Thank you very much hon Chairperson...
Xitsonga:
... Vaholobye lava nga kona na Swandla swa Vaholobye, ku katsa na Vaholobyenkulu hinkwavo lava nga kona laha, ndzi tile ku ta andlala xiviko xa timali ta tiko.
English:
The Minister tabled the 2019/2020 Medium Term Budget Policy Statement, MTBPS, on 31 October 2019. After the Minister's tabling of the MTBPS, the House referred the Revised Fiscal Framework for the present financial year,
the proposed fiscal framework, the macroeconomic projections and the assumptions undermining the fiscal frame work to the Standing Committee on Finance. This is done to comply with the Money Bills Amendment Procedure and Related Matters Act, 2009. The committee will continue to play its oversight role on the executive. The Standing Committee on Finance, having considered the 2019 MTBPS for the revised and fiscal framework reports as follows:
The Minister briefed the Committees of Finance and Appropriations of National Assembly and NCOP on 31 October 2019. Amongst other issues that he raised which we have also welcomed, are the measures aimed at improving efficiency and curb fiscal leakages, through different measures that he is going to introduce and also the issue of merging and consolidating entities and regulatory agencies.
The other challenge that he has raised is the problem of medico legal claims, where there is a huge legal claim in the Department of Health especially in Gauteng and the Eastern Cape. These are the lawyers who have been all
along targeting the Road Accident Fund, but now they are targeting the Department of Finance. In so doing, we have to accelerate the implementation of the Road Accident Benefit Scheme Act. The Minister also spoke about the cost saving measures to improve efficiency and also tabling the Public Procurement Bill to improve procurement regulatory framework.
The committees received the post budget input from the Parliamentary Budget Office and the Financial and Fiscal Commission. Subsequent to that, we held public hearings on O6 November 2019. The committee received many written and oral submissions. Hon Chair, there are challenges with regards to the economy. The global economic growth outlook has deteriorated in both developed and developing countries. The trade tension between China and the United States, US, has serious impact on the global economy. The economic growth has been revised downwards and Growth Democratic Product, GDP, per capita is likely to decline in real terms, exacerbating existing levels of poverty and inequality.
The current account deficit is expected to remain at 3,5% of GDP over the next three years, given low investment and import growth. We also looked at the issue of inflation outlook. The high electricity tariff, high meat and grain prices will contribute to an increase in inflation. Credit downgrades remain a factor to observe and state implications on sovereign debt ratings, higher debt premiums and Rand depreciation, investor flight are some of the issues that are going to contribute to the challenges that we have economically.
The revenue outlook has deteriorated with lower than expected corporate tax collections. It is anticipated that the 2020 Budget will introduce various tax measures in the back of unemployment levels. This might put pressure on the households on personal income tax. We welcome the resources allocated to SA Revenue Service, Sars, to increase its capacity to collect revenue. However, there are serious challenges when it comes to collecting of tax hon Chair. The problem, amongst others is under declaration by companies, both local and multinationals. Companies, local and multinationals conceal income or profit figures and overstate their
expenses with the intention of not paying what is due. We also have a problem of illicit financial flows, base erosion and profit shifting. Lots of billions leave this country; there are figures if you look at the Global Financial Integrity Report. It gives the amount of how much leaves South Africa.
The problem of illegal tobacco and cigarettes trade is serious. What is a problem hon Minister of Police is that, the culprits who are involved in the illicit tobacco trading are known. The factories and warehouses where these activities are taking place are known. There must be law enforcement in this regard. Low revenues, high debt service costs and bailouts to State- Owned Enterprises, SOEs, pose challenges in addressing a widening budget deficit. A continuous cash injection to assist ailing SOEs is crowding out spending categories and aggregates fiscal risk
Debt is increasing rapidly and is unlikely to stabilise in the immediate term. The rising debt service displaces social and economic spending and this will lead to negative impact on the National Development Plan, NDP,
targets. Therefore, we request that Cabinet should put more measures to stabilise the debt to GDP ratio. Hon Minister, we believe that we should not reach a stage where we are in a debt trap and will have to go to the Bretton Woods Institutions. Once we go to the Bretton Woods Institutions, we must forget about our sovereignty. They will come and take over Treasury, apply structural adjustment, cut spending on social programmes and the country will be in upheaval. This is a matter that has to be attended to.
Hon Chair, last but no least is the issue of the Wage Bill versus bloated service. We want this matter to be debated because, is the problem the Wage Bill or the bloated public service. In 1995 there were 1 269 000 public servants, serving a population of 38 631 000. In 2019, 1 515 598 public servants serving a population of 58,7 million, which is an increase of 300 000 or so.
What is the ratio of public servant to the population? There is a world standard as to, if a country has to have a particular size of a public service, it must be in proportion to its population. The problem is the salaries
of the senior and middle management, which is very high. This is due to higher than inflation salary increases, pay progression and Occupation Specific Dispensation, OSD. Hon Speaker, there has to be clarity as to what size and shape of public service do we want. How many managers do we want and unions are up in arms about this matter. However, we have to answer the 4R's. Do we want to rationalise, restructure, retrench or right size? What is the scientific instrument that we are going to employ in this regard, when we talk about the issue of the Wage Bill visa vie the bloated public service?
We are of course worried because the Wage Bill stands at R630 billion 700 million and something has to be done. Therefore, we are satisfied about what the Minister has presented hon Chair. The committee recommends to the House to adopt the Revised Fiscal Framework as tabled by the Minister of Finance. Thank you.