The challenge that the Minister of Finance and the Cabinet had was how we deal with a number of challenges we face. The first one is, our tax collections have gone down, R53 billion down and that is a hole that needs to be plugged and closed.
Secondly, Eskom, which we all agree plays an overarching role in the economy of our country, needs to be funded and you will say bailed out. Now, if - for instance - the government were to let Eskom go to the wall, this economy would collapse completely and everybody agrees that you need to support the state-owned enterprise because the economic and social life of our country hinges and hangs on the fortunes of Eskom.
The PRESIDENT OF THE REPUBLIC (Contd.): Now, those two... only those two... the lower tax returns... the support that we've got to give to Eskom have sucked out the money that we now needed to fund a number of programmes.
Now, funding those programmes was looked at very carefully by Treasury. And in certain cases we found that a number of departments as well as a number of provinces have not been able to spend all the money that they have been allocated. And treasury is the best-placed entity to be able to have a globe or globular look at all departments because they monitor this on an hourly basis. They have been able - if you like - to suck some money
out of those departments and those provinces that would ordinarily have gone unspent.
What we have sought not to do is to cut spending in a drastic way across the board. And it's been a process where, for instance, we've been able to agglomerate quite a bit of money from all over and the Minister of Finance did meet with his provincial MECs for Finance, he spoke to the Premiers as his did, of course, to his Cabinet colleagues. Everybody realised that we are in a tight budgetary situation or fiscal situation and everybody had to look at how their expenditure is currently configured. And it is from that, that there was a little bit of a come back.
Now, you would say that maybe you should have tried to find money elsewhere. The only way we could have done so is to go and borrow more; and borrowing more, ordinarily, is not the biggest challenge, except where, for instance, you are having rating agencies that are in the process of downgrading us, making our debt much more expensive. We knew that whilst it could have been an option to go and borrow more, right now it is not the most viable option.
We, therefore, had to look at how we, in a way, reprioritise. Reprioritise our spending and cut it down and it is for that reason that he also went to explain to the executive and it will hopefully cascade down even to Members of Parliament in terms of how we travel, in terms of our pay scales and all that.
Everybody focuses on the wage bill. The wage bill has gone up over the past few years excessively high and obviously there are discussions that are going to ensue with labour, so that labour is also in a position to understand precisely where the country is. And we hope that every South African will realise that we are in a situation where we've got to cut back on a number of things in order to save for tomorrow; in a few years, maybe two or three.
The tax collection will go up and we will begin to generate more growth into the economy and Eskom and other state-owned enterprises, SOEs, will be able to manage their own finances and we'll return once more to a much more balanced situation. That is exactly what we are aiming to achieve. The Budget Policy Statement that the
Minister released yesterday is aimed at achieving that; but also sending a clear message.
We are facing a dire situation but we are not yet out, we are still on our feet and we intend to correct a number of areas where we need to put things right, Eskom and tax revenue and whole number of things. We will resolve these problems. That I assure, that is the message I'm putting before all of us as South Africans. Thank you very much. [Applause.]