Deputy Speaker, hon members and Ministers present will recall that on 27 October 2009, the Minister of Finance complied with section 28 of the Public Finance Management Act, which obligates him and his department to present to the House a multiyear budget projection. The purpose of this projection is to give certainty and predictability to the country's finances and indicate its sustainability, particularly in terms of revenue and expenditure patterns and, most importantly, in terms of the macroeconomic outlook that seeks to locate our country's place and space in the world economy.
The relevant committees responsible for finances in this House were assigned to process the Medium-Term Budget Policy Statement and recommend and report back to this House. On behalf of the Standing Committee on Finance, allow me to say that it is an honour for us in the committee to be part of a team from this Parliament, entrusted with the task of overseeing the processes and management of our economy and its finances.
I am therefore pleased and privileged to present the committee's report and recommendations, which I will deal with later in my submissions.
We need to submit, upfront, that the committee had to perform its duties within a very short space of time, given the busy schedule of our parliamentary work. Nonetheless, the committee managed to receive substantive comments and very useful inputs from businesses, organised labour and respectable economists affiliated to reputable institutions.
In processing its work, the committee reflected on the following important topics: the state of the economy; the economic policy outlook; fiscal and monetary policies; spending priorities; and budget deficits.
The 2009 main Budget, like many budgets over the whole world, was formulated under very severe economic conditions and in an environment that could be described as being hostile towards the poor and emerging economies, through no fault of their own.
It is not my intention to dwell much on the historical deficiencies of our macroeconomic challenges. However, it must be said that the Medium-Term Budget Policy Statement and its recommendations are being debated under slightly improved economic conditions compared to six months ago. There are signs of cautious hope of an economic recovery, which means the country's national framework response to the global crisis is beginning to yield positive results. However, we must warn that it is not yet time to celebrate. The projected economic growth, that would suggest the roll-overs of yesteryear, is not yet in sight.
Our work as parliamentarians is clearly defined under these current economic challenges. We are called upon, through our various standing and portfolio committees, to monitor vigorously expenditure patterns in government departments and parastatals, and support Operation Clean Audit - the courageous effort by the Minister of Cooperative Governance and Traditional Affairs to improve service delivery and accountability at local government level.
In terms of our economic recovery, this can only be realised if proper and sound economic policies, with better co-ordination between all spheres of government, are implemented, monitored and evaluated within the context of a coherent and sustainable plan co-ordinated from a central point - in this instance, the Presidency.
We have noted that government has provided support to several key sectors of the economy through development and finance institutions, while simultaneously enabling economic adjustment. Development Finance Institutions, DFIs, have assisted in boosting public sector infrastructure and investments, without which the much celebrated 2010 Fifa World Cup activities and 2010 legacy projects would have been impossible.
Before I submit the committee's recommendation it is critical that we explain how we see the steps that South Africa is taking to support its recovery plan through the Medium-Term Budget Policy Statement proposals in the current global crisis.
Firstly, we need to commend the Minister and his team for protecting the key priority areas outlined in the state of the nation address. These are: creation of decent jobs and protection of existing jobs; investment in public and economic infrastructure; education; a sustainable rural development strategy; stepping up the fight against crime and corruption; and prioritising the fight against the HIV/Aids pandemic.
The Medium-Term Budget Policy Statement also indicates a strong intention to maintain expansionary fiscal and monetary policies into the outer years of the Medium-Term Expenditure Framework. One of the key lessons that corporate South Africa and corporations the world over should learn from the current economic crisis is that heedless, selfish, amoral economic interests, particularly in terms of business practices, leads to bad economic outcomes with unintended consequences that affects mostly the poor and the working people. Financial institutions designed to carry out functions of the bank should do so within the designed regulatory framework. If they desire to deliberately avoid and evade regulations, they wreak havoc on the very same economy and markets that they are supposed to support and sustain.
Secondly, the creation of subprime lending to the unbankable in order to support profitability and award huge bonuses to executives in the banking or financial institutions, is not sustainable.
The third lesson that we should learn from this economic crisis is that overvalued corporate assets and stock market shares also lead to distortion of the economy and undermine the same economy that seeks to be promoted and sustained.
The sad part of everything is that all these mistakes hurt the poor and working class people the most. As we proceed into the future in terms of our economic recovery, it will be important that we deliberately seek state intervention in the economy to reduce and eliminate inequalities in society and also seek to equalise incomes between the poor and the rich.
As far as our recommendations are concerned, I would like to focus mainly on three or more things that the committee has looked at. In order for Parliament to engage substantially and more intelligently with the budget before it, there is a need to expedite the setting up of a Parliamentary Budget Office in the near future in order to support the work of the Select Committee on Finance and Appropriations, especially during the value-for- money oversight and accountability exercise. It will therefore be ideal for the Director of the Parliamentary Budget Office to be appointed as soon as possible. This should be done no later than March next year. [Applause.]
The committee also believes that it is important to provide sufficient administrative content and research support capacity to Parliament in order for it to fulfil its legislative obligations and oversight functions over the work of the executive. It is also critical that Parliamentary programmes allow time for Parliamentary committees to engage with the Medium-Term Policy Statement and Budget matters, otherwise we pay lip service to public participation.
In conclusion, I would like to thank the committee members for their participation and for their dedication in making sure that the committee executes its responsibilities. We therefore recommend that this House consider and accept our recommendations as proposed in our report. Thank you. [Time expired.]