Chairperson, the core message from the Minister of Finance in this year's policy statement is that state spending has reached its limit. This point is further emphasised considering our low savings ratio of 16,1% and the government favouring consumption-driven expenditure. We are at our limit.
Our budget consumed 42% of GDP in order to pay for salaries. More than 40% of GDP is allocated towards debt servicing. Unauthorised, irregular, fruitless and wasteful government spending for the 2010-2011 financial year amounted to more than R26 billion. It becomes more evident that we are at our limit.
The level of household debt is at 76% of disposable income. Government is spending 20% of the total budget on social grants and health care. We are not left with much. Added to this doom and gloom is the fact that corruption is running rife. Provincial and local government spend too much on sky-high salaries to the detriment of capital goods investment.
The Minister of Finance has warned his own government and the nation that we are at a tipping point. We need to be very conservative with both spending and our growth figures that have been forecast. The alarming new European crisis, the continual rise in the fuel price which drives up inflation and food security concerns cannot be ignored. The National Treasury was brave with this statement, especially the Minister, and they need all the support they can get now. Whether his government will get the message, only time will tell. It's best to say that Cope will support the Minister and we will support this framework.