Chairperson, hon Ministers and members, the FD supports the broad principles of the Medium-Term Budget Policy Statement as presented by the Minister of Finance in his speech.
According to the MTBPS, its approach is to focus more on policy review and to provide government's view on the economic outlook for the future.
One of the key points of emphasis of the budget is to improve on the efficiency of public spending, and specifically targeting service delivery. And this aspect the FD wholeheartedly supports.
The budget reiterates the objective of our economy to grow at an average of about 5% a year for the next three years despite the decreased growth in global market economies. The three main challenges that may impact on the economy are the rate of economic growth, the growth of employment and the reduction of poverty.
Since our GDP is expected to continue to grow by 4,5% in 2008 and beyond, we need to guard against conditions that may be counterproductive to our economy.
Low accountability in public service is one of those adverse conditions that could put a strain on long-term global confidence in this country's capacity to build institutional stability. For instance, to remain competitive, South Africa needs to improve its global confidence and attractiveness ratings, if we wish to forge ahead with our GDP predictions way beyond 2010.
Although our current low global competitiveness ranking may not have an immediate impact on GDP projections, a continuous slide in our performance ranking may in the long-term dampen international confidence in this country's capacity to raise its levels to perform in the premier league of countries.
We have recently lost ranking positions in the global competitive index, slipping from 36th to 44th place according to the World Bank's Doing Business of 2008 Survey. South Africa also fell six places from 29th to 35th position. We also rate the lowest of 30 countries when it comes to attracting skilled persons.
In other words, we need to overhaul our Public Service sectors and demand greater oversight responsibilities from all government spheres, which includes imposing strict regulations and penalties on government sectors that default on accountable governance.
If we want to attract foreign skills, we have to do so aggressively; yet in doing so, we must also identify the reasons why a loss of skills occurs within our own country. The reasons may vary but the preconditions for a skills absorbing society are linked to balance and democratic power relations in society, a safe and secure environment, democratic freedom especially in the media and telecommunications sectors.
The FD support the Medium-Term Budget Policy statement. I thank you.