Hon Chair ... [Interjections.] ... the hon member is trying to save face by claiming that I look smart! [Laughter.]
Good afternoon, hon Chairperson, hon members, and ladies and gentleman. Before I begin with my speech, I need to indicate upfront that if the creative industry needs people to act, they can get many from the National Assembly. Today I saw a lot of actors in this House. [Laughter.] They demonstrated their ability to participate in the creative sector, and I think they are in the wrong place! [Interjections.]
Once again the time has arrived where we need to give a detailed account of what programmes we have implemented with the budget appropriated in the last financial year, namely the 2012-13 budget, and also to request approval of the budget for 2013-14 from this august House. We need to reflect on the programmes implemented, based on policy positions approved by this collective body. We will also reflect frankly and honestly on the realities that any government is faced with when implementing a mandate given to it by the electorate, operating within a complex environment of scarce resources.
In government the fiscus is based on tax revenue. In the South African context there is a situation where half of the labour force are not actively participating in the economic mainstream, due to factors that we all know and have regurgitated since the inception of the democratic dispensation.
For any economy to grow, we need unity of purpose. If the private sector and the government look at each other with a suspicious eye, we run the risk of unneeded disparities in policy formulation and policy implementation. I repeat, if the private sector and the government look at each other with a suspicious eye, we run the risk of unneeded disparities in policy implementation and policy formulation. [Interjections.] We need to harmonise the relationship between the private sector and the state through continuous engagement and consensus-seeking.
The target of five million jobs can only be achieved through consistent and vibrant economic growth. There was a question regarding whether we need a consumption-driven or a production-driven economy. That is the debate that ensued this morning. This question, in the context of the South African economy, is neither here nor there, as we are dealing with an economy that until now has left the majority of its citizens out of participating in the mainstream. That is a fact, hon members.
In the past our economy left the majority out of the economic mainstream and therefore we as politicians ... [Interjections.] Hon member, I'm going to beg for your indulgence. [Interjections.] We as politicians need to avoid gambling with such a sensitive matter and become patriotic in changing the lives of South African citizens. This does not mean that leaders and government officials should take advantage of the vulnerability of our society and become involved in corrupt activities.
We also need a balance between consumption and production because, for any economy to grow, we need both a competitive and a productive economy. Therefore, as the state we will continue to humbly call for a partnership between the public and private sectors in addressing these complexities.
We further promise, as always, to provide tax incentives, which we have always provided, as a reward. We will also reward compliance. Therefore, there will always be incentives when companies comply with regulations.
The debate on wage subsidies has become egg on the face of some and seems to have divided our society. In my considered opinion, any idea that seeks a solution to our unequal past should be embraced as far as it works. However, it should be evaluated, and abandoned if it does not work. Criticism should be positive ... [Interjections.] ... and an alternative solution should be provided.
I am also wary of international ratings that presuppose that all countries move on an equal footing. How can developed countries be measured with the same yardstick that is used to measure developing countries? How can the economic growth of developing countries be equated with that of developed countries? This is not just an exercise; it is actually insanity and hypocrisy.
However, that does not mean that the bar must be lowered. In fact, it must propel us to perform even better. Indeed, South Africa has outdone itself; hence we gained membership of Brics. This was not because we were equal to the Brics countries with regard to monetary value and otherwise; it was the political and socioeconomic factors that put South Africa on the map.
To elaborate on my point, it was reported that the International Monetary Fund, IMF, had slashed South Africa's economic growth focus for next year from 4,1% to 3,3%. This was done against the backdrop of what the Minister of Finance indicated in his Budget speech, putting next year's projection at 2,7%. Where did the IMF get the 3,3%? Our projection for 2015 is 3,8% and not 3,7%. Let people stop counting chickens before they hatch! [Interjections.]
Come 2015 we will report on the real growth, as we do every financial year. Of course, government did project its growth to be 5% in its last projections, but there were challenges that were experienced by our economy. [Interjections.] No, let me give you examples. I am going to be specific - I don't deal in drama, but with facts!
The first one is that the energy prices went up. [Interjections.] There were global risks - we know that there was a financial crisis. There was a decline in global demand, and that is a fact. [Interjections.] That is a fact. There was a decline in global demand. [Interjections.] Domestic consumer demand also declined. We experienced volatile capital inflows and commodity prices, the volatility of the rand, the rising of food prices and the rising of inflation. I can go on.
This eventually led to growth being below the 3,8% projection, ladies and gentlemen. I think we agree on that. We also agree that there was a challenge of structural problems in the country, and I have already provided the example of the labour force.
During the Budget speech the Minister of Finance indicated that the 2013 Budget was being presented during challenging times. He elaborated on this by saying that the South African economy was continuing to grow at a slower rate, and government had to take measures to reduce spending. Last year, during the Budget debate in the NCOP, I made a remark that the global economy was facing uncertainties, but countries were still expected to build vibrant economies.
We are meeting here today in the National Assembly, and we need to answer difficult questions about how we are going to create employment, especially for the youth, 80 days after the Minister of Finance tabled the Estimates of National Expenditure. This is based on his assertion that the global economy was painting a bleak picture.
We need to strike a balance in juxtaposing global economic discourse and South African policy challenges. He further challenged us to balance economic recovery and economic consolidation, and our being an economic power and having social solidarity. Given the above, he also provided hope by indicating that the South African economy was expected to grow from 2,5% to 2,7% in the current financial year, and it is expected to grow, as I said earlier on, to 3,8% by the year 2015.
The million dollar question that remains is how we achieve these economic projections, given the challenges experienced in the past. The answer lies in our performance. As long as there are low productivity levels, uncompetitive behaviour, little innovation and lack of investment in local content, they will not be achieved. To the hon member from Cope, it is not about foreign direct investment - if there is no local content, investment is equally useless. Notwithstanding global challenges, this growth won't be realised ... [Time expired.] [Applause.]