Hon Deputy Speaker, Ministers and Deputy Ministers, fellow colleagues, central to our developmental agenda as the ANC, the leading party in government, is the mammoth task of ensuring that all South Africans are provided with an opportunity to pursue economic growth, development and redistribution so as to realise a better life for all.
Our government's fiscal policy is the axis around which this developmental mandate orbits. It enables us to deliver on this mandate by providing resources in a manner that is sustainable and that complements the much- needed stability of the economy. As the ruling party, our beloved organisation the ANC has, since coming into power, striven for the realisation of a strategic perspective of contributing to a stable economy, which we understand to be crucial for creating an environment in which job creation can accelerate, entrepreneurial activities can flourish, and companies and households can invest with confidence.
The current global economic contraction has placed all governments' revenues under severe pressure at a time when economies require fiscal support the most, and at a time when liquidity is very scarce. As a result of our sound countercyclical fiscal policy, unlike many other countries in the world where budget deficits have increased, our healthy public finances enabled us to support growth and spending on infrastructure and social services.
In fact, our fiscal response to the economic recession is regarded as one of the largest in the world. The fact that our fiscal and monetary policy cushioned the impact of the budget deficit, which we are all aware moved from 1% of our GDP in the 2008-09 financial year to a projected deficit of 7,6% this financial year, is a much-welcomed reaction and confirms the correctness of the fiscal path we have opted for as the ruling party. We regard this development as a positive step forward towards the realisation of our massive programme to build economic and social infrastructure.
As the ANC we concur that the current expenditure trend will widen government borrowing requirements in order for the government to continue with its noble agenda of bettering the lives of our people. The fact that we entered the economic downturn with a budget surplus is a big plus for us as it creates space for us to continue with our long-term investment plans without having to worry too much about the recession's impact on such plans. It is in the same context that, as the ANC, we support the projected consolidated borrowing requirement of R285 billion.
The ability of government to finance its expenditure programme in a sustainable way is a very central principle of any fiscal policy. A key indicator of sustainability are debt-service costs. Hon Speaker and respectable House, if these costs are left to rise as a percentage of GDP over the long term, we will find it difficult to stick to our expenditure programme. To avoid the possibility of such an occurrence, we urge the Ministry to ensure that related spending is driven by real physical investment projects that will assist us to create jobs that will lead to growth in household expenditure, that will lead to injections to the tax revenue and that will make a positive contribution to the much-deserved economic growth.
It is our belief that such an approach will enable us to treat borrowing as a temporary solution that cannot be allowed to burden generations and inhibit future growth and service delivery. We agree that sustaining higher borrowing will lead to our having spiralling debt costs and eventually to a costly adjustment through lower spending on service delivery or, the most unfortunate situation, to increasing tax rates. This might have a very serious adverse effect on economic stability and growth.
Central to our attempt to curb a budget deficit will be the oversight capacity of both the National Assembly and the National Council of Provinces. As cited in the report of the Standing Committee on Finance, it is our submission as the ANC that, inter alia, the proposed measures be adhered to. The intended expansion of public sector capital expenditure is seen as a good enabler for economic productivity capacity, which will empower the state to continue providing required services and goods.
The expansion in public infrastructure expenditure is also welcomed as an initiative that will enhance the government agenda of economic growth and transformation of the economy in order to create decent work and sustainable livelihoods. We are convinced as the ANC that the newly introduced Ministries of the National Planning Commission and of Performance Monitoring and Evaluation will assist us in dealing with the problem of integrated implementation of all earmarked infrastructure programmes.
Indeed, our economic and social development is about our collective commitment as government, the private sector and civil society to realising the cited priorities of our government. It will be of the utmost importance to work together. Working together we can do. "Eendrag maak mag." [There is strength in unity.]
Hence, it is necessary for all of us to pay tax. Tax revenue has emerged as the key contributor to national income. Therefore it is extremely important for all taxpaying South Africans and companies to prioritise the payment of tax. In order to cater for current development needs and narrowing the worrisome budget deficit we really need to double our efforts and do things differently to boost tax revenue. We therefore welcome the tireless efforts in the form of penalties that are to be introduced by our hard-working, South African Revenue Service, Sars team. As commanded by the holy book, let's make sure that we owe no man anything and continue to shower the downtrodden with our love by abiding by the law by paying tax.
Taking our cue from the high-growth strategy studies conducted on 13 economies, we must use the five established growth reasons to further harness the economic moment we are currently in. These are: shifting resources to labour-intensive sectors; having fiscal and monetary policies that promote balanced, sustainable growth; increasing competitiveness, raising productivity, lowering costs; having trade and industrial policies that lower costs and create jobs; and improving public-sector performance and service delivery.
As the ANC we support the Medium-Term Budget Policy Statement, the MTBPS, and remain convinced that it is a budgetary and fiscal declaration of intent that has the full potential of ensuring that collectively we deliver on our mandate as assigned by the South African majority. Indeed, this MTBPS is an appropriate foundation for an economically sound Medium-Term Expenditure Framework, MTEF. Ke a leboga, Mmusa-kgotla. [Thank you, Deputy Speaker.] [Applause.]