Chairperson, Minister, comrades and colleagues, I don't know whether I have asked you to do this but I will be very grateful if you would protect me against my provincial whip. She is not supposed to hackle her own comrade but there she is. Alright!
Budget 2020 as we know colleagues and comrades is a very bleak budget in a very bleak global and domestic environment, and even if the budget is not a traditional budget of austerity it's very
austere budget. It's not as if the Minister wants it. Even if the smallest party in this country - let's say, I don't know whether it is AZAPO or whoever - were to produce a Minister of Finance, they would have to confront the very same challenges the current Minister and government does. There is no easy way out and never before it seems to me have we needed to work together and the coronavirus in a curious way, as bad as it is for our country and the world as a whole, hopefully will impel us... despite all our differences, ideological, political and other to work together. And so far it seems all parties are working together in this House and beyond, civil society too, labour, business and all of us on tackling the coronavirus.
So, not that there is anything good about it but who knows, maybe just maybe, one positive thing that might emerge is that we work together for once, since the first five years of our democracy and the national interest, whatever our differences are and of course they are many.
Now, obviously I am going just to give a quick overview of the recommendations in our report; obviously I will not read out the report, it is there in the Announcements, Tablings and Committee Reports, ATC, for those of who care to read it. But will pick up on
some themes and give it a political infliction that I think is appropriate; coming from the party I do.
Now, for what it's worth, the Organisation for Economic Co-operation and Development, OEDC, says that global growth is expected to fall to 2,4% in 2020 but to some extend it's done some assessment; the Minister and National Treasury night know more, in fact they will know more. I just looked very quickly just before I came here on the internet and drew on that. It seems that they believe that the coronavirus will contribute to China's growth outlook being substantially reduced to 4,9%. Last year for what is worth, it was 6,9%. Now ,this will actually mean that exporters to China, it's noted, are likely to see the exports decline both due to the weakening demand from China and the decline obviously in key commodity prices. The most exposed are obviously mining economies and that needs us. South Africa more over, it is argued by the OECD, if I got this right. The manufacturing sector will also be affected particularly in respect of metals, which has, of course, the consequence that you need lower demand for minerals and mineral inputs for South Africa. Importers, of course, might be faced with supply constrains and an associated increase in inflation. Tourism, this affects us very, very seriously, we will be negatively affected.
Now, obviously the committee is very concerned about the contraction of the growth rates in the last two quarters; it comes on the hills of a very low growth rate forecast for 2019-20 and 2020-21 and over the three years, we expecting it at most to get to 1,6%.
Now, it's interesting when the Reserve Bank briefed us in February this year, they stated that South Africa's projected growth is 'disconnected', to use their words, 'unusual' to use their words, as there's usually a much closer correlation of the country's growth to the global and sub-Saharan growth averages. We are far removed from that even before the virus afflicted us.
So, now, as usual all the experts not just the private sector, not just the rating agents say that our growth focus are linked partly to the global economy but significantly to our failure to effect structural reforms; and we go on and on, both the National Treasury and ourselves as Parliament, structural reforms, structural reforms, it's like a mantra, for years we have been saying it. Some of the issues that are currently on the agenda have been there for many, many years.
Chairperson, I think it's fine as we have said repeatedly to critic the executive, that's our job, but the truth of the matter is if we
more effective and efficient in our oversight role as required by the Constitution and many, many pieces of legislations that the majority party process through, sometimes for the cooperation of the opposition parties in this Parliament. If we did all the things we are required to do comrades, colleagues, then the prospects of growth, job creation, tackling unemployment more efficiently will be so much easier.
In my view and the view - I think - of the majority in our committee, we are complicit as the Parliament because we do not implement our role effectively and efficiently. You know, the thing is that we need to do that more than ever, more that ever we need to do that...and as I started by saying we need to work together, let's start in the finance committee, working more efficiently and effectively together and hopefully other committees will also in both Houses of Parliament, actually do what we are required to do. 14:09:22
So, the committee is obviously concerned about the low growth, leading to a R63,3 billion downward revision to estimates of tax revenue in 2019-20 when compared to the forecast in the 2019 budget. The committee expresses it's concern that this may further deteriorate, given the economic recession announced by Statistics SA
recently and of course the coronavirus as just mentioned. We welcome the fact Minister that value added tax, vat, increase has not come about for this year but your officials said it may well happed next year or the year after. Now, we think that this is the last measure and for all over, the committees on the both sides of the Houses feel that ... on both Houses rather, that we would not like a piecemeal approach to additional revenue. Obviously you can't as the National Treasury, say from the outset well ahead of time, well before a budget, you know the Mid Term Business Plan, MTBP, has provided a framework anyway for some degree of predictability, exactly what you are going to do on tax increase.
But the broader policy discussion is what we urging and we note for example that you are suggesting inspector-general. Now, let me read to you what the committee feels. The committee notes the proposal - it says no more than that - to introduce an inspector-general to oversee SA Revenue Services, SARS. However, the Committee of Finance would like to be briefed jointly in the next quarter on the overall changes being proposed to SARS including those that emerged from the recommendations of the Nugent Commission, so that we have an overall sense of the restructuring of SARS rather the current piecemeal approach of Treasury.
The Budget review of the Standing Committee of Finance of October last year said that:
The committee believes that there is a need for a discussion and clarity on the recommendations of the Nugent Commission and the Davis Tax Committee, as the former recommended the appointment of the inspector- general and the latter, the establishment of a governance or advisory board. The committee expects to be briefed - it's noted in that report - by National Treasury and SARS, on the Kats Commission, Davis Tax Committee and the Nugent Commission on the administration of SARS, once a discussion document on these issues have been finalised.
We more to be done on the digital economy, but I want to draw your attention toward the Parliamentary Budget Office, PBO, independently Minister I don't solicit it as the SA Communist Party, SACP member; this is what they say, right. It's sort of an argument that National Treasury also need to be more open-minded about the prospects of what it's possible not have a sort of sense of monopoly of wisdom, not that I am saying it does but that's the feeling sometimes one gets. Here it is Parliamentary Budget Office, PBO; argue that the micro-economic approach in the 2020 budget was too narrowly focused on the supply side intervention of the economy. It said that the
level of demand has been a serious constraint on economic growth. Fiscal consolidation, it said, has negatively affected aggregate demand and Gross Domestic Product, GDP, growth. It is submitted, that the speed at which the economy can grow depended largely on improving aggregate demand. It added, that's the PBO, to use the cost of business will be effective only if business have adequate demand for their products and you can read that it's there.
But I want to end on this note colleagues, that for all the difficulties we have, it's not all doom and gloom. We can get out of where are. If we didn't think so, we wouldn't be in this Parliament. We have an obligation to the people out there, who elected us to do what we have to do, to turn this economy around, to create jobs and to ensure a reduction of inequality.
This country is too strong, too powerful, has an enormous history that shows our considerable potential. We should never forget that we triumphed over apartheid in a relatively peaceful, unpredicted, unprecedented transition.
Archbishop Desmond Tutu didn't fall from the skies; Madiba didn't fall from the skies, even F W De Klerk and Inkosi Buthelezi and Constant Veljoen didn't fall from the skies. In all their ways they
contributed to where we are, but most of all we owe it to our people right now, to work together and deliver. Which is not to say we are going to succumb to what Treasury and the executive say but on the other hand as Parliament, we need to work with them where is necessary and exercise criticism and effective oversight of them when is necessary and towards that end that this report ultimately is pitched. Thank you very much Chairperson. [Applause.]