House Chair, it has not been an easy three years for the hon Minister of Finance since he delivered his Medium-Term Budget Policy Statement for the first time in 2009. We were at that time officially in a recession. He was passed the ball with the assistance of the President by the former Minister of Finance at a very difficult time. Matthew Lester said: "He has received a hospital pass." In rugby terms that is when you refer to passing of the ball, usually from the flyhalf to the inside centre, when the flyhalf tries to avoids a tackle but sets up the guy he is passing to be tackled with the ball.
From 2006 until 2009, we have seen alarming growth in the state wage bill, now consuming 40% of our national budget. This is something the hon Minister inherited from his predecessor to deal with now in recent budgets. Owing to tight fiscal policy by his predecessor, enough space was created to deal with the recession, but he was left with a huge backlog in infrastructure development for Eskom.
The Reserve Bank faces a difficult time regarding the balance of payments and to convince international investors that South Africa is the place to be. So, was it a hospital pass? If it was, the whole team suffers when your midfield attacker is hard-tackled with the ball. It is all about regrouping: trying to secure the ball and planning your next move, but it becomes a team effort, and playing conditions beyond your control start to affect your game plan.
Outside conditions like those in Europe come into play. The chief economists of the Bank of Austria and of the Bank of Singapore think Europe will be better off towards the end of 2013 if it can survive the current political crisis. Last week we saw for the first time combined strikes against austerity across Europe. France was yesterday stripped by Moody's of its coveted AAA credit rating.
Sir Mervyn King of England warned that Europe must get used to no growth or very slow growth. Greece's GDP is now 17% lower than in 2008. Youth unemployment is at 53% in Greece and Spain, and at 34% in Italy. In Greece, you bring your own food and sheets when you go to a state hospital. In Greece, wages have gone down by 11% and so too in Portugal and Ireland. Austerity is not well received in Europe, and doom and gloom remain part of daily reporting.
With President Barack Obama determined to deal with and avoid the fiscal cliff, all eyes are on China - how China will do under new leadership. South Africa cannot ignore all these factors. We are not the new Greece; we are not railing helplessly against austerity measures because of reckless overspending; we are not marching towards a fiscal cliff. But we cannot avoid what is happening elsewhere. It is time to be conservative, and time for all of us to take joint responsibility.
We are not in a debt trap, but ratings agencies have felt that our key economic and political indicators are now pointing in the wrong direction. We should deal with that; all of us. The reassurance by the hon Minister that our fiscal trajectory is sustainable and realistic is good, but we are faced with two big unknowns, both out of Treasury's control: they are the international economic situation and the state of leadership in South Africa. We are not acting as a team any more.
Certain departments are not doing their jobs. The Standing Committee on Appropriations engaged with these departments regarding their budgets' performances. We remain concerned that most departments lack capacity to implement government's priority programmes. The committee remained worried when seeing critical department failure to draw up workable plans over the Medium-Term Expenditure Framework period to utilise appropriate budget towards improved service delivery.
The Departments of Water and Environmental Affairs, Public Works, Human Settlements and Communications failed the test. We want to register our unhappiness at how the Department of Public Works' lack of capacity to budget resulted in overexpenditure in auxiliary services. Such departments are not assisting in regrouping our economy. Minister, even if you hang on to the ball after the tackle, you cannot keep it without support. You will be penalised. Let us avoid that and deal with failing Ministries; failing departments; failure and overexpenditure in state-owned enterprises; and provinces not doing their jobs.
The lack of implementation and the recent strikes in the mining and farming industries have focused the need for reform in labour relations in South Africa. The signs of institutional failure are evident in these events. We can no longer avoid the fundamental reconsideration of our labour relations. The hon Minister has hit the brakes at the right time on expenditure. Cope shall support both the fiscal framework and the Adjustments Appropriation Bill. [Applause.]