Madam Deputy Speaker, the ACDP shares the concerns expressed in the parliamentary report about deficit levels and the increasing public debt levels, forecast to rise to R1,3 trillion by 2013. Debt service costs are set to escalate dramatically, reaching R104 billion by 2013. We appreciate, however, that the increased borrowing requirement is a response to exceptional circumstances and that government has done relatively well, given the global recession.
May I, however, remind members that God in His Word promises that if we obey His commands, we as a nation will be blessed and that we will be a lender to nations, not a borrower. There is no mention about global recovery or global economic crises. Why are we not experiencing this blessing?
I submit, Madam Deputy Speaker, that it is not insignificant that the number of job losses last year was in the region of 900 000, and that this is almost the same number as the number of babies that have been aborted since abortion on demand was allowed. Can this be a coincidence? I don't think so.
The Budget Review states in no uncertain terms that high deficits lead to rising debt service costs that compete with productive expenditure. We are given the assurance by the government that steps will be taken to ensure that the growing debt burden does not crowd out spending on development priorities and that government will also stabilise growth in interest costs through a careful, controlled reduction in the deficit, taking into account the health of the economy. There is, however, no guarantee of this, given that the global recovery is risky and fragile.
Our trading partners in Britain and the Euro zone are facing a bleak time in the next few months. The Governor of the Bank of England has stated that this nascent recovery is fragile. According to him, the tensions that underlie the building up of large world imbalances have not been resolved.
Should there be - God forbid - a double-dip recession or even stalled economic growth, South Africa would be in an extremely precarious position - given investor sentiment with regard to emerging market economies.
For this reason the ACDP and other members, as well as the report, indicate our concerns about escalating public debt. This is also the reason that the report has recommended that National Treasury develop a clear strategy on how it plans to manage these new levels, both in a scenario of a growing economy and in a scenario of an economy not growing as forecast, given the possibility of a second wave of global recession.
At the very least, we should have a fiscal stability pact, as proposed by the Financial and Fiscal Commission. The ACDP will, however, remain positive and trust that growth forecasts will be far higher than estimated, leading to increased revenues, and that we will speedily reduce public debt and debt service costs, leading to a better future for all. I thank you.