Thank you, hon Deputy Speaker, hon Deputy President, hon members, comrades, distinguished guests - there are no guests; today's debate marks the culmination of a long journey that started on 23 February 2011, when the Minister of Finance, hon Pravin Gordhan, tabled the Appropriation Bill, B3 of 2011.
This Bill signals the ambitious intentions of our government to create jobs. President Zuma declared 2011 the year of job creation. In the February state of the nation address, President Zuma declared:
Our goal is clear, we want to have a country where more South Africans have decent employment opportunities, which has modern infrastructure, a vibrant economy and where the quality of life is high.
We South Africans have little chance for illusions about the enormity of the task we are engaged in to reverse centuries of subjugation and deprivation. On this, the 56th anniversary of the Freedom Charter, we must rejoice in the inexhaustible resolve of our people to be free. Our organisation, the ANC, has gone from strength to strength - no wonder its prestige at home and abroad has never been so high. The Appropriation Bill we are debating today is firmly responding to all the developmental issues raised in the Freedom Charter. There is no doubt that great progress has been made by the ANC-led government since the dawn of democracy in 1994.
Of course, hon Deputy Speaker, we are the first to admit that there are still challenges to overcome, especially in our rural areas. The ANC government will work side by side with our people to confront unemployment, poverty, illiteracy, the scourge of HIV/Aids and other ills facing our country. We are at the pinnacle of the Budget Vote process and the quality of our debate today must be informed by the political enrichment and valuable inputs in all 38 Budget Votes.
We have agreed and sometimes disagreed as political parties. Essentially, as public representatives, we are faced with the duty to ensure that the Appropriation Bill responds to the hopes and aspirations of our people because it is the lifeblood to projects and programmes that will benefit them. All too often we do not remind ourselves that it is the Appropriation Bill that we look to, together with the Division of Revenue, as the vehicle to deliver on the policies and priorities that our people endorsed when they voted the ANC back into power, confirming that it is the ANC and its policies and programmes that our people were endorsing.
While we have a constitutional and legal obligation before us today, what is fundamentally important is the economic and political considerations that inform the Bill. The Constitution and the Public Finance Management Act requirements are what we are bound to follow in order that money may be withdrawn from the National Revenue Fund. The Appropriation Bill reflects political and economic choices. Pro-poor macroeconomic planning requires going beyond the usual growth and stability focus. It requires a nexus between stability, growth, sustainable development and employment creation.
The 2009 ANC election manifesto outlined this when it stated that the following was necessary: the major scaling up of industrial policy with significant resources; state investment in the productive sector, especially in manufacturing and agricultural production; reviewing developmental financial institutions to support research and development and entrepreneurships; supporting the co-ops sector and small business development; ensuring high investment in education and training; implementing a larger national youth service; focusing on rural development, land and agrarian reform, improving access to health care and the introduction of the National Health Insurance, and so forth.
These ANC commitments have since become government programmes. In our debates there have been those who have questioned whether our macroeconomic framework can sustainably afford to absorb the funding requirements for these priorities. The Financial and Fiscal Commission, in their submission on the Appropriation Bill, raised a similar point but for a different reason. There is no doubt that some of these priorities can be absorbed by the fiscus, given the commitment to savings and cutting of unnecessary expenditure. The acceleration of these demands and priorities has meant more proactive and decisive deficit-financed expansionary macroeconomic planning.
Critics of deficit-finance expansionary macroeconomic planning argue that the borrowing always results in a heavy tax burden on future generations, while some argue that deficits have no long-run impact on outputs. What many of these perspectives fail to take into account is that the opposite effect results in growth in the short run. If a government uses a deficit to invest in productive infrastructure and, to some extent, income transfers to consumers, this will have both a supply and demand side effect on growth outputs - provided the economy has not converged. The expected growth in the economy then drives consumer spending instead of consumer savings.
Secondly, the expected growth from such spending usually leads to greater employment, an increase in economically active agents and thus widening the tax base to support future repayment of debts. The error in the thesis that future generations are burdened by higher taxes if expansionary deficit financing is used, is an assumption that economic growth remains relatively stagnant and the numbers of economic agents do not increase.
The Appropriation Bill is about enabling the State to meet the needs of the people as expressed in the Constitution and through the 2009 national and provincial elections and 2011 local government elections, both of which the African National Congress won with an overwhelming majority.
Eradicating poverty and ensuring job creation is the principal task of the Appropriation Bill. The electoral mandate, which we have been given, determines the priorities of the appropriation. The ANC as an elected majority party gives a mandate to government to implement its electoral mandate. This mandate is informed historically by the plans we laid down as the ANC. High unemployment rates and relatively low wage employment are contributory factors to inequality, low levels of human development, social polarisation, poverty, high levels of crime, illnesses and other forms of social stresses the country is currently experiencing.
In the short and medium term, unemployment and low wages lead to an increase in demand for social security for the majority of the people and a low tax base, which would in turn adversely affect economic growth. It is for these reasons that the ANC government has prioritised job creation and decent work as one of the most important programmes for this financial year and in the medium-term budget plans. We must build a more inclusive society, and putting more people to work will contribute to human development, income redistribution and social cohesion.
Broadening economic participation assists in curbing dependency, countering crime and reducing poverty, illness, alienation, mental stress and social exclusion. Government has adopted the New Growth Path and this is the first Appropriation Bill since then. There is obviously an expectation that we shall be able to see the beginnings of an influence on this macroeconomic framework. The New Growth Path identifies areas where employment creation is possible on a large scale. It develops a policy package to facilitate employment creation through a comprehensive drive to enhance social equity, mobilise domestic investment around activities that can create sustainable employment and strengthens the principle of 'together, we can do more' through strong social dialogue, focusing on all stakeholders to work for growth through employment-creating activities.
The Appropriation Bill is about how we implement these priorities within the framework of government programmes. It is about ensuring a financial framework for the executive which can be monitored and ensure accountability for the correct usage of funds appropriated and value for money. Since the second term of 2011, we have engaged with the government on their Budget Votes. These have been debated and subjected to scrutiny in order to assess whether the money asked for and appropriated by Parliament will indeed meet the needs of the people and the State in the 2011-12 financial year.
In this process, in fact, we are carrying out a number of interlocking and important functions of oversight. When the departments come and account for how they have used the funds appropriated for the past financial year and articulate their Budget Votes for the next financial year, we are exercising an important oversight tool of accountability, assessing the extent to which the State has the capacity to effectively and efficiently spend the money it is requesting. That assessment gives Parliament the real power of dealing with public funds and, as public representatives, of acting in the best interest of the people and the nation.
This raises the critical need for monitoring and evaluation capacity here in Parliament, in order that committees can effectively carry out oversight and make a significant contribution to good governance. The realisation of this potential is dependent on the way in which the monitoring and evaluation mechanisms are designed and implemented. For the future, this will become one of the critical criteria when we apply our minds to the Votes of funds as part of the Appropriation Bill.
Appropriately, in the middle of the Budget Vote process, the Minister in the Presidency responsible for the National Planning Commission released in this House the "diagnostic overview" report. Critically, the diagnostic overview examines the vexing question of the underlying causes to the main and contradictory challenges facing the nation. Its approach is typically and correctly a research methodological approach, scientifically extrapolating the base of the contradictions and not the superstructure. It emphasises cause and effect in its approach. It deals with the essence of the contradiction and not the form. Its approach, therefore, is dialectical. Its relevance for all political parties, National Treasury and other departments is that it forces us to rethink and re-evaluate the rationale for why we are doing what we are doing when we appropriate funds.
Importantly, it states that "if South Africa is able to reach broad consensus on its principal national challenges, it would stand a better chance of coming up with achievable solutions". We would do well to understand this statement, for it is equally applicable to the Appropriation Bill debates. As we go forward with the medium term expenditure framework, MTEF, the diagnostic overview report becomes a tool to unlock our thinking on the economy and policy and what informs each appropriation in the context of human conditions, material conditions, nation building and institutions of governance. Going forward, this is a tool that we need to apply in determining future Appropriation Bills. Our achievements so far are driven by a commitment to do better, to fix what is wrong and to deliver a better life for all.
The ANC has identified, in the short term, priorities that need urgent allocation of financial resources over the MTEF. Employment creation is our major area of focus and this has meant aligning priorities for the 2011-12 financial year through this Appropriation Bill. As we said in our January 8th statement: "To implement this goal, the ANC and its government will rally the country behind achieving meaningful economic transformation and job creation."
The Bill had to be assessed against the priorities of the ANC in government and its funding priorities. We need to ensure that this budget is used effectively and efficiently to achieve the mandate given to us by the people to pursue economic and social transformation. In adopting this Bill, we are going to intensify our oversight role in Parliament. We will vigorously ensure consistent monitoring and evaluation of the implementation of the programmes funded through the adoption of this Bill.
In conclusion, let me thank all the members of the Standing Committee on Appropriation and the staff for their contribution in the process leading up to this debate. However, I need to caution them that what lies ahead will require considerably more effort, time and resources if we are to do justice to meeting the obligations of the money Bills legislation. May I also express appreciation for the working relationship we continue to have with the Minister of Finance and the National Treasury, who continuously help us to manage the respective distinctive roles and responsibilities we have. The ANC supports the Appropriation Bill, B3 of 2011. I thank you.