Hon Chairperson, members of this august House and the public at large, I want to start by indicating that it is important for all of us, both members of this House and the public, to engage with the statement as presented by the Minister of Finance, but it is also important that we need to have sufficient time to deal with the statement because this is a major policy statement which requires more time to engage the public so that we know what the public view is. I believe that the recommendation from the committee will be taken on board by the powers that be.
I am going to speak on the priorities over the medium term and why it is important that the capacity of the state needs to be improved and strengthened. Amongst the issues that the statement raises is that there must be spending on infrastructure. This we have taken seriously as a committee - that the built environment will take up a huge part or a large part of spending over the medium term, and this takes on board housing, transport infrastructure, water and others.
However, the concern that we have as a committee is that despite the fact that there's considerable progress with regard to housing and public transport systems, there needs to be more capacity-building in the departments, firstly, to monitor what takes place, and secondly, to have an integrated approach amongst the relevant departments and the entities that belong to these departments.
For instance, we engaged with the Department of Public Transport in terms of public transport infrastructure as well as other transport-related infrastructure over the medium term. We were worried that there is no clear plan between the department and the relevant institutions that account to the department when it comes to transport infrastructure. This compromises our objectives and aims as a developmental state to ensure that even those who are in the rural areas will benefit over the medium term when it comes to public infrastructure spending.
The other point is that, in our engagement with the department, we have realised that there are serious challenges of capacity to overcome to be able to deliver. Yes, indeed, government is going to allocate a lot over the medium term to emphasise and even strengthen the built environment, but the fact of the matter is that the departments could not convince us that they are ready to consume huge allocations that will be given to those departments, and this is a concern.
I would like to quote the Public Service Commission in its input to a seminar that was held on the developmental state. They raised a serious challenge when they mentioned that, for government to fulfil its developmental role, the capacity of the Public Service should be central to the developmental state to be able to achieve its objectives. They further indicated that there should be a link between departments in the developmental state and the entities that account to that department.
I would like to cite an example: The Department of Minerals and Energy needs to have a co-ordinated and integrated plan with Eskom, so that all entities that fall under the Department of Minerals and Energy can have the same view of what we want to achieve over the medium term.
Another example would be the Department of Transport. As I indicated earlier on with regard to the entities that fall under it, do they have the same understanding of what they want to achieve in respect of the developmental state?
Coming to the Department of Public Enterprises, we had a serious challenge when we engaged with them. We are not yet convinced that the entities and the public enterprises that fall under the department are really geared towards the developmental state's capacity to deliver better service to our people.
The other point that I want to raise is the fact that, as a committee, in our interaction with the department, we felt that there was a strong need to engage the public more but even more so the portfolio committees. Although we had interacted with other portfolio committees of Parliament and we are really proud that the engagement was fruitful because the portfolio committees could inform us much more about what is happening in the departments as we were engaging, I would like to indicate that there is great potential to increase employment and there's great potential to reduce poverty through interaction among different departments and the entities that belong to those departments.
I also want to raise the fact that there is a need for the government - as is stated in the priorities - to raise the productive capacity of the economy. Definitely, that needs to happen - the Minister stated in the statement that we are more reliant on primary resources to export - but the challenge is what we are doing to ensure that small businesses can develop. How do we ensure that the small businesses can be nurtured as they grow so that they can become better competitors in the long-term? This is one of the areas which has the potential to create more employment.
The other thing that we are also challenging as a committee is that, as we create more employment, is the employment that we create sustainable or not? Are those wages sustainable or not? Are they assisting people to get out of poverty or are they exacerbating the fact that people might permanently live in poverty?
The other point that we are raising, Minister, is that although, in the short term, there is an attempt that government will ensure that inflation does not impact negatively on social grants and on public service salaries, the issue is that, right now, inflation is eating into those grants. We feel that it would have been proper that right now - even before the end of this financial year - there needs to be that cushion rather than over the medium term, because probably we don't know what the future holds. It might be that, in the medium term, inflation will have reduced, but what we are challenging is that, right now, inflation is eating into those grants as well as the public sector salaries.
Finally, what I want to state is that as a committee we are really concerned. Members of this House, we are concerned with the capacity of the state to deliver. Government is bringing more resources for spending, but do we have capacity? Why should government continue to rely on the private sector through consultants to deliver the service, whereas we are supposed to be developing the capacity of the state as a developmental state?
I want to emphasise that, as a developmental state, we must build our capacity in the state through training, skills development and the absorption of those who are unemployed but have qualities and skills which are not being utilised right now. What we are asking is: What are departments doing, for instance, to re-open colleges? [Time expired.] Thank you.