Hon Speaker, hon members, the Financial and Fiscal Commission's submission has interrogated government's policy priorities for 2010. It has also examined growth trends and the utilisation of national revenue funding. It concurs with government on its main priorities and thus gives support for the Appropriation Bill.
It is, however, distressing that 16 years after the advent of democracy, South Africa has the unenviable record of being the most unequal society in the world. The gap between the rich and the poor as shown by the Gini coefficient is forever widening.
It is not surprising therefore that unions' strikes stem in part from the disparity of earnings between the upper echelon and ordinary workers. The class divide is going to lead to a class conflict. One does not have to be a prophet to recognise this. The question is whether we have the will to alter the situation on time.
The government's key public spending priorities for the year are education and skills development, health care, job creation, infrastructure, rural development, justice, crime prevention and policing.
There has been little change since 2008. Skills development has been appended to education. We fully agree that skills development is a very important component of education. Job creation has been prefixed to infrastructure development. We also agree that considerable emphasis should be placed on job creation.
However, basic household services have been removed from the government's previous priority list. Rural development has taken its place. This is surprising as the issue of household services remains as contentious as ever. In Cope we agree that rural development has to come onto the priority listing but not at the expense of household services. This is fundamentally wrong. Even at this stage, it would be appropriate for government to list six extraordinary priorities instead of the basic, usual five. We urge government to do so and to return basic household services to the list as the sixth item.
I now come to debt serve costs as this is the fastest growing item on the budget line. The Financial and Fiscal Commission has warned about the government's use of debt to fund current expenditure, such as remuneration of public servants.
Like the commission, we too are concerned about the increase in debt service costs relative to other budget items, as well as the rapid increase of the public sector wage bill. Government must drastically restrict long- term borrowing because what has happened in Greece should serve as a timely warning to us in South Africa. Debt has a tendency to become unmanageable very quickly, especially as circumstances can alter very quickly.
At a time when economic conditions in the world are as uncertain as they are today, it is very important to curb debt rather than to roll it over as government is intending to do. I believe that red lights should start to flicker. As the custodians of the national purse, this august House should start to become very concerned. The national government's net loan debt will have risen from R526 billion last year to R1,3 trillion in two years time. Consolidated government debt service costs will therefore rise from 2,4% of the gross domestic product, GDP, or R57,599 billion this year to 3,2% of the GDP, or R104 billion in 2012-13. At that stage, the government debt service costs will be a staggering R104 022 billion.
The National Assembly must think very seriously about the impact of this spiralling debt service costs as it must do everything in its power to bring the debt down. As I see it, South Africa is never going to be able to enjoy a debt-free status again. While the national government's net loan debt is growing, so is expenditure.
Only International Relations, Public Enterprises, Arts and Culture, Sport and Recreation and Communications reflected a slight decrease in their budgets. All of the other departments have increased their budgets. This means that the hard pressed South African citizens must prepare for substantial tax increases.
Likewise, whichever party that comes into government in 2014, will have a note from Minister Gordhan left on the table saying, "Sorry but there is no money left in the Treasury. Good luck!" Remember that this is what happened just a few weeks ago, when the labour government left office in the United Kingdom.
It is an economic truism that large-scale debt, driven by current consumption, will compromise economic growth and destabilise the domestic financial system. It would have been different if debt was being used to finance capital assets. Unfortunately, this is not so and that is why the country is going to face fiscal uncertainty.
There is another matter of some importance on which we would like to get clarity from the Minister. This year, the national estimates of expenditure have not reflected government's expenditure on consultants. Does this mean that as of this year, consultants will no longer be appointed?
That would be a very progressive development considering how government employees leave by one door and return straightaway as consultants through the next door. Even though this is not allowed in the code, the practice is now well established.
It would therefore be of great relief to know that expenditure on consultants is not reflected in the estimates of national expenditure because departments may no longer employ consultants.
Cope would also like to hear from the Minister about procurement processes as these have been thoroughly corrupted by the ANC-led government. Although tax compliance certificates are required by law, departments are dispensing with them at will without any consequences. The Minister can look at how the Department of Correctional Services has generally subverted the law in this regard. Tender adjudication processes have been bent crooked and accreditation processes are twisted. For how long must the taxpayer patiently countenance such criminal behaviour inside government?
I now come to the question of funding for the public transport sector. A coherent fiscal strategy is lacking. Can we ask the Minister when this deficiency is likely to be remedied?
Finally, I come to the question of the poor in South Africa. Three factors that are making the present global economic crisis more severe for our poor are escalating food prices, rising electricity tariffs, fuel costs and joblessness.
Constitutionally, the poor are not passive victims of poverty and mere recipients of state grants and services. They have to be actively assisted to a better life through education, jobs and services.
We are seriously concerned about the fiscal position in which this country finds itself. We insist that debt has to come down as the cost of servicing that debt will impact negatively on taxpayers in particular. Thank you. [Applause.]