High costs in savings products undermine the national objective of getting our people to save more. [Interjections.] The financial industry must take more urgent steps to reduce costs and introduce more appropriate and transparent savings and investment products, including annuities. [Applause.] There is also much to be done to improve market conduct practices in the financial sector. The Treating Customers Fairly initiative of the Financial Services Board will be accelerated to protect customers more vigorously.
Our financial institutions should also recognise the important role of women in our economy. The progress of this amongst the companies needs to be reported more transparently. I thought the women would be happy with that! [Applause.]
Allow me to return briefly to the central policy challenges we face: growth of our economy, more rapid job creation and reducing poverty.
Initiatives in progress to strengthen support for business sector growth include the following. Small enterprise financing has been consolidated and is a new subsidiary of the Industrial Development Corporation, IDC.
In October 2011, a procurement accord was signed with business and labour; government procurement rules include incentives for both black economic empowerment and designated local supply sectors.
The tax regime for small businesses has been simplified, as I indicated earlier.
A new competitiveness enhancement programme has been initiated, which we also indicated earlier, building on existing production incentives in the automotive and clothing and textile sectors.
A support programme is being developed in the capital goods sector, leveraging large state procurement programmes.
The National Tooling Initiative is under way in support of accelerated apprentice training.
A draft policy framework and legislation have been published for special economic zones.
Technology investment is supported, both through partnerships between science councils and industry, and through research and development tax incentives.
A venture capital incentive is available for junior mining companies.
Recognising that assistance to the private sector goes beyond the provision of incentives, government is looking at wider interventions to lower the cost of doing business. Improvements are being made to economic infrastructure, such as ports, roads and electricity generation, to cater for the needs of business, as the President indicated. In addition, operational efficiency in ports and rail has been prioritised. There is a review of the regulatory regime and its effects on business in a number of sectors, as well as interventions in some institutions to speed up the issuing of licences and to improve transparency in government processes. Various strategies are also in place to deal directly with sector-specific issues.
Given the current global economic context, there is understandable caution in the business sector about investment and future growth prospects. Many firms have accumulated large cash balances instead of investing them or distributing them to shareholders. The time has come to confront uncertainty. From government's side, we are committed to an environment that will encourage business investment. From the side of business we seek investment for the long term, enhanced competitiveness and training commitments. We must all invest in our future, and that is the key as we go forward.
In respect of job creation, a wide range of government programmes and policies have come under scrutiny over the past year. Expansion of further education and skills development is a key long-term priority, alongside improving the quality of basic education and broadening access to adult education programmes.
At this time last year funding was allocated to a new Jobs Fund, aimed at supporting innovative public and private sector projects with the potential to create sustainable job opportunities. The fund began operating in June, received over 2 500 applications, and project allocations of over R1 billion have been committed to. A second round of project applications will be announced shortly.
We released a discussion paper proposing a youth employment incentive last year. It is under discussion at the National Economic, Development and Labour Council, Nedlac, where the labour constituency has expressed reservations. In our view, these concerns can be addressed in the design and implementation of the incentive. We would all like to see greater urgency in resolving this matter and making sure we do concrete things for our young people.
There are many ways in which job creation for young people may be accelerated. Last year I asked the Nedbank and Old Mutual Budget Speech Competition winners to participate in a second, mini-contest, on the question of how we might reduce youth unemployment. Several great ideas emerged in addition to what we have on the table. Ms Kagee argued that students should be offered practical internships as part of their curriculum to narrow the gap between education and the workplace. Mr Mashishi suggested using communities to arrest youth unemployment by revitalising townships through gyms, sporting teams and leagues, tutoring projects and clean-up operations. Ian Mrozek offered an interesting variation on the idea of a youth subsidy. He proposed that it should go to new business start-ups as a tax incentive, which would encourage entrepreneurs and business innovation and, of course, job creation. It is right that we should look for many ways of supporting enterprise development in many different settings and circumstances - in urban and rural areas, in agriculture, in manufacturing and in the service sector. We have to move beyond debate, however, and find the policy levers that will make a difference to the pace and dynamics of job creation across the whole of our economy.
In addressing poverty and inequality, reducing unemployment is the centrepiece of our approach to reducing poverty, Mr Speaker, but it is not the only measure. Social spending comprises 58% of the government expenditure for 2012-13, up from 49% 10 years ago. The Budget provides social grants to almost a third of the population and pays for largely free services at public health facilities and no-fee schools for 60% of learners. It also pays for housing, water and electricity in poor communities. The average value of the "social wage" for a family of four in 2012-13 is about R3 940 a month.
This represents a substantial investment in household living conditions financed through a broadly progressive tax structure. This is the contribution that all South Africans make to the poor in our society.
Social security reform and the phasing in of the National Health Insurance will improve the effectiveness and coherence of redistribution through the fiscus. But, of course, redistribution is not a substitute for economic growth and job creation. And so the quality of poverty reduction we achieve over the decades ahead will depend on our success in broadening development to include historically disadvantaged sectors and communities, as envisaged in both the New Growth Path and the draft development plan.
In conclusion, Mr President, we have a Budget that gives effect to the challenges you have set us: to accelerate growth, expand investment, support economic development and confront poverty and inequality. My profound appreciation goes to President Zuma and Deputy President Motlanthe for their support and wise counsel in finalising the Budget and, of course, throughout the year.
I thank my Cabinet colleagues for their backing, even when further haircuts, as I described earlier on, were proposed. The Budget is our collective statement, and it has benefited from many constructive contributions from all of you.
The members of the Ministers' Committee on the Budget have engaged with the policy choices that have had to be made with vigour and wisdom. This has been a great team effort on the part of that committee. Can we congratulate them, please? [Applause.]
Deputy Minister Nene - he says that he is the Minister of substance - has taken on an expanded set of responsibilities over the past year, and he has been a very valuable deputy. I thank him. [Applause.]
I am grateful for the efforts and support of the MECs for finance who oversee 40% of our spending. I think they know as well as we do that they have much more work to do to get that spending under control, but thank you. [Applause.]
Our thanks go to Governor Gill Marcus and the Deputy Governors of the SA Reserve Bank for steadily managing the mandate of the bank, and to Commissioner Oupa Magashula and the 15 000 staff of the SA Revenue Service for the excellent work they continue to do so that we can dish out money today, and for helping us to sustain our fiscal sovereignty. [Applause.]
I also thank Jabu Moleketi, chair of the Development Bank of Southern Africa, DBSA, and its chief executive officer, Paul Baloyi, who have a major contribution to make to the infrastructure programme; the Financial and Fiscal Commission and its acting chairperson, Bongani Khumalo, for their useful advice and inputs; the leadership of the Public Investment Corporation, the Land Bank, the Financial Services Board, the Financial Intelligence Centre and the Government Pension Administration Agency, all of whom play a very valuable role in our overall system; and Nedlac, its managing director Alistair Smith, and representatives of the business, labour and community constituencies for their contributions and for the vigorous debates we have - we just need a bit more action rather than talking, but we will get there, I am sure!
I thank the hon Thaba Mufamadi and Charel de Beer who chair the Standing and Select Committees on Finance respectively, and the chairpersons of the Appropriations committees, the hon Sogoni and Chaane, who continue to maintain rigorous oversight and encourage very constructive public participation. [Applause.]
Of course, we have a brand new director-general in the National Treasury, Lungisa Fuzile, from Mnqanduli, who has provided refreshing and frank leadership ... [Applause.] ... and, of course, this is his first Budget. The National Treasury team, whose hard work sets the high standards of our Budget documentation and the management of our fiscus and our financial status as a country, remains a source of pride. So, thank you very much. [Applause.]
I thank the staff of the Ministry, who always work extremely hard and are very supportive. Of course, I thank my family, who provide invaluable support. [Applause.]
Most importantly, I would like to express our sincere appreciation to the many South Africans who provide the encouragement, criticism and ideas that keep us alert and agile, and assist in making the government work better and, more importantly, differently. Thank you very much. [Applause.] I table these Budget documents before us: the speech of the Minister of Finance on the national annual budget - 22 February 2012 [RP03 - 2012]; the Budget Review 2012 [RP02 - 2012], including: the Fiscal Framework and Revenue Proposals for 2012, inclusive of the customs and excise duties; the Estimates of National Revenue for 2012; and Replies to recommendations in reports referred to in sections 5(2), 6(7) and 6(12) of the Money Bills Amendment Procedure and Related Matters Act, 2009 (No 9 of 2009); Division of Revenue Bill [B4 - 2012]; Appropriation Bill [B3 - 2012]; Finance Bill [B5 - 2012]; Additional Adjustments Appropriation Bill (2011-12 financial year) [B6 - 2012]; and Estimates of National Expenditure 2012 [RP01 - 2012].
I want to conclude on two notes. In former President Mandela's words, and I quote:
The future of our country is in your hands ...
Not just in this Chamber, but outside as well. Let me repeat:
The future of our country is in your hands. It will be what you make of it today. In the competitive international marketplace to which we are opening our economy, success and even survival of the nation will depend on you.
We have demonstrated excellent resilience during the post-2008 crisis. We now need to introduce this new dynamism that we spoke of earlier amongst all South Africans. All of us need to ask ourselves: What can I do for my country, my people and our future? Thank you. [Applause.]