Hon Chairperson and hon members, the fiscal framework is the foundation of our Budget and the good management of our government finances. What the Standing Committee on Finance and Standing Committee on Appropriations, led by Mr Mufamadi and Mr Sogoni, have begun to do is to undertake a listening exercise in respect of various stakeholders and the public, but also to apply their own minds to the various questions which arise from the fiscal framework. Is the country moving on a sound fiscal path? Are we overextending ourselves? Is the deficit beyond our means? Are the debt service costs of an extreme nature? Are we moving in a direction where our expenditure is not going in the right kinds of directions?
These are all vital questions in a democracy. They are questions which we must collectively answer, as many members have done this afternoon, in order to ensure that we continue to maintain the kind of fiscal path that the ANC government has been maintaining since 1994. I want to express our appreciation to the two committees and their leaders for the excellent work that they have done.
Fiscal sustainability is not just about the numbers. It's about more than just the numbers. It's about economic growth and jobs, the institutions that take decisions and regulate public finances, and our ability to provide future generations with growing opportunities. Ultimately, fiscal sustainability is about developing a caring and inclusive country and economy.
The fiscal framework under discussion today, which we were asked to pass today, takes account of all these issues. While government spending may be slowing, this is following a 10-year period in which spending has more than doubled, even after taking into account the impact of higher prices.
This ensures that the progress we have made in ramping up social grants, expenditure on health and education, equipment, remuneration of public servants and infrastructure can be sustained into the future. Our children will not find themselves, unlike the scepticism our colleagues have voiced, in an environment of shrinking public services, but rather expanding and better-quality public services.
This is the strength of our fiscus. To see this point graphically illustrated we only need to read the newspapers from many countries that are being forced to cut back on pension payments, civil servant wages and capital spending.
Government spending is also increasingly focused on the priorities -as we have demonstrated in this Budget - of this government. We have successfully introduced the social grant network, covering all those who are not able to work, are too young to work or should not be working because they are at school. We have boosted the contribution of the public sector to investment in the country and we seek to continue this trend of rising government infrastructure spending.
Importantly, as the committee chairperson Mr Mufamadi pointed out, this Budget and the fiscal framework are a demonstration of the fact that it's the ANC that has led this country beyond the 1994 creation of democracy and that, over a period of 16 or 17 years, we have rebuilt the finances of this country from the miserable state in which they were found in 1994. Today we know that elections are around the corner and that all political parties will seize whatever opportunities they have to score a few points. It's always important to remember where the leadership, both in terms of thought and in terms of practice, came from in this country. The ANC led, as Mr Mufamadi pointed out when he quoted President Nelson Mandela, in terms of the importance of rebuilding the finances of this country and of fiscal prudence. The ANC led once again in terms of budget transparency, which we celebrate as South Africans today. The ANC led by reducing the 9% or more deficit in 1994 to a surplus slightly before the recession gets us. However many rounds we want to count by whichever political party, it's the ANC government that has led with the idea that once hit by the recession, we cannot waste money, we need to get value for money and we need to engage in what we today call the savings exercise within government itself. [Applause.]
It is the ANC that had the courage to say to itself that if we are serious about our priorities, then let's reprioritise. If we are serious about our priorities, let's cut our budgets so that we can allocate money to those areas that require that money. Cutting 0,3% of the Budget from all my colleagues' individual budgets was a demonstration by this Cabinet that it has the will and indeed the ability to make the tough choices that are required to manage the fiscus of this country in a sound way.
It's the ANC which is asked, through its parliamentary committee of the Treasury, "Tell us how you will sustain this fiscal path", "Tell us what the guidelines are that you will offer" and "Tell us what framework you will offer so that we as South Africans can actually be assured that we are moving in the right direction".
Of course we've put forward three principles: countercyclicality, long-term debt sustainability and intergenerational equity. It is true that in the short term some of the money that we are borrowing is being spent on consumption. That is not our own fault; it's because of the great recession. We have had to take the measures that we have taken to sustain our government programmes, not impose any hardships on our people, as many countries around the world are doing, and still maintain a sound fiscal path and fiscal consolidation processes as well.
I think all of those are important factors to remember, and we should remind ourselves once again that the purpose of the fiscal framework, and I will keep repeating this, is to ensure that those sound fiscal principles are applied on a regular basis and for a sustained period. Secondly, the framework should ensure that we are able to sustain the promises and the delivery commitments that we have made to our people and that we will continue to reprioritise, within government itself and in all of its entities, to ensure that we get the right value for money.
We indeed want to invest in growth, as many hon members have in fact pointed out, and we want to ensure that we work our way out of the great recession. Remember, we didn't want the 7,3% deficit in South Africa. That was forced upon us by factors that are extraneous to us. What we are now doing is working our way out of it. Yes, we are some 0,5% or 0,7% out over the next three years in terms of what we thought the deficit would be. That is not because of irresponsible behaviour, but because revenue is not coming through as we predicted - although we predict that revenue will improve as we go forward.
There is interesting and good news today - a lot of us seem to be focusing on the bad news - that business confidence in South Africa, from the last quarter to the first quarter of this year, increased from 44 to 55. This is an independent study, which again shows that confidence in our economy is growing, investment in our economy will grow and the chances of the revenue picture improving are even better. [Applause.]
Let's turn to some of the contributions that our colleagues from various parties have made. Hon George has several concerns, but he shouldn't worry. The Budget and the fiscal processes are in very sound hands. They are in the ANC's hands. [Applause.]
I really do think, hon George, that we need a constructive debate between the official opposition and government about what a real alternate Budget would look like. Many of your ideas are copy-cat ideas. On the one hand you say, "We have a solution to poverty", then you go on to mention things which we know very well have no simple solutions. We need bold ideas and they take time. We have been telling you that for many years.
You say you want to have a countercyclical approach to fiscal policy, but at the same time you say we must stimulate the economy more and allow the deficit to grow. I think we have a much more credible fiscal path, both in terms of the financial markets and others, than the DA will be able to provide in terms of its so-called alternative area.
You focused on the role of the private sector and export promotion. If I can give a minute to Minister Rob Davies, I'm sure he will tell you what he is doing. You are saying, "Decrease tax on small enterprises". We've had any number of proposals over the years. That alone is not the solution. Decreasing tax is a poor substitute for increasing the number of small enterprises we have in our country. That is the real challenge actually facing us.
You talked about the Competition Commission. Again, if I give a minute to Minister Patel, I'm sure he can tell you a thing or two about the Competition Commission as well. You want to tell us about how every rand counts, but we have demonstrated for the past two years how it does count and how billions of rands have been saved, reprioritised and reallocated by the ANC government, and not by the DA. [Applause.] So, we've got to remind the DA of the ANC slogan that it does in fact lead, not only in practical terms, but in conceptual terms as well.
Several hon members have raised concerns about the National Youth Development Agency, NYDA. You are the Parliament. Ask the NYDA to present itself, to present its plans and question those plans as part of the established democratic process in South Africa. If you are unhappy, say so. Those who are responsible for the NYDA must account to you, like anybody else would account to you as well. Have the courage to raise those questions. Ask them to account to Parliament and use the parliamentary process to actually do so.
Hon Koornhof, I think you make some very good and important contributions. We share your concerns that no single factor in our balancing approach to the Budget must override any other. We thank you for your support for these fiscal guidelines.
Mr Orioni-Ambrosini, Santa Claus comes only on the 25th of December.
Several hon members have addressed the need to restructure the health system. We have been transparent about this process, saying it is going to cost more. There are funds within our system that we need to use better. We need to improve the quality of public health care. Minister Motsoaledi has been repeating this message many times over. All of these things put together will ultimately give us what we call the national health insurance system. It's not merely a question of where the money comes from. We have laid out the options that the country must have a discussion on.
My time is about to run out. Let me also assure Mr Swart that Mervyn King is really worried about banks, because in Europe the banks haven't come clean yet and they are not as safe as they are in South Africa.
In conclusion, we must say to South Africans that we are following a sound fiscal policy and that we are investing in growth. We will maintain the right balances but all departments, provinces, municipalities and agencies must do their bit to ensure that we can walk the sustainable path. Thank you very much. [Applause.]
Debate concluded.