As the hon Mr Mufamadi approaches the podium, I wish to say to him: Happy birthday, sir! [Applause.]
Thank you for the words, hon Speaker. Hon Speaker, hon Deputy President, hon Ministers, particularly hon Minister Gordhan, Deputy Minister Nene, hon members, comrades and compatriots, and colleagues on my left, the Minister's 2014 Budget Speech has drawn the most enthusiastic commentary of respected economists, who lined up to give their views and interpretation of the Budget in relation to the country's fiscal wellbeing.
Most political and economic analysts concurred that this is once again a balanced Budget, others calling it a disciplined Budget, with some going as far as saying that politicians - particularly the ANC - will be disappointed because it is definitely not your typical election year Budget. It is indeed not an election Budget, because the ANC-led government services communities on an ongoing basis, informed by the mandate received from the electorate in terms of our manifesto - commitments in particular, not promises.
In the Reconstruction and Development Programme we said:
The first priority is to begin to meet the basic needs of people - jobs, land, housing, water, electricity, telecommunications, transport, a clean and healthy environment, nutrition, health care and social welfare.
Indeed, great strides have been made in addressing these challenges in the past twenty years. Significant progress has been registered, and yet we are the first to admit and acknowledge that much more still needs to be done. Working together with all South Africans, we will be able to take South Africa forward.
Some political commentators have made comments and assertions that seek to reduce the work of a capable collective under the wisdom of the President of the Republic of South Africa, Jacob Zuma, and the collective committee of Ministers in the Cabinet, and seek to alienate the Minister of Finance from this collective. We have categorically refused this destructive thinking.
It is with this in mind that we wish to recognise and commend the collective efforts of the hon Minister of Finance and the Ministers' Committee on the Budget. We also commend the invaluable input of Cabinet colleagues and their consistent and sterling work in putting together a credible Budget for the Republic and the people of South Africa in general.
Through this Budget we remain true to our commitment. We continue to be guided by the Reconstruction and Development Programme. For the past half decade the Fiscal Framework has been an evident narrative of consistency, stability, debt management, economic growth, job creation and fiscal prudence, the foundation of which was laid in 1994 under the first democratically elected President and our world icon, Ntate Nelson Mandela.
The fiscal path over the last 20 years of our democracy has been a tool of assurance that the South Africa we have built since 1994 is indeed today a better place to live in and continues to inspire hope in millions of South Africans of an even better tomorrow.
From the submissions of interested parties during the public hearings the Select Committee on Finance has agreed that the 2014 Budget is underpinned by the following key principles.
The global economic environment outlook remains a festering sore, particularly for developed economies, whilst the developing world will continue to be the main pillar of the global economic recovery.
Domestically, the South African economy has registered a lower economic growth than projected due to lower commodity prices and labour instability, particularly in the mining industry.
The domestic currency remains volatile due to, amongst others, the quantitative easing measures introduced by the Federal Reserve Bank in the United States.
The budget deficit is now 4% lower than the projections, despite lower economic growth. This will narrow the deficit to 2,8% of the GDP over the medium-term expenditure period.
Consolidated noninterest spending will increase by only 2% over the medium term. This is a remarkable achievement.
In line with the Medium-Term Budget Policy Statement, we welcome the implementation of the expenditure ceiling in order to force government departments to reprioritise without undermining social security and service delivery programmes.
In regard to benefits to households, the committee acknowledges that the Budget will also support income tax relief to households; job creation in the private sector; infrastructure, particularly in the renewable energy supply; and an increment of child support grants, which will take care of over 16 million people in the Medium-Term Expenditure Framework period period.
On support for business, there will be increased support and tax relief to promote entrepreneur development, as well as financial support and subsistence for mainstream industries, ie agriculture. And on financial security, steps have already been taken to ensure the protection and security of income tax, particularly retirement benefits, in a prescribed assets environment.
Therefore, it is our view as the Select Committee on Finance that the 2014 Fiscal Framework which has been presented should support a developmental programme to promote youth employment and protect the most vulnerable people in our society - the aged, women and children.
Furthermore, this Budget re-emphasises three fundamental aspects of the National Development Plan. It seeks to foster partnerships; achieve fiscal prudence by capping the budget and management of contingency grants; support transformational imperatives, particularly land redistribution programmes, entrepreneurship, SMME development and budget management; and focus on managing public debt and reducing the fiscal deficit over the next three years.
It is important that we dispel some of the myths that have been propagated by some members inside and outside of this House. In that spirit, I wish to reiterate some of the important and valuable information that the Minister shared with us in his Budget Speech:
Your administration started out, Mr President, with an economy that, in rugby terms, might be called a "hospital pass". Furthermore you said:
We experienced a once-in-70-year economic earthquake, the aftershocks of which are not yet over. Today we can report to the South African people, on what we have done in the past five years to respond to this crisis.
We began on a firm footing.
It is important to repeat some of this information, precisely because some amongst us either appear to suffer from amnesia or selective memory or, worse still, will never let facts stand in the way of a political point that they wish to make. Accordingly, we have heard certain leaders claim that South Africa did not have World Bank debt before 2009. The facts are as follows.
Firstly, in the 2008-09 cycle the stock debt of our gross government loan was R626 billion. Adjusted for cash balances, this figure becomes R525 billion, which is a net loan debt in other words. Expressed as a percentage of the GDP, these figures translate into 23,1% and 18,7% respectively.
Secondly, and very importantly, the figures I have referred to above are a far cry from what we inherited from the apartheid government, thanks to the successive ANC-led administrations since 1994. For example, in the 1994-95 cycle, the gross debt was R240 billion or 46,5% of GDP, whilst the net loan debt was 45,2%. While the absolute debt continued to rise to reach the levels I quoted earlier, we can safely say, without fear of contradicting ourselves, that we succeeded in containing debt as a percentage of GDP, thus reducing it by over 20 percentage points. Thirdly, of course, even though our debt has increased, we pride ourselves on the fact that this debt was incurred delivering services to the people. We have built millions of houses, connected many households to water and electricity and built schools and clinics. Amongst other important programmes, we intend to fast-track the redistribution of land through this budget. [Applause.]
Lastly, I need to remind this House that when the 2008-09 financial crisis broke, we had registered a budget surplus for two consecutive years. I am raising this precisely because some among us have forgotten about the global financial crisis of 2008-09. As the Minister of Finance noted in his speech, "We ran one of the biggest countercyclical fiscal stances in the world." Correctly, when revenues fell short by R61 billion, we allowed the deficit to rise, invested in infrastructure, set up competitiveness enhancement packages and expanded our public employment schemes.
Today we know that we were right, because we have regained all the jobs that we lost during the crisis. The recently released Goldman Sachs study, assessing the first two decades of freedom, made the following findings once more:
Government debt costs have trended lower and foreign reserves have risen
Overall cost of capital has declined
Corporate valuations have improved relative to global peers
Per unit labour productivity has improved.
This is despite the challenges that we have in the mining sector.
Simply put, we saw increased economic growth, attracting the appraisal of the world, the International Monetary Fund and the World Economic Forum of the ANC-led government on the competitiveness and regulatory framework, as compare with the best globally. This Budget is characterised by budget reprioritisation and recovery of the contingency reserves of the medium- term period. We are, and will continue, to be a beacon of excellence and an example to many, both in the developed and emerging economies.
In conclusion, I would like to thank members of the Standing Committee on Finance for the good work they did, particularly the chairs and co-chairs of the Finance committees. Hon Charl De Beer has been a pillar of support in regard to the work that we all do. I also thank the hon Sogoni and hon Chaane, the Minister of Finance, Mr Pravin Gordhan, the Deputy Minister of Finance, Mr Nhlanhla Nene, the Director-General of the SA Revenue Service, Lungisa Fuzile and the SA Revenue Service officials.
I must say that the foundation of fiscus stability and revenue collection that was laid by the current Minister of Finance, hon Pravin Gordhan, remains. I wish to say that legacy continues to prevail under the current Acting Commissioner of the SA Revenue Service, Mr Ivan Pillay. With this foundation we have managed to put strategies in place that have become the pillars of our revenue supporting the national purse.
The former SA Revenue Services commissioners also played a very important role in pursuing this goal. Let me also thank the staff in the National Treasury, particularly under the leadership of the director-general, for the work done in the past five years.
The ANC supports the 2014 Fiscal Framework and Revenue Proposals for the 2014 Budget. I submit this report to the House for consideration. Thank you. [Applause.]
May I request the members who are standing around in the passages, having long conversations, to take their seats please? Thank you.
Hon House Chairperson, as a birthday present to the committee chairman, let me recap some of the credits that the budget speech got from certain analysts and commentators. There are three things I want to cover: firstly, the sentiments expressed in the Budget that underlined how government needs to work with the private sector, and move to implementation of the National Development Plan; secondly, the reassurance for rating agencies that are coming in with budget deficit figures lower than expected; and thirdly, introducing the expenditure ceiling and projections for cost containment and savings on items like catering, entertainment and venue rental. Overall, some analysts were relieved that this was a conservative budget.
However, the DA has to ask itself, when seven million South Africans are unemployed, and we have the highest unemployment rate amongst middle-income countries, whether a conservative budget is good enough. When our economy is growing at less than 2% per year, while any other emerging markets are growing at 4% to 6%, is a conservative budget good enough?
The Finance Minister has avoided these awkward questions, and he stayed on message for the governing party's election campaign by suggesting that this Budget should be judged by the fact that our country is better today than it was under apartheid. Of course, we all know that it is not debatable; we have all acknowledged that things are better today than under apartheid. The real question is how this administration has performed over the past five years, and whether this Budget before the House is strong and brave enough to take us out of the economic doldrums.
No member in this House would deny the fact that the global financial crisis had a central role to play in the deterioration of our economy in 2009. The Minister described this in great detail in his speech. But what he did not describe is how South Africa, unlike most emerging markets, suffered a double crisis, the global financial crisis on the one hand, and a crisis of political leadership on the other. While our economy grew at 1,9% last year, Peru, Malaysia, Chile - you have all of heard these countries in recent weeks - are growing at 4% to 6%. While political leaders in those countries and other developing countries responded to the global financial crisis by implementing reforms to make their economies more competitive today, our leaders muddled along, tabling contradictory economic plans and refusing to take on vested interest rights at the top of government. That is why our average gross domestic product growth has dropped from 4,2% under President Mbeki to 2,8% under President Zuma. The President himself acknowledged in a speech today that growth has not been adequate to meet the objective of reducing unemployment substantially. The bottom line is that today there are 1,4 million more unemployed South Africans than there were on the day that President Zuma took office.
The only way we can really measure this Budget is by asking two questions: Does it do enough to help our economy to create jobs and does it do enough to accelerate economic growth? I think the answer to both of these questions is no. That is why we cannot support this report, nor the Fiscal Framework.
If you dig a little deeper, even the aspects of the speech that I welcomed earlier on are problematic. [Interjections.] Firstly, it is good for the Finance Minister to make the right noises each February about implementing the NDP, but South Africans have seen that this government does not listen to him and the implementation does not happen; secondly, the main reason we hit that lower budget deficit figure is because the provinces underspent by R6,7 billion, reflecting deep capacity problems across ANC-run provinces.
It is also not clear that government will comply with the Finance Minister's cost containment measures. We remember the North West Premier at the end of last year buying herself a R1,3 million car; we saw the Mpumalanga Premier buying himself an Audi A8, a BMW X5 and a Range Rover; and we saw the budget for this years' presidential inauguration increased to R120 million, 60% more than what we spent last time.
There are other, deeper structural problems with this Budget. We are told that government debt, as a percentage of GDP, will peak in three years' time, but peak means it is going to come down afterwards. So, why has last year's peak of 40% in 2015 changed to a new peak of 44% in 2016? This raises serious questions, at the very least about the long-term sustainability of our government finances, particularly when already today R1 out every R10 we spend goes into paying off debt.
There has also been a lot of fuss about the R1 trillion we have spent on infrastructure over the past five years. If you go with the amounts the NDP says we should be spending on infrastructure, that number should have been more than R1,5 trillion. The R847 billion that the Minister is claiming over the next three years should actually be over R1,2 trillion. The bottom line is that we are not spending enough on infrastructure. While the Minister pays lip service to the NDP, the actual implementation has not happened.
Why are we not holding teachers accountable for their performance? Why have we not seen the regulatory reform we need to boost growth? Why have we not overhauled the Public Service to hold government employees accountable? Why are we increasing barriers to trade and investment rather than lowering them?
The implementation has not happened because the ideological enemies of the NDP are many; they sit at the highest levels of government, and the President is not prepared to take them on. That is the reason why South Africans do not have confidence that the good sentiments expressed each year by the Finance Minister will translate into real action by government.
It is the reason why, despite being the largest economy in Africa, we are not benefiting from the African economic growth of 6%. While we have the largest endowment of mineral resources, our mining sector has contracted by 0,5% for the past three years.
It is also the reason why this Budget is too conservative to tackle unemployment and slow growth, and the reason why we cannot support it. Thank you. [Applause.]
Hon Chairperson, hon Deputy President and colleagues, we must drive to continually align our Fiscal Framework and Revenue Proposals with the National Development Plan of this country. At the current economic growth rate of sub 2%, it is imperative that we focus on creating an economic environment that will boost the economic recovery environment and growth. This we can do largely by creating the necessary space within which our small, medium and micro enterprises can flourish and by utilising the limited fiscal space available to the utmost benefit of our economy.
Wasteful expenditure by government must become a thing of the past. It is high time that government started taking a very serious and responsible look at how they spend taxpayers' money. I have a good story to tell. However, it is not about the ruling party or the government; it is about the nameless South African taxpayers who continue to support this country. The citizens and corporates that comprise our tax base are the real heroes of this country. This government should thank them every day, for without their contributions very little of the infrastructure and social spend would be achieved. However, these taxpayers need to receive value for their money.
Unfortunately there are challenges that face us a country. South Africa is riddled with many dishonest people who, through their stealing, lessen our ability to learn, work and survive. Dishonesty means that state procurement laws are abused and officials steal money from service delivery projects to enrich themselves and their families. Those who are guilty of stealing very often escape public prosecution. People are hired based on their party affiliation and not their competence. State-owned enterprises and departments often cannot function properly because their resources are used to advance the political and financial interests of the elite. Big business steals your money and my money by colluding to fix prices for essential items like bread. Law enforcement officers often break the law by soliciting bribes, hijacking, extorting, pimping, assaulting, raping and murdering those they are meant to protect. I am sure we all in this House agree that corruption is a cancer that is not easy to remove. If allowed to thrive, it becomes the culture that will steal our future.
We as South Africans must not tolerate dishonesty. We must refuse to be part of it. We must report it and we must demand a justice system that punishes it. The IFP believes in fighting corruption with a zero tolerance policy.
The fact that government's net debt continues to grow is a matter of concern. We look forward to seeing how current policy deals with creating more fiscal space in the next three years by reducing the ratio of government debt to gross domestic product.
As the IFP, we will support this Fiscal Framework, but we will watch matters closely as we move forward into the coming years.
In the last 20 seconds I have I wish to say the following. I know that the hon Minister does not reply to the Division of Revenue Bill and this might be his last reply as the Minister of Finance. We as the IFP, and I as a member of the committee, wish the hon Minister well. You have certainly done an admirable job and we trust that the hon President, post the 7 May elections, sees his or her way to retaining you as Minister of Finance. You certainly have unfinished business and we thank you. [Applause.]
Hon Chairperson, hon Deputy President and hon members, economies around the world, including ours, have since the financial crisis in 2008 struggled to return to pre-subprime economic performance levels. This decline in business activity has resulted in massive job losses and business closures, and many families are finding it difficult to make ends meet.
Despite these challenges, good strides have been made in economic and social development to boost the economy, create jobs and reduce poverty.
One of the good things that the Minister and the department have done over the past few months is that they have heeded the call to reduce costs by keeping an eye on and actively seeking ways to moderate the public sector wage bill and by introducing a wide range of measures to try to cut costs in the system.
We also commend the government for ensuring that the consolidated budget deficit came down from the 4,2% in October last year to about 4%.
However, while it makes sense, in the light of the current general economic decline, to run a budget deficit of 4% in the medium-term to support our developmental objectives, the budget deficit, viewed together with the rising public debt, which stands at just over 40% of gross domestic product, gives the impression that government is struggling to embark on a fiscal consolidation programme. Yes, we are aware that the rising global interest rates have been a major contributing factor to the rise in debt service costs for government. We are also cognisant of the fact that significant steps have been taken to improve the management of the public debt and that currently only about 10% of public debt is in foreign currency.
However, the UDM believes that more needs to done to improve efficiency in government - fight corruption! This is essential to reduce South Africa's debt levels to sustainable levels.
Labour unrest is hurting the South African economy and it results in the loss of our country's competitiveness. Nowhere is this loss of competitiveness more evident than in the current account deficit of approximately 6% and the fact that South Africa's net portfolio investments declined to R24,3 billion in 2013, from R88,8 billion in 2012. Mr Minister, it concerns us that South Africa's large current account deficit, together with the budget deficits, are beginning to attract the attention of rating agencies, which already have a negative outlook on South Africa.
The UDM calls on government to take steps to improve the depressing investment climate in South Africa in order to ensure that private investment, both portfolio and in particular foreign direct investment, is rekindled. This is one of the most essential ways to achieve the economic growth rates that are necessary to arrest poverty in South Africa.
Mr Minister, it makes us uneasy to see that government's debt and deficit reduction programme seems to principally depend on optimistic economic growth forecasts. I thank you. [Time expired.] [Applause.]
Thank you, Hon Chair. Minister Gordhan, we admit that you have a very difficult job. There are many competing issues and causes worthy of intervention and funding, and one cannot, due to limited income, attend to all as one would like. We think that you are doing a good job in the circumstances and for that we are thankful.
We have a country partitioned between a very modern economy on the one hand and the dire socioeconomic challenges on the other. It is thus easy to fall into a trap where one merely redistributes wealth from one side to the other. The challenge, of course, worldwide is to ensure that the middle class grows and that people are uplifted without resorting to killing the proverbial goose that lays the golden eggs. The ANC talks about the developmental state as the governmental instrument to perform this function. In this respect, the apt word is "development" as opposed to mere "redistribution", which does not solve the poverty problem.
Daarom is dit goed dat die Minister wil sorg dat Suid-Afrikaners meer spaar. Tog betaal die gewone man en vrou in die straat steeds te veel belasting. Die beplande belasting op myne en olie-ontginners gaan die industrie breek. Enige koolstofbelasting moet nie teruggeploeg word in die algemene fiskus nie, maar moet eerder geoormerk word vir groen projekte vir beide werkskepping en skoon energie. Daar moet kreatief gekyk word na hoe die gewone man en vrou se belastinglas verlig kan word deur byvoorbeeld ander belasting kreatief te kan inspan, soos belasting op groot, riskante beleggingsinstrumente, wat die positiewe sosiale effek sal h dat swak beleggings en toksiese finansile instrumente nie sal plaasvind nie. (Translation of Afrikaans paragraph follows.)
[Hence it is a good thing that the Minister wants to ensure that South Africans save more. However, the average man and woman in the street are still paying too much tax. The intended taxation of mines and oil companies will impact adversely on the industry. Any carbon tax should not be ploughed back into the general fiscus, but should rather be earmarked for green projects with the purpose of creating jobs and clean energy. Creative ways should be considered for relieving the tax burden of the average man and woman, for example by imposing other taxes in a creative manner, such as taxes on large, risky investment mechanisms, which will have the positive social effect of preventing bad investments and toxic financial instruments.]
Lastly, Minister, I also asked you to kindly look at two important matters with possible huge financial repercussions. The first is the R80 billion class action claim against Transnet instituted by the Transnet pensioners. If this claim is successful, the credit status of Transnet, and other parastatals by association, and probably national government itself, will be severely downgraded.
There is, however, a way out this impasse, if you are willing to talk to us. The same goes for the intractable e-tolls problem. A win-win scenario is still possible if you are willing to talk to us and other interested organisations. We think that we can submit a plan that will take us out of this impasse and that will benefit the country as a whole, as well as the affected individuals. Ons hoop om graag van die Minister in hierdie verband te hoor. Dankie vir u harde werk, Minister. [We hope to hear from the Minister in this regard. Thank you for your hard work, Minister.]
Thank you.
Agb Huisvoorsitter, agb Adjunkpresident, agb Minister Gordhan, agb Adjunkminister Nene, agb lede van die Huis en kamerade, die 2014 Begroting, soos voorgel deur die Minister van Finansies, l die grondslag vir strukturele hervormings wat vir die volgende regeringstermyn in die vooruitsig gestel is. Dit l die middelebron uiteen wat aangewend sal word vir die verskerpte inwerkingstelling van die Nasionale Ontwikkelingsplan. Dit word ter tafel gel in die wete dat alle Suid- Afrikaners uit die deurlopende transformasie van die samelewing sal voordeel trek.
Ons ontwikkelings- en ekonomiese agenda moet deur die staat gedryf word en die wetgewende arm van die staat het 'n belangrike rol hierin te speel deur die nodige wetgewende en regulatoriese omgewing te skep. Hiervoor is die staat in vernootskap met die private sektor om diversiteit en die ruimte te skep vir meer swart Suid-Afrikaners en meer vroue om deel van die ekonomie te wees. Die klem is weer eens op eienaarskappatrone en produksiemiddele, en vereis verskerpte aandag op ons ontwikkelingsagenda. Dit het 'n diepgaande impak op voorstelle wat met behulp van 'n reeks maatrels bereik moet word, soos vervat in die ontwikkelingsbloudruk, naamlik die Nasionale Ontwikkelingsplan.
Die ekonomiese en brer ontwikkelingsplanne vir die tydperk wat voorl, is gefokus op ekonomiese transformasienoodsaaklikhede, wat groei sal versnel, 'n meer inklusiewe ekonomie sal bou, geleenthede sal skep en 'n meer gelyke samelewing daar sal stel.
Die aanvaarding van die Nasionale Ontwikkelingsplan as die langtermynraamwerk vir ekonomiese groei en sosiale ontwikkeling staan sentraal tot die planne wat deur die 2014 Begroting befonds word. Di plan dien as gids vir die toekenning van openbare bronne en erken die behoefte om te diversifiseer om uitvoermededinging te verhoog en vennootskappe te skep ten einde die gedentifiseerde uitdagings die hoof te bied.
Begrotingsprioriteite sluit in: Belegging in infrastruktuur; indiensneming van die jeug; verbetering van dienslewering; ondersteuning oor die langtermyn van die Gemeenskap Werksprogram; hulp aan kleinskaalboere; klein, medium en mikro-ondernemings; Belastingaansporings vir die indiensneming van persone wat die eerste keer begin werk; die Uitgebreide Openbare Werkeprogram; Spesiale Ekonomiese Sones; en Openbare infrastruktuurbelegging.
Gelei deur die verwagtinge van die Vryheidsmanifes, het die ANC 'n duidelike en omvattende visie vir Suid-Afrika in die jaar 2030, naamlik di van hor groei, skepping van ordentlike werk en groter gelykheid.
Beide die mediumtermynbegrotingsbeleidsverklaring van Oktober 2013 en die ANC se vyfjaar manifes vir die tydperk 2014 tot 2019, verskaf die implementeringsfase van hierdie visie, waarmee daar 'n verskil in die lewens van alle Suid-Afrikaners bewerkstellig sal word. Hiermee word ons prioriteite vir die volgende fase van ons radikale ekonomiese transformasie in werking gestel.
Die Nasionale Ontwikkelingsplan maak voorsiening vir 'n sosiale ooreenkoms om armoede en ongelykhede uit te wis, en werksgeleenthede en beleggingsgeleenthede te verhoog. Dit word aanvaar dat, om vinniger vordering met die uitwissing van armoede te maak, ons ekonomie in die rigting van 'n minimum van 5% per jaar moet groei. Om dit te bereik en om 'n groeikoers te vestig wat inklusief is en wat swart ekonomiese ontwikkeling vinniger bevorder, is daar 'n wye reeks inisiatiewe in die pyplyn. Die inisiatiewe sluit in: versnelde infrastruktuur belegging; nuwe ruimtelike planne vir stedelike ontwikkeling, verbeterde openbare vervoer en die opgradering van informele nedersettings; ondersteuning vir Spesiale Ekonomiese Sones en vervaardigingsaansporings soos uiteengesit in die Industrile Beleid Aksieplan, Ipap; belastingaansporings om jeug indiensneming te bevorder; verdere uitbreiding van openbare werksprogramme; 'n Hernude fokus op verantwoordbare en kwaliteit van onderwys; verdere infasering van Nasionale Gesondheidsversekering; verdere beleggings in hernubare energie, agb lid Alberts, en ondersteuning vir die oorskakeling na 'n lae-koolstof ekonomie; en stappe om die staatsdiens te professionaliseer en die bestuur van verkryging en voorraadketting op te knap.
Saam kan ons Suid-Afrika vorentoe neem. Ons kan maar net die ANC regering en Tesourie bedank dat die inkomende administrasie 'n gesonde stelsel van openbare finansies erf wat 'n platform vir die implementering van die Nasionale Ontwikkelingsplan verskaf, en 'n raamwerk vorm vir die samewerking met alle belanghebbendes in die verdere ontwikkeling van ekonomiese transformasie.
Werkskepping sal die sentrale prioriteit van die ANC bly. Ons gee erkenning aan die feit dat werkskepping sedert 2009 met ongeveer 1,3 miljoen toegeneem het, soos aangeteken deur die kwartaalikse Arbeidsmagopname.
Verhoogde belegging in die ekonomie deur die openbare en private sektore is die grondslag van werkskepping en groei. Ons kan saam Suid-Afrika vorentoe neem.
Belastingvoorstelle vir die 2014 Begroting prioritiseer steeds ekonomiese groei, werkskepping en generering van voldoende inkomste om staatsuitgawes te finansier wat strook met die oogmerke van die Nasionale Ontwikkelingsplan ten opsigte van die uitbreiding van die ekonomie en die vermindering van werkloosheid.
Vordering in verbeterde toegang van onderwys is oor die afgelope vyf jaar gemaak. Soos beklemtoon in die Nasionale Ontwikkelingsplan, is die verbetering in die onderwys van kritiese belang. Die 2014 Begroting gee dan ook hieraan spesiale aandag. (Translation of Afrikaans paragraphs follows.)
[Ms P E ADAMS: Hon House Chairperson, hon Deputy President, hon Minister Gordhan, hon Deputy Minister Nene, hon members of the House and comrades, the 2014 Budget, as presented by the Minister of Finance, lays the foundation for structural reforms that have been set out for the next term of office. It sets out the means source that will be applied during the sharpened implementation of the National Development Plan. It is being tabled in the knowledge that all South Africans will benefit from the consistent transformation of society.
Our development and economic agenda must be driven by the state, and the legislative arm of the state has an important role to play in this regard by creating the necessary legislative and regulatory environment. For this purpose the state is in partnership with the private sector in order to create diversity and the space for more black South Africans and more women to be part of the economy. The emphasis is once again on ownership patterns and the means of production, and requires enhanced attention to our development agenda. This has a profound impact on proposals that need to be achieved with the aid of a series of measures, as contained in the development blueprint, namely the National Development Plan.
The economic and broader development plans for the period ahead are focused on economic transformation necessities, which will speed up growth, build a more inclusive economy, create opportunities and establish a more equal society.
The acceptance of the National Development Plan as the long-term framework for economic growth and social development lies at the centre of the plans funded by the 2014 Budget. This plan serves as a guide for the allocation of public resources and acknowledges the need to diversify in order to enhance export competition and create partnerships in order to counter the identified challenges.
Budget priorities include: investment in infrastructure; employing the youth; improvement of service delivery; support in the long term of the Community Work Programme; assistance to small-scale farmers; small, medium and micro enterprises; tax incentives for the employment of persons starting work for the first time; the Expanded Public Works Programme; Special Economic Zones; and public infrastructure investment.
Led by the expectations of the Freedom Charter, the ANC has a clear and comprehensive vision for South Africa in the year 2030, namely that of higher growth, the creation of decent work and greater equality.
Both the medium-term declaration of October 2013 and the ANC's five-year manifesto for the period 2014 to 2019 provide the implementation phase of this vision, according to which a difference will be brought about in the lives of all South Africans. In this way our priorities for the next phase of our radical economic transformation will be implemented.
The National Development Plan makes provision for a social agreement for eliminating poverty and inequality and for enhancing both job opportunities and investment opportunities. It is accepted that, in order to make more rapid progress with the eradication of poverty, our economy needs to grow in the direction of a minimum of 5% per year.
In order to achieve this and to establish a growth rate that is inclusive and promotes the more rapid development of black economic empowerment, there are a wide range of initiatives in the pipeline. The initiatives include: accelerated infrastructure investment; new special plans for urban development, improved public transport and upgrading of informal settlements; support for Special Economic Zones and manufacturing incentives as set out in the Industrial Policy Action Plan, Ipap; tax incentives for encouraging youth employment; further expansion of public works programmes; a renewed focus on accountable and quality education; further phasing in of the National Health Insurance; further investments in renewable energy, hon member Alberts, and support for switching to a low- carbon economy; and steps for professionalising the Public Service and for improving the management of acquisition and supply chains.
Together we can take South Africa forward. We can only thank the ANC-led government and the Treasury for the fact that the incoming administration is inheriting a sound system of public finance that provides a platform for the implementation of the National Development Plan and forms a framework for collaboration with all interested parties in the further development of economic transformation.
Job creation will remain the central priority of the ANC. We acknowledge the fact that since 2009 job creation has increased by approximately 1,3 million, as was recorded by the Quarterly Labour Force Survey.
Increased investment in the economy by the public and private sectors is the basis of job creation and growth. We can take South Africa forward together.
Tax proposals for the 2014 Budget continue to prioritise economic growth, job creation and the generation of sufficient income to finance state expenses that match the objectives of the National Development Plan with regard to the expansion of the economy and the reduction of unemployment.
Progress has been made in respect of improved access to education over the past five years. As is emphasised in the National Development Plan, the improvement of education is of critical importance. The 2014 Budget also gives special attention to this.]
Education is not only a way to improve life; education is life.
Die ANC-beleid is di van inklusiewe groei om die siklus van groei en ontwikkeling te versterk. Oor die mediumtermyn word verskeie belastingmaatrels op strukturele ekonomiese uitdagings gerig en die bevordering van sterker en meer inklusiewe groei.
Die Nasionale Ontwikkelingsplan is 'n plan vir fundamentele transformasie waarin ons jeug gemobiliseer en alle Suid-Afrikaners byeengebring word. Elkeen van ons het 'n rol om te speel. Elkeen van ons het 'n verpligting om na te kom.
Die DA baseer debatte op media-analise eerder as op die Begrotingsrede. Agb Harris is duidelik onbewus van enige finansile hervormings wat deur die ANC-beheerde regering gedoen is. Tesame kan ons Suid-Afrika vorentoe neem. Die ANC ondersteun die Fiskale Raamwerk en Inkomstevoorstelle. Ek dank u. [Applous.] (Translation of Afrikaans paragraphs follows.)
[The ANC policy is one of inclusive growth in order to strengthen the cycle of growth and development. Over the medium term various tax measures are directed at structural economic challenges and the promotion of stronger and more inclusive growth.
The National Development Plan is a plan for fundamental transformation in terms of which our youth are mobilised and all South Africans are brought together. Each of us has a role to play. Each of us has an obligation to meet.
The DA bases its debates on media analysis rather than on the Budget Vote. Hon Harris is clearly unaware of any financial reforms undertaken by die ANC-controlled government. Together we can take South Africa forward. The ANC supports the Fiscal Framework and Revenue Proposals. I thank you. [Applause.]]
Chairperson, the ACDP supports the report on the 2014 Fiscal Framework and Revenue Proposals. We know that the Budget was very well received by commentators and economists, and we as the ACDP believe that the Minister has not departed from the prudent countercyclical fiscal policy, notwithstanding the labour unrest in the mining sector, as well as slowing global and domestic economic growth prospects.
We are also pleased to see that the Budget is now firmly aligned with the National Development Plan, and this we believe provides policy certainty. That is what investors are always looking for. Both foreign and domestic investors look for policy certainty. It sends a very clear message to reassure those investors and credit rating agencies that National Treasury will not deviate from its trademark fiscal conservatism, notwithstanding political pressure from various quarters. In our view and as other media commentators have pointed out, prudence has trumped populism.
We also need to bear in mind that the fiscal outlook for the years ahead is going to be challenging. With the onset of the 2009 recession, government was able to use the fiscal space built in the preceding years to support the economy. However, there is now very little space to move. The changed environment has significant implications for revenue collection, with global interest rates rising, and the rand depreciation and weaker commodity prices having significant fiscal implications. Our projected debt service costs for 2014-15 are R5 billion higher than estimated in October 2013, and that is obviously cause for concern.
Our economic growth remains below our potential with the terms of trade deteriorating, and they are unlikely to improve over the medium term. A weaker outlook for commodity prices, as pointed out in the report, has contributed to a downward revision of the estimated tax revenue.
We share concern about the debt to gross domestic product ratio, as pointed out by my colleague from the DA, in that it will reach just below 45% in the outgoing years, up from the 40% that was indicated earlier. Debt service costs rise faster than any other category of spending over the medium term, which in our view crowds out spending on developmental priorities.
We also, of course, need to look at our wage bill, which is increasing. Almost 40% of the consolidated noninterest expenditure is spent on our wage bill and we know that a new wage bill will have to be negotiated with the three-year bargaining cycle coming to an end. We must have an affordable wage sector wage agreement. That will have to be negotiated.
We support government's cutting down on wasteful expenditure and the Minister's announcements in that regard, but clearly much more needs to be done. Across the House we are in agreement with that. The issue of the estimated R30 billion being misappropriated must be addressed.
May we wish the Minister everything of the best. We congratulate chairperson Mufamadi on his birthday today as well. The ACDP, as indicated, will support the Budget and the fiscal report. Thank you. [Applause.]
Hon Chairperson, central to the Fiscal Framework is our economic growth. While the DA likes to criticise our government for the lack of growth, the statistics tell a completely different story. Let me tell you that 15 years prior to the start of our democratic dispensation our growth rate was a dismal 1,5% per year. However, in the last 20 years we have had a stable growth rate of more than 3%. This reflects and undoubtedly confirms that we have a good story to tell. [Applause.]
The plan presented by the Minister is both reliable and stable. This will do a lot to inspire investor confidence, unlike the DA, which concocts ridiculous figures to fool the masses. They must stop living in stupidity. [Interjections.] They have stated that an 8% growth rate is the solution to our problems. Satanism must be rife within the DA. Where did they get this 8% from? Was it Satan whispering in their ears ... [Interjections.]
Hon Chairperson ...
Order, hon members! Hon Bhoola, will you just take your seat, please?
Chairperson, may I ask the hon member ... [Interjections.]
Order, hon members! Chief Whips, you don't have to compete. I will listen to the hon Van der Merwe first and then the hon Watson.
Hy het van my gepraat, man! [Gelag.][Tussenwerpsels.] [He was referring to me! [Laughter.] [Interjections.]]
Order!
Chairperson, I would like to know if I can ask the hon member a very easy question.
Hon Bhoola, are you prepared to take a very easy question?
I will take it at the end.
He will take it at the end. There is a point of order by the hon Watson.
House Chair, would you rule whether it is parliamentary for a member at the podium to say that another party is rife with Satanism? [Laughter.]
Order, hon members!
I would think that it is totally unparliamentary.
Hon member, I will look at Hansard. It was a reference to the party and not a specific individual. However, I will consult Hansard and come back with a ruling if necessary.
Was it Satan whispering in their ears, telling them how to prolong the suffering of the masses? [Interjections.]
Now is not the time for lofty ideals and wishful thinking. We need to be realistic in our target for GDP growth, as opposed to chasing unattainable ideals, as this will provide stability to the long-term growth path and expected revenue.
We need to further contain costs, increase the efficiency of government and thereby decrease the national debt. The MF therefore lauds the implementation of the debt ceilings across all departments, as mentioned by the Minister in 2012, and I am sure we will see further results in the next few months.
I commend the hon Minister on the higher than expected tax revenue for the 2013 fiscal year. This shows that sound policies and good management ... [Interjections.]
Hon Bhoola, will you just sit down, please?
Hon Chair, in regard to my previous point of order, can I please draw your attention to Rule 63: Offensive Language, which says that no member shall use ... [Interjections.]
Hon Chief Whip ...
Can I continue please?
Hon Chief Whip, I have already said that I will consult Hansard and come back with a ruling. What you are saying now is not going to assist with what we are busy with at the moment. Can we continue with the debate?
Hon Chair, you said he was addressing the party. Members of this party are offended in terms of this Rule.
Hon member, your point of order is noted. It was a reference to a party and not to a specific member. Continue, hon Bhoola.
This shows that sound policies and good management are the drivers behind the good story that we are telling. Great results like this allow government to spend on pertinent issues like a livable increase in social grants for poor and marginalised communities. The MF welcomes this, and we will consistently advocate a greater increase and an inclusive basket of services for all the people, be it health, housing, basic services or other aspects.
Furthermore, we commend the Minister for not bending the knee to lower taxes in an election year and, by implication, decreasing the revenue in order to score cheap political points. Contrary to this, the DA campaigned hard for tax cuts for everyone. This is understandable, as the DA will do anything to protect their elite support base. However, tax cuts for the rich, the millionaires, in our country will not help right the wrongs of the past. They will be there, and indeed they will not cover the hardship of our national debt. Parties must not come, like the DA, and blow hot air.
Yes, with our country's deficit we do indeed acknowledge that we will be spending more than we have, but people are unemployed, poverty is rife and the gap between the rich and the poor is increasing. Deficit or no deficit, we simply must do more to ensure that we are delivering to these destitute communities.
Let us not allow the rest of the country to end up like the sad story of the Western Cape, with its growing gap between the rich and the poor. Let us instead do all that we can to achieve realistic goals to keep on telling the good story of our 20 years of democracy, which is indeed associated with President Zuma's administration and, of course, Madiba's inspirational and spiritual guidelines, which serve as a protective shield. The MF will support the Budget and the framework. [Time expired.] [Applause.]
Chairperson, the hon Bhoola once again surprised me with his unfounded attack on the DA, and once again there was not very much substance. Let me just note that his application to become a member of the DA and to serve the DA has been rejected. [Interjections.] However, we wish him all the best. We wish him a happy retirement and a good story in his retirement.
This year Minister Gordhan tabled a Budget that held the line against populist pressure to spend more. The Budget holds the line in committing government to a spending limit of R1,25 trillion in 2014-15. Whilst the fiscal consolidation is an impressive accomplishment, we have noted the global crisis, as the chairperson mentioned, and we know that some good work has been done, it is the hard realities in the Budget framework and in the Economic Outlook that forced government to implement prudent policies to achieve a decline in expenditure.
Hard realities in the Budget framework indicate, inter alia, a Budget deficit of 4% to GDP, whilst the current account deficit is expected to average at 5,7% of GDP, and debt peaking at 44% of GDP.
With regard to debt, it is the way a government handles its debts that is crucial to any economy, more so in a developing economy like South Africa's. With debt at 44%, Moody's did send us a very clear message: Our debt levels should not increase. But the risk of its happening still exists, especially noting that salary payments to public servants remained unchanged. The public sector wage bill constitutes 57% of expenditure - and I think the Minister shares my concern in this regard - in the Budget and is 6,5% of GDP.
The challenge of meeting debt service costs of R114 billion in 2014-15 and R126 billion and R139 billion in the medium term will have an effect on our ability to reduce the Budget deficit. Noting these challenges, it is evident that the fiscal boat could hit some turbulent waters with regard to costs and expenditure. The Minister indicated that Treasury was running a safe and stable fiscal ship. Therefore, I think the Minister will agree with me, boosting economic growth becomes essential. It is essential because we know that if we don't get growth going there will be no money. The GDP growth is projected at 2,7% in 2014. The current 2% growth is way below the growth of our peers in Africa. Major rating agencies and analysts appear to be skeptical about the forecast in the Budget for growth and the current account deficit. However, I seem to differ a bit with my colleague and chairperson in the Finance Committee about the response by agencies and critics.
It is also evident that in the event of the economy underperforming in growth, the fiscal boat could indeed hit some rough waters this year. In a crisis like the current energy crisis, which undermines our potential to achieve the economic growth required, it is essential that we take the right steps.
Load shedding has a devastating effect on the economy, and we saw it in 2008, where the blackouts cost the country an estimated R200 million per day. The costs today are perhaps double that. Yet, what is worse about the present energy crisis is that it could have been entirely avoided.
Indeed, for several years South Africa has been told that excessive electricity price increases were necessary, precisely to avoid the blackouts and to keep the lights burning. What has happened is that we have seen flaws with regard to Eskom's pricing formula, and some misunderstanding with regard to the costs of the replacement of assets and the return on assets for government. Although we have moved closer to inflation-related tariffs, there is a further 8% average increase in electricity prices scheduled for 1 April.
What can we do? That is what the Minister asked. Do we have any proposals? Yes, indeed we have those proposals. The DA will request a full National Energy Regulator of South Africa investigation into the causes of the current electricity supply shortages, including recommendations regarding who should be held accountable.
We will ask once again that Eskom provide us with all the documentation and contracts relating to the Medupi Power Station project. It is clear that infrastructure investment of 10% to GDP cannot be funded solely through the national fiscus.
I agree with the Minister that we need to consider innovative funding models and we spoke about it in the question and answer session. Thank you. [Time expired.] [Applause.]
Sihlalo, ndivumele ndikhahlele kuSekela Mongameli weli lizwe, aBaphathiswa, ooSekela Baphathiswa kunye namaLungu ePalamente ahloniphekileyo. Egameni lombutho wesizwe ndithi mpilo nde, Sihlalo, mfo kaMufamadi, ngale mini yokufika kwakhe emhlabeni. (Translation of isiXhosa paragraph follows.)
[Dr Z LUYENGE: Chairperson, allow me to salute the Deputy President of this country, Ministers, Deputy Ministers and hon Members of Parliament. In the name of the ANC I greet you all, as well as the chairperson, Mr Mufamadi, on his birthday.]
The ANC, as a responsible organisation, has another story to tell, a big one, about taxation.
Hon Chair, I would like to present the input, which is viewed by the ANC as an answer, in regard to ensuring that sustainable public finances and a stable tax base are the anchor of the country. Therefore, the ANC-led government has, over the past 20 years, ensured the protection of the tax revenue base so as to support the fiscus whilst ensuring that the system remains fair. In keeping with this approach, the ANC-led government continues to support the long-term policy objectives of inclusive growth, employment, development and fiscal sustainability. Within the ANC-led government's overall fiscal framework and in the context of rapid globalisation, South Africa's tax reform has since 1994 sought to improve the efficiency, equity and international competitiveness of its tax system.
These far-reaching changes implemented in the tax system are informed by both the ANC's domestic fiscal policy priorities and its response to economic globalisation. Broadening the tax base and reducing statutory tax rates are central pillars of the ANC-led government's tax reform agenda. Tax amendment proposals have been guided by equity and fairness, efficiency, intersectoral neutrality, certainty and consistency, simplicity in administration and a lighter compliance burden for taxpayers, all as central tenets of a good tax design and sound tax principles.
Over the past 20 years of democracy, the ANC's tax amendment proposals have been guided by the following: the principle of equity, whereby all residents should contribute to the fiscus in proportion to their ability to do so; the principle of simplicity, in that taxes should be easy to understand and should be collected in a timely and convenient manner; the principles of transparency and certainty in the way taxes are calculated and collected, being certain of and supported by transparent rules and procedures; and the principle of efficiency, which causes taxes to be raised in a way that interferes minimally with the economic decision- making.
According to the hon Minister of this department, meeting South Africa's development challenges requires sufficient revenue to fund key expenditure priorities, while ensuring that public debt and debt service costs are contained and avoid overburdening taxpayers. At the heart of the fiscal achievements is the financial management of the fiscus and the dramatic improvements in revenue collection by the SA Revenue Service, as well as disciplined spending choices.
One of Sars' strategic objectives is to grow the tax register and thereby broaden the South African tax base. Sars has sought to increase the number of registered taxpayers through tax education outreach and enforcement initiatives. The cost of revenue collection is an important indicator of the efficiency of Sars and is generally used as a benchmark internationally. This ratio is calculated by expressing the cost of internal operation as a percentage of total tax revenue. During the past five years, the cost of revenue collection varied between a low of 1,04% in 2008-09 and a high of 1,17% in 2009-10. This surge was mainly due to the extensive modernisation investment, which significantly improved the efficiency of its operations and specifically accelerated processing turnaround times, raised service levels and increased efficiencies. For the 2012-13 Budget the ratio was 1,07%, slightly lower than the previous year due to operating costs increasing at a slower rate than the revenue.
Among the key factors which have encouraged growth in compliance are improvements in the ease of submission through electronic filing, prepopulation of returns and third-party validations, along with the introduction of penalties on outstanding returns.
The system of e-filing continues to grow and less than 1% of filers still make use of the paper-based channels to submit their returns, which is a massive improvement from the 98,8% that made use of paper based channels in 2006. During the 2009 tax season 2,3 million returns were assessed within 24 hours. This volume increased by 18% in the 2010 season to 2,7 million returns.
Since 1994, tax policy has consistently delivered revenue growth that has enabled the fiscus to reduce deficit while expanding public services. The programme of fiscal discipline, sound fiscal management, efficient taxation, focused spending programmes and continual tax relief remain hallmarks of the ANC-led government's taxation policy. All of these principles have been recognised, both nationally and internationally, as defining features of financial management and have seen the ANC lauded globally in this regard.
Robust growth in tax revenue has contributed to the continued strong fiscal position that provides the platform for further tax reforms in every consecutive year's budget. The ANC-led government remains committed to a tax reform programme that improves the efficiency of the South African economy and contributes materially to investment and job creation.
In conclusion, the good story is that over two decades the ANC administration has built a progressive tax system founded on the principles of equity, simplicity, transparency, certainty and efficiency. Through the efficiency of Sars, tax revenue has remained buoyant in 2013-14, with the result that the revenue estimate presented in last year's Budget could be revised upwards by a billion to R899 billion. The ANC believes that the government has a duty to ensure that conditions are created to meet the basic needs of the population and, in the context of taxation, this will be achieved through a fair, progressive and efficient system of taxation. One could be deterred by the views of the opposition, especially hon Harris, who had the audacity to come to this podium and present what is a tautology, by presenting the same inputs that he presented during the debate on the state of the nation address, which is something that undermines the integrity of the members who are listening and the communities that have brought us here.
The hon Minister has lauded a number of aspects that have been raised by the department, and cost-effectiveness in spending is a cornerstone of all those aspects. The fact that we need to be responsible enough and work together does not necessarily mean that ...
... kufuneka kubekho urhwaphilizo, kube ngathi kufe inkomo, ibe ngulowo athi ndimanqe; athi omnye ndimafu; athi omnye ndiza kubamba intloko njengokuba abanye bezibona beziinkulumbuso zephondo laseMpuma Koloni abanye bekhetha iGauteng. Akuqhubeki loo nto eMzantsi Afrika. Abantu baseMzantsi Afrika ... (Translation of isiXhosa paragraph follows.)
[... there must be corruption, as if a cow has died, where it is the survival of the fittest as to who gets which part; others choose the head, just like those who want to be Premier of the Eastern Cape province and others choose Gauteng. It is not like that in South Africa. People of South Africa ...]
... have been liberated for the past 20 years and they have a reason to vote and they will do that come 7 May 2014. The ANC therefore supports the Fiscal Framework and Revenue Proposals in order to ensure that the gap between the haves and the have-nots is not just reduced, but closed. It will be closed as long as business goes on to assist government by employing more than the government can, because government is not an employment agency. Government has the responsibility to ensure that it creates a climate conducive for business to do the work and part of that work is to employ. Thank you. [Applause.]
Hon Chairperson, hon Deputy President, the chairperson of the committee, Mr Mufamadi, and members of the committee on both sides of the House, thank you for the various contributions. Happy birthday, Mr Mufamadi - I don't know whether it would be protocol to sing "Happy Birthday", but if the Chairperson would allow it, I am sure the opposition would lead it! At the outset, let me reiterate the foundations of the Budget. Firstly, we were going to ensure fiscal sustainability. We are not running a reckless ship, and I think it would be wrong, both factually and otherwise, if, in the search for votes in the coming elections, we started misrepresenting the facts.
Secondly, we tried to get the balance right between supporting the social wage, meaning housing, education, public transport and social grants, on the one hand, and support for the economy on the other. Details are in the Budget Review and in the Budget Speech. If you want page references to help you, we will certainly help you with that as well.
Thirdly, notwithstanding all of these constraints that we live under, we attempted to gradually still continue with fiscal consolidation. One of the hon members raised this particular question, about whether we are consolidating adequately or not. Our approach is slightly different to what some of us might actually want, which is a drastic cut. Mr Kwankwa, ours is a more gradual approach on this particular question.
Fourthly, in addition to that, we agreed as government that we would have an expenditure ceiling, and we are disciplined enough in the ANC to work within the expenditure ceiling and do whatever we have to do in that regard.
Fifthly, we are intent upon implementing the National Development Plan. A number of hon members made reference to whether we are implementing it or not. I want to refer them to P 4 of the Budget Review. There is a nice long list of projects there, which states in a very concrete way, firstly, that these are the projects, and, secondly, we are already funding them, or we intend funding them over the next three years.
Questions were raised about whether cost containment measures on catering, consultants, and so on, are working. In the Budget Review, on P 35, the first trends, which in each of these key areas begin to show a downward movement, are already there. There might be aberrations, where people buy expensive cars, but they are individuals we are talking about, who, in their own right, should be thinking more carefully about some of these issues, rather than giving in to their own preferences. Overall, however, in gross terms, government is moving in the right direction.
The announcements we made in relation to the Chief Procurement Office and the centralised purchasing that we will do, or the interventions that we will undertake in big purchase items in the state, from this point onwards, in order to ensure that we get value for money, is a further reassurance to South Africans that we are, indeed, spending their money in a responsible way.
The hon Mufamadi laid out very carefully the kind of global context that we operate in and also set right many of the factual issues that have arisen for party-political purposes from my left. The hon Harris is very gracious in admitting that there are some elements of the Budget that meet with his approval and approval elsewhere. However, he then goes radically wrong. He goes wrong, because he ends on the note that the Budget is too conservative. I didn't realise that the platform of the DA had suddenly shifted to radicalism of one sort or another.
There are factual issues that he needs to get right, however. He says that in my speech I made reference to the fact that we are better off today than we were under apartheid. Actually, I didn't. Very carefully. If you look at pp 11 and 12 of the speech, you will see that I talk about the last five years of this administration, the amount of money we spent, the kind of delivery that we undertook and the kind of delivery we intend to undertake over the next three years. So, again, facts can be twisted in order to get marginal votes in a desperate situation.
He then makes reference to the global crisis, and this is something that, as the hon Luyenge pointed out, is his favourite sport: Why aren't we doing better than x, y and z? He might want to read the latest Financial Times and The Economist, with reference to Chile, a country that has done extremely well in the past, but, like all countries, particularly emerging markets, finds itself in a spot of difficulty at the moment. There are street protests in those countries, from the middle classes, on issues of free education, and so on. So, let's not use these examples opportunistically and mislead the public into believing that all is rosy.
In fact, emerging markets/developing countries are going to face a very tough time. Globally, the developed countries are deliberately propagating a very negative narrative about emerging markets. If we don't get our act together, regardless of party-political affiliations, and begin to defend our own turf and promote ourselves across the globe, we are going to play into very difficult geopolitical agendas around us. However, I hope that there are sensible people on all sides who will undertake that. He says that we don't talk about reform, but again, in the Budget Speech on P 4, and elsewhere in the Budget Review, we say it very clearly. As the recent World Bank report on exports from South Africa indicates, 90% of our exports take place from 5% of companies in South Africa. That is an untenable amount of concentration in our economy. Even if we take commodities out of that equation, around 87% of exports from South Africa still come from 5% of companies in South Africa.
So, clearly, this is not a party-political issue. It is about ensuring that our economy widens its base, and that there are more medium-sized companies that are allowed to grow, that they become competitive across the global stage and that they are able to export and earn us the important income that will to attend to the other issue that the hon Kwankwa referred to, which is the current account deficit. We need to export more. We need to earn more dividends, as South African firms, in order for us to change that current account deficit. In the meantime, the currency is going to play the buffering role that it currently is.
The hon Harris also makes reference to the NDP and our intention to implement or not. Once again, I refer him to P 4 of the Budget Review. He then makes reference to our deficit being arrived at in terms of 4% in the next year merely because the provinces are underspending. That, again, is a misrepresentation of the facts. There is extra revenue coming in, both in tax terms and in nontax terms, that the state is actually obtaining. This is in addition to the fact that we actually implemented the expenditure ceiling that I made reference to earlier on.
In regard to infrastructure spending, the government said a long time ago that we wanted infrastructure spending to be beyond 10%, if we could help it, and we want to head in that particular direction as we make fiscal space available for ourselves, as the hon Singh pointed out as well.
There is a fundamental contradiction in the DA's argument. On the one hand, they want more fiscal discipline and a narrower deficit. On the other hand, they want a more expensive Budget and more expenditure. I do not know what kind of budgeting this is that can narrow your deficit and still give you more expenditure without there being growth in either the economy or on the revenue side of the equation.
However, we have some important things happening in respect of the private sector. Firstly, South African firms have been doubling their investment in Africa every five years for the last five years; and, secondly, exports from South Africa to Africa now constitute 28%, largely of our manufactured exports, both of which are extremely important developments in terms of the kind of agility that some of our firms have been able to display. The key, of course, is still to continue to expand our economic base so that we can move further.
We agree with the hon Singh on wasteful expenditure. We have always said that we need to spend taxpayers' money carefully. That is going to be a long battle, which, even in the next and following administrations, will have to be pursued. We certainly agree that we need to create more fiscal space for ourselves as a country.
The hon Kwankwa is right. We are working very hard at creating the right kind of investment climate in this country. There are lots of references to incentives, to the special economic zones, and to other measures that the Department of Trade and Industry and others have in place to, in fact, make South Africa more hospitable as far as investment is concerned.
The hon Alberts says we must be willing to talk to them in order to get the e-tolls issue right. We have been willing to talk for a long time. We are not the ones who have been running to the courts in order to delay and compound this particular problem. So, you are welcome to come for a cup of tea while it's free, hon Alberts, any time you actually want to.
I want to thank the hon Swart for his support and I once again thank my colleagues in Cabinet and all of the members of the standing committee from all of the parties. I certainly wish them well in the elections as we head towards an ANC victory. Thank you very much. [Applause.]
Debate concluded.
Hon Speaker, I move:
That the House adopt the 2014 Fiscal Framework and Revenue Proposals and the Report of the Standing Committee on Finance thereon.
Motion agreed to (Democratic Alliance dissenting).
2014 Fiscal Framework and Revenue Proposals and the Report of the Standing Committee on Finance on the Fiscal Framework and Revenue Proposals accordingly adopted.