Hon Chairperson, hon members, firstly, let me thank the chairpersons of the two committees, hon Mufamadi and hon Sogoni, and their respective teams for the excellent work that they have done, both on the Medium-Term Budget Policy Statement, MTBPS, and the Appropriation Bills.
Hon members from different parties have raised questions about the economic outlook. We cannot wish away nor will away the fact that, since we last spoke in this Chamber, the outlook on the European side is increasingly getting gloomier and more technocratic governments are taking the place of democratically elected governments.
However, more problematic is the fact that, as of last night, the United States also found itself in a political gridlock and is unable to resolve a way forward in terms of reducing its debt levels. Both these situations are creating a rather unfortunate dark cloud, not only over Africa and South Africa, but, indeed, amongst most of the fast-growing emerging economies.
As many members have said, we have begun to prepare, and we have prepared. We do have a plan to ensure that South Africa can sustain itself. The hon Ambrosini should remember that we are not in a prolonged recession, because we are still going to grow at 3%. We are in a prolonged recovery, which itself is in a crisis as a result of some of these developments.
So, what did we say in the MTBPS? We said that we need to do three things in the near future or over the next three years. On the one hand, as Mr Sogoni has said, we must ensure that we keep our real expenditure and growth above the zero level, which we have done at 2,3%. Secondly, we have said that we need a credible fiscal consolidation plan, which we have delivered upon as well. Thirdly, we are saying that we should watch our expenditure. We need to change the composition of expenditure so that more money is found for investment in infrastructure and maintenance of infrastructure than on consumption. As we prepare the Budget for February next year, this is what we will be looking at.
Many hon members have raised concerns about the question of debt and the level of debt. Our debt is in a manageable situation and, given the current circumstances, the countercyclical approach, which the hon Koornhof talked about earlier on, is one that we are still pursuing. As a result of dropping revenue, we have actually increased our borrowing marginally. However, we will still be just above the 40% mark over a three-year period and then we will level off.
Yes, there are rather regrettable consequences as a result of our actions, but these are unavoidable. We need to avoid these consequences because we do not want austerity in South Africa. We do not want to cut social spending. We do not want to cut our spending on infrastructure. We do want to cut our spending on wastefulness. We do want to discourage leakages from our system. We do want to fight corruption. However, we all need to do a lot more than just talk in order to achieve this.
As the hon Mufamadi has said, the committee wants a contingency plan. Certainly, that is something that we need to work with, both as the Treasury and the Reserve Bank, in the event that the circumstances around us become even worse. As innocent bystanders, we can be affected to a greater extent. Hon Sogoni is right to invoke the spirit and thoughts of this great leader, Oliver Tambo. One of the things that Oliver Tambo taught us is that you must evaluate and understand the material conditions in which you find yourselves in order to adopt the appropriate methods to respond to those conditions. Therefore, we cannot dream about things that we are unable to do, given the current economic climate around the world. I believe that the MTBPS certainly produces a very credible story regarding where we want to go, both in terms of growth on the one hand, and fiscal management on the other hand.
The hon George reiterates his point that he does not think that we have a credible fiscal framework. Well, I have not seen a better one emerging from my left yet. On the last occasion, the hon George talked about more incentives, more taxing, a greater deficit and then when we try to manage our deficit he says that this is not a credible way forward. So, hon George, let's have a chat. If you want to offer me a free cup of tea, you are welcome. Let's talk on a more reasonable basis about what is it that we need to do under the constrained environment in which we find ourselves and ensure that as a country we move forward.
We have many incentives for business in South Africa that go into tens of billions of rands every year. The question is not whether we have enough incentives. The question is whether they are adequately targeted and appropriate in the current climate, as well as whether businesses are actually using them as they should. Chairperson, I'm sure all of the parties in this House will agree that we need to induce and introduce more confidence in the economy. The Deputy President has been speaking on this question on a number of occasions. However, all of us should contribute towards making less unconstructive political noises which discourage investment in this country. Whether you are in party A, or party B, or party D, as might be the case on my left, we all need to be careful about the way in which we articulate political views and other views and not to endanger the little bit of growth that we have in our economy. Again, as parties, I think we need to make this an apolitical issue so that we can indeed induce more confidence in our economy.
The government has indeed, hon George, been a job creator in our economy. If it had not been, we wouldn't have the numbers that we have actually seen. However, I want to reassure him and other hon members that government cannot and will never be the major job creator in our economy. The private sector in South Africa, in all its different forms - the informal businesses, small businesses and larger businesses - is the prime creator of jobs in the South African situation.
The budget office, as Mr Sogoni has pointed out, is not the concern of the Ministry but that of Parliament. I thought the hon George, with his experience, will actually appreciate that and not raise that kind of question. The hon Koornhof is absolutely correct that we have tried to practice and have indeed practised countercyclicality in terms of our approach. He is also correct that all of us need to contribute towards creating the right kind of political climate in South Africa so that we can inspire the kind of confidence that we actually require.
We should be worried about Europe. One of the lessons from Europe, hon Mario Ambrosini, is to ensure that we do not place ourselves in the same position as your homeland has done. [Applause.] We believe we have a credible plan to do so. We do not owe more than one trillion euros to anybody. Our debt levels are not the same as some of the countries in the European situation. Therefore, let us not unnecessarily create panic in our environment about a situation that is, in fact, very credible and well managed in our instance.
The hon Koornhof talks about the breaking up of the eurozone. That, certainly, is a possibility. We shouldn't want that to happen and we hope that many people around the world feel the same. We also hope that European leaders will not engage in anymore brinkmanship and take the substantial political decisions that need to be taken with the European Central Bank in order to remove even the greater levels of uncertainty that are beginning to enter the economic equation.
The hon Greyling is right. We cannot only blame the global situation for the fact that we have unemployment levels as we do. None of us has actually done that in government. As hon Adams has said, we are prepared to confront the challenges of poverty and unemployment. We recognise that much more needs to be done, but that does not mean that we are not doing anything at this stage. The hon Adams is absolutely right that we have got to be careful as a society to watch the rich and poor gap, both in our own country and around the world. Clearly more needs to be done in this particular regard.
Both of the hon Swarts have made valuable contributions. The hon Steve Swart of the ACDP talks about South Africa being more competitive. We certainly agree with that. The hon Swart from the DA says that jobs will be created mainly in the private sector and we agree with that as well. If we can sit down with you, hon Swart, we will demonstrate to you that most of the things that you talk about are, in fact, work in progress and are areas that we have acted quite assertively on as well.
In conclusion, we recommend the MTBPS to the National Assembly. We believe that it has the right combination of measures, both fiscally speaking and in terms of managing our expenditure the right way. There is no doubt that much more work needs to be done, but much thereof also lies in the hands of parliamentary committees and we look forward to co-operating with you in this regard. Thank you very much. [Applause.]
Debate concluded.
Bill read a first time (Democratic Alliance dissenting).