Hon Deputy Speaker, the 2013 Budget was tabled at a time of challenging economic conditions both globally and domestically. We have to acknowledge that the slowdown in trade and investment has also affected our economy. The result of the slowdown is therefore that levels of business and investor confidence in South Africa are currently at a low ebb, and business is rightfully worried about South Africa's fiscal deficit and the debt burden.
The year 2012 was disappointing for South Africa's economic performance for both external and internal reasons.
The Gross Domestic Product, GDP, growth was 2,5% last year, and a tale of two deficits emerged; both fiscal and trade. This is a real risk that important fiscal ratios could deteriorate to a point where a further downgrade in South Africa's credit rating is possible.
The Finance Minister has been forced to run a Budget deficit of 5,3% of the GDP for the first time since 2009 because he has been faced with a R16 billion shortfall in tax revenue.
The effect of the larger deficit will be to drive government debt high over the medium-term, and when contingent liabilities are included, government's indebtedness now extends beyond 50% of the GDP. Servicing this debt, and I think that is the problem, will amount to in excess of R100 billion per year. South Africa will therefore remain on a fiscal tightrope for the foreseeable future.
The government has a point in asking for more investment from the private sector, and we hope it can be done. However, business is not investing because of the uncertainty in the policy environment, especially with regard to the unions and the low levels of growth.
The World Bank's latest ease of doing business rankings indicate that South Africa is only rated 39th, and Mauritius beats us by being rated in the 19th position.
Last week, Bidvest's chief executive officer, CEO, Brian Joffe, complained about the following: that a lack of co-ordination between labour, business and government still exists, resulting in a drowning in red tape in securing access to natural resources such as water and electricity. And my colleague, Lance Greyling, has indicated the very low reserve margins in terms of electricity and also that above-inflation wage increases are negative for business confidence.
Improving the capacity of the state, sir, and restoring confidence in our economy will require a careful balancing act - something you have tried to do in the Budget - a balancing act that will have to consider the impact of corruption on business and investor confidence. The cancer of corruption - let's talk about the cancer of corruption - eats away at growth; steals from the poor; enriches the unworthy and will, if unchecked, wreck the National Development Plan, NDP.
Minister, we agree with the planning, which is in the newspapers today, that the Public Service - the engine room - must be fixed by hiring skilled people; employees must be barred from trading with government and corruption must be dealt with.
Advocate Paul Hoffman, from the Institute of Accountability, made a calculation that since 1994, we have lost R675 billion due to corruption in the public sector. It is estimated that corruption in the public sector is costing the country R30 billion per year. There is much talk of restoring business and investor confidence. The only problem is that one cannot simply instruct business to have confidence, as it has to be built by taking good decisions over a long period of time.
Mr Gordhan, with regard to policy stability, promoting economic growth and predictability, the National Development Plan has gone a long way towards instilling greater private sector confidence. However, sir, Cosatu, remains opposed to the NDP.
Hon Dubazana, the plan that the DA supports is the NDP. However, two days ago, which was on Sunday morning, the secretary-general of the National Union of Metal Workers of SA, Numsa, Irvin Jim, threatened that the implementation of the National Development Plan would be undermined by public protest action and that action would be taken to the streets.
On the contrary, sir, a good start would be to acknowledge that the private sector is central to solving our economic woes. It is therefore important that government engages with business on its participation in one of the main drivers of South Africa's economic growth, namely the national infrastructure build.
And it was mentioned that we have a R1,5 trillion backlog in infrastructure, that we do spend 20% less in terms of what was budgeted for and that spending on infrastructure is well below the 10% of the GDP targeted by the National Development Plan. Those are the important indicators and I think we should stick to them.
In conclusion ... Thank you, Madam. [Time expired.] [Applause.]