Nndaa, khakhamela, dada muhali, marungadzinndevhelaho ... [Praise.]
With regard to the responsibilities vested in me as of now, it is my pleasure to introduce the report of the Standing Committee on Finance on the Revised Fiscal Framework, as presented by the Minister of Finance on 27 October 2010 in the Medium-Term Budget Policy Statement.
Let me indicate that the main thrust of the Fiscal Policy Framework is premised on a countercyclical and expansionary policy approach informed by the need to stimulate job creation, growth and development to best address the objectives of a developmental state.
Amongst other things, it seeks to promote the creation of decent work and sustainable livelihoods by strengthening labour market institutions; further the expansion of education and opportunities; promote health; ensure rural development underpinned by food security and land reform; enhance safety and security and fight corruption; and advance settlement philosophy and programmes and, amongst other things, local government that addresses the needs of the people.
Through strategic state intervention, the achievement of the above- mentioned priorities will ensure that a developmental state provides equitable wealth redistribution in the economy. Fiscal policy is one of the key policy instruments available to policy-makers to redirect the economy in order to activate the stated objectives of government.
The monetary policy is a key policy instrument of the Reserve Bank which focuses on monetary intervention in the economy. This includes management of interest rates, price stability, exchange rates which must be utilised to actively promote the creation of decent employment, economic growth, broad-based industrialisation, reduced income inequality and other developmental imperatives.
On the balance of evidence, the Revised Fiscal Framework as presented to this honourable House is consistent with the government policy which is directed towards the maintenance of social expenditure and economic infrastructure investments. It also provides stimulus packages for economic activities as stated in the Medium-Term Budget Policy Statement of 2010.
The basis for the committee to analyse the Revised Fiscal Framework and any envisaged changes remains the adopted fiscal framework that laid the basis of the Division of Revenue Bill and other relevant money Bills tabled earlier this year. The Revised Fiscal Framework as announced in the Medium- Term Budget Policy Statement does not show any major shifts that are inconsistent with the government objectives, which are geared towards the expansion of public spending directed towards the maintenance of economic investment, particularly in infrastructure - social and economic.
In essence, the main thrust of the revised fiscal policy is to ensure a balance between expansion and spending in order to address problems of unemployment and the need to reduce the levels of borrowing and to mitigate against long-term implications of debt service costs. The committee has noted the positive aspects of South Africa's countercyclical policy designed to steady the economy and to protect core social and economic programmes from undue volatility.
In pursuing this trajectory, in the past the government realised some surpluses, particularly when the economy was growing at a higher rate. Let me also indicate that the Revised Fiscal Framework as tabled before this House seeks to achieve higher gross domestic product, GDP, growth and reduced inflation; a recovery in tax revenue as a ratio to GDP; moderation in the real growth of non-interest expenditure; a reduction in the proportion of expenditure to GDP over the Medium-Term Expenditure Framework, MTEF; and a rise in government debt service costs from 7,5% of expenditure in 2010-11. Most important is the R977,2 billion made available for spending next year; and the additional R89 billion for public expenditure over the next MTEF period.
Before I recommend the committee's report and proposal, let me also take this opportunity, on behalf of the committee, to congratulate the government and the National Treasury in particular, on being rated number 1 amongst 94 countries by the International Budget Partnership in its 2010 Open Budget Survey. [Applause.]
The survey is based on the degree of transparency that government is able to display in providing budget documentation and information to allow for both public participation and oversight by the public in the process of budget decision-making, so that the citizens can at all times hold government accountable for the public purse.
Equally, we must congratulate the collective efforts of our electorate for keeping government under constant scrutiny through parliamentary committees and public engagement. May I also congratulate committee members and thank them for their willingness to deliberate on the Revised Fiscal Framework as presented within a very short space of time, as dictated by the parliamentary programme. Despite those limitations and obligations imposed on us, the committee has succeeded in applying its mind to the content of the document.
Amongst other things, based on those deliberations, the committee recommendations are as follows: National Treasury should take appropriate steps to accelerate the rate of decline in expenditure; provide the committee with a detailed report on how government will rebuild a fiscal space that we seem to have lost during the recession; provide the committee with a detailed report on the impact of the fiscal framework on a value- added tax zero rating, particularly on school textbooks; and government should resolve the issue around Southern African Customs Union revenue- sharing formulas as a matter of urgency.
Since it has become evidently clear that to realise the full implementation of the Money Bills Amendment Procedure and Related Matters Act, Parliament's programme would require a total overhaul. We therefore recommend that the House accept the Revised Fiscal Framework as tabled.
Let me also say and indicate up front, that the ANC supports the Revised Fiscal Framework.
Lastly, on behalf of the committee, I would also like to congratulate government under the stewardship of President Jacob Zuma, the Minister of Finance, and his deputy, together with the National Treasury staff for their incisive collective efforts on the presentation of the Medium-Term Budget Policy Statement. I thank you.
There was no debate.