On that date the US dollar could be purchased for R3,15. When the hon President assumed office on 9 May 2009, one US dollar cost R8,64, while today a US dollar will cost you R12,28.
This is significant for a number of reasons: Firstly, the value of any country's currency could be described as the value of that country's shares, as if rands were shares and the market was the stock exchange. A company's share price is determined by factors such as the value of its assets, its past performance and, most importantly, the public's perception of how the company will perform in the future. The value of a country's currency is determined in much the same way.
On this basis, it is clear that offshore investors are losing confidence in South Africa as an investment destination. Our fundamentals are sound: We have better than average natural resources, availability of labour and a sound banking system. This can only mean that it is the political climate that causes the perception of our future performance to be so low - a political climate set and maintained by the ANC.
Secondly, it means that our currency has lost value in comparison with other countries' currencies. The exchange rate of the British pound against the US dollar, for example, has not changed at all since 1994, while the Japanese yen has actually improved in value against the US dollar in that period. If the rand had maintained its value, it would mean that a car currently costing R250 000 would only cost R64 103. Would you not agree that the average South African would be overjoyed if his or her R20 note could still purchase the equivalent of R78 today? What good news that would be for our poor people, if the few rands they do have actually had some value.
Thirdly, this would mean that our current budget total of R1,222 trillion could be covered by R313 billion.
Fourthly, the effect on savings is devastating. If we as a nation would save money, we could generate our own investment capital and reduce our dependence on foreign loans. This alone could reverse the poverty spiral. However, in order to encourage savings, one needs to provide an incentive. If I had invested R100 in 1994 at 5% interest, compounded annually, I would today have a total of R278,60. Very nice! But if I factor in the devaluation of the currency over the period, my original R100 plus accrued interest would be worth only R71,44 - and this does not take into account bank charges or taxes. This is certainly no incentive to save money.
So, what has all this got to do with the Division of Revenue Bill? Simply this, I find not a single rand of the 2015-16 budget being allocated to improving the perception of our country's future performance in the outside world. For all the negative sentiment expressed in this House against so- called white monopoly capital, it is after all that very same capital that we so desperately want invested in our country. When foreign capital flows into the country, the value of the rand goes up because when the perception is good, the demand improves and drives up the price.
Hon Minister Nene, it is my belief that you should follow the example of your brother Minister, the hon Pravin Gordhan, and get back to basics as far as South Africa's economy and the division of revenue are concerned.
While I am on the subject, hon House Chair, I take umbrage when hon Minister Gordhan refers to the rich tax evaders, while indicating those seated in the opposition benches. As far as I know, there are no Ministers seated on the left side of the House and Ministers earn considerably more than ordinary Members of Parliament. [Laughter.] I also know of no opposition members who own R246 million homes or who have received gifts of R25 millions worth of shares from mining companies. I could go on, but I think the point is made.
Equally, when hon Tobias says that the DA has no interest in the poor but is only concerned with big business, I feel compelled to correct her. Of course the DA is interested in big business because it is the big businesses that pay the big taxes that would enable a DA government to provide for the needs of the poor while creating opportunities for personal advancement of those same poor people, very possibly within those same big businesses where such opportunities could easily be created, especially if our currency had a better purchasing power.
Hon Mdakane told the House on Tuesday evening that there is no harm in merging municipalities - no harm to the people. I do hope that he will be on hand to explain this to the 66 councillors, at least 50 of whom are ANC councillors, in Sedibeng who will be out of work if the Gauteng merger becomes a reality. And does he believe that all the councillors in Mangaung were unharmed when they all took a dive in salary on becoming a metro because they failed to take into account that the merged municipality qualified at a lower grade than it had previously?
Hon Minister Nene, the budget as read together with the Division of Revenue Bill reminds me of the woman who received a call from her bank manager, advising her that her account was overdrawn. She replied by saying, "It can't possibly be overdrawn! After all, there are still cheques in my cheque book."
Minister Nene, I plead with you to be realistic in your budgetary projections. You do not want to reply to your grandchildren one day when they ask if you enjoyed your time in Parliament with the words, "Yes, thank you, but that's all I enjoyed." [Time expired.] [Applause.]