Hon Speaker, the ID is extremely concerned about the global economic meltdown, which could bring about a worldwide depression as bad as the one in the 1930s. This meltdown is already having a negative impact on our economic indicators, with our economic growth rate retracting, government revenues falling, commodity prices falling and a spate of retrenchments being announced.
As the Minister says, the storm is now over us and we will have to take action to mitigate its worst effects. In this regard, the ID maintains that we have to ramp up government spending in order to stimulate demand in our economy and to create jobs and provide relief to the millions of South Africans who continue to live in poverty.
In doing this, however, there are a few principles that need to be observed. Firstly, we need to make investments that will address the structural failures in our economy that prevented us from fully capitalising on the past period of high capital growth.
We must invest in our failing infrastructure and bring down the cost of doing business through addressing factors such as our exorbitant telecommunications costs. This investment must also maximise job creation through ensuring that local industries and jobs are promoted in providing for our infrastructural needs.
One clear opportunity in this regard is for the government to ramp up its investment in renewable energy, which will not only position us as leaders in the fastest growing industry in the world, but will also stimulate local industries and create hundreds of thousands of jobs across the value chain: from research and development, to manufacturing, installation, maintenance, and sales and marketing.
This Budget, however, has only allocated a paltry R55 million to renewable energy, while it continues to pump billions of rand into the nonperforming Pebble Bed Modular Reactor that does not hold out any potential for job creation.
We must also avoid rewarding mismanaged enterprises with expensive government bailouts, such as the R1,6 billion given to SAA. How can you justify such a bailout and, in the same breath, question the affordability of extending the child support grant to 18-year-olds?
Minister, the grant system is without a doubt the most effective poverty alleviation measure that we have, and numerous studies have already shown that extending the grant will reduce the high school dropout rate in this age category.
Overall though, Minister, the ID welcomes this Budget and its significant increase in government expenditure during this difficult period. We specifically support the increase in health expenditure and we agree that we have to find ways of reducing the massive inequalities between the public and private health sectors.
While expenditure has increased in the criminal justice sector, the bulk of this seems to be going towards the DNA database. The ID questions why this has to cost R6 billion and which entities, both local and foreign, will be involved in supplying the components for it.
Finally, on the social side, the ID believes that more emphasis should have been given to hiring thousands more social workers and channelling more government resources to those NGOs and community-based organisations that are tirelessly providing services which the state is obliged to provide. Working together should not just be a slogan, but should be matched with budgetary resources. I thank you.