Chairperson, hon Deputy President and colleagues, I just want to assure hon Davidson that we, the IFP elephants, don't fight; we construct.
The IFP welcomes the Medium-Term Budget Policy Statement introduced by the hon Minister of Finance. My party appreciates that the Minister may not have had the same room to manoeuvre, due to the rising inflation and lower economic growth, than in previous years. But, overall, the government spending priorities for the next few years appear to be mostly directed at the right things. We are, however, concerned that the taxpayer should get full value for every rand the hon Minister has committed.
Some of the departments benefiting from the announcements are simply not performing adequately when it comes to financial management, as pointed out by the Auditor-General recently. General non-compliance with PFMA and Treasury regulations are creating a crisis for government as the public simply does not know whether it is getting good value from state expenditure, for instance, some provincial departments and municipalities appear to be in a state of audit disarray, yet this Medium-Term Budget shows very strong growth in transfers to municipalities and provinces to improve basic services.
We agree that increased spending in these areas is necessary, but we are concerned and must express our doubt about the ability of some provinces and municipalities to spend within the prescripts of the PFMA and the MFMA respectfully. Our concern is reflected in the approved rollovers of R4 billion arising from unspent balances in 2006-07.
The IFP also has to question whether the taxpayer is getting full value for money from state funds spent on salaries and bonuses for chief executives of public entities and agencies. Some of these public entities have had to be rescued by the state on more than one occasion, but government continues to pump money into loss-making entities such as SAA, Denel and the Land Bank.
The IFP wants to urge extreme caution in this respect, as the Land Bank case has clearly indicated the potential for executives to dole out patronage and enrich themselves at the expense of the taxpayer. We welcome the firm action of government in respect of the Land Bank, but we want to recommend that the National Treasury launch a full investigation into all public agencies and entities to establish whether taxpayers are indeed getting value for money or if that money is disappearing into a black hole.
Chairperson, while we understand the hon Minister's reasons for building budget surpluses in the next three years, we are disappointed that he did not see his way clear to ring-fence some of the budget surpluses and revenue collection overruns and to redirect those funds to carefully selected strategic interventions like crime-fighting, education, job creation and specifically infrastructure spending on the new power generation. We question whether it is necessary in an emerging economy such as ours with the focus on development to maintain a surplus at all. That extra money, we believe, should be targeted specifically at strategic priorities.
One priority which is omitted in the policy statement is the question of rural development and we believe that much more focus needs to be placed on developing people in the rural areas, because urbanisation is not helping us in any way but is creating more problems in the cities of our country. We trust that this issue will be addressed by the hon Minister and Treasury.
Food price inflation is another serious cause for concern. We find that almost half of the 6% inflation is attributed to food prices. We would like to see the government's food pricing committee come up with a report as soon as possible so that we can have a cap on the rising inflation.
As far as Eskom is concerned, we know that the hon Minister said that you do not scratch when it does not itch. Eskom has not asked for additional funding, but we do trust that there can be a dialogue between Eskom and government so that the taxpayer ... [Time expired.]