Chairperson, I would like to express my appreciation to all parties in the House, because it's clear that everybody supports the Division of Revenue Bill, but let me deal with some of the issues that have been raised. Firstly, regarding the support expressed by the hon Davidson for an independent body doing the micro forecast, we recently undertook an interesting exercise where we looked at trends in respect of this consensus forecast. There are two groups of consensus forecasts by private sector economists: one is run by Reuters and the other by Beeld.
We looked at our own forecast over the past few years and, just yesterday, the GDP growth for last year was announced as at 5% year on year. The Beeld consensus was 4,05% for last year and the Reuters consensus was 4,05% while ours was 4,9%. In the previous year, where growth was 5,1%, the Beeld consensus was 4,1% and the Reuters was 4,0%. Treasury was marginally better at 4,3% but less strong.
Now, if you go back over the history of the last decade you will find the same trends. I think the observation that we can make is that whilst Treasury may have been wrong, we were significantly less wrong than these consensus forecasts. There is a very important point here, because if you take this responsibility and hand it over, where is responsibility for this vested?
I am saying it's an intensely political function. We take responsibility; we will stand before this House and debate the issues. But, to hand this thing over to some other institution out there and believe that they would be the determinant of the forecast on which we must put the premise of fiscal framework to allocate resources, is probably taking the economic functions of government into some kind of belief system where you leave it all to automatons. There is no government in the world that operates like that, and that is the first problem I have with it. [Applause.] In respect of the tax to GDP ratio, I would like to leave that and perhaps when we have the Budget debate, we can give a bit more attention to that. Regarding the support expressed, again, by the hon Davidson for the operation and maintenance costs, let's firstly explain that when we use conditional grants, we use them in order to try and influence another sphere of government in respect of national priorities. Therefore, if you look at the local government and go through the list, you will find that there are grants that would support the eradication of the bucket system, water, sanitation and electricity; and then from the equitable share, financing for free basic services.
If you fail to understand that there are limitations in respect of the different functions, you are running the risk that the hon Mokoto raised, namely that you then open a huge moral hazard, because municipalities don't have to collect the revenue that they must collect, because somebody else is going to do it for them. Operation and maintenance costs are key to what municipalities ought to do, and whilst it is also something that the national level must do, to do it through conditional grants is not entirely rational.
Regarding the hon Swart and the demarcation, there is an issue that arose in the past few days. As luck would have it, in the area of Moutse which is now part of Limpopo province, somehow there was a miscalculation and teachers have been taxed twice and thus they are in uproar. They believe that you pay more tax in Limpopo. It is something that we will resolve together with the government of Limpopo in the next 48 hours, but these kinds of things happen.
We think that provinces are adequately resourced to deal with the changes. We have calculated this very carefully and we have been in very close consultation with them. So, there are no real additional costs. There is an endeavour to hide costs or to recalibrate the costs in some way where it's clearly unaffordable, but I think we are on top of that.
About issues raised by the hon Likotsi, monitoring and control are issues that are part of political oversight. Don't leave it to the Treasury. Our constituency officers should be doing a lot more of this and we must defend the rights and the responsibilities of Members of Parliament to be part of that monitoring and oversight, ensuring that the IDPs are there and are linked to provincial growth and development plans, and that the money is spent as planned.
This Parliament should be a repository of all that information, so that monitoring and evaluation of the money that we allocate would be much better. Democracy would be better served because all Members of Parliament would be involved in the process. Thank you very much for the support from all parties. [Applause.]
Debate concluded.
Bill read a second time.