You need to listen, because listening is a skill! The MTBPS continues to prioritise the social wage, correctly, as the main instrument in fighting poverty and building the capabilities that will drive longer- term growth and productivity. This includes education, infrastructure and a diversified industrial capacity.
The strategy is to invest in our human and physical capital whilst lowering the cost of living for the poor. It means regulating the economy to improve competitiveness, whilst raising beneficiation of our raw materials, and investing more time in developing a collaborative partnership with organised labour and the private sector, based on the principles of decent work and employment, strategic investment in the most productive sectors of our economy, and growth through development.
On the question of debt servicing costs, the central question is the price of debt and the cost to government. This only rises when other available investments yield a better return to investors than their purchase of the current government debt. All signals from the bond market, the financial markets, and the real economy suggest a more positive position than the opposition parties would want us to believe. Inflation is not a threat, because monetary policy and bond yields are low by historical standards, making it possible for government to finance its debt relatively well. The notion that government debt is crowding out private sector investment has no empirical evidence. No one can substantiate that. The alternative that the opposition parties want the ANC-led government to adopt is a reduction of government spending, which would reduce consumption growth. The economic facts are that lower government spending will further depress the economy in the short term. We all agree, on raising taxes to deal with the deficit when the economy is weak, that you cannot suspend service delivery in the face of what you want to save.
To those who advocate for that, the DA and Cope, the answer lies with austerity. That will send the right signal to the private sector, which will then spontaneously kick-start spending and stimulate our economy. However, it has failed to show a single country where this ill logic works. We in the ANC, would rather reaffirm the stance, as stated in the MTBPS, that we should adopt a balanced package that continues the pursuit of the countercyclical fiscal policy, broadens the social wage to fight poverty and inequality, and deals with inefficiencies in public spending.
Therefore, we in the ANC support all endeavours by the leader of this Ministry, Comrade Pravin Gordhan, to ensure that the gap between the haves and have-nots is not just minimised, but closed. In achieving that, it is only the responsible political party which is driving these processes that will also take responsibility where there are gaps. We are able to do that under the stewardship of this comrade who, since he came into office has been leading in Africa, if not the world. I thank you. [Applause.]