Sekela-somlomo, zihandiba, nezinxiba-mxhaka ezikhoyo kule Ndlu, ndivumeleni ukuba ndibethe koomofu, okokuqala ... [Deputy Speaker, esteemed honourable guests in this House, allow me to be brief. Firstly ...
... let me, on behalf of the ANC, express our sincere condolences to the Deputy Minister, whose mother passed away and was laid to rest this past Saturday.
Sithi ke singumbutho wesizwe, ungakhali ngathi awunathemba, ndoda yakuthi; sikho sonke. [As the ANC, we say, you must not lose hope, my brother; we are all with you.]
Judging by the overwhelmingly positive response from almost all sectors of our society, this year's Budget has indeed been a ground-breaking one. What drives this response is the public acceptance of the fundamentals of our policies to transform the social and economic landscape of this country. Within the economic transformation trajectory, the Budget had to deal, in the short and medium-term, with the five key priorities of the ruling party.
Given the constraints of our mixed economic system, the success of the funding and resourcing of these priorities will require a creative balance in our fiscal, revenue and tax policies. These policies have to be geared towards supporting the key focus areas of our economic transformation agenda, identified in the New economic Growth Path strategy, which seeks to alter the structure of our economy. It specifically puts forward a developmental approach that is based on the enhancement of inclusive growth and improving sustainability. This approach should serve as the criterion by which we should assess the soundness of our fiscal, revenue and tax policies, as they are critical levers in funding our priority programmes.
According to the New Growth Path, the core measures for sustainable growth are an improved balance on current accounts, combined with a greater reliance on domestic resourcing of investment. Some of the strategies proposed to achieve this include, among others, tax measures to stabilise capital inflows and outflows, measures to encourage the redirection of domestic funds towards developmental investment, supporting company investment in the local economy, and by targeted utilisation of financial savings. These measures can be achieved through a well-balanced regime of fiscal, revenue and progressive tax policies.
The New Growth Path's emphasis is on expansion of public spending, balancing it with an appropriate and progressive fiscal, revenue and tax policy regime and improving economic efficiencies. Its main thrust is spending on production-based, state-led investment, as opposed to a predominantly consumption-based approach.
Viewed against this model, the fiscal policy addresses some of the pertinent concerns going forward, such as stabilisation of public debt and how we focus on a qualitative shift in our spending patterns in the manner that is proposed in the New Growth Path. The fundamental qualitative shift is a strategic focus away from predominantly consumption spending towards a more production-based one. We welcome the Minister's announcement that this year, in due course, we will have a long-term fiscal trends report that will form the basis for a sustainable fiscal framework.
The tax proposals, as contained in the 2012 Budget Review, are equally consistent with our broad economic transformation agenda, identified in our New Growth Path. Those proposals that are most consistent are relief for micro and small businesses; an increase in effective capital gains tax rates; reforms to tax treatment of contribution to retirement savings and further reforms of the tax treatment of medical scheme contributions.
As is the case with the fiscal policy study, we equally welcome the announcement of the tax policy research projects to be undertaken during the 2012-13 financial year.
Umbutho wesizwe [The ANC] is encouraged by the overwhelming support these policies have received from the majority of South Africans, most of whom constitute the unemployed and the poor. We believe that these policies are indeed the correct ones to answer the challenges of unemployment and poverty faced by our people. The fiscal, revenue and tax policies outlined in this Budget will go a long way in supporting our economic transformation and development plan through, among others, expanding public spending on infrastructure investment to achieve exclusive and sustainable growth.
It is apt to recall the President's exhortation to write a new South African story about how, working together, we are driving back unemployment and reducing economic inequality and poverty. The incontrovertible truth is that our infrastructure continues to tell an old and ominous story of how an illegitimate oligarchy intentionally created high unemployment, deep poverty and extreme inequality. History is now presenting us with an opportunity to redress the imbalances of the past.
An infrastructure build of the magnitude confronting us compels a strong developmental state. Planning and monitoring have to be consolidated to ensure the effective implementation of concrete plans. The state must demonstrate that it achieves what it sets out to and its entities and departments have to discharge their mandate fully compliant with legal prescripts.
Fiscal expenditure must at all times be regular and in accordance with generally accepted accounting principles and in compliance with Treasury regulations and other relevant regulatory measures. Of supreme importance is the broadening of the skills base, with particular emphasis on scarce skills within the public sector, to ensure the requisite capacity to drive socioeconomic imperatives and accelerate transformation.
We welcome the R844,5 billion budgeted and approved for public sector projects. We agree to the rigorous assessment of all projects to determine the feasibility thereof. We have noted, as Treasury has, that public-sector capacity to implement projects is currently inadequate. However, we conceptualise the inadequacy referred to as a manifestation of a continuing skills deficit. Our earnest call goes to those private companies that either import or poach skills to engage in skills development of the currently unskilled and to extend training for newly qualified graduates.
We call on state-owned enterprises to prioritise skills development and mentorship to produce the requisite skills for the economy. We are also convinced that, properly handled, the public infrastructure build that was announced in the Budget offers a golden opportunity for artisan training. Our plea therefore is that these projects should not just offer employment for the skilled and unskilled but also ensure that the unskilled become skilled.
It is encouraging to note that Medupi and Kusile coal-fired plants are expected to start operating in 2014 and the Ingula Pumped Storage Scheme is on track to assist with peak capacity supply from 2014. Of considerable importance are the Republic's plans to provide 25% of generation capacity from renewable sources by 2030, in compliance with the Kyoto Protocol and the Durban Accord.
We agree with the hon President that we need an electricity price plan that will ensure that Eskom and the industry remain financially viable and sustainable, but which remains affordable, especially for the poorest of the poor. We will therefore await with keen interest Eskom's proposals on tariff management as our interests are always with the poor and the economically marginalised.
We are pleased with the recent completion and commissioning of phase 1 of Transnet's R23,4 billion new multiproduct pipeline. The pipeline is to increase capacity to meet inland demand and moderate road congestion by reducing the number of fuel tankers travelling between Johannesburg and Durban.
According to the SA Institute of Civil Engineers, municipal infrastructure is deteriorating in many places. Bulk water facilities, particularly in small towns and rural areas, sanitation in many municipalities and provinces, as well as rural roads are particular areas of concern. It is therefore important that we focus our efforts on the renewal of such infrastructure, because the dignity and general health of our people may be compromised.
We need to make use of project management expertise gained and lessons learnt in preparing for the 2010 Soccer World Cup to support infrastructure development. As noted in the World Cup experience, the inclusion of experienced engineers and other delivery experts will ensure better planning, assessment and implementation of projects.
The issue of fraud and corruption cannot be left unattended as it continues to hamstring service delivery efforts. We support Treasury in taking further steps to combat fraud and corruption, including strengthening the national procurement architecture, but we should go further and set up a procurement office. Vetting of all procurement officers is greatly welcomed as part of our campaign, as is developing a national price reference system.
We again call on South Africans, including those in the opposition benches, to heed the President's call to write a new story. May I remind the opposition that obligations freely assumed must always be observed and that oppositionism is reneging on a binding oath to promote the spirit and purport of the Constitution.
In conclusion, working together, we will do more to build infrastructure to drive economic growth and employment. Yes, the writing of the new story must begin in earnest. We therefore commend the political leader of the department and urge him to continue the splendid work he is doing. We are very proud of him, his team and the entire department. We are very sure that our funds, our finances and the infrastructure that we are talking about are spearheaded by hands that are committed and fully committed under the ANC and the ANC alone.