Chairperson, the ACDP has already joined others in expressing concern over our rising Public Service debt levels, although South Africa is in a better position than many other countries, as indicated by the Minister.
In this regard Sars is to be commended for collecting R8,1 billion more revenue than anticipated by the end of the previous year, resulting in the reduction of the budget deficit to 6,8% of the gross domestic product, GDP. We commend them and we trust that they will have even greater success in the present financial year, particularly, and hopefully, in an environment of an economy that is continuing to grow.
Whilst the budgeted economic growth forecast is 2,3% of GDP for this year, rising to 3,2% in 2011, much will depend upon the unravelling crisis in the Eurozone, as alluded to by other speakers including the Minister. Whilst a E100 billion bailout has been given to Greece, fiscal concerns about Portugal and Spain remain. European banks hold significant Greek, Portuguese and Spanish debt. A sovereign default by a European member could undermine the viability of European banks, creating another banking and credit crisis as severe as that caused by the subprime mortgages.
The hon Minister has already expressed concern regarding the time that it has taken the Europeans to deal with the Greek sovereign debt crisis. The question is, how will this impact on emerging markets like South Africa?
Thankfully, we have not experienced much fallout. Stock exchanges have bounced back since last week following the news that the European Union, EU, had moved to stabilise the euro and prevent the Greek debt crisis from affecting other member countries. South Africa's situation is also different. It is characterised by improving real growth and tax revenues with lower inflation rates.
We also do not have sky-high public debt and low economic growth, which is plaguing certain European countries. However, if double debt recession were to materialise in the euro area, this would undoubtedly impact on our markets due to investor risk aversion and have an effect on our exports to the EU.
We trust that this will not occur, particularly as we now have this unprecedented package of support with the International Monetary Fund, IMF, and US Federal Reserve, USFR, saying that they are also there to give support.
These crises, however, illustrate the need to bring our public debt levels down to manageable levels. Thus, the ACDP supports the finance committee's recommendation that Members of Parliament, MPs, should engage in more detail on the fiscal exit strategy which seeks to reduce the impact of high borrowing on future growth prospects.
The ACDP remains positive on our economic growth prospects. However, it is crucial that the National Treasury works closely with other departments, particularly the Department of Economic Development, and the private sector to achieve job creation, economic growth and poverty reduction. The ACDP wishes to thank the staff members of the Treasury, the commission and Sars for their hard work and commitment. We will support this Budget Vote. I thank you.