Madam Chair, consolidated non-interest expenditure by all spheres is set to increase at an annual nominal average rate of 11,9% over the next three years or 6,2% in real terms. Social services expenditure is set to increase at an annual average real rate of 6% over the next three years. Social expenditure therefore increases at a faster rate than expected GDP growth. Given the huge resources now at the government's disposal and the increase in the tax to GDP ratio, this is not surprising. However, social expenditure grows at a slightly lower rate than total government expenditure. This, to the ID, indicates a subtle shift from social towards the economic function of the MTEF period.
The new year budget allocation to national departments represents the largest share of the national Budget. Subnational governments will collectively receive the larger share of additional resources in the consecutive two years. This raises serious questions, in light of local and provincial government spending ability.
The provincial equitable share is projected to grow by a real annual average rate which is slightly higher than forecasted economic growth rates over that period. This raises possible future funding questions for the Minister or alternatively an adjustment in allocations.
The emphasis in the Minister's speech as well as in the Budget Review is on fostering growth while remaining aware of the risks associated with increased integration in a global economy. However, the ID would have welcomed a more robust increase in social services expenditure but with specific emphasis on the social grant. There is no doubt that savings to fund investment are required and that the government savings are but only one way of achieving this. It remains imperative to balance long-term investment needs with measures which soften the impact of poverty now.
In the final analysis, much rests with the validity of how policy-makers currently assess risk and therefore what constitutes due prudence. It is hoped that, in looking back from the future, it will not be decided that the actions taken were not bold enough. The ID supports the Bill. [Time expired.]