need a supportive government. Organised labour needs to take a long-term view and we all need to look at the long-term benefits rather than short- term agendas.
The point I am making here is that whilst it is correct for the industry to raise their expectations, we equally expect them to spell out their own obligations to government, labour and, in particular, the communities in which they conduct their mining activities.
In his own assertion, the CEO only expects the solution to come from government and labour, and in that regard the industry has no role to play in creating a conducive working and productive environment between employees and employers. In his view, government should remain central in resolving labour relations industrial actions.
Domestically, we have made huge social and economic advances that few other countries have been able to achieve in less than 20 years of democracy. Certainly, we still face challenges, but it is in the quality of the leadership provided by the ANC government that the answers to the economic challenges we face today are to be found.
Today we can say without a tinge of arrogance or fear of contradicting ourselves that the countercyclical fiscal path is responding to the challenges of the poor and the needs of our general population. The countercyclical fiscal policy has responded positively and continues to reaffirm the principles of long-term sustainability and fiscal consolidation to support inclusive economic growth and to ensure service delivery.
Over the medium term the Revised Fiscal Framework will ensure that government is able to meet the 2013 fiscal deficit target of 4,2%. The ANC supports this Revised Fiscal Framework and so does the committee. Thank you. [Time expired.] [Applause.]
There was no debate.
Hon Speaker, I move:
That the Report be adopted.
Speaker, there are no objections, but the DA requests an opportunity to make a declaration.
Declarations of vote:
Hon Speaker, last week the Minister told us that the news flow was what was damaging South Africa. I am afraid, hon Minister, it is government policies that are doing that. In 2011 your Treasury forecast that South Africa's growth would be 4,4%. Actually, this year it's 2%.
It is because this government has an inability to introduce a single plan for the economy. This means that our fastest growing budget item over the medium-term is interest payments, which will increase to 9,7% per year for the next three years. By 2016, the year before debt is meant to stabilise, we will be spending R140 billion a year servicing our R2 trillion debt. This is more than we will spend on health care in that year.
Now the problem, hon Speaker, is that achieving the stabilisation of debt in 2017 depends on the Minister's forecast of 3,5% becoming a reality for 2017. The question is: If the Minister was so wrong three years ago in his growth forecast, how can we believe that this forecast is right, especially considering that this budget did not introduce any new measures from the National Development Plan, NDP, for implementation?
This year the Minister had to spend the entire R4 billion contingency reserve and rely on R3,5 billion's worth of underspending by government departments without the capacity to spend the money that they were given. He also had to recalibrate the budget deficit, so now we can sell state- owned entities in order to make the budget balance.
The point is, if the Minister does not introduce real reforms to drive growth higher, he will run out of these tricks to reach his budget deficit targets, and our mounting government debt will become a serious problem. Thank you. [Applause.]
Mr Speaker, we concluded this report yesterday and we all approved it. We shall debate the budget framework next week.
The renewal emphasis in the National Development Plan is yet again welcomed, and only time will tell whether we have done enough to keep the credit rating agencies away from our door. All eyes will now be on the implementation that has been pledged.
Zambia, with a growth rate of 7%, has just been downgraded. We are still borrowing to fund social grants and to pay a huge state wage bill, and more than a third of our debt is held by foreigners. So it is important to remain focused. Cope will support the Minister of Finance, so that he remains focused and takes care of our economy.
Hon speaker, the Revised Fiscal Framework reaffirms to the nation that the countercyclical fiscal policy of the ANC-led government is the most appropriate policy to use to address the economic challenges we face. It is precisely this fiscal policy, adopted in advance of the international economic crisis, that has enabled the country economically to come through this period with relatively less uncertainty than most countries.
This approach in managing the fiscus has enabled us to maintain infrastructure spending, and drive the industrialisation of the economy, despite sluggish growth in the economy and relative inflationary pressure. This Revised Fiscal Framework therefore grounds itself in continued fiscal consolidation and support for the economy.
Furthermore, it recognises the risk of servicing debt costs and continues to establish the economic path of creating great debt sustainability. The ANC government is doing this as a policy position, and we have noted with concern that the political party with no logical economic policy, the DA, agrees with us. Let us be reminded ... [Interjections.] You are even worse, because at this stage you are going to the extreme of claiming our policies. You are not the creators of this idea; it belongs to the ANC.
On the contrary, the fact that you are calling for regulatory impact assessments confirms the ANC's long-held view that there are unnecessary administrative costs within our economy, and that this situation should be reviewed. This does not suggest, as some would want everyone to believe, that regulation of the economy should be relaxed. Again, on the contrary, in achieving the nature and character of the growth, we are seeking further strategic regulation of the economy by the state. This is necessary, given that we are a developmental state and we have a programme in the National Development Plan that must be achieved. This will not happen spontaneously; it has to be driven, and it has to be driven by us.
In conclusion, the ANC government continues to manage our economy in a manner that best addresses the current conjuncture. The ANC calls for the adoption of this report. Thank you. [Applause.]
Motion agreed to.
Report accordingly adopted.