Hon Deputy Speaker, hon members, comrades and distinguished guests, the African National Congress sees the Division of Revenue Bill as a critical financial instrument by which the state ensures equitable allocation of resources, to effect economic and social transformation that will bring about a prosperous nation, based on nonracialism, nonsexism and equality. We recognise the enormous economic imbalances that exist in our country between and within provinces, as well as between and within municipalities.
Our country is still characterised by unequal developments and deep social and economic inequalities, the persistent legacy of the apartheid racial- spatial planning and development. This is particularly evident when we look at the massive backlogs in social and economic infrastructure development, the distribution of people living in extreme poverty, and high rates of unemployment in the former Bantustan geographic areas, the predominantly rural provinces and municipalities.
Underdevelopment, squalor, crime, poverty and unemployment are equally the defining features of our predominantly black townships and villages. These conditions make it difficult, if not impossible, to achieve financial viability in the majority of municipalities and it therefore affects their ability to provide services. It is these challenges that define the basis on which we assess this Division of Revenue Bill of 2011 and the debate thereon.
The Reconstruction and Development Programme says:
Our history has been a bitter one, dominated by colonialism, racism, apartheid, sexism and repressive labour laws. The result is that poverty and degradation exist side by side with modern cities and a developed mining, industrial and commercial infrastructure. Our income distribution is racially distorted and ranks as one of the most unequal in the world. Lavish wealth, side by side with abject poverty, characterises our society.
The economy was built on systematically-enforced racial division in every sphere of our society. Rural areas have been divided into underdeveloped Bantustans and well-developed, white-owned commercial farming areas. Towns and cities have been divided into townships and villages without basic infrastructure for blacks and well-resourced suburbs for whites.
Segregation in education, health, welfare, transport and employment left deep scars of inequality and economic inefficiency.
The Division of Revenue Bill we are debating today is firmly responding to the challenges raised in the Reconstruction and Development Programme, RDP. It is a fact that since 1994, much work has been done to turn the plight of our people around. The ANC-led government has achieved so much in just 16 years.
Hon Speaker, it is clear that we are continuing to fulfil the aspirations of the overwhelming majority of South Africans, black and white, to live in peace in the country of their birth, to reconstruct its future and share its fruits, to put an end to the centuries of racist tyranny, exploitation, misery and humiliation. We agree entirely with the Minister of Finance when he says:
All South Africans aspire to these freedoms. Freedom from poverty; freedom from need; freedom to exercise our talents and thrive as individuals; freedom to work together as communities, as organised social formations, as business enterprises and as a proud and forward-looking nation.
A number of changes are introduced in this Division of Revenue Bill and allocations to provincial and local government this year. Revisions have been made to conditional grants to differentiate between and better respond to the needs of rural and urban municipalities. The formula to allocate the equitable share to municipalities has also been adjusted to direct more resources towards poorer municipalities. The changes will be built on after a review of the local government's fiscal framework to be conducted later this year.
In debating our national revenue and how we should use it to drive transformation and achieve the kind of society we aspire to, as enshrined in our Constitution and the Freedom Charter, we must always remind ourselves of the principles upon which this ANC government was elected. These principles include continued democratisation of our society based on equality, nonracialism and nonsexism; national unity in diversity, which is the source of our strength, and building on the achievements and experience since 1994. It also includes an equitable, sustainable and inclusive growth path that brings decent work and sustainable livelihoods, education, health, safe and secure communities and rural development as well as, targeted programmes for the youth, women, workers, rural masses and people with disabilities, and a better Africa and world.
In our analysis and debate we need to use these principles to ask the following questions regarding the Division of Revenue. Firstly, to what extent does it provide adequate financial resources to the least developed provinces and municipalities in order to address uneven development, disparities and to promote inclusive growth?
Secondly, does it adequately provide financial resources for the most critical priorities of the present government, such as job creation, health, training and education?
Thirdly, does it adequately provide financial resources to support the implementation of the New Growth Path programmes in order to transform our country's economy to benefit the majority in our society?
We pose these questions because of the recognition that policy and plans are only good and achievable when backed up by appropriate resources; otherwise they remain pipedreams. From the ANC's perspective, the financial allocations, as tabled in this Bill, have provided us with positive answers to all these questions. We believe, furthermore, that these questions are not only important for the technical assessment of the budget allocations, but that they are particularly important to the Division of Revenue Bill because it is at the heart of the nature and character of our nation state.
The nature and character of our state is unitary and developmental within a constitutional democracy which is underpinned by the principles of co- operative governance. One of the most important building blocks for the maintenance of the unitary, co-operative and developmental character of our state is the Division of Revenue Bill. Provisions such as equitable share and allocations of both conditional and unconditional grants, and the formulae by which these allocations are determined, are made through division of revenue.
The allocation of financial resources to the three spheres of government is a critical step in the budget process, which is required before the national government, the provinces and municipalities can determine their own budgets. The allocation process takes into account the powers and functions assigned to each sphere of government. The process for making this decision is at the heart of co-operative governance as envisaged in the Constitution.
Section 214(1) of the Constitution of South Africa requires that every year a Division of Revenue Act determines the equitable division of nationally- raised revenue between the three spheres of government. The Intergovernmental Fiscal Relations Act ... [Interjections.]