Chairperson, when Minister Tito Mboweni delivered his Medium-Term Budget Policy Statement, MTBPS, last month, South Africa saw perhaps really for the first time just how badly things have gone
wrong. I commend the Minister for being honest about the state of our public finances for he did not hide or varnish the truth. But, ultimately his mini Budget must be judged on whether it achieved its main purpose.
The Minister's primary task, really his only job, was to present a credible plan to stabilise the national debt. The fact is that by any objective measure, he did not achieve that. The Minister did not present a plan to stabilise debt at all. His mini Budget sees the deficit blowing out to 6,5% this year and next, and national debt ballooning to over 71% of GDP in three years time.
By that time we would have borrowed another nearly R1,5 trillion and we would be spending R300 billion a year just on interest. So, the view that this mini Budget was simply inadequate was confirmed by 30-basis point spike in bond yields in the days following, and by Moody's decision to place us on, "Negative watch", for downgrade.
To be fair to the Minister, he did identify more than R50 billion in spending cuts. The point is that despite
these cuts, overall expenditure is still going up, and there's a simple explanation for that. That is because the spending cuts are more than offset by huge bailouts to zombie state owned entities, SOEs.
Every Budget always involves direct trade-offs. We understand that, but we believe that the 2019 Revised Fiscal Framework represents a fundamentally wrong and unethical set of trade-offs. The real story of this Budget is that basic services on which the poor critically rely everyday are being cut - and cut deeply - because for this government that is the path of least resistance.
It is easier to cut basic services to the poor than it is for the ANC to take on public sector unions. And, that is the truth! [Interjections.] Today, national Union of Metalworkers of South Africa, Numsa, and the SA Cabin Crew Association, SACCA, tell us that they will, "Shut down SAA", if planned job cuts go ahead.
May I just say to them parenthetically: Please go ahead! And thank you very very much! [Applause.] We've been
calling for SA Airways to be shut down for years. If you're volunteering to do it for us, maybe we should all go and join you on a picket line on Friday!
If this strike goes ahead though, it will be a key test for the government. Will they cave again to union pressure and give another bailout; or will they stand firm in doing what is right and fair for the whole country?
We are all pledged. Every member of this House is pledged in theory to creating a fairer society. For the DA, creating a fairer society is one of the fundamental values that underpin our approach to government.
So, how do we square the ANC's commitment to a fair society with the trade off choices made in this mini Budget? Is it fair to cut R50 million from cervical cancer tests for Grade 5 school girls to protect the bloated public service?
Is it fair to cut R40 million dedicated for eradicating pit latrines in schools to protect 15 000 supernumerary
Eskom employees? Is it fair to ask millions of South Africans to pay higher electricity prices, higher VAT and higher fuel prices to pay for the effects of years of mismanagement and cadre deployment in the state?
Is it fair to ask the domestic worker who can only dream of air travel to bailout to SA Airways? Is it fair to make the unemployed mother pay for the free higher education of the middle class while that mother cannot afford to send her own child to crche?
Is it fair that police stations do not have rape evidence collection kits, as Mr Whitfield has so boldly exposed, but 29 000 millionaire managers in the public service have got salary increases of 10% a year for a decade? That is not fair!
In fact, my colleague, Mr Macpherson told me this morning of a public servant in the National Empowerment Fund who earned R6 million this year. [Interjections.] These are the real trade-offs this government has chosen to make, and they are simply ethically indefensible. They are not
only unfair and wrong, but they are also financially unsustainable.
In recent days, we have heard the argument that the solution is to borrow even more in the vain hope that spending more will boost growth. Even the Parliamentary Budget Office, PBO, which should be giving us MPs responsible and credible advice on the Budget, has shamefully propagated this argument.
This is a ludicrous argument. Every rand we borrow requires more rands in future to pay off interest. That's fine when national debt is low, but those days are long gone in South Africa.
The fact is that we are now spending more on interest than we spend on education and healthcare. We are spending triple on interest than we spend on policing. We are using your credit card to pay off our overdraft, and then we are going to Capitec to borrow more money to buy groceries. This is the path of certain economic destruction, and we must not go down it any further.
I'm pleased that everyone in the finance committee agrees with this. I really associate myself and congratulate the chairperson on the fine speech that he has just given. I agree 100% with his comments around debt unsustainability and the public service.
We need big, bold decisions to save our essential public services from collapsing under the weight of our public debt. That is why the DA has proposed a credible plan to cut Rl68 billion from the public wage bill by focusing cuts on the 29 000 millionaire managers in the civil service - the people that earn R6 million per year - while protecting the true heroes of the civil service: Nurses, teachers, doctors, social workers, police officers and other front line delivery staff. [Applause.]
We have proposed a three-year wage freeze for all millionaire managers and a head count reduction of 9 200 non-front-line staff. If we did this, these savings would rein in the deficit, bring down debt and free up funds that would otherwise have been spend on interest, for spending on investment in critical infrastructure or social protection.
This is the only credible plan on the table that delivers fairness, and we hope the Minister will consider it seriously. I assure him that he will have the support of this whole House if he does so. Thank you. [Applause.]