Deputy Speaker, Deputy President, members of this House, when my predecessor, Minister Gordhan, who is sitting there, tabled the Appropriation Bill in this House on 26 February 2014, it was based on the government structure which prevailed at the time.
On 25 May 2014, President Jacob Zuma announced the appointment of Ministers and Deputy Ministers in terms of section 91(2) and 93(1) of the Constitution of the Republic of South Africa. The portfolios of these Ministers required the reorganisation of departments, including the establishment of new national departments to support the Ministers in executing their respective mandates.
The corrections being tabled here today with this First Reading debate provide for a new vote structure that gives effect to the reorganised government structure. The 2014 Adjustments Appropriation Bill will therefore provide a more detailed breakdown of the impact of the structural changes to the format of the Appropriation Bill.
I therefore move the amendments as printed in my name on the Order Paper. Thank you very much.
Hon Deputy President, hon Deputy Speaker, hon Ministers and Deputy Ministers, hon members, fellow South Africans, this is another budget prepared by the ANC, one of broken promises. At the outset we know that this budget is predicted to come in at a deficit of 4% of the gross domestic product, GDP. This is not a budget in the interest of working South African citizens. It is not a budget for jobs. It is a budget that confirms the dismal economic and fiscal management of the ANC-led government.
Ahead of the Budget Vote, the Treasury spent millions of rands in taxpayers' money on the political propaganda campaign that included dishing out food parcels and T-shirts. The campaign included promising South Africans a better future for all. These broken promises were the broken promise to provide electricity for all, the broken promise of a better life for all and the broken promise of jobs to lower the unemployment rate.
In May this year, unemployment was above 1994 levels. The promise to lower the cost of living was also a broken promise, with hikes in fuel prices, electricity prices and interest rates. With the sluggish economy, the promise of a thriving economy has also been broken. Debt now sits at R1 590 billion.
As far as jobs are concerned, the ANC-led government, instead of admitting that it did not have all the answers before the election and that it has broken its promises, continues to let the people of South Africa down. They are a government in denial.
When the ANC-led government was elected into power in 1994, the unemployment rate was 20%. Now, 20 years later, it is 25,2%, still without any constructive plan to create jobs and it is getting worse. The 2014 budget now confirms that Treasury does not expect the unemployment rate to decrease to the level it was in 1994. This will leave the President short on his promise to decrease the unemployment rate. According to the National Development Plan, NDP, achieving full employment, decent work and sustainable livelihoods is the only way to improve living standards to ensure a dignified existence for all South Africans - black, coloured, Indian and white.
The NDP further states that to gain employment, the country needed to have created about 11 million jobs since 2011. Three years have gone by; in fact, we've been experiencing continuous job losses. The NDP also states that the economy would have to grow by about 5,4% on average over the next 20 years to achieve this target. It is currently growing at under 2%.
The objectives for employment and growth, as stated in Chapter 3 of the NDP, is that the unemployment rate should fall from 25% in 2010 to 6% in 2030. Is this going to happen? The DA does not think so. The objective for the proportion of the population with an income below the poverty measure of R418 per day should have fallen from 39% in 2009 to zero in 2030. At the current trajectory, it is not going to happen.
An optimistic programme, the New Growth Path, is government's key programme to take the country onto a higher growth trajectory. A critical complement between the New Growth Path and the NDP is the need to lower costs in the economy, but we are continually faced with ever increasing fuel prices, electricity tariffs, water prices, interest rates, etc.
After 20 years the ANC-led government still has no realistic plan for jobs or for supporting employment. The government does not want to accept that unemployment is a problem. The unemployment rate amongst the youth aged 15 to 34 increased from 32,7% to 36,1% between 2008 and 2014. This is unacceptable. And this ANC-led government just doesn't have a solution.
Unlike the DA, the ANC-led government has no plan to assist the unemployed and address the increasing rate of unemployment. In contrast, Minister Gordhan, the DA has a policy and a plan to grow the economy and create 6 million jobs. [Interjections.] Minister Gordhan is the one who commented.
The only party that has a plan to support South Africans to get jobs is the DA, because, unlike its opponents, we actually care for all who live in South Africa.
As far as economic damage is concerned, after 20 years, the ANC-led government has failed South Africans. The current state of affairs is a much slower growth than the 8% economic growth that the DA offers. Business and private investment continue to decline. This, combined with a forecast average annual unemployment rate of 25,2%, paints a bleak picture of a very weak domestic economy over the next year. The ANC-led government has failed to present any substantial economic strategy. All we get are promises. The Budget, including the bleak outlook for the domestic economy over the next year, shows that the government's approach is wrong, but it hopes that nobody will notice. The DA opposition will have a very different approach. The only party with a policy and a plan for the whole economy and for jobs of the future is the DA.
Despite the gloomy outlook for the economy next year, the President, in his state of the nation address, said it's going to be a good year, because the ANC has a good story to tell. The problem is that the story only has a beginning and no end. The economy that has slowed down, with a higher unemployment rate, is not good for the country, and the citizens are the ones who are affected.
The President must start seeing what is happening to our country. He needs to start seeing how businesses and the people of our country are suffering. The damage done to the economy has caused the citizens of the country to incur increased debt in order to survive.
With regard to corruption, according to the NDP, South Africa suffers from high levels of corruption that undermine the rule of law and hinder the state's ability to affect development and socioeconomic transformation. Although the entire country is harmed by corruption, the cost falls most heavily on the poor through the impact on the quality and accessibility of public services. The NDP further asserts that in the democratic era, several significant steps have been taken to counter corrupt practices. These include a number of oversight institutions, established in terms of Chapter 9 of the Constitution. These institutions, although the NDP agrees that they have played an important role in combating corruption, are prevented by this government to do their jobs effectively.
In terms of some economic numbers prior to the global crisis, the stock of public debt stood at R525 billion. It has now risen to R1,590 billion and is expected to reach more than R2 trillion. In the first three months of 2014, the South African economy shrank by 0,6%. In May 2014, the Reserve Bank revised its economic growth forecast for South Africa down to 2,1% from 2,6%. The forecast for 2015 remains unchanged at 3,1%, and growth in 2016 is expected to average 3,4%.
The DA's aim is to grow the economy by 8% in 2025. With the right combination of policies we could create 6 million jobs and reduce unemployment to 11%. At 8% economic growth, we can double the national budget. This means that there will be more money for things like housing, basic services, education, infrastructure and small business support.
To conclude, South Africans will have a clear choice in the elections in 2016. The ANC will govern for a higher cost of living and broken promises. [Time expired.] [Applause.]
Deputy Speaker.
Yes, hon member, on which Rule are you rising?
I rise on a point of order. In terms of the speakers' list, it is now supposed to be hon Gardee. That is the sequence that this House has agreed upon; when the ANC is absent, the DA and then the EFF member should come and speak. So, we really don't understand what is happening now. I don't know, unless you have changed the Rules yourself, because this is the sequence that we have agreed upon.
Hon member, the position of the EFF is still number three; it has not changed. He will get his turn, as number three.
Hon Deputy Speaker, there is a sequence that we have agreed upon. We do not know ... when a member is absent, hon Paul Mashatile is not present here. He is ...
Hon member, may I ask you to stop there?
Yes.
The Whips constantly negotiate with the Table to change their speakers around and this is a matter in which we do not get involved. The important thing is that as long as it does not affect the placement of any speaker on the list, it is generally accepted. So, when those changes do occur, I assume that they are appropriate, unless the Whips think otherwise.
Hon Deputy Speaker, it is a convention of the House that when the speakers' lists are changed, there should be consultation amongst the Whips. There has been no consultation. I am in the dark as to why the times have been changed. If we are to have a smooth running of this House, which is why we have the Whippery, I think there should be consultation when parties change their speaking times.
The times have not been changed, hon Steenhuisen. The swop does not involve changing times, but I agree with you that there must be consultation. The positions will remain as they are, except for those two changes. May we proceed, hon member.
Hon Deputy Speaker, hon Ministers and Deputy Ministers, Your Excellency hon Deputy President, hon members, I rise to confirm that the ANC supports the Appropriation Bill, and I do so focusing on infrastructure.
The massive infrastructure build programme that was announced by the President of the Republic during the Fourth Parliament was in recognition of there being a need to inject capital investment into the economy to stimulate economic growth and create jobs in the face of the recent global economic crisis. Equally and more importantly, the ANC-led government was responding to decades of underinvestment by the apartheid regime in the country's social and economic infrastructure.
More than Rl trillion has already been invested in social and economic infrastructure, such as human settlements, water, electricity, schools, higher education institutions, clinics, roads, rail, ports and energy. A further R847 billion will be spent during the current Medium-Term Expenditure Framework period. It is estimated that over the next 15 years investment in infrastructure will cost about R4 trillion. We pay particular attention to this huge infrastructure build programme because, as we appropriate funds for its implementation, we seek to achieve the outcomes as articulated in the Strategy and Tactics of the ANC, the ANC 53rd National Conference resolutions and the election manifesto of the ANC. These outcomes are: The radical transformation of our economy as part of the agenda of the second phase of the national democratic revolution; secondly, an integrated social and economic infrastructure; the creation of decent and sustainable jobs - in this regard, the ANC manifesto says that job creation is the priority of the infrastructure programme. In concrete terms it says that more than 250 000 jobs will be sustained through the construction, operation and maintenance of infrastructure and manufacture of local components. Of even greater significance, the ANC manifesto says that 60% of jobs shall be set aside for youth employment and empowerment in infrastructure and other projects.
Another outcome is the facilitation of movement of people across the country and transportation of goods and services to domestic and export markets. Also a very important outcome is the facilitation of regional and continental economic and trade integration.
The ultimate prize must be the attainment of a better life for all our people. Having allocated funds to all the departments and public entities, the ANC seeks to ensure that the appropriated funds are spent efficiently, clear of maladministration, wastage, fraud and corruption. The visible outcomes must demonstrate a better life for all our people. Only then shall we achieve full reconciliation, social cohesion, a prosperous society and peace among our people. The ANC supports this budget. Thank you. [Applause.]
Hon members, Deputy Speaker, the EFF is turning one year tomorrow, 26 July. [Applause.] We call upon those members of this House who referred to the EFF as a Nazi fascist party, led by a Hitler, to maybe take time to read a book called The Coming Revolution. It will help them to have a real understanding of what "EFF" stands for.
Today in this House, the EFF rise to reject the Appropriation Bill. We do so because the contents of this book that contains the hope and aspirations of our people are not served well by any of the expenditure estimates of the 38 Votes financed from the national Appropriation Bill tabled before this House. The amount in excess of R1,2 trillion to be appropriated is, amongst others, financed by state borrowing in excess of R1,8 trillion.
Though the EFF would support increased state borrowing to finance public expenditure, it is problematic when one of the basic principles of the fiscal policy, which is that of intergenerational fairness, is being overlooked. The principle contends that borrowing should not be used to finance goods and services from which future generations will not accrue benefits, but be burdened with obligations to pay back the debt used in futility by a preceding generation.
We say that increased borrowing to finance the state expenditure is not necessarily problematic, but in the case of the ANC administration it is problematic, because future generations are going to be burdened with paying debts that have been used to finance goods and services from which future generations are not going to accrue benefits. Such goods and services, like the Nkandla residence - that asset of R230 million - will have to be financed from state debt which will need to be paid by a future generation that will not accrue a single benefit from that asset.
Borrowings are used to finance frivolities, providing the executive with perks to the tune of two high-end vehicles and houses in Pretoria and Cape Town, figures exceeding billions, considering the cost of keeping Parliament in Cape Town.
Borrowings are used to buy stolen land, and the costs of these transactions run into billions - one transaction stood at a figure that the President could not even pronounce correctly - instead of expropriating that land without compensation.
Borrowings are used to subsidise white monopoly capital to sustain their mega-profits and dividends in the form of youth employment tax incentives.
There are no reciprocal benefits and offsets from the borrowings. Instead, we see scandal upon scandal in the arrests of public representatives who are alleged to have helped themselves, having seen an opportunity in the passing away of President Mandela.
The SA Revenue Service is undercollecting revenue. Collusion of big white monopoly cartels continues to erode the tax base unabated. In addition, they are protected by statutes denying expropriation of land without compensation, and there is the refusal to nationalise mines, banks and other strategic economic sectors which would increase state revenue in order to finance the socioeconomic pillars of national economic development. [Interjections.]
For more than two decades, both the fiscal and monetary policies of the state in which this Appropriation Bill is anchored, have failed to massively industrialise the country's economy through beneficiation of mineral resources in order to address the triple challenge of inequality, unemployment and poverty.
The allocation of public resources, guided by the structural adjustment of neoliberal policies of white monopoly capital, known as the National Development Plan, NDP, has failed to lay down a sustainable economic development framework and does not provide for focus on the urgent improvement of quality government services.
Without the bold decision of nationalization, massive industrialisation and the expropriation of land without compensation, the economy cannot grow rapidly. The platform for faster growth in the much-praised NDP will not enable the economy to redress the stagnation, if not regression, experienced over the past 20 years. Accordingly, the EFF rejects the Appropriation Bill in its entirety. I thank you.
Funda elakho igama. [Read out your name.]
Hon Deputy Speaker, firstly, I would like to state that the IFP supports this 2014 Appropriation Bill. [Applause.] We do so, however, mindful of the many challenges that remain and beset a number of our departments regarding the effective management and use of these budgetary allocations.
The lack of proper planning by departments impacts heavily on this process and retards not only service delivery to our people, particularly our most vulnerable, but also our economic growth. The Ministers and deputy directors-general must be held accountable for improper departmental planning and the results of overspending and underspending that usually follow such laissez-faire management.
For example, in the Department of Home Affairs, I noted that in 2013-14 we had seen underspending equivalent to 2,7% less than the budget allocation. The department had similarly underspent by 2,6% in 2011-12. This equates to a consistent underspending of approximately 3%, which is above the 1% usually considered acceptable by Treasury. The result is that Treasury has just reduced the department's budget and this will in all likelihood hamper the department's plans for its new vision. I just want to state the fact that the underspending in the report of the Department of Home Affairs is actually tabled as a savings on the template that they gave us, and we would like to recommend to National Treasury that this template be changed so that underspending is reflected as underspending. Departments must always strive to meet their key economic indicators.
We still see widespread service delivery protests in this country, which are often accompanied by violence and serious injury to people and property. Such discord begins with the lack of planning, misuse of public funds and general maladministration and, as such, the IFP stresses again the sacred trust and obligation placed on our Ministries to utilise these public funds in as efficient and effective a way as possible.
The taxpayer wants to see value for his or her hard-earned money; the money at work; infrastructure maintained and developed and the encouragement of entrepreneurs. Whilst we fully support social development, welfare programmes and grants to our most vulnerable, the aged and indigent, we are mindful that we should not actually become a welfare state.
The excessive use of consultants in our departments is a problem. This does not only result in massive wasteful expenditure, but also leads to low morale and reduced work output by departments' personnel. The use of consultants must become the exception and not the rule, as it currently is.
The hon Minister of Finance, in the debate on the Treasury Budget Vote for this Budget, supported the implementation of the National Development Plan. Now it is up to the Ministers and their departments to make this a reality. The IFP and the people of South Africa are counting on you. I thank you. [Applause.]
Hon Deputy Speaker, hon members of the House, let me start by saying that the NFP supports the Appropriation Bill. [Applause.] The NFP supports the Budget. However, we would like to raise a concern about the monitoring mechanisms in place and their effectiveness to ensure value for money.
The NFP wants to express its concern about the high government debt of approximately R2 trillion and especially the cost of servicing such debt, which is equivalent to about R142 million per annum. However, the NFP acknowledges that most borrowings are for the purposes of capital expenditure.
In order to take South Africa forward, South Africa needs to borrow in order to provide the infrastructure required throughout the length and breadth of this country. It is the view of the NFP that borrowing for the purposes of infrastructure is acceptable in any part of the world.
The approval of the Appropriation Bill will ensure that the strategic plan will be achieved, and achieved timeously. Whilst all leaders need to unite and ensure that projects that are part of the strategic plan are implemented, it is the responsibility of all members in different portfolio committees to ensure, from time to time, that these processes and projects are being undertaken to prevent underspending. I want to urge that this is the responsibility of every leader of every party in this House.
The different entities have been interrogated, the reports were filed and the NFP is satisfied with the reports that were given to us - one of which was that they would ensure that all service providers, after submission of their claims, will be paid within 30 days to ensure the sustainability of small businesses. Let me finally say that the NFP supports this Bill. Thank you. [Time expired.] [Applause.]
Hon Deputy Speaker, His Excellency Deputy President, Ministers, Deputy Ministers, hon members, fellow South Africans, the Appropriation Bill reflects political and economic choices. Pro-poor macroeconomic planning requires going beyond the usual growth and stability focus. It requires a nexus between stability, growth, sustainable development and employment creation.
It is the Appropriation Bill, together with the division of revenue, which we regard as the vehicle to deliver on the policies and priorities that our people have endorsed when it voted the ANC back into power, proving that it is the ANC, its policies and programmes that our people are still endorsing.
Whilst we have constitutional and legal obligations, what is of fundamental importance is the economic and political considerations that inform the Appropriation Bill. In exercising its oversight role, the standing committee, in so far as passing the Appropriation Bill is concerned, has the responsibility to ensure that there is a link between the budget and the policy outcomes in the Medium-Term Strategic Framework and the delivery agreements around the 12 outcomes.
The Appropriation Bill assists in prioritising socioeconomic and developmental priorities and benchmarks. The Bill is used to guide planning and resource allocation, as well as to monitor and evaluate new approaches.
With regard to managing our financial resources and the economy, the Bill has been tabled in the context of reprioritised expenditure, with the overall ceiling set in the October Medium-Term Budget Policy Statement of 2013. Sound public finances are a necessary platform for the implementation of the National Development Plan and a framework for collaboration with all stakeholders in driving social and economic transformation forward.
The reprioritisation of resources aims to give greater impetus to programmes with the greatest developmental impact and proven implementation capacity. The Appropriation Bill provides support for the economy. The emphasis falls, therefore, on ensuring that the expenditure is allocated efficiently, enhancing management, cutting wastage and eliminating fraud and corruption. A series of initiatives are focused on these concerns.
Spending reviews are underway to examine the programme's performance and value for money. These are conducted by the National Treasury, the Department of Performance Monitoring and Evaluation and the provincial treasuries. The Office of the Accountant-General has stepped up efforts to strengthen the financial control environment, leading to both criminal investigations and internal disciplinary action. As part of efforts to combat waste, cost-containment instructions have been issued. The budget for consultants, travel, accommodation and venue hire has been curtailed, which will contribute to savings over the next three years.
The review of the validity and cost-effectiveness of all government property leases has taken place and the exercise has exposed several deficiencies. The intervention also identified a backlog of more than half of the lease portfolio review. As a result of this initiative, the Department of Public Works now has a turnaround strategy which will enable it to regularise the lease portfolio, while ensuring continuity of services to client departments.
With regard to efficient and effective spending at provincial and local government levels in pursuit of service delivery, the National Development Plan calls for an efficient, effective and development-oriented Public Service. Another key objective of the National Development Plan is the development of a responsive, accountable, effective and efficient developmental local government system. There is no doubt that the allocation made in the 2014 Appropriation Bill goes a long way towards the realisation of these key objectives of the National Development Plan.
The provincial government and municipalities, in particular, are at the coalface of service delivery. Therefore, there is no better way of building better and more sustainable communities other than to budget for programmes and projects that provinces and municipalities are in a position to efficiently and effectively deliver services to our people. It is important that, as a point of departure, the 2014 Appropriation Bill applies a concerted bias in favour of provinces and municipalities; especially small and rural municipalities. It is without a shadow of a doubt that this budget is on course with the realisation of the priorities set in the ANC's 2009 manifesto.
With regard to capacity building across provinces and municipalities, the 2014 budget allocates a significant slice of 52,5% to provinces and municipalities in order for these spheres of government to speed up service delivery and the building of social and economic infrastructure. However, there are challenges that need to be sorted out.
For instance, in its 2009 manifesto, the ANC noted that many municipalities are functioning well, but many others, especially in the rural areas, are still struggling, lacking the capacity and resources they need to fulfil their functions. This has led to some municipalities being unable to provide even a core of basic municipal services effectively and efficiently.
Over and above the need for greater co-operative governance, the government has devised a number of programmes and mechanisms aimed at improving the capacity of local government towards efficient and effective service delivery.
Ziningi izindlela uhulumeni wethu oze nazo zokusiza komasipala ukuze bakwazi ukunikezela izinsiza kubantu bakithi, enye yazo yile ebizwa ngokuthi phecelezi i-Project Consolidate. Kulolu hlelo uhulumeni kazwelonke uthumela ithimba labantu abanamakhono, abazokwazi ukusiza kuhulumeni wasekhaya futhi baphinde badlulisele nalawo makhono ukuze bakwazi ukuletha izinsiza ngendlela elindelekile kubantu. Lolu hlelo olwenziwe uhulumeni kazwelonke selwenze umehluko omkhulu komasipala njengoba sibona ukuthi sebeyazama ukusebenzisa, ikakhulukazi, isabiwomali esikhulu. (Translation of isiZulu paragraph follows.)
[There are a number of mechanisms that our government has come up with in order to assist our municipalities so that they can deliver services to our people; one of them is called Project Consolidate. Through this programme, the national government delegates skilled people to assist local government and to impart those skills towards the required for service delivery. This programme, which was devised by the national government, has made a big difference at the municipalities and we note that they are now trying to use more of their budget.]
Furthermore, as indicated in the 2014 Budget Review, over the Medium-Term Expenditure Framework period more than R3,9 billion has been allocated to various capacity-building programmes aimed at contributing to the National Development Plan's vision of building a capable state, especially at local government level.
With regard to enhancing revenue-raising capacity, most rural municipalities are in fiscal distress, mainly because they lack revenue streams. However, municipalities also struggle to collect monies owed to them and this is mainly due to weak debt-collection strategies. As correctly pointed out by the National Treasury in the same report, the problem of high debtor levels as a percentage of total own revenue shows a lack of effective credit and debt collection strategies in municipalities.
As part of co-operative governance, national and provincial governments should help weaker rural municipalities to improve their revenue and expenditure performance. Grant funding needs to be linked to capacity- building initiatives so that municipalities can improve their ability to collect revenue and their quality of spending.
Improving the collection of revenue in municipalities will go a long way to supplementing their capital budgets. It is also important that National Treasury, in partnership with the Department of Co-operative Governance, develop and implement strategies aimed at enhancing revenue generation and debt-collection capacity of provincial and local government, especially small and rural municipalities. In conclusion, since 1994 the process of reconstructing and developing the country has consistently placed the previously excluded, the poor, women and youth in particular, at the centre of our country's development. As a result, millions of South Africans who were excluded from participating in the political, social and economic life of the country under apartheid now benefit directly from the democratic governance. Indeed, government, in all spheres, has achieved remarkable success over the past 20 years, despite other challenges that we are still facing as a country.
I want to indicate to South Africans, all South Africans, that we are no strangers to Bantu education which eroded our right to choose what we want to be. This has left us with the challenges which we are experiencing today, namely of a lack of capacity and an unskilled society. I do not think there is any false propaganda that can substitute the wisdom of our people, their knowing that they are in this mess today because of the apartheid government and some people who were part of it.
Also, I must indicate that most people, in particular the Leader of the Opposition, have benefited from this democracy and freedom. When you go back and look at the Immorality Act, Act 21 of 1950, which made sexual relations with a person of a different race a criminal offence, it is clear that some people here today have benefited from this democracy and freedom.
Hon Deputy Speaker, on a point of order ...
Hon Madlopha, just take your seat for a moment, please. What is your point of order, Mr Steenhuisen?
Deputy Speaker, I rise on a point of order which relates to offensive language. We are all hon members of this House and if we are going to start getting into each other's personal lives, that is going to make this House a mess. I would ask that you make a ruling that what hon Madlopha said about the hon Leader of the Opposition's private and personal affairs is unparliamentary and must be withdrawn.
Yes. Hon members, in the course of the debate, we may become pretty zealous and say things which we may feel are appropriate, but oftentimes such things might be interpreted as inappropriate. We recommend that hon Madlopha retract the remarks she made because they do tend to be personal.
Thank you, Deputy Speaker. I referred to the freedom ...
Deputy Speaker ...
There is an hon member on the floor.
Hon Deputy Speaker, I do want to contest your ruling. The fact is that the Immorality Act, Act 21 of 1950, which was repealed as a result of our struggles, has afforded our people the right to engage in mixed marriages. Therefore, there is nothing untoward about the remark made by the hon member. {Applause.]
Hon member, please go ahead and do as I requested. I will speak after you have done so.
Hon Deputy Speaker, I referred to freedom, but I withdraw ... [Interjections.]
Hon members, allow the Chair to preside, please! Do not howl.
Hon Deputy Speaker, I withdraw. Although I referred to the freedom ... [Interjections.]
Hon members! I request you ... All right, hon member.
... freedom, from which we are all benefiting. [Interjections.]
Hon members, let us make political statements; let us move away from personal references. This is the most important part of what we are saying. I want to suggest ... [Interjections.] ... hon member, you have raised your objections, so do not behave irresponsibly. I also wish to state that we do not apply Rules mechanically. We are reasonable. We also want to make reference to earlier requests for rulings. We allow hon members to read speeches and we do not rule against them. Members here, on the left, request their members to give others time, and we do not object to that. Chief Whip, you negotiate that.
Similarly, members here, because the next member is not yet here for reasons we do not know, negotiate amongst themselves that one of them will speak first and the other member will speak afterwards. We agree to that. If we were to be inflexible, we would create serious problems for the decorum of the House.
Therefore, I am suggesting that you recognise that the application of the Rules will not be mechanical. We also appeal to you to recognise that even when you make strong political statements, they should not be made in such a manner that they become personal.
The President spoke strongly about this matter yesterday. Let us disagree without being disagreeable. I hope that this will be the order of the day.
Hon Deputy Speaker, hon Deputy President of the Republic and hon members ...
... masiyibethe ngesiXhosa le nto kudala siyikhumsha singade siyicacise, Mphathiswa ohloniphekileyo ... [... let us put it in isiXhosa because we have been couching it in English and not explaining it, hon Minister ...]
...this thing of optimistic forecasts.
Ndiyithethiswa ... [I say so ...] ... for one simple reason. Let us say the economy is growing, now ...
... ityala lethu ... [... our debt ...]
... as a ratio of GDP ...
... liza kuhla ngoku lingakhange kube kanti silithobile. Ibalulekile ke loo nto ngokwecebo kube kanti siyayiqwalasela. [Uwelewele.] [... is going to come down automatically. This is a very important strategy to take into consideration. [Interjections.]]
The second issue ...
Kaloku awekho la magama Mphathiswa esiXhoseni. [Indeed we do not have Xhosa terminology for these words, Minister.]
The second issue ...
Umba wesibini! [The second issue!]
I beg your pardon, Madiba.
Umba wesibini ngowokuba sifuna ukuyincoma le nto ye- ... [The second issue is that we want to applaud the ...]
... reprioritisation of resources, especially now that the expenditure ceiling has been fixed. Shouldn't we consider ...
... ukuba sibeke umda kwityala? [... putting a ceiling even on debt?]
There are other economies around the world that put a ceiling on debt and not only on expenditure. The other issue that is important, hon Minister, is the one of indirect transfers, which are mainly for infrastructure ...
... koomasipala abazama ukukhawulelana nento yokunqongophala kwezakhono zokwenza ezi projekthi. Umngeni okhoyo ngowokuba loo nto ingasebenza njengesisombululo sethutyana, kuba kufuneka kube kanti izakhono ziyongezwa kwaye ziyomelezwa kwinqanaba loomasipala. (Translation of isiXhosa paragraph follows.)
[... in municipalities engaged in efforts to address the lack of capacity to carry out these projects. The challenge is that this might work as a temporary solution, but skills acquisition and skills enhancement should be happening as a matter of course at local municipality level.]
There is also another situation where you find that, even if these indirect transfers have been utilised and infrastructure has been developed, the maintenance thereof becomes a problem.
Uya kufumanisa ukuba ngoku besisithi siyazikhupha etyaleni, siphindela kudyobha sityikitya ngesiXhosa. Siyawabona amalinge amahle ... [You will find that as much as we say we are dealing with our debt, we are back to square one. We applaud the good efforts ...]
... to try and reduce expenditure on consultants, and that is very good.
When you look at infrastructure development as a whole ...
... sisekude kwakoku sijolise kuko, okulishumi ekhulwini, ngokuphathelele kwiSicwangciso soPhuhliso seSizwe. Andifuni ke ngoku ukuqala ndixhwithane naso, ngathi ndiyi-DA ne-ANC zibangisana ngaso. Oku sijolise kuko ... (Translation of isiXhosa paragraph follows.)
[... we are way too far from our target of 10%, in terms of our National Development Plan. I don't want to engage in a fight over this, like the DA and the ANC are doing. However, our target ...]
... is realistic in terms of what we can achieve. We need to know that what we are actually spending on infrastructure development is far below what we should be spending to be able to give the economy the impetus that it needs to alleviate hunger and poverty among people. Thank you very much. [Time expired.]
Deputy Speaker, South Africa's economy is stagnant and the financial planning space for the Minister of Finance is getting more restricted. Choosing what to do, what to fund and with how much is becoming increasingly complex. Some of the complexities arise from outside South Africa; however, many are self-made due to the ANC's policy choices.
Die kern van daardie beleid kan in een aksiewoord, transformasie, saamgevat word. Bykans alles moet getransformeer word. Wat inhoud betref, hou die woord verband met beleidstukke wat vir ons uiters kommerwekkend is. (Translation of Afrikaans paragraph follows.) [The core of that policy could be summed up in one action word, transformation. Almost everything has to be transformed. As far as content is concerned, the word is associated with policies that are extremely worrying for us.]
So, it is in the name of transformation that today's Appropriation Bill is to be enacted. The Bill's title is ironically apt as it truly elucidates the ANC's economic plan. This is how many people view the ANC's thinking: Let's appropriate taxes to misappropriate funding that can enrich us while the majority stay poor. Think of Nkandla and Chancellor House! Let's appropriate taxes and pension fund savings, and misappropriate it to prop up bankrupt state-owned enterprises. Think Transnet, Alexkor, SABC and SAA!
Let's appropriate taxes from the Afrikaans minority and use it to undermine their language in schools, universities, courts and other state institutions. Let's appropriate taxes and refuse to pay for the expropriation of minerals. This will open the door to the appropriation and eventual misappropriation of all types of property rights.
Let's appropriate taxes and collectivise farms, like Stalin did, and thus ensure that we will face a future of famine and conflict; after all, every ANC cadre must have a farm. The hon Thandi Modise has shown the way. Let's appropriate taxes from whites, coloureds and Indians, and misappropriate to aggressively drive racist employment and business policies.
To the ANC, it apparently matters not that black babies are dying due to inadequate skills; no, it is more important to rigidly ensure that no skilled white or coloured person is employed by the state - the ones who die in the name of transformation are seemingly merely collateral damage.
Dit raak laat in die dag vir die ANC. Niemand glo julle meer as julle die verlede blameer of daarin vashaak nie. Sommige ANC-lede is wel opreg in hul kommer oor Suid-Afrika, maar dan moet hulle begin optree en reg regeer.
Vernietig korrupsie en rassistiese wette. Koester ons diversiteit. (Translation of Afrikaans paragraphs follows.)
[Time is running out for the ANC. Nobody believes you anymore when you blame the past or get stuck in it. Some members of the ANC are indeed sincere about their concerns for South Africa, but then they should start acting and governing properly.
Eradicate corruption and racist laws. Nurture our diversity.]
Otherwise, the people will soon make up their own minds and use their policy choice and say to you: Shape up or ship out! Thank you.
House Chairperson, hon Deputy President, hon Ministers and Deputy Ministers, hon members and fellow South Africans, it is indeed an honour and privilege to participate in this debate. First and foremost, I rise in support of this Appropriation Bill with its amendment, as made by the Minister of Finance.
The 2011 Census report indicates that the majority of the population of this country reside in rural areas, the majority of whom are poor and illiterate. These poor constituencies are characterised by high levels of unemployment. The reality of the matter is that women and children constitute the most affected group.
South Africa is a developmental state, and as a result the government has introduced a number of intervening instruments aimed at relieving our communities from the triple challenges of unemployment, poverty and inequality. This government has produced a blueprint in the form of the National Development Plan, NDP, as a vehicle to grow the economy, stabilise society and grow employment opportunities. The ANC manifesto articulates on its interventions, such as rural enterprise development, increased investment in agriculture, improved security of tenure and support to co- operatives.
Twenty years since the advent of democracy, a lot has been achieved in reversing the negatives of the 1913 Native Land Act. The government introduced the Comprehensive Rural Development Programme, CRDP, in July 2009, and since then the programme has been implemented in all the provinces.
Since the start of the CRDP in these areas, various interventions dealing with the three phases of the CRDP have been implemented, ranging from improved housing, and access to water, sanitation and energy. His Excellency the President of South Africa, in the state of the nation address, emphasised skills development. In this regard, the Department of Rural Development and Land Reform will enhance the implementation of the National Rural Youth Service Corps programme, with the main objective being the recruitment and development of the youth to become agents of change in the rural areas.
After 20 years of democracy, rural women are still facing the challenge of their inability to participate in economic development. We believe that if we are to put local women from rural areas in the mainstream of economic growth, this should be done in a structured manner, and it should be well co-ordinated and managed. It should also serve as a lever to make them job creators and family sustainers. It has been proven that any investment in women amounts to a great investment in the community.
Over the past years, government has engaged with the processes and programmes aimed at creating and maintaining an equitable and sustainable land dispensation. The government is the first to acknowledge that the majority of our people are still without land. There is a need to fast- track the process so that land is equitably and sustainably appropriated to our people.
This year, it is 101 years since the notorious Native Land Act of 1913 was enacted. The Act set aside 7,3% of the total of South Africa's land to accommodate the native population. It also put certain restrictions in place as to the possibility for natives to buy and/or own land outside the reserves. Section 25(5) of the Constitution provides for the state to take reasonable legislative and other measures with the available resources to foster conditions which will enable citizens to gain access to land on an equitable basis.
We need to acknowledge the strides made by the government with regard to land restitution. The reopening of the lodgement of land claims to accommodate those who missed the opportunity to lodge land claims by the closing date of 31 December 1998, was a direct response by His Excellency President Jacob Zuma during the state of the nation address.
At the 52nd conference of the ANC, we identified land reform and rural development as priorities. In giving expression to this urgency, land reform must represent a radical and rapid break from the past, without significantly disrupting agricultural production and food security. Sustainable land reform and improved food security is very important if we are to change the situation in the rural areas for the better.
Abalimi abasafufusa badinga ukuba bathole usizo kuhulumeni ukuze bakwazi ukuthi bazimele bakwazi ukwenza amabhizinisi futhi bakwazi nokondla umphakathi walapha eNingizimu Afrika. (Translation of isiZulu paragraph follows.)
[The emerging farmers need assistance from government in order to become independent and to have businesses so that they can provide food for the people of South Africa.]
Despite budget constraints, we believe that adequate resources have been allocated in this Medium-Term Expenditure Framework, MTEF, period.
In conclusion, it is our task to reverse this terrible legacy which made black people trespassers on their own land. Big strides have been made since 1994, but there is still much more to be done. As we support this Appropriation Bill, we believe that the government will hit the ground running and take South Africa forward. We dare not fail our people. [Applause.]
Chairperson and hon Deputy President, today we have reached the culmination of a process that began when the then Minister of Finance, Pravin Gordhan, tabled the Budget and Appropriation Bill in February. The ACDP then indicated its broad support, joining most economic commentators in commending the Minister for a prudent and balanced Budget, and for not pandering to populism, particularly in the run-up to the election.
We know the economic outlook has changed significantly since then. We have a new Minister and the economy has experienced its first contraction since the 2009 financial crisis - 0,6% in the first quarter. The risk to the financial outlook, including domestic uncertainty, remains, mainly due to strikes in the manufacturing and mining sectors. Of course, we still have the public sector wage negotiations that lie ahead.
The ACDP has previously expressed its concerns about the budget deficit, the projected state debt stock and spiralling debt service costs. Do we as Members of Parliament know how much R1,5 trillion is? How long would it take you to spend a trillion rand? That is the appropriation we are going to approve today. If you spend R1 per second, it will take you 32 years to spend R1 billion. This is a thousand times that. It would take you 32 000 years to spend R1 trillion. So we need to understand the enormity of what we are busy with, and I share the concerns of other speakers about our debt service costs.
Minister Nene, you are faced with many challenges and a changed environment, as indicated in your Budget Vote on the National Treasury. We welcome your commitment to stabilising the growth of public debt over the medium term and to rebuild that fiscal space - again, referring to the intergenerational equity that other speakers referred to. Whether you are able to achieve this is, of course, the challenge, as pointed out by various speakers, given the various political pressures from various quarters and the new pieces of legislation and Bills that are sought to be passed. It is also premised on economic growth reaching targeted levels, which was initially 2,7%, but which has now been significantly revised downwards; that is a concern. Of course, we need to address wasteful expenditure and we need a greater commitment to address the R30 billion per year which is lost through state procurement fraud.
We look forward to your first medium-term budget policy later this year, but you are indeed faced with a challenging environment with a deeply unsettled labour environment, an NDP that is basically still in its starting blocks and strained public finances. Much wisdom is required, but we wish you well and we will support this Appropriation Bill.
However, we must ensure value for our money. Hon Minister, maybe you should require all Treasury officials to sing the song, "Money is too tight to mention", and maybe you will get support from the EFF, because we all know who sang that song - it was Simply Red. I thank you. [Laughter.] [Applause.]
Hon Chairperson, hon Deputy President and hon members, let me say from the onset that the AIC has no reason not to support this Appropriation Bill. [Applause.]
The AIC was formed on the basis of humanity, and respect and tolerance for one another. This party believes that the people of South Africa must participate fully in decision-making. Their views and submissions should be considered.
The AIC is not sure whether the Bill that was churned out, or signed into law, the Civil Union Act, Act 17 of 2006, is supported by most of the people of South Africa because we do not believe that there was proper consultation on the Bill.
The Act that encourages marriage between people of the same sex is a taboo in our culture. We therefore call upon the same House that passed this Bill to revisit it and perhaps repeal this Act.
We as the AIC believe that traditional leaders deserve more recognition in their local traditional councils and local government councils. Their involvement in the development of their areas may fast-track the slow service delivery by local municipalities. However, we are of the view that the district municipalities should be done away with, because there is a lot of money that is being spent in those district municipalities.
A lot of corruption is taking place there and most of the guilty people or culprits just escape. They are not apprehended or arrested. The AIC is of the view that the existence of these district municipalities is a waste of taxpayers' money. Therefore, they must be done away with. [Time expired.] [Applause.]
Hon Chairperson, hon Deputy President, Your Excellency, Cyril Ramaphosa, I want to declare my joy and profound gratitude to His Excellency J G Zuma, President of the Republic of South Africa, for his hard work in contributing to the establishment of the Brics Bank, which will have its African regional office in our country.
The establishment of the bank will mark the departure from economic dependency to economic co-operation with other developing economies like ours. This bank, once established, has the potential to bring about, amongst others, opportunities for South Africa, Africa and, indeed, the global economy. The ANC supports this appropriation as we believe this will assist government to put into effect the radical transformation of our economy.
We believe that enough resources have been allocated to enable government to take bold and decisive steps to implement the creation of more jobs, decent work and sustainable livelihood for inclusive growth; for rural development, for land reform and food security, for education, for health and for fighting crime and corruption.
As the study group of the ANC, we do not doubt that this appropriation is correct, because we have been reassured by heads of department during the Extended Public Committees, EPCs, that government has taken steps to do more with less. That is very encouraging to us.
As the study group of the ANC in the Standing Committee on Appropriations, we think we do have the necessary skills, the energy and the political will to hold government and all institutions that receive money from the fiscus to account. We are going to use all the tools at our disposal. We are going to use our laptops, the Budget Office, the Statistician-General, the monthly reports of the Accountant-General, the reports generated in The Presidency: Department of Performance, Monitoring and Evaluation. We are going to monitor on a month-to-month basis.
We are not going to allow departments to misbehave and appear before the Standing Committee on Public Accounts, Scopa. We do not want any department to appear before Scopa. That is our determination and we think we are equal to the task.
Before I go further, I just want to deal with a few issues that have been raised by the DA, two things that the DA did not think could be done. They said that it would not happen. You know, we are used to those stories in this House. We had the World Cup and the DA never believed that it would happen, but it happened. The DA always said that the ANC would not come back in this House and yet, we are here in our majority, 62%. [Interjections.] You did not believe it. It is not the question of belief; it is a question of votes. The people of the Republic of South Africa love the ANC and they will vote us back. [Interjections.]
Do not disturb me; I did not disturb you. I listen to you. That is why I can hear what you are saying.
Something happened recently, and that is the unauthorised and the irregular eating of food in the Gauteng legislature. [Applause.] I want to ask the committee secretary to actually get me a list of precisely what food was eaten, whether it was sandwiches or wings, because that might have very serious financial implications, and financial implications do have consequences.
In this Fifth Parliament, I am really appealing to Members of Parliament, MPs, to be realistic, because people come here and say they do not support this budget, knowing very well that their salaries are not in the appropriation; they are not included here. So, they do not worry as long as they receive their salaries. If we do not pass this budget, hospitals will collapse, schools will be closed and nothing will happen in the Republic of South Africa.
So, this gives me the impression that there are people who have come here to talk about their own salaries. [Applause.] So, this appropriation does not include salaries of MPs. Some MPs say they don't support this budget because they know that they and their families are well taken care off. I thank you. [Applause.]
Hon Deputy Speaker, hon Deputy President and hon members of this House, when one is reporting on any aspect of the spending of public funds, it should be of prime importance to tell the truth. Sir Winston Churchill said, "The truth is incontrovertible, malice may attack it, ignorance may deride it, but in the end, there it is." That erudite gentleman was also of the opinion that there are three kinds of lies - "lies, damned lies and statistics". I have heard many statistics in this Budget Vote debate.
The hon Minister Patel informed us that 78% of the voters rejected the DA. He is correct. Although it is flattering for the ANC to continually proclaim that they have received a mandate from an overwhelming majority of the people in this country, and represent 62% of South Africans, there is more than one way of interpreting the relevant statistics.
One enthusiastic hon member recently told us that the ANC had received 62 million votes. [Laughter.] While another hon member, unbelievably, was under the impression that because South Africa belonged to all who live in it and the majority had voted for the ANC, it meant that South Africa belongs to the ANC. [Laughter.] The truth is not nearly so flattering.
Of South Africa's approximately 51 770 000 residents, only 25 388 082 are registered voters. Of the registered voters, only 18 402 497 cast their votes. Of that number, 11 436 921 voted for the ANC. Therefore, in reality, the ANC actually represents only 22,87% of the population in South Africa. [Laughter.] It is hardly the overwhelming majority the ANC would have us believe.
Another incontrovertible truth is that in 2001, the Municipal Demarcation Board established the Midvaal Local Municipality. In the 2001 Midvaal local elections, the electorate voted the DA into power in the newly formed municipality. When the DA arrived to start the process of local government, they discovered that their predecessors in the Eastern Gauteng Services Council had effectively stripped the municipality of all of its assets. There were no furniture, no computers or information technology, IT, systems, no vehicles and very few members of staff.
In 2011, Ratings Africa assessed all the municipalities in Gauteng in terms of the Municipal Financial Sustainability Index. Midvaal was found to be the best performing and most financially viable municipality in Gauteng. [Applause.] The DA-led municipality succeeded in this, from starting with nothing, in only 10 years. Why has the ANC been unable to fulfill its basic mandate in 20 years? [Applause.] In my opinion, the answer is simple - failure to adequately oversee and failure to establish and enforce effective sanctions for nonperformance. For one to be able to do oversight, one actually has to have sight. [Laughter.] You cannot judge what you cannot see and have no knowledge of. Department heads, in their own interests, report to their Ministers what they want their Ministers to hear - good news. Unless the Ministers and the portfolio committees get out of their chairs and do hands-on overseeing, failures will continue unabated.
We were recently told by the director-general of the Public Service Commission that during the years 2010, 2011 and 2012, no more than 18% of department heads were evaluated for their performance and that in 2013 no evaluation at all took place. Is it any wonder that departments perform so dismally? There is no oversight.
Section 27(2) of the Constitution provides that the state must take reasonable, legislative and other measures within its available resources to achieve the progressive realisation of each of the fundamental human rights enshrined in the Constitution. However, the Constitution also provides in section 237 that the state's constitutional obligations must be performed diligently and without delay. It is in failing to comply with this constitutional imperative that the ANC-led government has failed South Africans.
It is the intention of the DA to closely monitor the appropriation of funds. The Appropriation Bill is the bridge that connects the National Revenue Fund to various government departments that are dependent on the fund for financing. Although this Appropriation Bill does not deal with the five new Ministries that have been created and an expanded Cabinet, it can hardly be expected that it is going to cost the taxpayer any less. The DA would reduce the number of Cabinet members and Ministries in order to become more efficient and more effective.
I noticed recently with concern that the Gauteng provincial legislature has to spend 96% of its budget on salaries. This begs the questions: Is the premier engaged in an empire-building exercise? Does he perhaps owe many favours or has the appropriation of funds for this province failed to provide it with sufficient funds to actually carry out its mandate?
On producing the estimated expenditure document, I noted another area of grave concern to me. Of the 38 Budget Votes dealt with, not one showed a greater expected percentage of revenue than of expenditure. Appropriating funds is all very well, but if one does not have funds to appropriate, the alarm bells should be deafening. If we continue in this vein, we are doomed. We are on a road to bankruptcy and the imposition of austerity measures.
Before Minister Davies and hon Fubbs accuse me of being another negative DA prophet of doom, let me assure them that I am not. I am, however, a realist who knows the incontrovertible truth that you cannot borrow your way out of debt.
I believe it is a common cause that the majority of people who voted in the last elections are those who suffer from poverty. Many live in shacks in informal settlements, walk 20 minutes to the nearest tap, stand in a queue for 20 minutes to fill their buckets and walk home again for 20 minutes, back to their shacks. They do not live like this by choice, but of necessity.
If I were one of them, I would not find much in the Appropriation Bill to get excited about. I would believe that my aspirations had again been sidelined. I would probably be left wondering what had happened to the better life for all that I have been promised for 20 years. Is it not time that our priority focus is on improving the lives of such people, not merely on promising to improve them?
A recently released report by the Human Sciences Research Council contains the results of a survey that indicates that in 2004 the ANC enjoyed a public satisfaction rate of 70%. That same rate today stands at 39% - not good news for the ANC! The same report also reflects that 60% of those surveyed believed that the government is currently headed in the wrong direction.
It is obviously no accident that most of those who participate in service- delivery protests are disillusioned ANC supporters.
The time to act is now. We can procrastinate no longer. We need urgent, far- reaching oversight throughout all government departments. We need the swift and effective imposition of sanctions for noncompliance. We need an urgent end to corruption and a rapid move into action. In my opinion, the ANC likes to think of itself as the Land Rover of political parties. Sadly, I suspect that the party is reminiscent of what I read recently, that of all Land Rovers ever built, 93% are still on the road and only the remaining 7% have reached their destinations. I thank you. [Applause.]
House Chair - my apologies for not being here earlier, I got the time wrong today - hon Deputy President, Ministers, Deputy Ministers, hon members of the House, it is my privilege to make a few remarks this morning as I table before this House a report on the 2014-15 Appropriation Bill, [B4-2014], on behalf of the Standing Committee on Appropriations.
The 2014-15 Budget ushers our country into the second phase of our ongoing transition from colonialism to a national democratic society that is truly united, nonracial, nonsexist, democratic and prosperous. During this phase of our transition, government is called upon to accelerate the pace of social and economic transformation by implementing radical programmes that will place our country on a qualitatively different development path.
This path is clearly articulated in the National Development Plan, NDP, Vision 2030. This budget therefore lays the basis for the implementation of the radical programme of social and economic transformation for the next five years and beyond. Equally, the Budget seeks to deepen and expand the gains we have made since the 1994 democratic breakthrough. It will also help move our country forward as we, together, advance towards the kind of society envisaged in the Freedom Charter, that seminal document of our people upon which our Constitution of today was founded.
The 2014-15 budget must also take us closer towards meeting the bold commitments outlined in the manifesto of the ruling party, the ANC. This Budget will ensure that government continues to build an inclusive economy that creates jobs; transforms our rural areas for the better; ensures decent living conditions and sustainable human settlements; improves and expands access to education and training; ensures quality health care for all; provides social security; fights crime and corruption; and promotes national unity and social cohesion.
In addition, the policy priorities contained in the National Development Plan and which are funded and supported in the 2014-15 budget framework, include building on formal social accords and consultations in areas related to the mineral sector; partnerships in education involving teachers, parents and learners; allocations for the building, refurbishment and maintenance of health infrastructure; the roll-out of the community works programmes in every municipality; the new bus rapid transit system to be constructed in nine cities, with existing networks expanded; as well as increased support for small, medium and micro enterprises, SMMEs.
Indeed, this Budget is a major step towards achieving the priorities of the National Development Plan, which, amongst others, are the following: Uniting South Africans around a common programme to achieve prosperity and equity; promoting an active citizenry to strengthen development, democracy and accountability; bringing about faster economic growth, higher investment and greater labour absorption, focusing on key capabilities of people and state; building a capable developmental state; and encouraging strong leadership throughout society to work together to solve problems.
The Budget is anchored in the principle of fiscal sustainability, allocative efficiency and value for money. It places priorities on the need to ensure quality spending and the imperative of doing more with less. The Budget also gives practical meaning to government's commitments to the principles of counter cyclicality, debt sustainability and intergenerational fairness.
Allow me to reflect briefly on the overview of the South African economy and its implications on revenue. The Fiscal Framework and Division of Revenue Bill, which was adopted at the beginning of the year, presented government's outlook for revenue, expenditure and borrowing over the 2014 Medium-Term Expenditure Framework, MTEF. However, South Africa's economic outlook has changed since the 2014 fiscal framework was passed by Parliament early this year.
Following modest growth of 1,8% in 2013, South Africa's economy experienced its first contraction since the global financial and economic crisis. The South African economy shrank by 0,61% on a seasonally adjusted and annualised rate when compared to the last quarter of 2013, when growth of 3,8% was recorded. This was primarily due to a contraction in mining and manufacturing output. The strike in the platinum belt saw mining output contract by 24,7% compared to the previous quarter. Manufacturing on the other hand - the output thereof - also declined by 4,4% over the same quarter, in part to due to spill-over effects from the platinum sector strike and the depressed demand for gold. The first quarter also saw real consumption spending by households moderating. The first quarter of this year was also marked by slower growth in some of our major trading partners such as Europe, the United States and the rest of Africa and China.
The committee is mindful that recent economic developments, locally and globally, have implications for the 2014 fiscal framework, specifically with regard to current and estimated revenue growth, expenditure, the budget deficit and government borrowing.
The committee noted the reduction in the percentage of aggregate revenue collected, from 20,92% of GDP in 2013-14 to 29% of GDP in 2014-15. Meanwhile, aggregate expenditure has increased from R1,1 trillion in 2013- 14 to R1,2 trillion in 2014-15. Current estimations are that the budget deficit will moderate from 4% to 2,8% of GDP over the 2014 MTEF period. The committee supports the National Treasury's intention to target a reduction in the budget deficit through a decrease in noninterest expenditure. This work will be monitored to ensure that it yields the projected outcomes.
Despite the contraction in the domestic economy and the challenges brought about by the global economic situation, the 2014-15 budget makes available an additional total allocation of R38 billion over the next three years. So, hon Mcloughlin, we are not going to go bankrupt.
The committee welcomes the cost-cutting measures introduced by Cabinet to limit expenditure on conferences, travel, entertainment and other nonessential items. The committee undertakes to monitor the implementation of these cost-cutting containment measures.
The committee also noted that the continued tight fiscal environment will necessitate trade-offs between various funded priorities in order to balance fiscal sustainability and the need to accelerate socioeconomic development. Whilst the committee welcomes the work of the Chief Procurement Officer to put in place national systems for the purchase of high-value goods, it cautions that such procurement reforms should not negatively affect small businesses.
The committee is of the view that government departments need to significantly improve on their work of ensuring that suppliers who do business with government are paid within 30 days of the receipt of an invoice. The committee views the nonpayment of suppliers by government departments as having adverse effects on the economy, especially in realtion to the operation of small, medium and micro enterprises. Whilst the committee supports the strengthening and enhancement of the work aimed at ensuring that contracts are fair and transparent, it also supports the work that is under way by the Accountant-General to investigate fraud, corruption and maladministration relating to state contracts. The committee deems this to be a positive initiative and will monitor its implementations.
Whilst the committee acknowledges improvements in the overall budget expenditure at national level, it remains concerned about the low levels of expenditure on a number of programmes that are important drivers for job creation and economic development. Whilst the committee supports the reprioritisation strategy of aligning allocation of school infrastructure backlog grants and the education infrastructure grant with spending capacity, it cautions that alignment should not compromise school infrastructure delivery to provinces.
The committee is of the view that there is a need for the Department of Basic Education to strengthen its support, particularly in the Eastern Cape, where some challenges were pronounced. I know that there are members who are concerned about this grant, but the committee has agreed that this grant will be strengthened in going forward.
Whilst the committee noted the funding allocated for further education and training, it's of the view that systems need to be put in place to monitor the financial health of further education and training, FET, colleges. The committee welcomes additions by the National Treasury to the 2014 grant framework for specific indirect grants that set explicit requirements for skills transfer and capacity-building, which will set out how this capacity will be provided by national departments to provinces and municipalities.
There was concern that some of the grants that have been sent to provinces were not implemented and we agreed with National Treasury that the latter will assist with skills and capacity when those grants are sent to provinces so that we can accelerate service delivery.
So, the committee supports these measures that have been taken by the National Treasury. The committee also supports efforts by the National Treasury to encourage domestic savings.
In conclusion, the committee notes that this Bill, initially tabled on 26 February 2014, did not take into account the new departments announced by the President of the Republic on 17 June 2014. In this regard the committee supports the technical corrections presented by the National Treasury in terms of section 14 of the Money Bills Amendment Procedure and Related Matters Act.
I therefore take this opportunity to thank all members of the committee for the diligent manner in which they worked on this Bill.
Notwithstanding the recommendations of the committee, and due to the fact that no formal submission or amendments were proposed by other Parliamentary committees, we recommend that this House adopts the 2014-15 Appropriation Bill without amendments. [Applause.]
I would therefore like to conclude by reminding members that resources have now been made available. Let's all work together to move South Africa forward. Let us ensure that we can achieve radical socioeconomic transformation and bring about a better life for all our people.
Ndza khensa, inkomo. [I thank you.] [Time expired.] [Applause.]
Thank you very much, Chairperson, and once again thanks to hon members who engaged on this Appropriation Bill. Our Budget this year supports the implementation of the National Development Plan, contrary to what some members have said. Government is ensuring that the priority programmes identified in the manifesto of the ANC, which are now being translated into medium-term strategy plans, are funded.
Nevertheless, economic weakness and the rising burden of public debt reinforced the importance of ensuring the sustainability of fiscal policy over the period ahead. Rising global interest rates have increased the cost of servicing our debt; commodity prices have declined and the depreciation of our currency has pushed up inflation.
The fiscal space that we have built up in the early 2000s and into the late 2000s has indeed diminished. The period ahead will therefore not be easy. To ensure that the fiscus remains sustainable, we remain committed to the three principles that are the backbone of our fiscal stance - counter cyclicality, debt sustainability and intergenerational fairness and equity.
If I were to refer to some of the comments that were made with regard to intergenerational fairness, let me refer the hon member from the EFF to what I said in the Budget Vote debate, namely that these five years, colleagues and comrades, are going to be an interesting learning period for you. On page 36 - I understand that you may not have had the time to read our documents. On page 36 of the Budget Review, we showed the consolidated operating and capital accounts of our government.
The 2014-15 revenue exceeds current spending in compensation, goods, services and interests. Therefore, it is not true that this doesn't talk to intergenerational equity. This implies that our borrowing of R153,1 billion for 2014-15 is for capital spending, consistent with the principle of intergenerational equity.
This Budget increases debt in order to finance the continuation and the construction of schools, clinics, roads and municipal infrastructure that will benefit our children and grandchildren, and not burden them with debt. The budget also introduces the means to further reduce consumption spending and increases the current surplus.
The DA refers to this period as the period of broken promises and all sorts of other things. It just shows that the difference between us and some members on the left is that others have the luxury to scream from the sidelines, like at a soccer match, whilst we have the responsibility of implementing our policy, as we hereby do. [Interjections.]
After twenty years, the ANC government can indeed only report prosperity and bringing a better life to many in this country. You know, reading the statistics that we provide in the interest of transparency and accountability, made the member of the DA the wisest in the room ... [Interjections.] ... thanks to us, for having provided you with that information. That is why we are ranked amongst the best in the world when it come to transparency. [Applause.]
I thank the member of the IFP, hon Nkomo, for raising issues with regard to a lack of planning by departments, resulting in underspending. We trust that oversight by this House, particularly this committee, will assist us in making sure that we are able to do that.
Over the next three years, government will stabilise the growth of public debt and then begin to rebuild fiscal space. This will be achieved by remaining within the expenditure limits that we have set in the Medium-Term Expenditure Framework. Expenditure will continue to grow and the real value of our social spending will be maintained, but the fiscal limits will be far stronger.
The need to ensure value for money and effective allocation of resources is now even more paramount. Our challenge is to transform the ample resources made available in this Appropriation into real change in the lives of ordinary South Africans. So let us all, government, the private sector, labour and public society at large, roll up our sleeves in a partnership for change and build the country of our dreams.
The role of the office of the Accountant-General, as hon Madlopha had indicated, is actually very critical. We have also strengthened the role of this office through the establishment of the Office of the Chief Procurement Officer in order to ensure that our Procurement and Supply Chain Management is managed appropriately. The support from municipalities and building capacity, both in financial management and in service delivery, in partnership with Cogta, is also going to be strengthened and intensified.
We take note of a number of commitments that hon members made, including hon Kwankwa, who spoke about the optimistic forecast. We say to him that we are continuing to improve on this front, but as we know, forecasts are actually based on assumptions. Should those assumptions not be realised, forecasts are likely to be missed, overperformed or underperformed.
To the members of parties who actually decided to go against the tide, I just want to sound the warning that you should not find yourself in a situation in which one lady found herself, making a call to her husband, that there is a lunatic driving in the wrong direction on the highway and, she said, he is not the only one, all of them are driving in the wrong direction; I am the only one driving in the right direction. [Laughter.] Little did she know that she was the only one driving in the wrong direction. I therefore implore the members of this House to adopt the Appropriation Bill with the amendment as tabled for technical corrections. Thank you very much. [Applause.]
Debate concluded.
Order! Hon members, are there any objections to the Bill being read a first time?
Bill read a first time (Democratic Alliance and Economic Freedom Fighters dissenting).
I wish to thank parties for advising the staff on which Votes they will make declarations, on which Votes they will record their objections and on which Votes they intend dividing. This information will greatly assist the process this morning.
I will first put each Vote and the question for decision, and thereafter ask parties for declarations of vote, as they have indicated. Members may make declarations of vote from the floor microphones if they wish to do so. After this, I will put the Vote for decision. I have been advised that declarations will be up to two minutes each, which is in line with the practice of previous years. The bells will be rung for five minutes for the first division on a specific Vote, but only for one minute for subsequent divisions.
Hon members, before we proceed to consider the Votes and Schedule on the Appropriation Bill, technical amendments to the Bill have been proposed by the hon Minister of Finance in terms of section 14 of the Money Bills Amendment Procedures and Related Matters Act, No 9 of 2009, as printed on the Order Paper. I now put the amendments as they appear on the Order Paper.