Hon Speaker, the first thing that I noticed is that there is no water for me here, and my speech is going to be very long.
Mr Speaker, it is my honour and great pleasure to participate in this historic budget debate of the fourth democratic Parliament. It is indeed a special occasion for us as hon members, because the fiscal framework under consideration and the budget proposals contained in the Division of Revenue Bill and the Appropriation Bill to be deliberated upon are the first to be processed under the new Money Bills Amendment Procedure and Related Matters Act.
This Act is a consequence of years of deliberation by the public on how budgetary processes should reflect the concerns of broader society. The ANC as an organisation of the people, through its structures, finally resolved in Polokwane that Parliament should pass legislation to effect this aspiration of our people. This piece of legislation seeks to deepen public participation and therefore there is indeed an expectation from the public that their voices will be heard through this process more than ever before. After the Budget was presented, the Speaker referred the fiscal framework to the Standing Committee on Finance. Between 18 February 2010 and 1 March 2010 we interacted with different stakeholders representing the views of various constituencies on the fiscal framework, and all parties in Parliament, with the exception of the IFP, supported the framework.
Let me also take this opportunity to thank, express appreciation to and congratulate President Jacob Zuma on giving the nation and the world at large an opportunity to celebrate the 20th anniversary of the release of our torchbearer and true liberator, Tata Nelson Rolihlahla Mandela ... [Applause.] ... who epitomises the dignity and pride of the heroic and relentless struggles of our people in the fight for political and economic liberation, because, in reality, political freedom will remain meaningless and incomplete without economic power.
This celebration is but a recognition and reaffirmation of the correctness of our history, and that Mandela is not just an icon of our people but the heritage and a living symbol of human dignity. Given the current economic challenges, what we need is a growth path underpinned by a coherent industrial strategy, with clear sector programmes aimed at the creation and retention of quality jobs and employment opportunities via a process of retooling the skills of economically active people.
The proposed fiscal framework and revenue proposals are a base and foundation on which the Appropriation and the Division of Revenue Bills will be considered by this honourable House at a later stage. The new Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009, provides the ideal opportunity for the broader public and Parliament to engage with long-term trends in fiscal and economic policies.
When we compare this budget to the Medium-Term Budget Policy Statement presented in October 2009, the first observation we make is that it is premised against the backdrop of a slightly positive economic outlook, which remains fragile in terms of the projected recovery of the global financial markets, and it addresses two main policy challenges. The first is the transformation of the South African economy to realise sustainable growth accompanied by employment creation. The second is the need to have a responsive public sector to meet the expectations of our population and the broad objectives of a developmental state.
These proposals are borne out of our experience of the last decade, which justifies a new way of doing things, because we can safely say, without fear of contradicting ourselves, that we now know what has worked and what needs to be adjusted.
What was of critical importance in this Budget Speech was an admission by the Minister of Finance that the current economic growth path has not adequately responded to the challenges of the growing statistics on joblessness, income inequalities and wealth redistribution.
In the same spirit, the Minister used this public platform to invite all stakeholders to a national dialogue, particularly between government, business and labour, to chart a common developmental economic growth path with practical solutions to the challenges that confront ordinary people on a daily basis.
The fiscal framework recognises that the majority of the potentially economically active population who are unemployed are young people. This must be viewed in a very serious light. In fact, we must treat this as an emergency. Young people need to be exposed to an environment that will assist them in realising their goals. The proposed subsidy by the Minister will play a big role in responding to the negative impact that no education, no skills and no entrepreneurial skills have on young people.
The onus is on us to act in a responsible manner, cognisant of the fact that there are capable men and women who, in the past decade, lost hope of any job prospects. As leaders, irrespective of our political affiliations, we have a responsibility to engender entrepreneurship and skills development in young people who, in turn, will be capacitated to restore hope to uBaba Madikane in the Eastern Cape who last saw the inside of a factory 10 years ago before he was retrenched. This will create the type of economy which, simultaneously, changes the hopeless situation of Joyce Tshikukununu in Thothololo, a graduate who has not had a job for the past eight years.
The proposed measures to promote youth employment through employer subsidies should be carefully considered. Just like any other new initiative, there will always be serious challenges in the implementation of the proposed employer subsidy. Our response to these challenges will determine the success or failure of this noble idea.
All the parties should view this as the beginning of a potentially fruitful process; let us come forward with more enriching ideas. Together we can do more. The need to encourage the private sector to give young people experience and meaningful employment should be commended and supported vigorously. [Applause.]
For this initiative to succeed, maximum co-ordination between the economic cluster of Ministries and their departments is paramount. And, most importantly, the matter should be thoroughly canvassed with the labour representatives.
Taking experience as our best teacher, we must guard against employers turning this into a scab labour scheme, in which real jobs are conveniently replaced by this state intervention or by temporary jobs. We need to be careful of employers who may seek to turn the good intentions of government into a get-rich-quick scheme to boost their profit margins.
The question to ask is: What then is the trajectory of a new growth path? This brings me to my next point and observation with regard to the national response to the economic crisis. It is my considered view that, to a very large extent, what held our economy together during these trying times was largely the government's countercyclical fiscal policy, particularly on public and economic infrastructure spending. It is also evident from the budget presentation that our economy is on a recovery path, and this can be attributed to the partnerships among the private sector, labour and government.
Notwithstanding the successes of this state intervention, there are indications that not all sectors of the economy have responded positively to government's offer, particularly when we assess the training lay-off programmes in the clothing and textile industries, and in the transport and metal-fabrication industries.
We must commend government spending particularly on public and economic infrastructure and in the automotive industries, and we particularly commend BMW and Renault for taking full advantage of the lay-off programme incentives. This has thus far succeeded in mitigating the retrenchments.
Given that not every opportunity provided to the private sector has been maximally utilised, the impact of the economic recession has been more severe, hence we have lost almost one million jobs in the economy in a period of less than a year. We urge the private sector to participate fully in the lay-off programmes. In fact, there is a need to examine whether the economic recession wasn't used to a certain extent as an excuse to lay off workers in some instances. This matter requires the attention of Nedlac and other relevant stakeholders.
Although a deficit is bad, it can also be good, depending on the reason for borrowing and when properly managed. From the budget presentation it is clear that in order to meet our expenditure priorities, we will have to increase our debt levels over the next three years.
What is comforting, though, is that this borrowing is not meant to sponsor the current account, and there is a clear indication of fiscal stability around 2014. Our role as Parliament is to ensure that there is value for money. For us to achieve this, we will have to ensure that our Public Service is properly geared up to deliver on the mandates of a developmental state. We must further strengthen the efforts by the executive in the fight against corruption by mobilising all our communities to reject any corrupt tendencies wherever they occur.
In conclusion, we acknowledge that the fiscal framework, as stated before us, is presented under different economic conditions, which indicate positive signs of a slow recovery - and yet it has also taken into consideration the five priorities reflected in the ANC manifesto and is indicative of steps to strengthen the three arms of government. It is therefore a good basis and foundation for the Division of Revenue Bill and the Appropriation Bill.
I therefore urge the honourable House to support the fiscal framework, as presented by the Minister, and would like to say officially that the ANC supports the framework. I thank you. [Applause.]