... to avert the plunge of our economy over the fiscal cliff. That is the point at which all of
government revenue is spent on the public sector wage bill, interest repayments and social grants.
If government behaviour does not change now, there would be no money for service delivery. While other African economies growth surges ahead, ours does not, because government discourages entrepreneurial behaviour and is now amending our tax laws to make venture capital investments even more difficult.
A DA government will liberate our economy and entrepreneurs will thrive as they have done in South Africa's fastest growing economy, the Western Cape. Our taxation laws should facilitate accelerated economic growth.
Although the Minister has said what is necessary to avert the fiscal cliff, nobody believes that he will take any action. The rating agencies did not believe him. Moody's and Standard & Poor's immediately responded by downgrading our credit outlook to negative.
The only way that government can avoid the fiscal cliff, is to cut spending or increase revenue. There are a number of taxation amendments proposed and they still do not go far enough to generate the revenue that the Minister will need the numbers work. The growing deficit reflects that reality. What the proposed tax laws do, is continue to increase the tax burden on already hard at consumers whose only response can be to reduce their spending elsewhere and further shrink our economy. Increased taxation on the tobacco industry, although it is welcomed, will not generate enough revenue neither will proposals to more heavily tax our vital motor industry.
A developmental state can work only if there is a capable and competent government, and we have neither. Instead of dabbling on the income side of our balanced sheet, government needs to focus on its spending.
The public sector wage bill is spiralled on the back of a failed cadre deployment fiasco that resulted in millionaire managers feasting on the people's money, while service delivery dries up with no money to pay
salaries for frontline service providers such as educators, police and nurses. These are the basic building blocks of service delivery and they are broken. They are broken because the public enterprises model has failed and it cannot be fixed.
Billions in bailouts have been squandered on the zombie enterprises Eskom and SA Airways, SAA, whose executives pay themselves millions in bonuses, when they are hopelessly bankrupt and churn out one failed turnaround strategy after the other. A DA government would split Eskom, and allow independent power producers to inject much needed efficiency into the power grid. Our government has proven unable to deliver a reliable electricity supply and it should allow those who are able to do it, to get on with the job. A DA government would sell SAA, or, more likely, give it away to someone who will be willing to take it and pay back the people's money that it never should have received to keep it artificially alive. [Applause.]
It would also be possible to increase social grants to the most vulnerable members of our society if public
finances were better managed. A DA government would do just that.
Sadly, Minister, your little Aloe is not going to survive, unless you do what you say you will do and it is very clear that you cannot cut spending. So, in February, we will see further tax increases that would crowd out more economic activity and further dumped economic growth.
We will not support the taxation amendments. Thank you. [Applause.]
IsiNdebele: