Hon Chairperson, Minister of Finance, hon members and members of the public, I greet you all. Minister of Finance, I would like to congratulate you for the most impressive record set in Budget 2006. The ANC, throughout its term, has been the democratic leader of government, which has preoccupied itself with the responsibility of transforming the South African economy from an economy that has been deeply characterised by inequality, dispossession, racial exclusion and skewed distribution of resources into one of the model developing economies of the world.
Our endeavour as the ANC government was to build a strong developmental economy which would comprehensively and effectively seek to redress the twin evils of apartheid, that is poverty and joblessness, which continue to exacerbate the structural gap between the developed few and the underdeveloped masses of our people.
Key to this economic policy approach has been to ensure that all people have equal share in the wealth of their country. At the same time, we have to ensure that we develop and sustain the economy.
We have to acknowledge that our economy is booming to the dismay of many of our detractors. However, we are prepared to move on to extend the net to other sectors of our economy and to improve and sustain this positive outlook on the economy.
For the past decade we have seen an increased growth in the economy by 4,9%. We have seen additional opportunities being made available for the previously marginalised groups, including blacks, women, youth and the poor. There has been lower government debt and inflation. Our labour market reforms have immensely improved our labour relations and there has been more certainty, high stability and high levels of confidence within our markets. We are proud to say that we have now decreased the debt burden of our country.
Today as we journey into the second decade of democracy, we are proud to highlight impressive breakthroughs made by the government in its effort to respond to the policy dilemmas and fundamentals.
The Constitution of South Africa places on government the mandated responsibility to provide basic services to all its people. For the larger part of society, these socioeconomic rights have never been as justifiable as they are today.
We have to recall that section 26 of the Bill of the Rights deals with the obligations of the state to ensure progressive realisation of the right to housing and section 27 highlights the right to health care, food, water and social security; whereas the right to education is enshrined in section 29.
The significance of this constitutional provision is clearly enunciated in the RDP document adopted by the democratic government. This has successfully highlighted key priorities for government and the impact on the fiscal system.
For the past ten years government spending has been focused on the redistribution of resources from the privileged few to the previously disadvantaged. Specific challenges have been identified with this approach. However, as long as it satisfied the constitutional obligation, it had to happen.
Firstly, large chunks of the government's budget had to be cut and redirected to address the basic needs of our community. Although this approach was extremely beneficial to the many who were locked in the poverty trap and the cycle of unemployment, it had its negative consequences arising from our slow growing economy, which was steadily readjusting to the volatile global markets.
But the major challenge lies in the analysis and questions raised by many of the economies across South Africa. The question of whether our booming economy is able to effectively respond to the redistributive demands and obligations that are entrenched in our Constitution and the economic policies still stands. It is, however, important to note that the milestones we have achieved in the first years of democracy have set an outstanding record of performance for this country, both economically and socially, especially in terms of delivering the hard services.
Notwithstanding the impact made by these services we must acknowledge that in some instances it has resulted in unforeseen circumstances, like the increasing high rate of dependency and the extension of racial inequalities.
Our social spending has been characterised by the redistributive thrust of our economy - and in many cases this has had a negative impact - which is quite often output-oriented, rather than input driven. Half the time, budget allocations and intergovernmental grants are linked to service delivery outputs.
It is time that government translates budgeted allocations to actual service delivery because it will not be sufficient for government to argue that it has met its obligations in terms of socioeconomic rights through the allocation of sufficient funds for health, education and other forms of service delivery. Let me refer to quite a few examples in education, health and housing. We have seen a dramatic drop in the quality of services provided to the people. This has been the case despite the fact that government has increased its allocation of funds to address these sectors.
It is thus clear that redistributing budget allocations does not immediately result in redistribution of service delivery outputs, as anticipated initially. Furthermore, it suggests that the binding constraint was not purely financial, but rather management capacity, especially on capital projects.
This can be coupled with the inability to spend effectively and this has been a phenomenon in most of the provinces where high budgetary allocations did not automatically result in high delivery rates.
In the light of the above it becomes a necessity to consider a budget reform at all levels especially the introduction of budget reforms in all spheres of government to specifically oversee the introduction of performance budgeting, which has a potential to improve public sector efficiency and effectiveness. The ANC supports the Bill. I thank you. [Applause.]