Chairperson, hon members, thank you to all the speakers this afternoon and to all the parties for their support of the Budget tabled and their support in this First Reading debate. First Reading debates, in their tradition, are highly political events. The fact that we are now within the two-month zone of elections, meant the debate this afternoon was no exception.
But I think it's also important to recognise that there are certain features of the contributions made here this afternoon that we must be aware of. One of them is that this is a particularly emotive period in the history of this Parliament. The end of the third Parliament is a particularly emotive period.
A number of members who have been here since 1994 and some of those who have been here even before then have decided to call it quits. So part of what we heard in the Budget debate this afternoon is a very emotive sense of people who will take leave of something that has been all of their lives for a very long period.
I think we want to recognise that, and we also want to recognise the contributions of all across the divide of the House. We want to recognise that and the contributions of all because above all, we are here to serve our people. I think we must recognise that and pay tribute to Members of Parliament for their service. [Applause.]
I also think we need to recognise the contributions of the many who stood up here today to announce their departure and some of those who did so in the debate on the state of the nation address. I think there is also something else we together as colleagues in this House must recognise, namely the fact that a number of us in this House also have an uncertainty about our future because whilst some are privileged and can choose to depart, others don't know.
This is in the character of the political animal in all members, even those who have not declared their departure and may later wonder why they didn't actually have a farewell speech. It is important that we recognise the contribution of the members. I don't make this remark light-heartedly.
It is a big, big issue in all our lives. The need for certainty and the need for continuity in our lives and where we choose to be is a big, big issue. I want to pay tribute to all the members who worked with us in the portfolio committee and the Joint Budget Committee and also those with whom we have interacted as Members of Parliament over the past 15 years. [Applause.]
The debate this afternoon is less about numbers - a number of colleagues have referred to that. I think the debate is about the choices we make as a country in times that are outside of our immediate sphere of influence. This is what I think we need to understand.
To some extent Dr George prompted this debate to be advanced this afternoon. As for the key issue before us, I am one of those pessimists who don't think that this issue is going to be resolved within the next year or two. I think we are in for a pretty long haul as we try and get the global economy through the trough. I think it is going to be a long haul.
I think one of the first questions that confront us is: What do we know and where do we know it from? These issues are important because we need to understand the nature of the crisis. We also need a yardstick against which we can measure decisions taken by government here and also by governments elsewhere.
The key issue in respect of what we have now - and it is very different from the Great Depression - is that right now the world is very highly globalised. Within this highly globalised world there are huge imbalances. So if indeed we observe what the remedies are - and I go back to what Dr George offered - with all due respect, Dr George, I think your remedies appear too close to those which were offered in the USA between 20 January 2001 and 20 January 2009. This is a period during which you had the complete attrition of the state, the unfettered control of markets and the excesses that the world has lived through.
Very important in understanding this period is the testimony of Dr Alan Greenspan to Congress on 23 October when he said: "There has been a fault in the approach that I've had." I think it is fundamentally important that we understand this and understand the turning point because in this period you now have a situation in the United States.
Forget about Wall Street and the Detroit Three. Consider the fact that there are 43 million people in that country who don't have access to health care because they are uninsured. Consider the millions of people who are just disgorged, without much protection beyond a short period of unemployment insurance, because the labour markets are free and unregulated. Consider the vast differences between schools for the rich and schools for the poor. This is measured in the outcomes.
As we begin to understand this, then, I think we can go back to the question: What do we know and where do we know it from? The proposals advanced by President Obama are already being lobbied against. The US$500 000 limit on bank executives is being lobbied against so extensively, as is the proposal that a bonus should not exceed one-third.
But if you go into the detail of the legislation that President Obama signed two days ago, there are features that are exceedingly worrying because they are highly protectionist, highly nationalist and take the country back as though it's not part of this global entity. We need to understand that and ask questions about what we know, and deal with this Budget so that as the debates continue over the next few years, we have tools with which to measure and gauge the effectiveness of the decisions of government.
Part of what we know is frequently masked by what we assume. One of the most abused assumptions is what Adam Smith said about the "hidden hand". I think he only used the phrase twice in the Wealth of Nations - if he used it more times it may be thrice. People sometimes forget that, in fact, his more important work is the Theory of Moral Sentiments; and the fact is that you must have ethics, and governments have a role in respect of ethics.
This assumption that Adam Smith is all about markets to the exclusion of the state therefore has to be fundamentally wrong because it is not supported by reality.
Similarly, I suppose, there is this assumption that the strong left- wing view includes a view that one must have very high deficits. This is certainly not a view espoused by Karl Marx in Das Kapital, because he argues, and I quote:
The public debt becomes one of the most powerful levers of primitive accumulation. As with the stroke of an enchanter's wand, it endows barren money with the power of breeding and thus turns it into capital, without the necessity of exposing itself to the troubles and risks inseparable from its employment in industry or even in usury.
To ask, "What do we know and where do we know it from?" becomes very important as we try and take decisions over this next period. In the same way Keynes' work in the Great Depression was fundamentally important. However, it was important for a time when countries were highly sovereign and had control over the instruments of the economy from monetary policy to trade policy. The issues of aggregate demand driven by Keynes clearly had a place in a large economy that was somewhat isolated from the rest. It doesn't yet deal with the problem that obtains here, which is global imbalances.
The problem we have in the world is in China. China now has savings equal to 54% of its GDP. The country has foreign exchange reserves of some US$1,8 trillion. It is the world's workshop - it manufactures everything for the rest of the world - and the US consumes what China produces and lives off the savings of China.
This in many ways defines these global imbalances. So when countries take these highly nationalistic decisions, what doesn't disappear is the extent of global imbalances. Unless we put heads together and unless we mandate government to sit in the G20 and in all the international forums to deal with this issue, all we have in the endeavour to deal with the crisis is palliatives. That is the problem between the present and the future. This is why the question of what we know and what we don't know becomes so fundamentally important. These issues, I believe, should continue to dominate; and hopefully the fourth Parliament in its early term will have a very intense debate about this because I think it is fundamentally important.
I would also like to turn to what the hon September said. It is very important that we recognise certain proposals to deal with vulnerable workers - low-skilled workers at risk. But in my view it is equally important that we also have proposals to deal with those who are not yet vulnerable workers because they remain unemployed. So the issues of school- to-work transition are important.
It is unfortunate that you categorise these proposals as coming from the DA because in fact, the hon Sibhidla also focused on school-to-work transition because that is fundamental. There are too many young people in society who have left school without the possibility of ever finding work. They sit on street corners and get up to mischief in our communities.
This is more than an economic problem; it is a social issue that produces social crime. We must deal with the school-to-work transition, and I think this moment of crisis presents us with the opportunity to deal with that as well.
Where is my comrade Eddy Trent? Oh, there he is. Comrade, I think what makes the truth inconvenient is that there are no easy done-and-dusted proposals about corruption. This is inconvenient because you so badly need to show how corrupt we are; it is inconvenient that you can't find it because, inconveniently, it is not there!
Let me respond to the hon Pheko - he is not here. Do you represent him, hon Godi? [Interjections.] No longer? [Laughter.] Let me repeat because he misses what I'm saying. The government cannot create sustainable employment except for public servants. Expanded Public Works Programmes are important, but they are of short-term duration. They are not permanent. We must continue to engage in this issue. But I think government is going to be a poor owner of barber shops, corner shops, local bakeries and stuff like that. We are not going to be very good at that.
A number of colleagues have raised the issue of SAA - I hope my time runs out! [Laughter.] The hon Bekker says he hopes that SAA will not be back in a year or two. I don't understand why they would wait so long. They were in Parliament yesterday asking for more. [Laughter.] I think there are key issues that will perhaps be taken up again.
When you have these entities, what is the point at which you might be considered to be throwing good money after bad; what is the point at which the absence of an intervention might actually sink something that otherwise could be brought to sustainability? This is especially the case in a competitive industry where we need to strengthen the balance sheet. Then we can say, "We have now taken off your training wheels; go and sort this out."
The problem, of course, is that when Members of Parliament discuss this they remember the food they had on the plane; the number of times the planes were late; and the number of times they were kicked off the plane even though they had boarding passes. [Interjections.] The whisky? That too! That is in fact not what the restructuring is about.
I think that with Eskom we need to exercise choices. The hon Greyling is very big on green energy, but green energy costs. Now what would electricity cost and how would we deal with these issues? These matters are not going to go away, partly because Eskom has been in this position of privilege for more than a century when it didn't need fiscal transfers. Now it finds itself in a position that it can no longer do that. So what is the rational approach that government must take, and how does Parliament intervene in that process?