Hansard: Member's Statements
House: National Assembly
Date of Meeting: 18 Mar 2008
Summary
No summary available.
Minutes
NREVISED HANSARD
NATIONAL ASSEMBLY
Tuesday, 18 March 2008
TUESDAY, 18 MARCH 2008
PROCEEDINGS OF THE NATIONAL ASSEMBLY
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The House met at 14:00.
The Speaker took the Chair and requested members to observe a moment of silence for prayers and meditation.
The CHIEF WHIP OF THE OPPOSITION
END OF TAKE
Start of day
NOTICES OF MOTION
The CHIEF WHIP OF THE OPPOSITION: I hereby give notice that I intend moving the following substantive motion: That -
1) the House notes the Speaker of Parliament's appointment as both Chairperson of the ANC and the ANC's political committee;
2) further noting that the National Assembly Guide To Procedure 2004 argues that, although affiliated to a political party, the Speaker is required to perform the functions of that office fairly and impartially in the interest of the Assembly and Parliament,
3) resolves that an ad hoc committee be appointed to investigate the implications of the Speaker's dual role for Parliament.
The MINISTER OF EDUCATION: Madam Speaker, the hon Davidson indicated ``Speaker of Parliament''. I wasn't aware there is such an office. He may be talking about a phantom, and not yourself.
The SPEAKER: We don't have a Speaker of Parliament, as the hon member knows. Is there any other notice of motion?
Mr G G BOINAMO
END OF TAKE
The SPEAKER
Mr G G BOINAMO: Madam Speaker, I hereby give notice that I intend moving the following motion on behalf of the DA:
That the House debate the current problem of job stress, poor working conditions and physical and emotional abuse from learners, which has resulted in many teachers leaving the profession, and to come up with solutions to this problem. Thank you very much.
Mr G R MORGAN
END OF TAKE
Mr G G BOINAMO
Mr G R MORGAN: Madam Speaker, I hereby move on behalf of the DA that, noting the high number of new mining applications in South Africa, and further noting the recent reports by the National Nuclear Regulator into the radiological contamination in the Wonderfonteinspruit, that the House debates the effect of acid mine drainage on South Africa's water sources and the effectiveness of current environmental laws in preventing this pollution. I thank you.
The CHIEF WHIP OF THE MAJORITY PARTY
END OF TAKE
Mr G R MORGAN
NATIONAL WATER WEEK
(Draft Resolution)
The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice that:
[Take in from Minutes]
Agreed to.
The CHIEF WHIP OF THE MAJORITY PARTY
END OF TAKE
The CHIEF WHIP OF THE MAJORITY PARTY
LAUNCH OF PARLIAMENT'S MULTIPARTY WOMEN'S CAUCUS
(Draft Resolution)
The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice that:
[Take in from Minutes]
Thank you. [Applause.]
Agreed to.
THE SPEAKER
END OF TAKE
THE CHIEF WHIP OF THE MAJORITY PARTY
The SPEAKER: Before we move away from that motion without notice, I wish to take the opportunity to also inform the House that the presiding officers, at 12h30, addressed the press club to inform them about the hosting of the Inter-Parliamentary Union.
Among the matters that were presented to the press was the fact that the IPU continuously concerns itself with issues of women. The IPU is very well known for its ongoing survey on women in politics and in parliaments. The women parliamentarians in the IPU sit and are given an opportunity to deliberate among themselves, during the time of the IPU conference, which will happen here in Cape Town, on Sunday 13 April, at the Cape Town International Convention Centre, where all women parliamentarians who will be attending the IPU will be meeting to discuss issues of common interest to themselves.
I say this since this is International Women's Month, where even the United Nations concerns itself with issues that affect women around the globe. South Africa of course was represented, among others, by our own Minister for the Public Service and Administration, the hon Geraldine Fraser-Moleketi.
The CHIEF WHIP OF THE MAJORITY PARTY
END OF TAKE
The SPEAKER
48th ANNIVERSARY OF SHARPEVILLE AND LANGA MASSACRES
(Draft Resolution)
The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice that:
[Take in from Minutes]
Thank you. [Applause.]
Agreed to.
The CHIEF WHIP OF THE MAJORITY PARTY
END OF TAKE
The CHIEF WHIP OF THE MAJORITY PARTY
FOR BILLS AND JOINT STANDING COMMITTEE ON INTELLIGENCE CONSIDERATION OF SECOND REPORT OF JOINT RULES COMMITTEE 2007 – ORDERING JOINT SITTINGS AND RULES OF DEBATE AND CONSIDERATION OF FIRST REPORT OF JOINT RULES COMMITTEE 2008 – MULTIPARTY WOMEN'S CAUCUS, LANGUAGE REQUIREMENTS
There was no debate.
The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move that the reports be adopted.
Motion agreed to.
Mr N M NENE
END OF TAKE
The CHIEF WHIP OF THE MAJORITY PARTY
APPROPRIATION BILL
(First Reading debate)
IsiZulu:
Mnu N M NENE: Somlomo, oNgqongqoshe abakhona namalungu ahloniphekileyo ePhalamende, kuyintokozo enkulu kimi ukuthi ngime lapha ngixoxe ngalolu daba lokwabiwa kwemali olwethulwa mhla zinga-20 kule nyanga ephelile uFebhuwari.
English:
The day, 20 February 2008, marked the pronouncement of the will of the democratically elected ANC government's policy, when the Minister of Finance tabled the 2008-09 Budget in this House. This followed after the President of the country had outlined the policy priorities in the state of the nation address, as mapped out also in the January 8 Statement of the ANC.
These milestones are just different stages of the ANC's commitment to building a national democratic society, which, by definition, is made up of various classes and strata. In order to address the class contradictions and class struggle that manifest them in the inequality, poverty and underdevelopment, there is a need to intensify the national democratic revolution so as to ensure that every South African, especially the poor, experience an improving quality of life.
The 52nd ANC National Conference enjoins us to continue building a developmental state that is shaped by the history and socio-economic dynamics of South African society. This state is expected to guide the national economic development, and mobilise domestic and foreign capital and other social partners to achieve these goals and must have these attributes: The first is that of capacity to intervene in the economy in the interests of higher rates of growth and sustainable development; the second is that of effecting sustainable programmes that address the challenges of unemployment, poverty and underdevelopment with a requisite emphasis on vulnerable groups; and the last being that of mobilising the people as a whole, especially the poor to act as their own liberators through participatory and representative democracy.
This Budget is tabled at a time of uncertain global economic environment, but continues to focus on our country's pressing needs, as espoused in our Reconstruction and Development Programme, taking advantage of the fiscal space created by the post-apartheid macroeconomic policy. This has put the country in good stead to withstand the unfavourable economic climate that is sweeping through the entire universe. Some economists that appeared before the committee identified some challenges as those that relate to lower than expected growth forecasts, large current account deficit, high inflation, which is set to rise even further and a weakening exchange rate further compounded by the spiralling oil prices.
Even though the South African economy has the resilience to weather the storms, it is commendable that the National Treasury, under the stewardship of our Minister of Finance and his team, has exercised the necessary caution in its fiscal stance. In its submission to the committee, the Minister pointed out that several reasons necessitated the downward revision of the Gross Domestic Product, GDP, growth forecasts, including a net loss due to the electricity and an impact of higher commodity prices coupled with rising imports and low savings.
As the committee's report states, the Federation of Unions of SA, Fedusa, is of the opinion that economic growth is an important precondition to reduce structural unemployment in the country, and acknowledges that economic growth is a multifaceted phenomenon that is affected by a diverse range of factors, ranging from the level of demand, savings and investment and social stability. One of the notable achievements of the South African economy is an increase in gross fixed capital investment over the last two financial years. It is expected that gross fixed investment will average about 10% over the Medium-Term Expenditure Framework and this could be attributed to the investment in the public sector infrastructure, particularly the energy infrastructure.
The National Budget Review notes that public co-operations outperformed the private sector and the general government as the most important drivers of investment during the first three quarters of 2007. The other economic indicator that received attention of the committee and stakeholders during the hearings was inflation that has remained above the target for the considerable period of time, and is likely to remain high for some time to come. The National Treasury, in its submission, has attributed this state of affairs to high global prices for agricultural products, high oil prices and high capacity utilisation in many sectors of the economy and wage settlements that were above 8%.
A healthy debate also focused on the projected fiscal surplus that the National Treasury asserts will contribute towards increased savings, and will cushion the economy in the light of current account deficit and inflationary pressures. Some commentators have slammed this stance citing poverty and service delivery backlogs as the main reason for an expansionary fiscal policy that would rather see a deficit rather than a surplus.
The committee was convinced by the arguments advanced by the National Treasury and supported by the other economists of saving for rainy days during the good times, and signs of this rain are actually already in the horizon. The tabled Budget also has all the features of expansion characterised by tax relief for both individuals and corporate, and strong spending growth with significant additions for infrastructure and social services. My other colleagues will be elaborating on this aspect. Provisions for support to Eskom are clear characteristics of an expansionary budget.
With regards to this structural budget balance, Fedusa agrees with the Minister that while actual balance would remain in surplus of around 1% of Gross Domestic Product until 2011, the structural balance would be in deficit of around 0,6% over the same period. This would help government in using the revenue windfall in a manner that does not undermine sustainable growth.
Another important highlight of this Budget is a shift on the monetary policy stance from exchange control to a prudential regulation for institutional investors. In the National Treasury submission, the following principles were outlined: Firstly, the removal of red tape; secondly, the continued support for foreign diversification through domestic channels; thirdly, the reforms that reflect a fundamental shift from exchange controls; fourthly, the promotion of global expansion from a domestic base; and lastly, the deepening of South Africa's financial markets.
The National Treasury is of the opinion that, as the exchange controls are removed, tax reforms are required to protect the fiscus against artificial outflows. This change also comes with a name change for the Exchange Control Department in the SA Reserve Bank, which will now be called the financial surveillance department reflecting its new function. All economists and other stakeholders that appeared before the committee welcomed this. The committee will monitor the implementation of this policy shift as well as its impact working with both the National Treasury and the central bank.
In line with the resolution of the 52nd conference of the people's movement of meaningful intervention in the second economy, small business is also relieved of the tax compliance burden and the reduction of the tax liability. This assists in facilitating the formalisation of the informal sector, while it also allows them an opportunity to contribute meaningfully to the mainstream economy.
This is in direct response to our resolve of building small, medium and micro enterprises as a critical developmental challenge, which requires the state to deploy resources to build capacity and institutions. In pursuit of our agenda of economic transformation, the ANC government continues to expand opportunities for sustainable livelihoods, and supporting the growth of the second economy through better access to centres of economic growth and through financial and institutional support for co-operatives and micro enterprise. The hon Martins will be talking about this point in his speech.
As the Portfolio Committee on Finance, we are comfortable that despite the prevailing economic uncertainties across the globe and domestically, our macroeconomic policy is sound and stood the test of time. This Appropriation Bill enjoys our support and your support. [Applause.]
Mr S J F MARAIS
END OF TAKE
Mr N M NENE
Mr S J F MARAIS: Madam Speaker, this Bill, as tabled by Minister Manuel on 20 February, has major implications and potential consequences that will either support or be in conflict with the requirements for a sustainable gross domestic product in line with the set government objectives. The Minister must be complimented for some of the bold and wise measures that he has announced, while it is important to be aware of the challenges and potential obstacles.
The global economy is in turmoil and uncertainty prevails among global investors, which emanates in negative sentiments that affect our economy as well. The perceived political pressure post-Polokwane and the Eskom electricity crisis have added to the uncertainty and negative sentiments. Our inflation and interest rates remain high and are set to rise further. The rand will weaken further in response to the uncertain portfolio inflows and a volatile dollar and our large current account deficit remains on an increased trend.
The DA's alternative budget has the objective, not primarily to criticise government on its policies and the effective implementation plans, but to offer a realistic alternative approach in an open opportunity society in order to assure all South Africans and global investors that the opposition can and will, not only make realistic, meaningful and constructive contributions to assure the highest probability of macroeconomic success, but that we can act as credible and knowledgeable watchdogs in our economy. I am sure the Minister will agree that such an opposition has an important role to play to comfort current and potential investors.
Afrikaans:
Voorsitter, die Minister moet gekomplimenteer word met die volgende ooreenkomste: Die R60 biljoen aan Eskom se kapitaaluitbreidingsprogram; die hulp, steun en konsessies aan kleinsakeondernemings en die korporatiewe sektor, om werkskepping en die aanbodkant van die ekonomie te stimuleer - hoewel ons glo daar moet baie meer gedoen word; die klem op die noodsaak van uitvoergerigtheid en die verdiening van buitelandse valuta; die noodsaaklikheid vir die nodige vaardighede om die verlangde ekonomiese groei te ondersteun; en die allokasies om die sosiaal-maatskaplike sektore verder te bemagtig om die mees kwesbaarste van ons gemeenskappe en armstes onder die armes te ondersteun.
Dit is noodsaaklik dat ons die ekonomiese koek groter moet maak, waarna meer volhoubare werksgeleenthede sal kan bestaan wat die lewenstandaard en welvaart van alle burgers sal verbeter en kan verseker dat die vraag- en aanbodkant van ons ekonomie optimaal ontwikkel en benut kan word.
Die volgende bekommernisse bestaan egter, onder andere, wat bydra tot onsekerhede by beleggers: Die vooruitskatting van die BBP word waarskynlik oorwaardeer en behoort 'n koers van tussen 3,5% en 4% eerder gebruik te word vir begrotingsdoeleindes; inflasie is wêreldwyd aan die styg en is daar geen aanduidings dat die CPIX binne die volgende twee jaar hier in Suid-Afrika op vlakke so laag as 4,7% sal daal nie; hoewel sommige ekonome 'n begrotingstekort propageer, is ons gemaklik met die beginsel van 'n begrotingsurplus, veral in die afwesigheid van 'n noemenswaardige spaarkultuur onder die verbruikers. Indien hierdie tendens voortgaan, behoort daar teen 2010-11 'n opgeloopte begrotingsurplus van R100 biljoen te wees. Die vraag is net: Wat is ons optimale spaarmikpunt hiermee; en tot watter mate verhoed dit noodsaaklike investering waarmee groei gestimuleer kan word? Met ander woorde, wat is die geleentheidskoste daarvan? Daar is ook 'n spreekwoord wat sê "'n mens kan jou bankrot spaar." Maar ek glo nie dit is u bedoeling hiermee nie. Die al groter wordende tekort op die betalingsbalans is 'n groot bron van kommer. Die Minister het dit erken en is die goedbedoelde erkennings versoeke vir buitelandse kapitaalinvesterings en die toewysing van geld na die Departement van Handel en Nywerheid vir uitvoerbevordering alleen nie genoegsaam nie.
Die verswakkende rand in reaksie op die kwesbare dollar en die onsekerheid by veral portefeuljebeleggers is enersyds 'n bron van kommer, terwyl Suid-Afrika andersyds nie gerat is om effektief munt te slaan uit die uitvoergeleenthede as gevolg hiervan nie. In baie gevalle het ons belemmerende arbeidswetgewing wat ons arbeidskomponent geensins kompeterend maak nie.
English:
The Setas are not able to spend effectively their yearly allocations and to secure the skills required to support the targeted GDP. The DA's view is that the business sector, which knows best what is required, should rather be rewarded for providing the required skills in partnership with government. A whole restructuring of the employment, skills development and human resources programmes in the Department of Labour are needed to ensure an environment that will be conducive to quality and responsive skills development.
The underperformance of most government departments and the apparent lack of real accountability is a major concern. The lack of adequate infrastructure and a secured energy supplies are hampering investment and has lately resulted in the smelter at Coega to be put on hold, which will now possibly be moved to Malaysia.
While the Minister has announced the intention to remove red tape and measures to ensure easier and cheaper access to especially foreign investors, we have lately seen substantial foreign investment deals being put on hold due to the uncertainty that prevails.
It is evident that the current requirements for foreign, mainly portfolio investments, in access of R3 billion per week to fund the deficit is not sustainable. South Africa urgently requires an initiative to attract more foreign direct investments, with the intention to add value to the products to be exported. The initial investments will bring in much needed foreign capital and the sustainable exports will support the much-needed employment drive and the decrease in the current account deficit.
Afrikaans:
Dit is nodig om na die kommerwekkende inflasie en rentekoerstendense te verwys. Die DA is nie ten gunste daarvan om inflasieteikens te verander nie, maar ons is van mening dat 'n holistiese herevaluering nodig is van die strategiese, fiskale en monitêre pad waarop ons onsself bevind.
Die Reserwebank voer sy mandaat goed uit om die inflasie in toom te probeer hou met rentekoerse as sy enigste instrument. Die huidige dryfvere vir hoër inflasie, naamlik voedsel, brandstof, geadministreerde en kommoditeitspryse asook die energiekrisis se nalatenskap is egter nie rentekoerssensitief nie. Verbruikersbesteding en kredietopname en hulle spaarvermoë het skerp gedaal, tot die mate dat daar onsekerheid bestaan of daar effektief gereageer sal kan word op 'n gestimuleerde aanbodkant van die ekonomie. Dit regverdig dus nie verdere rentekoersverhogings nie.
Die regverdiging daarvoor lê eerder in die behoud van die effektiewe prysdifferensiaal vir veral buitelandse portfeuljebeleggers om so genoegsame beleggings te verseker om die groeiende tekort op die betalingsbalans te finansier. Net jammer dat die vuisvoos verbruikers weereens die onderspit moet delf.
Dis ooglopend dat kreatiewe fiskale intervensies noodsaaklik geword het. Die DA sal voortdurend krities wees om te verseker dat ons 'n kompeterende en voorkeurontwikkelende mark alternatief bly, veral ten opsigte van direkte vastekapitaalinvestering. Ons is egter gemaklik met die doelstellings van hierdie wetsontwerp en sal daarom die aanvaarding daarvan steun. Ek dank u. [Applous.]
Mr J P CRONIN
END OF TAKE
Mr S J F MARAIS
Mr J P CRONIN: Madam Speaker, in presenting this year's Budget Minister Trevor Manuel quite correctly located it in the context of a turbulent global economy. The weather chart he put up proved to be even perhaps more turbulent than it was when he presented it. The US is headed for likely recession in part as a result of sub-prime loans and other bad lending practices, but reflecting deeper, underlying systemic problems. Global food prices are soaring; the impact of various factors including climate change, rural depopulation and the growing use of agricultural land for biofuel production; oil prices are surging, whether as a result, as some argue, of oil production peaking or as a result of more conjectural factors like voracious Chinese demand.
Minister Manuel was absolutely right to locate the Budget in this broader context. A budget is not or should not just be an account of revenue expected and expenditure planned; little more than a pie to be haggled over and sliced up. A budget has a strategic politico-economic context and we should require of it to guide short, medium, and longer term transformation objectives, especially in a country like our own.
As Minister Manuel noted, South Africa's economy has both significant factors of insulation against the worst of this global turbulence, as well as points of vulnerability. The latter include our current account deficit, itself a reflection of systemic features of South Africa's economy that go back many decades. As growth occurs, as it has for a sustained period now, we seem to suck in high value imports, especially capital goods. Our low savings ratio is another point of vulnerability.
So, how do we go forward? Well, a decade ago everything seemed very clear and simple. Wasn't it? Privatise, liberalise, stabilise, privatise, liberalise, that was the mantra. Just eight years ago, a former ANC colleague of mine, who had, by then, become a rather worldly-wise and cynical journalist, and later editor of the Mail and Guardian, Howard Barrel, wrote a piece entitled, "The idiot's guide to South African politics". He said: "Since the triumph of neoliberal consensus" – which he which he characterised as capitalist, pro-market with an emphasis on "prevailing Western orthodoxies", as he put it, the domain of the economic was, as he said, "beyond politics". There were no political choices to be made, no meaningful policy debates of worth. The only rational choice was to recognise that you must, as he put it, "play by the markets' rules".
If you reduce, as he was doing, economic rationality to simply obeying the markets and to some number crunching by technocrats, then you have immeasurably reduced the space of democracy, including parliamentary democracy. Indeed, in modern societies most of the big decisions are either directly or indirectly economic ones. And now, well, in 2005, interestingly, the World Bank, itself, home of this Washington Consensus that my friend Howard Barrel was so impressed with, set out to assess the lessons to be learned from the world- wide implementation of its own Washington Consensus, and it published its findings in a volume entitled, Economic growth in the 1990s: learning from a decade of reform.
According to one of the Vice-Presidents of the World Bank, Gobind Nankane:
The central message of this volume is that there is no unique universal set of rules. We need to get away from formulae and the search for the elusive best practices.
Now, these are words coming from Washington D.C., not from Caracas, Venezuela or Havana, Cuba.
And surely even the World Bank, however belatedly, is right in this respect. If we are to chart our way forward in the current turbulent global context in a country facing many developmental challenges, we need to appreciate that there are no easy answers. We need to create a generous climate in which as a ruling party, as Parliament, as government, as a country, we able to discuss and debate with each other, collectively learn lessons from the immediate past, accept responsibility for mistakes and move forward together.
Unfortunately, however, there are many attempts at frustrating this kind of thoughtful, democratic policy openness that is so necessary. For instance, in the weeks immediately preceding the Budget Speech, there was a concerted attempt from some quarters, particularly in the media, to lock the ANC and its broader movement and government into a false dilemma. The question that was being floated in a thousand forms in influential parts of the media was: "Will Minister Manuel cave in and produce a Polokwane budget? Or will he fail to blink not blink and keep it steady as he goes?"
Now, framing the question in this way could only lead to an entirely false debate; a debate that understood neither the multiyear character informing a budget, nor the dynamic evolution of ANC economic policy in the months and years preceding the organisation's Polokwane national conference.
Those pushing the paradigm were hoping to get the post-Polokwane ANC, if that's what we are, or its alliance partners, to pronounce that the Budget was "anti-Polokwane", and to get the government to say economic policies were unchanging, unchallengeable and beyond debate.
Now, interestingly, those pushing this kind of view, the mainstream, neo-classical economists, are themselves debating policy, but they want to be the only ones allowed into the debate. For instance, for some while now, they have been debating the appropriateness or otherwise of our 3 to 6% inflation target. Some, Dawie Roodt comes to mind, are firm: The 6% ceiling must be targeted doggedly and dogmatically by the Reserve Bank. Others like Brian Kantor, no left wing radical I can assure you, have been arguing that the 6% upper limit is too restrictive on growth and a developing economy, and that interest rate hikes are a blunt instrument when inflation is being driven by external factors like oil price, food prices and so forth. Now, I don't want to get into that debate.
But, when these latter are points are raised, the same points that Kantor were raising, tentatively often, from within the ANC-led movement, there are cries of horror and outrage and charges of "macropopulism": Don't you know that the poor suffer the most from inflation? The poor know they suffer the most from inflation. The nominal target in all of this is Cosatu or the Post-Polokwane ANC or the left in some form or another, but the real target is in fact government, the Cabinet and the Minister of Finance. These are concerted attempts and persistent attempts to frighten government's economic policies into the narrow confines of maintaining the confidence of the markets. Fiscal discipline, fiscal discipline, fiscal discipline is the theme song.
They want the Minister of Finance to proclaim himself in favour of fiscal discipline. Of course he must; of course he must. As if proclaiming fiscal discipline were a rejection of ANC policy. And they want the rest of us to hoist up a flag which says, "Fiscal indiscipline", and to imagine that in hoisting up a flag called "Fiscal indiscipline " we were somehow proving our "left" or Polokwane credentials in so doing. Of course we must all want fiscal discipline. The question is: Fiscal discipline to what end?
Allow me to read an interesting passage from a renowned Brazilian theorist, and I quote:
Will the call to fiscal realism be used simply to win and maintain financial confidence, identifying the whims of the capital markets with the dictates of economic wisdom? Or will governments use fiscal prudence to free themselves from these whims?
Two very different approaches to fiscal realism.
He writes:
Fiscal realism is not a program, not even a program for macro- economic policy. It is merely a precaution. Its justification is to broaden a freedom of manoeuvre that must then be used. It does not teach us how to use this costly freedom.
There are, I think, many interesting points but at least two that I want to mention from this quotation. It comes from Roberto Unger, who is currently the Minister of Planning in Brazil. And two -and for the benefit of those who are trying to drive us into trenches of a false debate - let me confess that my attention was drawn to this passage by a South African Cabinet Minister, the Minister of Finance, none other than the Hon Trevor Manuel.
Rather than getting trapped into a false debate, let us agree that indeed we do need fiscal discipline, fiscal realism – less for the narrow and exclusive purposes of reassuring the whims of market sentiment which are very hard to pin down and always have shifting barriers, and more for the critical purpose of freeing ourselves from those very whims and broadening our sovereign capacity as South Africans to debate and decide upon our economic course.
That is the consensus I believe that informs the ANC's national conference economic resolutions and that is the consensus that I think that informs the current Budget. And nowhere is this more apparent than in the sustained state-led infrastructure investments that we have over the last several budgets and which is consolidated and accelerated in this Budget. Increasingly robust government–led spending on infrastructure is the key factor in sustaining growth in a turbulent global context.
In this Budget, to mention a few features, a total of R17billion is added to the budgets of the Departments of Housing, Provincial and Local Government, Water Affairs, Sports and Recreation and Transport over the next three years - mostly for infrastructure.
Using the leverage of the 2010 Fifa World Cup, our host cities are poised to begin to roll out integrated public transport system probably for the first time ever in South Africa. Transnet will be investing more than R78billion on rail infrastructure and port expansion. And, of course there are Eskom's R343billion expansion plans.
All of these initiatives, and others like them, are to be welcomed. As the ANC we will lend our full support. However, we would be failing in our responsibilities as the ANC parliamentary caucus if we simply left matters there , basking in a justifiable sense of satisfaction and pride in this infrastructure spend that has been, and will continue to be, the be key catalyser of growth and job creation.
We need also, as the ANC, to ask some probing questions. For instance: Are the strategic choices we make on major strategic programmes always the appropriate choices? Madam Speaker, at the risk of seeming to be obsessive, let me take one example with which at least I have some familiarity -it's the Gautrain and you guessed it. Yes, I know the construction of the Gautrain system is now well underway I have no intention of waging a rearguard struggle against it. I wish it well and I wish the best of luck. It will need lots of luck especially when it comes to operational front. But are there not lessons that we can at least learn retrospectively for the future so that we don't repeat mistakes? [Interjections.]
In the first place if my information and understanding is right, quietly and below the radar screen, its construction costs escalating towards R35illion; up from the already exorbitant R20billion that we were told, hand on heart, here in Parliament just a few years ago, was the written-in-stone absolute upper limit.
But that is not the key issue that I want to focus into here. Yes, big projects like the Gautrain create thousands of jobs, of course. And, at least during the construction phase they create jobs and they contribute to our overall GDP growth. And yes, strategically and smart infrastructure programmes can catalyse many other things. But, ill-conceived ones might have the opposite impact: They might crowd out and undermine other possibilities by drawing off scarce engineering, artisanal and project managing skills from government departments, parastatals and municipalities; by driving up the prices of cement and steel and even threatening the availability of some of these key inputs for other infrastructure; by making inappropriate technical choices, for instance, in the case of the Gautrain, the train sets, the electrical component are being largely imported. And because it is a stand-alone and once-off system it means there will be little medium- and longer term manufacturing spin-offs for future transport projects.
So, the questions we need to ask ourselves, not in order to be critical and to punish people and so on. But, let us be a learning society, let us move forward and let us do the right things.
How do we align our infrastructure investments with our industrial policy objectives? I was pleased to see that the Trade and Industry Department was talking about that last week. In the course of the different line department budgets, as the ANC, Minister of Finance, we -and we know you support us in this - will be taking forward many of these kinds of questions. We would be failing in our duty if we did not.
We will be failing in our duty if we did not ask for greater clarification on why, given our electricity generation crisis, Cabinet appears -and I have a different impression from the previous speaker- to be committed to another energy guzzling aluminium smelter at Coega. Perhaps there are sound reasons, but we certainly, as the ANC, need to ask what those sound reasons are.
And all of this takes to perhaps what is the key question: Are we sure, as the ruling party that our planning capacity in the state is effective, is co-ordinated and is aligned to budgeting? Should we - and we throw this out as an idea to be thought about- not be considering something like a Council of State, which exists in a number of developing countries; a Council of State which would be a super Cabinet, if you like, with a strategic planning mandate, and with key overarching portfolios like infrastructure, energy, human resources, social development, public safety, trade, industrial policy and so forth and of course treasury.
Our more regular line departments would form a second, implementing tier. In this way, surely, we could ensure much better alignment of, for instance, our human resources, infrastructure, energy and industrial policy objectives.
At present, and I might be wrong, too many of our major infrastructure projects give the impression of being a particular province's or department's pet fancy; if not vanity project -if that is not being unfair- with insufficient integration into a developmental and transformational strategic agenda.
As the ANC, we welcome the overall thrust of this Budget. Above all, we welcome it because it provides us with the basis; it creates the space for us as South Africans, as parliamentarians, all of us, precisely to debate all of these challenging questions.
And that is something that should never be taken for granted. There are many developing countries where a budget debate is irrelevant, not because the speaker of parliament or of the national assembly happens to be from the ruling party; not because they don't have a parliament, but because their economic sovereignty has been eroded. In these cases, all of the key decisions have already been taken for them elsewhere, in Paris, in London, in New York, in Washington by the IMF, by conditionalities. We at least have the space to debate meaningfully. Let us use this space responsibly, with a sense of generosity, but, yes, also vigorously. Thank you, Madam.
[Applause.]
Mr N SINGH
END OF TAKE
Mr J P CRONIN
Mr N SINGH: Madam Speaker, hon Cronin asked the question whether we are sure that our planning and co-ordinating capacity is effective, etc. The simple answer to that is: No.
I am pleased to be following on hon Cronin, because I will touch on something that affects his portfolio, that is the Road Accident Fund.
I would like to start off by commenting on the report of the Portfolio Committee on Finance on the Appropriation Bill of 2008-09. The IFP agrees with the committee's recommendations, that more details are needed on how government will fund Eskom with
R60 billion over the next five years. We are quite sure that the hon Minister will furnish us with more details in his reply tomorrow.
We also want to associate ourselves with the input of various of the presenters at the public hearings, including the Black Sash, who felt that the Budget could have been more pro-poor. I will touch on this again a bit later. For now let me say that the IFP is very concerned about food price inflation as it hits the poorest where it hurts the most, and that is in their daily struggle for survival.
What we must remember is that Mr Motsepe - and we all know him - and Mrs Khumalo from Nongoma pay exactly the same for a loaf of bread or any other necessary food item. The prices of food have increased over the past year by double digit figures. The difference is that Mr Motsepe can absorb the increase because he is rich, but Mrs Khumalo cannot as she has limited resources, and all her expenses have been going up over the past year. She can simple no longer make ends meet. To make a meaningful difference to the levels of poverty in our country, government must do more for the Khumalos of this world.
In general, however, the IFP welcomes the 2008-09 Budget as it maintains a balance between pro-poor interventions and continued stimulation of the economy to reduce company tax rate, increase infrastructure spending and incentivise small businesses.
While we generally welcome the pro-growth aspect contained in the Budget, we are disappointed that the pro-poor side could not be equally matched.
We appreciate the increase in old age grants to R940, but this still falls short of our expectation of at least R1 000 per month. We welcome the increase of R20 in the child's support grant by October, but in our opinion this is far too low.
We have to agree that the means test and its application have to be reviewed on an urgent basis to enable more people to benefit from social grants. In saying this, as the IFP, we do not want to see a culture of dependency on unfold in our country.
Sustainable jobs need to be created, to face the challenges of unemployment, especially among the youth.
Additional support for small business must continue and the concepts of self-help and self-reliance must be promoted and supported.
If government is truly serious about the situation in our country deserving a "business unusual" approach, then the IFP asks why not "incentives unusual" to help the poor in their plight, in the face of extremely unusual economic circumstances both internationally and locally.
As I have mentioned earlier, the IFP is very concerned about the increasing food price inflation, and studies conducted by the National Agricultural Marketing Council confirm that food prices have increased considerably over the past few years.
Extreme poverty occurs mostly in the rural areas of our country, and the higher food inflation rates there than in urban areas clearly show that government must take unusual and drastic steps to address rural poverty.
I now want to turn to integrated rural development. This is where the co-ordination and the planning come to mind. This Budget, we believe, does not adequately deal with the proper framework to accomplish rural development and alleviate extreme poverty in rural areas.
I know that the hon Minister will say that government has identified certain nodes for development and that it is the responsibility of local government and provincial government to deliver, but we feel that national government has a role to play in integrated rural development.
Agriculture, land reform, land restitution, infrastructure development, local business opportunities and job creation can all be tied together in a master plan to uplift rural areas. If we are serious about addressing crushing poverty in the rural areas, the national war-room to fight poverty must focus not just on urban communities, but also on the poorest of the poor. This is a national imperative, we believe.
Not only will rural upliftment alleviate extreme levels of poverty, it will also address the bright lights syndrome where rural dwellers flock to the cities in search of jobs, only to find that they are most often worse of than in the rural areas.
I now wish to turn to taxpayer confidence. Whilst the IFP welcomes the increased allocation of R46 billion over the next three years to the provinces, and believe that service delivery should take place at the lowest levels of government, we are concerned with unspent grants and the lack of proper monitoring at provincial level.
A case in point, as just an example, is the KwaZulu-Natal department of agriculture, where an amount of R80 million remains unaccounted for owing to missing documentation.
Mismanagement by the former head of department who, by the way, received a healthy 80% bonus when he resigned, resulted in the largest volume of overspending in the history of KwaZulu-Natal, some R160 million. Even now, the report of the forensic investigation into the department's overspending, fraud and corruption is being withheld from the provincial legislature.
The select committee on public accounts in KwaZulu-Natal was seized with probing the mismanagement at the agriculture department, and when things got hot for certain people, the chair of Scopa was removed by the majority and replaced. Does this represent good governance and political accountability? Mr Minister, these are the kind of things we must prevent at all cost from occurring at all levels of government.
We are acutely aware that taxpayers need to get value for money. Even the hon President of the Republic, over this past weekend, acknowledged that departments are returning unspent money to Treasury because they could not spend it, and he deemed this a national disaster.
The IFP agrees with the hon President and calls on Treasury to, in the future, directly intervene in cases where it becomes obvious that the department cannot spend its allocations. We have the constitutional tools to do so.
Another case in point, where financial and management accountability surely needs to be strengthened is the Land Bank. Last year the Land Bank became embroiled in controversy as its board at the time was dissolved, amidst allegations of misspending about R1 billion.
To add insult to injury, it was reported this past Sunday that the police have begun investigating a R100 million loan guarantee provided by the Land Bank for the development of an industrial park in Durban - an industrial park! This forms part of the roughly
R1 billion that is involved in schemes initiated by the bank's former CEO. We trust that there will be a turnaround strategy as soon as possible so that we can restore confidence in the bank, especially the farmers, who use the bank to develop their own farms.
Another area is the Road Accident Fund and the crisis there. Every year South African motorists plough billions and billions of rands into the funds. We know that from 1 April 2008, which will not be a fools' thing, the fuel levy will go up and we'll pay an extra six plus five cents.
Yet the CEO of the fund told the Portfolio Committee on Transport recently that the fund, and I quote: "...had reached a precipice." This means that it is again in crisis, which appears to be par for the course over the past number of years.
Once again, the fund has launched a so-called "rescue plan" to overcome what it euphemistically terms "challenges". These challenges are the same as last year, and the year before that and so on, including the fund's onwards inability to effectively process claims, leading to massive backlogs, high costs associated with administration, fraud and corruption, dissatisfied and disillusioned stakeholders.
It is quite obvious to the IFP that the umpteenth rescue plan for the RAF will not achieve the desired results. We therefore call on government to consider privatizing this entity immediately so that the public can get the fund they deserve, for funding it so loyally.
In conclusion, the IFP wanted to see more proper initiatives in this year's Budget. Some very positive steps have been taken, but considering the levels of poverty in our country, more could, and should have been.
We insist on taxpayers getting full value for their contribution to the national fiscus, and we trust that accountability, accountability and accountability by all government departments will be the buzz word as we move forward. Thank you, Madam Speaker.
Ms L M MASHIANE
END OF TAKE
Mr N SINGH
Ms L M MASHIANE: Madam Speaker, hon Members of Parliament, fellow colleagues, friends and compatriots. Madam Speaker, as we assemble in this House to consider the Appropriation Bill, it is fitting to take this opportunity to pause and to take our memories back and reflect on the journey we have undergone. Our consideration of the Appropriation Bill this afternoon takes place at the most defining moment in the history of our evolving constitutional democracy.
It takes place at the time when Parliament as the elected tribunal of our people continues to undergo strategic repositioning to be a truly people's Parliament that is responsive to the needs of our people for the realisation of a better quality of life to all. For us in the ANC, the key test for performance budgeting is nothing less, but the masses of our people in whose name we are assembled here.
It is about paying attention to details as to how strategic plans of various organs of states and the attended allocation of resources respond to the challenges faced by our people. Madam Speaker, it is within this context amongst others that we should locate our understanding and appreciation of the critical role of the
Auditor – General in the consolidation of our people's democracy and promotion of good governance. What is important in the statement that I have just made is that the committee on the Auditor– General in its report, has made recommendations that the office of the Auditor – General needs more resources and more funding so that this office continues with the good work that it is doing.
Madam Speaker, please allow me to highlight the root causes linked to the qualifications for the national departments and these are some of the reasons: Payments of bonuses without performance contracts; capital assets - the ownership of immovable assets, lack of proper asset register and evaluation issues; monitoring by the heads public entities and the executive on the other hand and the legislature on the other. With regard to the constitutional institutions, the Auditor-General's general report shows that 13% of the institutions that were qualified had issues with regard to the accounting of related parties which affected the presentation and disclosure in the financial statements, issues linked to internal control; information-system audits; material misstatements or corrections to the financial statements and good governance.
It also says that 38 of public entities and 4 of constitutional institutions need to improve the effective functioning of the internal audit units and the audit committees. They are considered to be primary catalysts to assist these entities to eliminate the funding that led to qualifications. A breakdown in the control environment, a lack of compliance with existing controls as well as ineffective risk management and monitoring.
Regarding a breakdown of expenditure, it indicates as follows:
Irregular Expenditure - Department of Defence -R170 000 000; Department of Home Affairs - R17 785 000;
Unauthorised Expenditure – Provincial and Local Government – R1 122 553; the total of Unauthorised Expenditure – R1 122 553 and irregular Expenditure – R187 758 000.
Regarding the expenditure of provincial departments, we have unauthorised expenditure of R924 406 666 and irregular expenditure – of R463 060 933; whereas fruitless & wasteful expenditure comes to R736 802 000.
The total for including public entities is as follows: Unauthorised expenditure – R925 529 219; irregular expenditure – R1 013 698 969 and
fruitless & wasteful expenditure – R77 038 389
Madam Speaker, the Auditor-General operates in a constantly transforming and developing country and to remain relevant in such a context, the Auditor-General must therefore constantly redefine itself to meet the challenges posed by the changes of this country.
The Auditor General's office should continue to enhance government in the public sector by exploring ways of simplifying reports thus making them more relevant, easy to understand and positively conveying the message to all stakeholders. In doing so the office will then ensure that taxpayers are able to engage their elected public representatives from an informed position. If this is done the Auditor-General's report will be relevant to all.
Madam Speaker, the Auditor-General introduced a number of changes to the content and format of the reports. We always get informed that the department's reports are getting worse. In my view as a member sitting on the Committee on Public Accounts the reports of the departments are improving, you might think that in the past year they performed better. If you understand the way the Auditor-General's Office does its reports; it is not in a static way, it improves from one level to the other. I want to congratulate the departments with this statement:
They have moved from level one and they are now at level 3; this means that they have past the test in level one; they have past the test in level two and now they are on the third level and they are at the stage indicating that they will be passing the test.
Some of these departments, in my view, have been tinted as doing badly, for the past 5 years that I have been here as a member of that committee, but now I want to congratulate all of them.
Regarding the new audit report format, the Auditor-General has also introduced a number of changes to the content and format below are some of the evident changes necessitated by the amendments to the international standard of auditing: The new guidance on the audit report allowing the flexibility to report in a more detailed manner on issues touching on accountability in the public sector; the report on the financial statements includes the responsibility of accounting officer.
Other matters which are ancillary to the responsibility of the Auditor-General in the audit of the financial statement for example, noncompliance with applicable legislation, matters of governance and internal controls. Other responsibilities focus on reporting on performance information.
Madam Speaker, it is important to note that the audit report includes root causes that gave rise to the matters included in the audit report, in line with the new format of the audit report. Madam Speaker, the Auditor General's Office has also revised the format and content on the management report previously known as the management letter.
This qualitative approach will enable those charged with governance to take the appropriate corrective action to improve governance and accountability. The changes are in line with the information contained in the Auditor-General's engagement letters as agreed with the accounting officers and accounting authorities. This letter sets out the detailed information on the audit and the responsibilities of the accounting officer and the auditor for certain aspects of the audit.
In this case, Madam Speaker, I am speaking on this trying to explain …
Setswana:
... ke tlhalosetse batho ba ba kwa gae, le fa ke e buile ka Seesemane thata, gore tiro e e dirwang fano ga e ree gore go senyegetse ruri. Re ntse re tswelela go siamisa mme e tlaa re fa re boa, morago ga ditlhopho tse di tlang, re bo re siamisitse dilo go feta jaanong. Ke a leboga. [Legofi.]
Mr L W GREYLING
END OF TAKE
Ms L M MASHIANE
Mr L W GREYLING: Deputy Speaker, South Africa is unfortunately still characterised by persistent and unacceptable high levels of unemployment, poverty and inequality. In terms of the narrow definition of unemployment, South Africa's figures are in excess of 25%, and almost half of our population still lives in poverty. Our inequality is also one of the highest in the world, which presents a constraint on our economic growth as it limits the rate of economic participation. The ID believes that these three areas need to be given absolute priority in terms of the objectives of the Budget.
The ID is concerned that South Africa still lacks an employment creation framework and that the Budget does not have job impacts as one of the indicators of the outcomes of public expenditure. In particular, the ID is extremely concerned that we have too often in the past spent vast sums of public money on projects and enterprises that have not borne sufficient fruit in terms of job creation. Examples of this would include the billions of rands directed to the capital-intensive and nonperforming arms manufacturer, Denel, as well as the billions of rands spent on the Pebble Bed Modular Reactor – PBMR - without any tangible outcomes. The ID would therefore argue that future public investment decisions need to be comprehensively and realistically assessed in terms of their job creation potential.
In terms of poverty, it is clear that the poor have had to bear the brunt of spiralling food and fuel prices. It is therefore disappointing to the ID that the grant amounts have only increased by about 10%, which is well below the 14% range that food inflation is currently running at.
The ID also maintains that the child support grant should have been increased to all children under the age of 18 years as per the constitutional definition of children. This would have had a positive impact on reducing drop-out rates at schools in this age category. This is something which the Minister is obviously concerned about, given that he has proposed making school attendance a condition of the child support grant. While the ID obviously supports measures aimed at increasing school attendance, it is important that we do not create a perverse situation where children are excluded from receiving a grant due to the government not providing sufficient access to schools and health care.
The ID would, however, like to congratulate the Minister on the priority he has given to sustainable development. This is merely the start of a long journey towards a more sustainable South Africa, and we will certainly have to employ more measures to bring about that ideal.
In terms of the 2 cents levy imposed on nonrenewable energy generation, the ID applauds this as a brave move, particularly in this time of expected electricity price hikes. The money raised from this levy over the next three years, however, amounts to R10 billion. Yet, Treasury is currently only committing R2 billion to renewable energy sources. Renewable energy needs all the money it can get, Minister, particularly given the insignificant amounts that were given to it in the past. It is also important to realise that it is only energy efficiency and renewable energy that can help us out of our immediate electricity crisis. Therefore, the ID would argue for the full R10 billion to be given to renewable energy generation.
We must avoid another plastic bag debacle, where money raised from an environmental objective merely swells the Treasury's coffers without financing environmental initiatives that can create many more jobs for our people. We have an opportunity to build a renewable energy industry that could provide leadership to the rest of the world and at the same time provide hundreds of thousands of jobs to our people. We must seize this opportunity. [Interjections.] I thank you. [Time expired.]
Mr D T GEORGE
END OF TAKE
Mr W L GREYLING
Mr D T GEORGE: Madam Deputy Speaker, the 2008-09 Budget is a prudent budget. It is realistic with the focus on the ongoing sustainability of the economy within an environment of global economic turmoil.
We are at a point of our economic history where there is debate on the type of economy that we should have in South Africa. Economics is the politics of resources, and governments do intervene in economies to reflect their political priorities. We need to be cautious, however, of any attempt to replicate failed models that have left large parts of the world in economic ruin. Cuba is taking a hard look at its ailing economy and North Korea recently heard the music of the New York Philharmonic Orchestra. It is only a matter of time before they go shopping in New York. Central planning does not work. So, it is surprising that this debate is still happening in South Africa.
The world needs to hear the message that South Africa is stable; South Africa is open for business; South Africa is a secure destination for foreign direct investment; and South Africa's economy is robust and can withstand the impact of economic shocks. So, how are we doing? South Africa needs to grow at 6% per annum to reach the goal of halving poverty by 2015. It is highly unlikely that our economy will grow at 4% in 2008 - in view of the electricity crisis that has not only damaged our economy, but has also dented our credibility in the eyes of the world and, worst of all, eroded local confidence. Incentives should be provided to encourage the use of alternative energy sources. Eskom says that consumers have failed to reach demand reduction targets. This merely adds insult to injury.
To grow the economy, South Africa needs to be competitive. To be competitive, we need to be productive. To be productive, we need a skilled work force and an environment that is attractive to business activity through a reduction of the tangled red tape that is currently associated with operating a business in South Africa.
According to National Treasury, unemployment rate has declined to 25,5 %. It is unlikely that there will ever be full employment, but an environment should exist where employment opportunities are maximised. The Minster himself has pointed out that the unemployment challenge needs to be better co-ordinated. Yes, co-ordination is required, but we need some action. The Budget mentioned a wage subsidy, but nothing specific. In our alternative budget, the DA proposed a wage subsidy to encouraged new employment. We also need labour market flexibility as well as a match between skills developed in the economy and the economy's requirements. Skills development should be in the hands of the employer who knows best what business needs.
Inflation is bad for poor people, in particular, because the value of what little money they have is eroded. The Consumer Price Index excluding interest rates on mortgage bonds – the CPIX for January was over 8%. Prices in general are increasing. The rising consumer demand in the absence of efficiencies on the supply side of the economy causes inflation. Economic efficiency in areas such as transport, skills development and the labour market requires an efficient regulation. A robust infrastructure to stimulate our emerging economy needs to be developed. We must be able to withstand economic shocks such as the spikes in oil and food prices that we are now experiencing. An increase in the fuel levy and the introduction of an electricity tax punishes consumers and will accelerate overall price increases.
South Africa's current account deficit is growing and is more than double the international norm of 3% of GDP. South Africa needs to export more and attract Foreign Direct Investment. To export more, we need to be more competitive. To attract FDI, investors need to have confidence that their investment will provide sufficient return. The ease of doing business, labour market conditions and the tax regime must be internationally competitive.
The income gap in South Africa remains amongst the highest in the world. The income gap between the lowest and the highest earning black South Africans is growing. This suggests that black economic empowerment measures are not sufficiently broad-based and are not broadening participation in the economy. Social security measures have reduced the Gini coefficient, but only slightly, and this seems as a result of social handouts. Steps need to be taken to ensure that the cycle of poverty is broken. The process of reformed income security, retirement provision and social development has begun, and this presents an opportunity to develop the support mechanisms required to encourage individuals into self-sustainability without disrupting the positive aspects of the private pensions industry in South Africa.
From a macroeconomic perspective, South Africa can do a lot better. Our economic efficiency needs to improve. Government's microeconomic interventions should focus on this objective. Education, health care, housing and the social security net form the basis for economic development. The DA believes that it is possible to create an Open Opportunity Society in South Africa, where individuals can participate in an economy that will improve their standard of living on an ongoing, sustainable basis irrespective of their race, gender, age, political connectivity or any irrelevant factor.
Doing business in South Africa is not easy, especially for small and medium-sized businesses - the net job creators. The electricity crisis, lack of skills and the volatile rand are serious weaknesses. Business confidence recently took its steepest dip in 24 years. South Africans cannot afford to slide into a mindset of negativity – it is not going to help. Sentiment influences the economy. We must improve what is working and fix what is not. Thank you. [Applause.]
Ms M J J MATSOMELA
END OF TAKE
Mr D T GEORGE
Ms M J J MATSOMELA: Madam Deputy Speaker, hon members, ladies and gentlemen, in the second decade of democracy and freedom, all of us are invited to ensure that the right to basic education, as enshrined in our Constitution, is realised. It is therefore the responsibility of Parliament to reflect on the work already done and to focus on the road that lies ahead with renewed vigour and determination, to consolidate gains achieved in the first decade of democracy.
It is particularly encouraging that education continues to be the recipient of the largest share of the national Budget, accounting for not less that 20% of the allocated expenditure in the 2008-09 Budget. For this financial year, government has allocated a total of R121,1 billion to education.
The yearly growth rate from 2007 to 2011 for this sector is 11,5%, and the Budget prioritises school infrastructure, early childhood education, delivery of books to schools and remuneration of educators.
South Africa's education budget exceeds the world average of 4,7% of GDP. Having said this, there are questions that we all need to ask:
Firstly, are returns, in terms of educational outcomes, consistent with this massive investment?
Secondly, is the education budget enough to address the challenges and imbalances in the system?
Thirdly, is the vision being realised of a South Africa in which all people have access to lifelong learning as well as education and training opportunities that contribute towards improving the quality of life for all and building a peaceful, prosperous and democratic South Africa?
According to the 2008 Global Monitoring Report, South Africa, owing to the slow progress in enrolment rates since 1999, is one of the 33 countries that are at risk of not achieving the universal primary enrolment by 2015. This implies that notwithstanding the consensus that South Africa has done well in the first decade of democracy to ensure access to education for all, there is still a need to create opportunities for universal access to quality education.
Then we come to the matter of early childhood development. The President, in his state of the nation address, dealt with early childhood development within the context of government's efforts to intensify the Expanded Public Works Programme. This commits government to doubling the number of children enrolled in early childhood development to over 600 000. This will be done through 1 000 new sites, with more than 3 500 practitioners trained and employed, and through increasing the number of caregivers.
The Department of Education must thus ensure that all ECD funding reaches the centres on time. It should also pay particular attention to improving the quality of programmes offered at this level and to providing properly qualified educators with appropriate skills to offer these programmes. Well-resourced and functioning ECD programmes are essential to improving the quality of the education system as they contribute towards ensuring readiness for formal schooling.
There is a need to intensify efforts to expand ECD programmes so as to ensure that poor children are able to access the programme, particularly in rural areas. This will enable them to develop their full cognitive, emotional, social and physical wellbeing. It is also vital to ensure that both the Department of Education and the Department of Social Development fully collaborate in implementing ECD programmes, focusing particularly on ages 0 to 4.
When we consider general education and training, one of the most significant factors affecting learner performance is teacher quality. Here, the effect is greatest for the poor. There is a strong suggestion that the conceptual knowledge of some of our teachers is low. My observation, and certainly that of many others, is that, while it is correct to focus on Grade 12, there must be a commitment to the pursuit of quality outcomes across the system. Learning and teaching must, therefore, be consistently taken far more seriously from Grade R right through to Grade 12.
The budget for education departments should address the imbalances that still exist in our education system, especially between rural and urban schools. The South African Schools Act of 1996 set the foundation for a nonracial approach to education.
Numerous initiatives, policies, directives, budget and legislation have led the drive to equalise expenditure in terms of race, and address issues such as class size, access to teachers and course materials.
According to the January 8 Statement by the ANC, this is a task that necessarily requires a longer view. Education must be elevated from being a departmental issue or even a governmental issue to being a societal issue, one that occupies the attention and energy of all our people.
On average, for the past four years, of the learners who reached Matric every year, only 17% achieved the standard necessary to proceed to university. 50% passed, but did not qualify to proceed to university and a third failed Matric.
The majority of these are likely to join the ranks of the unemployed. Young people between the ages of 20 and 24 comprise 14% of the labour force, but are over-represented in the unemployed; they comprise 27% of the unemployed. These individuals are likely to wrestle with a very low self-esteem, a deep sense of betrayal and may even be involved in criminal activities.
Significant persistent inequalities exist at provincial level, as indicated by Matric pass rates and Grade 6 evaluations for both mathematics and languages of learning. The rural provinces generally perform worse, with Gauteng, Northern Cape and Western Cape doing better.
The Grade 6 results show a very strong correlation between performance and school location, with rural and township schools doing worse. The current prognosis, with regard to inequalities, points to the potential existence of two education systems, as articulated in the recent Human Rights Commission public hearings. The implementation of the equalisation of expenditure per pupil, since 1994, is steadily narrowing this gap.
Management of the relationship between the national Education department, which is responsible for policy, and the provincial departments, which are responsible for delivery, presents challenges with regard to the envisaged achievement of consistent outcomes.
At provincial and district levels there are stories of mismanagement, maladministration and poor infrastructure in schools. Learners in the rural and poorer provinces such as the North West, Mpumalanga, Limpopo, Eastern Cape and KwaZulu-Natal remain at a disadvantage and continue to perform worse than more urban provinces such the Western Cape and Gauteng.
It is therefore of great necessity that the Portfolio Committee on Education conducts vigorous oversight on provincial departments and at district level.
Insofar as FET colleges are concerned, the FET recapitalisation process has contributed to accelerating skills development by focusing on scarce and critical skills. Government interventions ensured that in 2007, 25 452 students enrolled in the new National Certificate programmes. In 2008, the department set enrolment targets to 40 000 students, which was exceeded, with 52 000 students already registered for the three-year programmes.
The increase in student enrolment in these programmes is attributed to interventions such as the outreach to schools and the provision of bursaries to about 20 000 students. It is, however, imperative to escalate the implementation of the improved National Skills Development Strategy, which registers learners on accredited-based learning programmes offered by Sector Education and Training Authorities.
The President, in his 2008 state of the nation address, noted a necessity to intensify the programme of resourcing schools in the lowest three quintiles, thus freeing them from the responsibility to charge fees.
The ANC, in its January 8 Statement for 2008, argues that particular attention must be given to improving the access of poor South Africans to quality education. In particular, efforts should be intensified to progressively introduce free and compulsory education for the poor until undergraduate level.
As part of this, consensus has been reached to implement the resolution that 60% of all schools should achieve the no-fee status by 2009, and the lowest per learner allocation in such schools has been increased to R581 in 2008. It is, however, imperative that expanding the no-fee schools from the current 40% to 60% should not compromise the quality of education.
One of the notable mechanisms to sustain the system is to capacitate the school management teams in financial management and fundraising, including establishing collaborations so as to source alternative means of support. The increasing number of no-fee schools should be integrally linked to the process of providing water, sanitation and electricity in schools, as well as the national school nutrition programme, so as to maximise the impact of these programmes on the provision of quality education.
As part of the social and school enrichment programme, the increase in the 2008-09 Budget is geared towards the expansion of the National School Nutrition Programme, including extending the programme to secondary schools. Parliament is examining progress on the implementation of this programme, particularly in the rural areas.
With regard to higher education, it is appropriate to start by acknowledging that the right to education is indeed a recognised human right. That right is protected in our Constitution, more particularly in the Bill of Rights. Today, the right to education is viewed primarily as the right of all children, youth and adults, to be educated. The duty of making such provision available belongs, largely, to society.
This is also outlined in the ANC's national campaign document namely, "Mobilising Communities to Ensure Quality Education for all," and the January 8 Statement for 2008 commits the organisation to undertaking a concerted campaign to support and promote the continued transformation of education.
The University of Free State's video incident is a reflection of our society and the progress we have made, and, in many ways, it requires all of us to revisit our goals and objectives in transforming education. It challenges our ideals of a democratic and nonracial society.
A total of R1,4 billion is being provided for higher education, research and knowledge development. Skills shortages were identified by the National Treasury as one of the significant barriers limiting faster export growth. This, in turn, fuelled the trade deficit, one of the points of vulnerability in the South African economy.
There is a need to address the quality of higher education. Our institutions of higher learning are characterised by a high drop-out rate, owing to the high fees charged by such institutions, and, of course, a low throughput, as a result of this inequality in the quality of education.
The implementation of Kha Ri Gude, the national mass literacy campaign, as outlined in the 2008 state of the nation address, is significant in developing functional skills among the illiterate youths and adults in South Africa.
In giving impetus to the campaign, the state of the nation address committed government to training master trainers, who will provide basic literacy classes to 300 000 adults and youths in 2008. The aim is to ensure that 4,7 million adults and youths achieve basic literacy and numeracy by 2012. The department has developed measures to ensure that educators are always in school, in class, on time, teaching, and that there is no abuse of learners and neglect of duty.
Similarly, learners must uphold the norms and values enshrined in our Constitution and aspire to becoming responsible citizens.
In conclusion, it is important to continue to make quality education a major national priority so that we lay a solid foundation for this, our country. Thank you very much.
Mr S N SWART
END OF TAKE
Ms M J J MATSOMELA
Mr S N SWART: Madam Deputy Speaker, hon Minister, the Budget was undoubtedly presented under difficult conditions of global fears of a USA recession; slowing domestic economic growth; Eskom's power crisis; high interest and inflation rates, and declining consumer and business confidence.
Since Budget Day, the global outlook has worsened somewhat with the fire sale of the troubled US investment bank, Bear Stearns, sparking further concerns of a worldwide credit crisis. We are clearly seeing a rerun of the 1998 emerging market crisis, with the difference that it is the emerged markets that are in crisis. As a knock-on effect, more than R100 billion was wiped off the value of our equity markets yesterday.
Notwithstanding these challenges, the ACDP agrees that it is not a time to panic. We need to limit the damage by sending a positive message to both domestic and foreign investors. We cannot afford loose political talk that will be understood negatively by international markets and that will cost South Africa dearly.
I am not saying that we shouldn't debate economic policy, as suggested by the hon Cronin, but it is about the manner in which we do that and the manner in which we portray that message to the outside world, particularly against the context of international market jitters.
The Budget should thus be supported as it is clearly redistributive in nature and pro-poor, but with the firm assurance that government is not going to deviate from successful macroeconomic policy undergirded by Mr Cronin's strict fiscal discipline which we have become accustomed to with the Medium-Term Expenditure Framework process.
The revenue authorities are to be commended for collecting R15 billion more than the projected target, with revenue estimated up to R580 billion for the 2007-08 financial year. Minister, you announced a projected Budget surplus of 1% for 2007-08 and 0,8% for 2008-09. This, in itself is commendable, particularly in view of the slow-down in the economy. Interest costs have, as a result, kept falling as public debt has declined as a percentage of GDP, with the savings effect freeing up R90 billion per year for expenditure elsewhere. This is a feat that should not be sneezed at.
The ACDP also appreciates that, although there is a surplus on the main Budget, the structural, adjusted Budget could go into deficit. Whilst welcoming the fact that government will address the power crisis by providing R60 billion over five years to assist Eskom, we need greater clarity, as set out in the document of the finance committee, on the terms and details of the funding arrangement. We need greater clarity in that regard.
The ACDP also clearly supports the increase in social welfare grants to meet the increasing costs of living facing the poor, and the phased-in equalisation in the age qualification for male pensioners. We also clearly need to look at the means test, hon Minister, and whether it is disqualifying those persons applying for much-needed social grants. We do understand the budgetary constraints in this regard.
Whilst social welfare addresses short-term needs, we must move from welfare to economic development - as we have said in the past and as you, hon Minister, have also indicated – in the long run, which will provide the much-needed employment to address widespread poverty.
Fighting crime and ensuring personal safety clearly remains a paramount concern. The high crime rate is also a disincentive to foreign investment in the economy. The ACDP, therefore, welcomes the additional amount of R10 billion to be spent on the criminal justice cluster.
We need to ensure that government departments can spend the funds Parliament allocates. Capacity constraints must be addressed. However, on the whole, hon Minister, we commend you and we support the Budget Vote. I thank you. [Time expired.]
Mr B A D MARTINS
END OF TAKE
Mr S N SWART
Mr B A D MARTINS: Madam Deputy Speaker, esteemed hon members, ladies and gentlemen, whilst the South African economy continues to show significant signs of growth, poverty and unemployment, however, remain at unacceptably high levels, and much work remains to be done to ensure that growth rates are accelerated and more employment is created. It is important to do so, because being unemployed and poor is not just the state of having little, but also being vulnerable to losing the little that one has.
To ensure that growth is sustainable requires a continued focus on investing in productive capacity, as well as providing leadership in the continued development of policies and strategies that promote and foster competitiveness, enterprise development, empowerment, and equity in the economy.
In resourcing its strategy over the Medium-Term Expenditure Framework period, the Department of Trade and Industry has reprioritised its budget in line with the government's strategic objectives and priorities, which are underpinned by the ANC's policies. The aim is to ensure a more equitable allocation of resources to programmes that seek to bridge the economic divide and broaden economic participation and those that seek to promote technology, innovation and modernisation.
The implementation of the DTI's policies and strategies continues to be supported by a number of agencies whose work is co-ordinated through the framework of the Council of Trade and Industry Institutions. The agencies fall into three broad categories, namely, development finance, regulatory, and specialised service institutions.
Development finance institutions include the following of which we will give a summary: The Small Enterprise Development Agency works closely with the Apex Fund and Khula to ensure alignment of financial and nonfinancial support. Seda has offices that provide a one-stop shop for small business support. The support includes, one, developing a network of service providers; two, mentorship programmes; three, facilitating and co-ordinating access to technology; four, support in terms of franchise, tender, and business plan advice, and five, training and capacity-building in terms of export orientation and project management.
The Industrial Development Corporation is a government-owned development financing institution which promotes entrepreneurship by building competitive industries and enterprises. The IDC's focus is on contributing to economic growth, industrial development, and economic empowerment through its financing activities.
The National Empowerment Fund Trust was created to promote economic equality for historically disadvantaged persons and to increase their participation in the economy. The promotion of ownership of income-generating assets by historically disadvantaged persons was identified as an important way to achieve this. The NEF's broad mandate includes providing historically disadvantaged individuals with the opportunity to own equity in private business; supporting business ventures; promoting understanding of equity ownership; providing individuals with the opportunity to own shares in government-owned commercial enterprises, and encouraging and promoting savings and investment.
Khula Enterprise Finance Ltd specialises in ensuring the enhanced availability of loan and equity capital to small, medium and micro enterprises. Finance is made available by, one, offering loans, guarantees and seed funds to retail funding intermediaries; two, offering guarantees and equity capital directly and indirectly to small, medium and micro enterprises, and three, providing assistance and guidance on financing and opportunities.
Khula directly addresses the financing needs of small and medium enterprises that remain outside the mainstream economic areas currently not serviced by the banking financial services institutions. It gives primary focus to start-up enterprises, women-owned, rural and other target groups from the SMME market. It also focuses on loan sizes ranging between R10 000 – R250 000, this being the critical loan size that current micro-finance institutions find too big and costly to finance, whereas the banking institutions find the same segment too small and costly to finance. If Khula's application is approved to be a direct lender, the Seda-Khula compact will be bolstered, resulting in integrated financial and nonfinancial government support to the SMME sector.
With regard to micro finance, the nonavailability of micro finance for informal, start-up, and survivalist entrepreneurs is often an issue linked to access to finance. The DTI, having recognised the impediments to economic development occasioned by the lack of access to finance for micro enterprises and informal sector enterprises, continues to work with a broad range of organisations to provide this support.
The SA Micro Finance Apex Fund is a micro finance institution catering for the needs of the very poor. It allows enterprises, particularly co-operatives wanting to engage in economic activity, to borrow amounts from as little as R20 up to a maximum R10 000. However, access to finance alone will not create viable, vibrant and growing enterprises. It is crucial that nonfinancial business development support is also provided.
With regard to regulatory agencies, the following are included: The Competition Commission and Competition Tribunal was established in terms of the Competition Act of 1998 and is responsible for promoting competitive market conditions through investigating and prosecuting anticompetitive activities; reviewing and approving mergers and exemption applications; doing research and disseminating information to business, consumers and other stakeholders. As we will recall, the commission recently dealt with bread price-fixing and fined the transgressing companies for anticompetitive conduct, predatory pricing, and other forms of monopoly abuse. The commission continues to conduct investigations into various alleged infringements of the Competition Act.
The International Trade Administration Commission of South Africa aims to create an enabling environment for fair trade through custom tariff amendments, trade remedies, and import and export controls.
On the other hand, the National Credit Regulator estimates that up to 300 000 people are seriously over indebted and would need external assistance to resolve their debt problem. Furthermore, as many as 1 million are, at least, debt stressed, which means that they would have to adjust their expenditure patterns in order to make ends meet. The statistics which the NCR receives from credit bureaus and which they published recently, shows that the number of people with negative information on their records had increased from 6,11 million to 6,38 million between the June and September quarters of 2007. This implies that, over this period, approximately 270 000 more people were experiencing difficulty in meeting their credit obligations than before.
The National Credit Act introduced debt counselling in order to assist overindebted consumers. In their presentation to the Portfolio Committee on Trade and Industry, the NCR indicated that 287 debt counsellors had been registered and that they expect to register a further 300 debt counsellors over the course of the next year. The Act enables debt counsellors to make recommendations to the magistrates' court for the restructuring of over indebted consumers' debts. This would assist consumers to deal with their debt burden. It also allows for reckless debts to be suspended. The NCR reports that there is constructive co-operation between debt counsellors and credit providers. However, there still appears to be a problem in processing the debt counselling applications through the magistrates' courts.
The past few years have made it evident that South Africa's economy is capable of higher levels of economic performance. Consequently it is correct for government to aim, principally through the Accelerated and Shared Growth Initiative for South Africa, to reduce unemployment and poverty by half. In order to achieve this higher growth and development, the South African economy needs to undergo some fundamental restructuring which recognises the central role of a strong and coherent industrial policy to steer this process.
In regard to skills, the following needs to be noted. The skills and education system form a fundamental component for success of an industrial policy. We support the Budget Vote. [Time expired.] [Applause.]
Dr P W A MULDER
END OF TAKE
Mr B A D MARTINS
Dr P W A MULDER: Deputy Speaker, South Africa's new Constitution was signed by former President Mandela in Sharpeville on 10 December 1996. On that day, the London gold price stood at US$368 and the US dollar cost R4,69. Today, the gold price is US$999 and the US dollar costs R8,10. On that day, the overall index from the Johannesburg Stock Exchange stood at R6 666. Today it stands at R29 647. Mr Manuel played a key role in the economic successes since that day, and we gladly give recognition for that.
In the world, there are over many examples of how quickly economic successes can easily, with one unwise decision or announcement, revert to a disaster – Zimbabwe is a good example. I do not want to sound alarmist but, in the past two months, I have experienced the worst economic pessimism in South Africa since Mr Mandela signed the Constitution.
Afrikaans:
Natuurlik is die kragkrisis 'n rede, maar die hoofrede vir die ekonomiese onsekerheid en pessimisme is dat Suid-Afrika tans 'n baie ernstige leierskapvakuum ondervind. President Mbeki het hom onttrek en gee nie leiding nie, terwyl mnr Zuma nog nie in 'n posisie is om te kan regeer nie. Die feit dat hierdie toestand nog 'n jaar lank kan voortduur, is baie sleg vir Suid-Afrika. Baie geld verlaat die land, want beleggers is onseker en sakevertroue is besig om te daal.
English:
The FF Plus had, prior to the reading of the Budget, asked that Mr Manuel should in these times of crises and despondency use the Budget to send a positive message of confidence in South Africa's future. With his Budget, he mostly succeeded in that. By announcing further foreign exchange control reforms, lowering company taxation and making it easier for small businesses to operate, Mr Manuel sent a positive message of self-confidence and hope for the future. Thank you for that.
But, unfortunately, that alone is not sufficient.
Afrikaans:
Een van die ernstigste probleme in die ekonomie bly 'n tekort aan vaardighede. Nou sê ek vir u, regstellende optrede en misdaad word as hoofredes aangegee deur kundiges wat in groot getalle die land verlaat. Wat doen die regering om hierdie probleme aan te spreek?
Ek hoor gereeld die argument in hierdie Raad oor hoe regstellende optrede positief toegepas kan word. Feit is dat regstellende optrede tans op die grondvlak op 'n rassistiese wyse as 'n anti-wit en 'n anti-bruin beleid toegepas word. Dit lok wrewel uit en versuur verhoudinge, en dít jaag kundiges die land uit.
Dieselfde geld misdaad. U weet, mnr Chris Lubbe is 'n meganiese ingenieur van Pretoria. Ons het sy kundigheid tans baie nodig. Verlede week het vyf mans om 11:00 die aand by sy huis ingebreek. Hulle het sy vrou, Rachelle, met 'n warm strykyster op haar linkerbors, haar arm en skouer gebrand. Daarná het hulle haar verneder deur haar klere uit te trek voor haar tienerseuns en haar op haar boud te brand. Mnr Lubbe is op sy rug gebrand. Die rowers het 'n tou om sy nek gesit en hom probeer ophang.
Uiteindelik het hulle maar R600 gevat en die Lubbes se bakkie is later in Diepsloot gevind. Wat is die gevolg? Mnr Lubbe het nou aansoek gedoen; hy en sy gesin vertrek na Australië en ons sal sonder daardie ingenieur moet klaarkom. Die ANC moet hierdie goed veroordeel omdat dit deel is van die proses om ekonomiese stabiliteit te bevorder. Dit help nie ons baklei alleen daarteen nie. Ek dank u. [Tyd verstreke.]
Mr M S BOOI
END OF TAKE
Dr P W A MULDER
Mr M S BOOI: Thank you, Madam Deputy Speaker and hon members. Let us all thank the Minister of Finance. He has done a very good job with regard to the Budget. As the ANC, we give praise to that and we keep on saying that it is upon all South Africans to see the work that is being done. As a matter of fact, you know that we in the ANC give you all the support you need, and we also say well done. We do hope to continuously work with you for the few years to come.
The contribution that you have made in assisting all of us who are engaged in the cluster of security in fighting crime is one of the most important things that have to be welcomed; the way you have conducted yourself and the whole Budget that you have allocated to improving the police service within South Africa is one of the things that have been very positive, especially on how we have been able to address the issues that confront the society.
One of the major issues that we have always wanted to express and talk to you about is crime. We do feel that crime is a challenge to South Africans. We support what the FF Plus has just said - that we need to do something together as South Africans. We do acknowledge, as the ANC, that this is a challenge. If the police have enough capacity and the Treasury is able to assist us in building the particular capacity, what is then left of us is what we do together as South Africans. This is a challenge we are facing and this is what we really want to appeal for as we engage in this budget vote – that it is important that we hold hands as South Africans. Let us not politicise crime. One man dead is a challenge to us all. We want to appeal to hon members here that they must hold hands with us and the police and on the type of views we have on how we would combat crime.
One of the things that the Ministry has been able to do for us at this particular moment has been the building of the capacity of detectives around issues of crime. The Ministry has also assisted us in trying to improve on the views that we held when we left Polokwane. The Ministry did not really do this because of us. They did this because they thought South Africans needed a better budget or a better engagement of the police.
But, one of the things the Ministry says we should look into is the issue of dealing with organised crime. One of the things that go along with organised crime is the type of hierarchy that ordinary police men cannot deal with. What you are dealing with here is very sophisticated types of groupings. These types of groupings have been able to put themselves together since 1994 - postapartheid. They have been able to pursue certain things like building big businesses for themselves through money laundering and building their own, capacity as criminals and have continuously had the capacity to do drug trafficking. We say that these are the things that we really want to challenge. With the lessons we have learned through what we saw happening in Russia, where it is quite clear that a number of groupings.... Not just gangsters. Gangsters are very small types of groupings. We are talking about serious people in businesses who get involved in these groupings and get themselves involved in crime. That is why when you look at the case of Agliotti, you must look at it from different perspectives. We take it as a challenge because this is how one sees and views an organised crime - how it has conducted itself and how it can bring down very important people within society. That is a challenge. This is the type of thing we want to welcome from the Ministry - the Budget, so that we can deal with capacitating detectives. If we can have enough capacity of detectives, we should be able to deal with this matter in a more relaxed manner.
When we engage in trying to get the Directorate of Special Operations - DSO to be part of the police, we are doing so on the basis that we think, from the ANC's point of view, dealing with organised crime is a challenge. The DSO has been able to build a capacity that the police have not been able to build in this regard. At this particular moment, the figures that come from the police come from a group of people or good technical lawyers who have been able to assist us in combating crime. So, maybe what we are looking for is to engage you and make sure that we help each other in fighting crime as South Africans. The DSO must be patient and they must listen to us. They must come with people who have technical skills and those who can assist us.
The recent figures we have been given by Saps are that we have about 192 organised syndicates that deal with crime in South Africa, and that we have 1093 suspects that are under surveillance
One other thing we are able to put our fingers on is the type of drug trafficking syndicates that are taking place. We have about 96 of them. We have 83 syndicates that deal with car hijacking. An ordinary police man at a police station does not have the capacity to deal with these kinds of crimes. That is the reason why sometimes when you go to a police station to report a case, they listen to you and then accept what you are saying. But they do not understand that you might be involved in a particular crime and that you might have a different profile. If you had gone to the police station for slapping a lady, they would take it that you had committed just that and then you would even give them a totally wrong name. You survive as a criminal. But, over time, with the involvement of organised crime, it is important that those who have the capacity to deal with these kinds of crimes must profile people immediately at the police station so that they can look into any situation. As they do a profile, they will be able to see whether the person has been involved in other different activities or not. Detectives do not have the kind of capacity to do that, but the Scorpions have that particular capacity. We need to engage the Scorpions in looking into this matter so that we can learn something from them in order to build the capacity on combating crime within the South African context.
We all accept and say that crime is barbaric at this particular moment. We all say that it is something that is very unacceptable. Nobody sends people to go and rape a 2-year-old child. Nobody sends people to go and rape a 9-year-old child. This type of crime is very unacceptable. We are saying to South Africans, with the perceptions that are being grown that South Africa is becoming a crime-ridden type of country, it is important that we work together. It was within this particular context that the ANC members said - wherever they were and even in Polokwane – that it was important to bring the Scorpions more closely to the police themselves so that we can be able to use the type of skill they have to assist in combating crime. This is the type of challenge we are talking about as South Africans. We should hold hands together as South Africans so that it is not said that South Africa is just a violent country. If we don't sell a positive perception about South Africa, as different speakers have said, this is going to affect every other work we have been able to do.
We are very clear about the fact that we need to deal with the capacity and the weaknesses within the service itself when we prepare for the 2010 World Cup, and that is going to be a challenge. If we don't invest properly in the police and in crime fighting, all the types of investments that are going into the 2010 World Cup and that are assisting in building infrastructure are going to have an effect upon contributions to this event.
We have raised issues with regard to boarder policing; and members have visited the boarders. The work that you have done there and the contribution you have made in this regard, hon Minister, is very much important. We, as South Africans, are not xenophobic. What we are saying is that the challenge of how to police the borders themselves is very much of importance to us.
I was trying to listen to the national key and strategic points at the airport this morning – what was exactly happening and what type of situation was occurring there and whether the key points were really crime ridden. Is it that South Africans are unable to handle this particular point? We do have the capacity to deal with this issue. But it is very clear that the way we are organised around the airport, this impacts on the results that we get out of the airport.
I know it was said to Comrade Zola that one of the things that we might have been able to agree upon were the environmental issues that have taken place. This is becoming a challenge to South Africans - to have better boarder policing. We know exactly that it is important for us to bring in crime intelligence. We know it is important for us to build in Saps. We must also look at what soldiers do in this particular environment - what they are confronted with. This type of an integrated arrangement is something that is a challenge to us as South Africans because in the past it would only be the police and the police alone in a particular line. But at this moment we are saying it is important for them to make use of crime intelligence and the type of information that is being gathered so that we can fit it within the type of infrastructure we have created. If you have to gather intelligence on a particular crime, you should use that intelligence. You must give it to Saps so that if it deals with Saps issues, then it will be of importance to them. If it deals with issues of money laundering, you can share that type of information. This is a new approach we want to take in assisting ourselves in combating crime.
Minister, the money that you have been able to give to us is a good challenge. It will live up to a particular expectation - we will be able to improve on our own border policing. We will be doing this not because we want to keep the Zimbabweans away, but because organised crime infiltrates us through these infrastructures.
Organised crime has an impact on what we are preparing for South Africa. I have gone to a border in Natal where you would virtually see a car leaving the place and entering into Maputo immediately in the morning. Your car gets lost in Cape Town and it is gone off to Maputo the following day. Within Maputo, there is no infrastructure to assist us in retrieving that particular car. As people who are working on safety and security, these are the types of challenges we are faced with. We should be able to make use of the R10 billion that has been forwarded to us. This is the money that we would love to use so that we can improve on this particular situation and so that we can be in a position to detect the situation. There is nothing worse about crime than the fact that you can't detect it before it occurs. This is where the challenge is and this is what we are getting confronted with - the types of detections that are put up by the police so that when they deal with combating crime they know exactly whether they can tackle that particular challenge or not.
We really welcome the contribution the Ministry has made and the people they have provided us with. They have assisted us to grow within the police service. There are a lot of young people walking around in and out of police stations. This type of injection has been able to assist us to improve the image of the police, and we have been able to improve within police stations. It is just for us to improve continuously and assist the police in building a better capacity for themselves.
We have, sometimes, taken most responsibilities from national level and put them on police station level. This was because we wanted to make sure... [Interjections.] Thank you, Madam Deputy Speaker. [Applause.] [Time expired.]
The DEPUTY SPEAKER: Order! Hon members we will now take a body break for 10 minutes.
Business suspended at 16: 06 and resumed at 16:22.
Debate interrupted.
Mr M SWART
END OF TAKE
Mr M S BOOI
Mr M SWART: Chairperson, hon Minister, it was a good Budget ...
Afrikaans:
... maar elke jaar wanneer die onderskeie begrotingsposte hier in die Parlement bespreek word, kom die betrokke Ministers deur die bank om te spog oor die toename in die fondse wat hulle in hulle departmente gekry het. Die probleem is ongelukkig dat die verhoogde bedrae nie oral doeltreffend en tot voordeel van die bevolking aangewend word nie. So byvoorbeeld sien ons gedurende die afgelope aantal jare groot verhogings in die veiligheid- en sekuriteitsdepartement se begroting, maar weinig verbetering in polisiëring op grondvlak.
English:
The second problem with increases in budget funding is that many departments are unable to spend even what they are currently receiving. Let me give hon members a few examples of spending patterns by departments as at the end of the third quarter of this financial year. The Department of Transport, a major role-player in the 2010 Soccer World Cup, has only spent 5,9% of its Consumer Price Index budget, which means they have to spend a further 94% in the last quarter of this financial year. The Department of Labour has only spent 12,4% of its CPIX budget. The Department of Water Affairs and Forestry has only spent 19,45%. The overall spending by the Department of Home Affairs, Department of Communications and the Department of Water Affairs and Forestry amounts to 53% and 59% respectively for the three quarters. It should have been at the level of approximately 75%.
When departments are asked to explain the serious underspending, the stock answer is always a lack of human capacity and relevant skills. There are of course a number of reasons for the lack of capacity being the incorrect application of affirmative action, jobs given to pals without them having the required skills and experience, the deterioration in education and the lack of relevant skills training.
When one looks in more detail the lack of skills training one finds that the government-funded SA Development Management Institute has only spent 45% of its budget up to the end of the third quarter of this financial year. The income of Setas on the other hand is projected to increase to over R9 billion in 2010-11. In this regard, the Minister stated that we owe it to young people and taxpayers to ensure that these funds leverage is visible and lasting improvements in our Further Education and Training programmes. Unfortunately, the Setas are costly to run, their effectiveness is questionable and a number of them are totally dysfunctional.
The Minister's wish is therefore unlikely to be achieved, and it is bureaucrats in the Setas rather than employers who identify the skills training needed by business. It is high time that the private sector be allowed to decide their own skills training requirements and that they be reimbursed for their effort by the Setas. I thank you. [Applause.]
Mr B E PULE
END OF TAKE
Mr M SWART
Setswana:
Rre B E PULE: Modulasetulo, UCDP e amogela molawana o go dira tshiamelo ya gore mafapha a bosetšhaba a abelwe matlotlo go tswa mo sekgwameng sa lotseno lwa setšhaba. Molawanakabo o, o aba R355 billion ya lotseno la letlole la setšhaba, go feta kabo ya ngwaga wa matlotlo o o fetileng. Kabo e e dira 13% go feta ya ngwagatlola.
Maikaelelo magolo a go oketsa kabo e ka madi a a boletsweng, ke go kgontsha tiragatso ya puo ya Mopresidente ya go tokafatsa ditirelo go ya kwa bathing (service delivery). Re tsaa tsia gore mafapha a mangwe kgotsa ditheo tse dingwe jaaka Public Enterprise, SA Management Development Institute, Lefapha la Merero ya Selegae, Lefapha la Botsweretsi le Setso, Lefapha la Dipalangwa, a abetswe go feta a mangwe. Kabo ya one e farologana go simolola ka 22 ...
The HOUSE CHAIRPERSON (Mr G Q M Doidge): Order, hon member! Can we just inform you that there is no interpretation? I do not know what the problem is. The speakers list reflects that you will be speaking in Setswana and the Minister is unable to follow. We are trying to find out what is happening in the Language Services, but I am not quite sure how we will deal with this because I am sure the Minister will certainly like to follow your inputs. I know it is disadvantaging you and it is not an ideal situation.
Mr B J PULE: I have written my speech in Setswana.
The HOUSE CHAIRPERSON (MR G Q M Doidge): Will you continue in Setswana?
Mr B J PULE: Please.
The HOUSE CHAIRPERSON (MR G Q M Doidge): The Minister will have to try and get that translated and give it to you. [Interjections.]
Mr M J Ellis: Chairperson, on a point of order: In fairness to the Minister and to the hon member, would it be better if he was able to start the speech again at the later date when the translator has been found and we should continue now with next speaker?
The HOUSE CHAIRPERSON (Mr G Q M Doidge): Hon Pule, if you are in agreement with that we can give you a speaking slot later on in the programme rather than you complete your speech now. Are you in agreement with that?
Mr B E PULE: To speak later?
The HOUSE CHAIRPERSON (Mr G O M Doidge): Yes. Can we call on you later?
Mr B E PULE: When is later?
The HOUSE CHAIRPERSON (Mr G O M Doidge): We'll just check what the problem is.
Mr B E PULE: I see, with pleasure.
Mr S P HOLOMISA
END OF TAKE
Mr B E PULE
Mr S P HOLOMISA: Ngiyethemba Mhlalingaphambili unayo itoliki yesiXhosa. [Chairperson, I believe that you do have a Xhosa interpreter.]
Chairperson, hon members and princes amongst us ...
isiZulu:
nabantwana abahle abalapha phakathi kwethu. [and the beautiful,handsome princes that are among us today.]
English:
The ANC is confident that South Africans will persist in building and enduring national partnership further to change our country for the better. Working together with them, siyimbumba [we are united], we shall spare neither strength nor courage until this strategic objective is attained.
Through this Budget, therefore, the government is carrying out its historical responsibility to bring about the necessary social transformation by making funds available to redress the inequities occasioned by colonialism and apartheid.
At its recent conference in Polokwane, Limpopo, the ANC once again took stock of the situation in our land and, as was expected, came up with resolutions that will take us forward to the Promised Land of a nonracial, prosperous South Africa. These resolutions are practical, realistic and affordable. Hon members, we notice that these resolutions and this Budget make up a seamless web which ensures that you neither talking Utopia nor are we living in cloud-cuckoo-land. In the words of the President of the Republic, all that is required is for South Africans to put their hands on deck, and get to work in a manner we have not been accustomed to before.
The formation of the ANC in 1912 was precipitated by the introduction of the Native Land Act of 1913. As we approach the 100th anniversary of the organisation's formation in 2012, it is incumbent upon all of us who enjoy this freedom and democracy to ensure that the legacy of that notorious piece of legislation is eliminated.
The guiding document of the liberation movement, the Freedom Charter, commands us to share the land amongst those who work it. The recent conference calls on us to expedite the provision of land to those who live on other people's land - those are the farmworkers, farm dwellers, labour tenants, and all those who are landless as a result of the racism of the recent past. The same sacred document commands that farm implements such as tractors, seeds, fertilisers, and infrastructure such as irrigation systems and fencing must be provided to the poor of our people.
We are not short of the means to make the Freedom Charter demands realisable. The Land and Agricultural Development Bank is in a position to help our people not only to acquire land, but also to ensure that they use such land in a sustainably productive manner. This bank has done it for the historically privileged white sector of our society. We are therefore pleased to note that the Minister of Agriculture and Land Affairs has appointed a new board to steer the bank forward, and we are confident that we shall hear no more reports about bank funds being used for purposes other than the acquisition of land by blacks and the development of agriculture.
With the money allocated for the Comprehensive Agricultural Support Programme, Casp, and the Micro-Agricultural Financial Institute of South Africa, Mafisa, we expect to see a hive of activity in the entire countryside, especially the former homelands. Arable lands must not lie fallow because the owners do not have money to fence and irrigate them. The homestead gardens should be green at all times, as women are provided with the necessary finances from these schemes. Agricultural extension officers must now spend more time in the countryside and less in their town offices. In fact, their offices should be located in the rural areas so that they provide extension services to the people who need them most.
The Land and Agrarian Reform Programme, which has been launched in five of our provinces, is aimed, among other things, at promoting co-operation among relevant stakeholders on the question of land reform. The provincial departments of land affairs, the Department of Agriculture and municipalities must not work in isolation as they prosecute the programme of land redistribution. Needless to say, all government departments would do well to interact at all times with the institutions of traditional leadership. Traditional leaders even and especially in this era of democracy continue to be the gateway to rural communities. Let us use this attribute for the benefit of the people.
The abiding feature of failed land reform programmes has been the absence of post-settlement support to land reform beneficiaries. The tendency has been to provide land and money to them without the provision of the requisite skills and training. We are fortunate, though, to know that there are many white commercial farmers who are willing and prepared to give support and mentorship to the emerging farmers. As we build a national partnership further to change our country for the better, let us seize this hand of co-operation.
As I said earlier, we owe it to the founders of the ANC, all of us on both sides of the House, to ensure that the legacy of the 1913 Native Land Act does not live with us by 2012. I would beseech, therefore, those whose land has been identified for either restitution or redistribution to co-operate without forcing the government to resort to expropriation.
In the spirit of the national reconciliation and nation-building, we had hoped that there would have been more willing sellers than there would have been willing buyers, but now that there continues to be fewer willing sellers, Parliament has no choice but to come up with an expropriation instrument to speed up this process. This could be avoided if those who are in possession of more land than they need and more land than they deserve were willing and co-operating with government in executing this programme of land reform. We support of course, as the ANC, this Budget. [Applause.]
Ms S RAJBALLY
END OF TAKE
Mr S P HOLOMISA
Ms S RAJBALLY: Chairperson and Ministers, annually we return to the podium amazed by our Minister of Finance, the hon Trevor Manuel, and his impeccable team. Once again, we applaud them for drafting a workable Budget.
The MF believes that all allocated budgets to the various departments of national government are workable, and that it is glitches in the system that hinders delivery. We have annually experienced departments that are off-course and who experienced roll-overs. This troubles us as it is met by cries of ``We do not have sufficient funds.'' I sincerely hope that, in this year's review of departments' performance, that these loopholes have been smoked out and addressed effectively.
In view of the state of the nation address by our hon President and the Budget Speech by the hon Minister of Finance, the focus for 2008 has been outlined and it is evident that the Budget's allocated. We acknowledge the 13,34% increase in this year's National Budget, finding much energy being focused on the Department of Public Enterprises; the SA Management Development Institute; the Department of Home Affairs; the Department of Arts and Culture, and the Department of Transport. This clearly indicates the government's intentions to further the growth and development of the economy. This, in turn, we expect will service unemployment and help melt down the barriers of poverty.
Further, these allocations serve as a concern to government-owned companies and, hopefully, we shall see a turn around in the shortfalls. We sincerely hope that the issues around Eskom shall be addressed by the allocation indicated by our Minister of Finance.
With the 2010 Fifa games just two years away, we are pleased that attention has been given to transport that shall hopefully finalize the establishment of the Gautrain, and the revamping of the taxis and making transport both accessible and safe in South Africa.
We concern ourselves with the ever-increasing number of illegal immigrants in South Africa. We look at the Department of Home Affairs to address this, and to step up on stamping out corruption through all illegal distribution of identity documents. We ask whether funds will be directed at this new identity card, and how the department plans to protect this process from being hijacked through corruption.
The sector of arts and culture has a pivotal role to play in South Africa. In a country where racism has found itself creeping into our democracy once again, we need to promote the values and principles of democracy, our national Constitution, and the spirit of our rainbow nation.
We need not handle these incidents with violence and hatred. We need to embrace these lost people and show them the way of living together, accepting each other and loving every bit of being a South African. These individual incidents cannot rob the entire nation of its progress, its brotherhood and of its ubuntu.
We sincerely hope that the concerns of crime, education, social development and health shall accommodate serious turn around in this 2008. We hope, even though the Department of Defence has received one of the lowest allocations, that this shall not hinder the performance and accessibility of defence locally. We pray that we shall never fall victim to incidents such as in Kenya.
Lastly, the MF acknowledges the allocation made to prioritize a factor highlighted in the state of the nation address, but this does not rob priority from any other department. They are all equipped with a suitable budget to enable delivery and progress. The MF supports the Appropriation Bill. I thank you. [Applause.]
Dr S E M PHEKO
END OF TAKE
Ms S RAJBALLY
Dr S E M PHEKO: Chairperson, I will tell you a lot about the land. The PAC supports the Appropriation Bill. This Bill is known to provide the appropriation of money from the National Revenue Fund for the requirements of the state and so on. With the limited time at my disposal, I simply want to remark that the government has presented the infrastructure as the cornerstone of development. This is a welcome move.
Since 1994, development has not occurred where it is most lacking, namely, in the rural areas, townships and squatter camps, where the majority population of this country live. Worst are the hospitals, the most depressing conditions of learning, most atrocious roads, more unemployment and poverty that are found in the rural and townships areas. The rural people in particular, are the most neglected in the country. Their once thriving subsistence farming has collapsed because of their land disposition which was caused by the Native Land Act of 1913.
They flock to the cities, only to find that the green pastures they are looking for there, are the same as when chasing a rainbow. Rural areas must be treated in the same way that Europe treats its countryside. Rural areas and African townships should not be perpetual cesspools of poverty, ignorance and disease. They must be paid attention to, not only during election time.
The demand for land is great. The pace for equitable redistribution is slow. It is clear that no budget will ever be enough to buy back land for Africans in the country. Willing-seller willing-buyer has, as predicted, proved beyond reasonable doubt to have been a pipe dream. Expropriation will face the same fate. What is needed is a more radical land policy involving the amendment of section 25 of the Constitution and revisiting liberation documents on land, which were abandoned in 1955.
There is not enough money to buy land. The sale of land is inflated and the patience of the land-hungry shall not last forever. Izwe lethu! [Our land!] [Applause.]
Ms L L MABE
END OF TAKE
Dr S E M Pheko
Ms L L MABE: Chairperson, I would like to start by saying that the ANC wholly supports this Budget, especially because it reflects what the congress of the people had decided in Limpopo. What it decided on has been put into effect through this Budget.
The Polokwane conference noted that the Stellenbosch conference emphasised the role of the state as the key instrument for the delivery of basic services to develop appropriate systems and structures, in order to facilitate capable and sustainable service delivery machinery. My focus will be on service delivery which is due unto our people.
The Constitution requires that all spheres of government provide effective, efficient, transparent, accountable and coherent government to secure the well-being of our people. The Polokwane conference concluded that the ANC must monitor the implementation of a single public service because we are one country and one nation.
The ANC organisational report to the same conference states that our programme to provide social services continues apace and all statistics point to the decline in the number of households that are without access to portable water, electricity, sanitation and other basic services. It also acknowledges that we have challenges that need to be addressed. Those include amongst others that while poverty has declined, income inequality has worsened and that there are backlogs in service delivery.
The report continues to state that the challenges of poverty, unemployment and inequality are even more pressing and that government has a central role to play in responding to these challenges. Therefore, there is no reference to privatisation or outsourcing of delivering the service the services to our people.
In the provincial budget and expenditure review of 2003-04 to 2009-10, National Treasury reports that the provincial expenditure has been growing strongly, in real terms and has put departments in a better position to deliver more services for improving services to the people. It also states that service delivery information is not always readily available to stand against expenditure data or the efficiency of spending to be assessed.
This is crucial to the role that Parliament has to play in its oversight function that it needs to have sufficient information from the departments in order for it to be able to do its oversight function much better. The nonavailability of service delivery information creates a serious problem when Parliament has to conduct its oversight function. Information on money spent should be compatible with information on services delivered and whether they were of good quality or not.
It is vital to acknowledge it is only under the ANC government that people can insist on getting better service without fear of arrest or intimidation of any kind - something that was unheard of before 1994, and even in some countries during this era. This puts Parliament in the central place of ensuring that departments are monitored oversight is being performed.
As I mentioned Parliament, I want to emphasise the fact its integrity must be respected. Parliament is independent – it is on its own, as a sphere of government. Some people report negatively about Parliament and they even believe that it is subservient to the executive; of which they are 100% wrong. I believe that those who have been prophets of Parliament being weak and subjected to the executive will think twice and reconsider their facts.
To sight an example, what has recently happened in the Portfolio Committee on Home Affairs, where the director-general challenged the power that Parliament has as its oversight function – whether it was doing the correct oversight or not. That was really out of order, because how can the director-general challenge Parliament and tell it how to do its oversight function when the department has appeared before the portfolio committee to come and account? That is what the Public Finance Management Act wants. The Constitution gives Parliament the authority to conduct an oversight function. I am saying that the media was really impressed by what the DG said. As Parliament we are totally not impressed because we have the responsibility to do our oversight function.
The Public Service has reported that senior managers in the departments do not want to sign performance agreements. I don't know why, because these things ought to have been settled long ago. The Public Service Commission continues to indicate that most of these senior managers sign their performance contracts long after the beginning of the financial year. The question is how can you propose that you will do better service to our people, when you have not committed yourself to signing in black and white, and tell your executive head that this is how you are going to deliver better service to our people?
We are saying that it is time that as Parliament portfolio committees, we must hold the executive to account on ensuring that senior managers sign performance contracts in time, so that at the beginning of the financial year, we would understand what they are going to do with the money that we apportion and voted for.
The Public Service Commission reported that some of these senior managers were reluctant to sign their contracts. Some of them do not even understand the content of their performance agreements. You ask yourself what is really happening because they must deliver better services to our people. These are some of the things that as Parliament, we need to need to be vigilant on, to ensure that we even assist members of the executive in ensuring that they monitor what their senior managers are doing in the departments.
But one cannot access service delivery without considering the impact of vacancies of unfunded posts in the departments. How many times have we approved budgets for the departments, whereby they promised us that they are going to employ people and fill vacancies; but come the mid-term – September, October or the end of the financial year, you find that those funds have not been utilised to find people. Then they hide behind the fact that there are no skills available that are required in the economy.
I don't agree with that, because there are many people with relevant skills and that are unemployed. The unfortunate part is that they are not employed because they don't have experience. Where will they get experience from, because government is the relevant place where they can gain experience? I want to say that the ultimate question that needs to be asked is why government must continue to approve the budget for vacant funded posts, when there are so many unemployed graduates who cannot be employed by the departments?
At the same time, we are concerned that there is high employment. Why should this be the case? Maybe this needs some reflection on our part, especially amongst those who come from the majority party because we have the muscle to ensure that the departments can implement the Budget as they promised us, so that as we vote for the Budget, we will be happy that we are doing just to the people of this country.
I want to cite of an example of how sometimes the departments hide behind the relations between the different levels of government. Last week I was in Swartruggens where there was a burst sewerage pipe. As I went to that place, I discovered that for more than two weeks, the pipe was running into a river, and the river was flowing into a dam.
When the municipality wanted assistance from the Department of Water Affairs, in the province, it shifted the blame and said it was not their responsibility. Instead, it was local government that is responsible for fixing that pipe. I am talking about a poor municipality that does not even have the capacity to raise its own funds. And when you ask what that provincial department and the Water Affairs in the province are doing then they shift the blame to the local government; knowing that it does not have the capacity to do that function?
Another example that I want to refer to is the fact that last year, after the presentation of the annual reports, it was indicated that more than R10,6 billion went to contingent liabilities which the departments have; some of them being to pay for the legal claims that are waged against them. But you ask yourself as to how long should people continue to either abuse the rights of people, knowing that they are not the ones who are going to pay, but the money will come from the national fescues? How many times should that continue? How many times should people continue not providing better service to our people, and knowing well that they will not be held accountable? Instead, it is the Minister or the national fescues that will be charged when people want to sue the government. Why should that be the case? Why should we continue to approve such funds when those things are happening?
Setswana:
Fela ke rata gore ke boele kwa morago. Pele ke boela kwa morago ke re rona re le Maaforika Borwa re a leboga tota gore Lefapha la Matlotlo, le wena Rre Trevor Manuel o bo o re file Tekanyetsokabo e o re fileng yona, e e bontshang tota gore re le baagi, ebile re le maloko a ANC re a e lebogela. Se se bontsha gore e tla re le ka moso fa re ntse re tsweletse go fiwa madi, ra bo re dira go tlala seatla go feta ka mokgwa o re direng ka teng. Ke a go leboga, rra.
Mr B E PULE
END OF TAKE
Ms L L MABE
Setswana:
Mr B E PULE: Modulasetilo, ke rata go go lebogela go mpusetsa tshwanelo ya me ya go bua segaetsho. Ke a go leboga. UCDP e amogela molawana o go dira tshiamelo ya gore mafapha a bosetšhaba, a abelwe matlotlo go tswa mo sekgwameng sa lotseno lwa setšhaba. Molawanakabo o, o aba dibilione di le makgolo a le mararo masome a le matlhano le botlhano (R355 billion), tsa lotseno la letlole la bosetšhaba, go feta kabo ya ngwaga wa matlotlo o o fetileng. Kabo e, e dira 13% go feta ya ngwagatlola.
Maikaelelo magolo a go oketsa kabo e, ke go kgontsha tiragatso ya puo ya Mopresidente ya go tokafatsa ditirelo go ya kwa bathong. Re tsaa tsia gore mafapha a mangwe kgotsa ditheo tse dingwe jaaka Public Enterprise le SA Management Development Institute, Lefapha la Merero ya Selegae, Lefapha la Botsweretsi le Setso, Lefapha la Dipalangwa, a abetswe go feta mafapha a mangwe. Kabo ya one e mo gare ga 22% go ya go 64%. Mafapha a mangwe jaaka Lefapha la Badiri, kabo ya lone e ile kwa tlase ka 17%.
Ga re batle go tsena thata mo goreng mang o filwe bokae go feta mang? Kgangkgolo ke gore re nesetsa kabo pula gonne ga re na pelaelo ka matsapa le matsetseleko a e dirilweng ka one. Kgangkgolo ke gore a e a bo e tlaare fa pegelo ya Moruni-Kakaretso etla morago ga ngwaga wa matlotlo, mafapha a Ditlhogo a bodiwa gore ba dirisitse jang madi, ba bo tlhaba dinaane motshegare ba sa itlhomela ditlhokwa mo tlhogong. Ke setse ke amile ntlha e maloba fa re bua ka kgaogano ya matlotlo go ya diporofenseng, gore tiriso ya matlotlo e a swabisa ka ntla ya maipato a go tlhoka nonofo e e rileng mo mafapheng le go sa fetseng go ipata ka puso e e fetileng ya tlhaolele.
Mopresidente o kopile gore go ke go nne le pharologanyo monongwaga. Nako e tsile ya gore go tsewe dikgato tse di gagametseng kgatlhanong le badiredipuso ba ba a iseng ditirelo kwa bathong, mme ba iteboga ka dibonase, ba sa dira sepe. Go bonala gore ba itebogela gore ba paletswe ke go dirisa madi sentle.
Mo mafapheng a masome a mararo le bone, a le masome a mararo le bongwe ke one fela a a dirileng sentle. Ke gore go na le mafapha a le mararo fela mo go a le masome a mararo le bone a a dirisitseng madi sentle mo dipakeng tse tharo tsa dingwaga tse di fetileng, ke gore 2005-06, 2006-07, le 2007-08. Re akgola a mararonyana fela a a dirileng sentle, bogolo la Thuto gonne ke lone tota setšhaba se ikaegileng ka lona.
UCDP e dumalana gore Molawana wa Tiriso ya Matlotlo o fetisiwe. Re a o lebogela. Ke a leboga. [Legofi.]
Mr S B FARROW
END OF TAKE
Mr B E PULE
Mr S B FARROW: Chairperson, it is encouraging to see that at last government has realized the importance of investing in infrastructure. Infrastructure is the backbone of the economy. Not only does it ensure the efficient movement of goods into and out of our ports but it also provides the means for our population to move from one city to another in the pursuit of opportunity and within our towns and cities for their daily work. Business cannot effectively operate to its optimum level of productivity without good sound infrastructure.
South Africa on a whole has a good road, port and rail network, but unfortunately over the past ten years the lack of maintenance and capital flows into these entities has resulted in massive backlogs. These backlogs are estimated to be in excess of R200 billion in the case of our roads and some R100 billion in the case of our rail network, and similar needs exist for upgrading our ports. These three entities must represent billions of rands in investment and the resultant lack of maintenance, upgrading and reinvestment in them has caused numerous opportunities of jobs that could have been developed and retained in South Africa than moving abroad.
As a rule of thumb, the South African Institute of Civil Engineers estimates that in order to maintain and repair capital works of this nature approximately 2% of its value must be budgeted for annually. If not properly maintained, this figure increases twofold to 4%. Their recent scorecard on infrastructure gave water, sanitation, roads, airports, ports, rail, electricity distribution and hospitals and clinics and overall grade D, which is not a good score.
The main causes for this decline in the status of this infrastructure which was once classified as world class was due mainly to inadequate maintenance funding, inadequate skills and management systems. In considering the viability of the huge investments required to develop and upgrade the transport network alone, it is estimated that in the Department of Transport 1 000 staff will be required by consulting practices in the private sector over the next few years and over 2 000 highly skilled staff would be required by contracting companies.
The situation is even worse when it comes to the public sector with 45 of the 231 local municipalities have any civil engineers and 25 of the 47 district municipalities and those that have civil engineering staff report a 35% vacancy rate. All in all it is estimated that between 3 000 and 6 000 additional civil engineers, technologists and technicians will be needed over the medium-term programme the expenditure of which is calculated - I think recently - to be in excess of R568 billion over the next three years.
One wonders if this case is of too much too late and a wake-up call was only really brought about to the fore by the Fifa World Cup Bid. Although the DA is pleased about the large funding going into our infrastructure, we have concerns as to just how the effected departments will handle these large expenditures and clear the massively looming logjam.
I say this in a number of factors some of which I've already touched on together with the general slowdown in the economic growth, historical under-spending by key departments, low productivity, and the availability that's going to be needed in respect of cement and steel and the high cost of moving goods around our country. But more importantly, the low level of the involvement of public-private partnerships in the infrastructure plan.
Many of these issues you may argue Minister can be solved but time is not really on our side. Importing skills is expensive and even more when we talk about the Gautrain - bringing in instead of manufacturers as the hon Cronin has mentioned is another dilemma – the department involves red tape in finding the right person with the necessary skills and experiences is even harder.
The hon President himself at the Indaba in Midrand last week bemoans as a tragedy the annual returns of billions of rands of underspending to the Treasury.
Excited as we may all be with the Minister's generosity towards improving our much needed infrastructure and the hope and opportunity it can bring our citizens and particularly the benefits it will offer to SMMEs, private contractors, foreign direct investments and the general expansionary effect on our economy, it is paramount that we gear up public-private sector spending which is currently and sitting at 5% and it should be at 15%. I thank you Chair.[Applause.]
The HOUSE CHAIRPERSON (Mr M B Skosana): Before I call on the next speaker, I just want to break the monotony. The hon Minister will remember when he was making his Budget Vote Speech, I watched him very closely when he went for his glass of water several times. Then it reminded me of something which I think the Ministers knows abut. It is said that the shortest speech which was made by the Chancellor of the Exchequer, Benjamin Disraeli, was about 45 minutes. Then there was the longest made by William Gladstone, also the Chancellor of the Exchequer, was about five hours.
But now what is more amusing is that, that's when alcohol was allowed in the Chamber. [Laughter.] And now subsequent Chancellors could take their taste and other came in - Geoffrey Howe, Lord Callaghan, Denis Healey - and some had Rum and Coke, Gin and Tonic. Those were Chancellors of the Exchequer! They called it the ``Chancellor's Sustenance''. [Laughter.]
Mr T M MASUTHA
END OF TAKE
The HOUSE CHAIRPERSON
Mr T M MASUTHA: Chairperson, perhaps it's not a bad idea after all! [Laughter.]
Chairperson, colleagues, the most critical question before every South African today is how to reverse the ever-illusive challenge of socio and economic exclusion that affects the majority of our people. Simply put: How do we eradicate poverty?
A democratic order founded on the principles of human rights and human dignity has now been entrenched, and our task at hand is to build a caring society that brings about material improvements in the lives of our people, especially those living in poverty and confronting vulnerability. The ideal of achieving formal employment has to remain the central objective of South Africa if it hopes to eradicate poverty amongst its citizens. A thriving economy that creates jobs is therefore critical in responding to poverty.
Equally, though, the jobs that the economy can create or offer will not be taken advantage of by potential employees if they have a paucity of skills to match the job requirements. Issues that have direct bearing on the supply of an appropriately trained labour force to drive the economy and in itself contribute to economic growth is a critical element therefore. However, in addressing human capital development, we cannot look purely at training required for the acquisition of relevant skills. We have, instead, to look holistically at human development. In this regard, addressing the basic human needs such as health care, nutrition, decent accommodation, water, sanitation, energy and transport needs is critical to the production of a labour force that will be able to contribute effectively to the economy at the required levels.
Evidence to date suggests that children from poor family backgrounds have not been able to perform optimally at school and are, as a result, not acquiring the requisite educational skills needed. These children will remain a liability rather than an asset to the economy and, therefore, addressing poverty in its totality, as I said earlier, especially child poverty, as prioritised by the ANC National Conference in Polokwane last December, is absolutely critical.
In the first decade of freedom, we focused on deracialising eligibility for and extending access to social assistance. Further, to complement the enhanced income capabilities of poor people resulting from increased access to social assistance, we have introduced special programmes that protect older persons, people with disabilities, children, vulnerable workers and workers in the domestic and farming sectors.
We have committed ourselves to building a comprehensive social security system that is both effective and sustainable. Increasingly, government's programmes of economic and social development are being assessed in terms of their impact on the assets of the poor, and their impact on the specific vulnerabilities of our people, especially the poor. The commitment of our government to poverty eradication in response to the Polokwane resolutions has seen the formulation of a national comprehensive anti-poverty strategy unveiled by the President in his state of the nation address last month. That will ensure that all efforts within and outside government are co-ordinated to address the poverty challenge.
The thrust of the new approach is not the revision of policy, but the intensification of its implementation so as to maximise access by all to its benefits. Today, over 12 million children, the elderly and persons with disabilities are supported through the social grant system. Two-thirds of these beneficiaries are children who benefit from the child support grant. There is strong evidence to suggest that South Africa's social grants are well targeted and account for a substantial share of the income of poor households. From the recent household survey that was released by Statistics South Africa two weeks ago, we have learned that grants are associated with a greater share of household expenditure, and therefore contributes to and leads to improved nutrition for many people living in poverty. In particular, the child support grant contributes significantly to the health of young children.
The stated position of the ANC is that child poverty is an extremely unique form of poverty that requires long-term solutions. Perhaps at this juncture, I need to pause and address the often-raised concern that we, as a nation, are fast drifting into becoming a welfare state and perpetuating dependency, and thus compromising long-term productivity in society. As I indicated from the outset, promoting full employment remains the most critical strategy for addressing poverty, hence the various interventions relating to growing the economy, imparting skills and other employment-promoting initiatives that have, very often, been articulated.
We must, however, emphasise the point that the kind of social interventions aimed at addressing poverty and vulnerability are highly targeted. It is only the poorest children, the elderly and people whose disabilities prevent them from participating in gainful employment who are targeted by this system. These are people who have no choice but to be dependent on others, as society itself does not expect them to be independent economically.
Government's introduction of a poverty line is also welcome. We hope that this measurement tool will be able to provide us with more scientific information on mapping, geographically, where poverty is more severe and so direct resources accordingly, and evaluate whether or not poverty alleviation programmes are effective in moving people out of poverty, and improving their wellbeing, both in the short term and over an extended period of time.
By placing information about the levels of poverty and the resultant inequality in South Africa in the public domain, we can build a national commitment to eradicating poverty that goes beyond government. While there are many positive outcomes that can arise from poverty measures such as the poverty line, there are however unintended dangers that can arise and that must be guarded against.
The thinking in government also rests on an appreciation of the multidimensional nature of poverty; hence, measuring income poverty alone would not provide sufficient information for planning and targeting of appropriate interventions. Our efforts are contributing positively towards the social inclusion of historically marginalised persons, and the sustainability of their livelihoods.
Over the next few years, we must intensify our efforts to advance our agenda to establish a comprehensive social security system for South Africa. Therefore, we are now focusing on the reform of the contributory schemes. Already the Department of Labour has, for example, expanded the provision of unemployment insurance to low-income earners. The Department of Health has started the dialogue to increase participation in the medical scheme coverage system, and the Department of Transport has initiated the process of public involvement in the reform of the Road Accident Fund. An honest and frank reflection of South Africa's retirement provisions is that the system is in dire need of reform. It is fragmented, and needs greater consolidation and regulation. Certainly, the Fidentia story is a case in point.
Retirement provision, if properly designed and regulated, should help retain the dignity of contributors upon retirement by guaranteeing them adequate income to sustain their livelihoods and those of their dependents. We urge the Department of Social Development, in conjunction with the Treasury, to conclude their work on the process on retirement reform. Retirement provision does not only provide income-smoothing in the last days of an individual from employable age to old age. Properly designed, these provisions should also provide insurance coverage, contingencies such as death survivors' benefits and post-retirement medical provision.
Failure to provide adequately for retirement results in persons living in poverty during their twilight years. Invariably, society is left with the responsibility to provide for them or their dependents with basic income support for survival. Therefore, a matter as important as is the reform of retirement provision cannot be the exclusive preserve of government and the retirement sector. All South Africans, from all walks of life, should participate actively in this historic process of transforming our social security system, and charting the way forward.
By way of conclusion, allow me now to make a few comments regarding the specific issues relating to the Appropriation Bill. Funding for the social welfare sector has grown over the Medium-Term Expenditure Framework period. This reprioritisation has resulted in improved service delivery to the most vulnerable. Analysis of provincial budgets and expenditure reveals that provinces have increased resources to fund social welfare services, and are in a better position to scale-up preventative programmes, early intervention and protection services.
What is hampering service delivery, however, is human resource capacity constraints as well as the joining up of strategic and operational plans to ensure improved service delivery. In terms of social assistance transfers ... [Time expired.] [Applause.]
Mr L M GREEN
END OF TAKE
Mr T M MASUTHA
Mr L M GREEN: Chairperson, hon Minister and hon members, it is common knowledge that the world economy is facing a downward trend and consequently our economy also faces a similar trend from an aspiring 6% to a realistic 4% over the next few years. Given the global trend, we are fortunate that despite the downward trend, our economy is nevertheless able to maintain a 4% growth. If the fundamentals were not in place, the suffering would have been far greater, especially amongst the poorest of the poor.
Many of the people we speak to, feel that in an economic slump, the tightening of their purse-strings, even saving on power consumption are things that they can adjust to. Nonetheless, they express their apprehension about the way government might have contributed to these conditions.
Our nation is facing a shocking 24% price increase in electricity, if Eskom succeeds in its appeal to NERSA. South Africans are generally critical of the ability of government to run the state, and this may be an historic notion given that this country has for many years had a lack of transparent and open government. Consequently, more transparency is expected of our new democratic government but with the continued escalation in violent crime, the Eskom crisis, growing food prices, interest rate hikes and service delivery problems there is a concern amongst our people whether government is doing enough to combat inflation.
As we consider the Appropriation Bill today, Chairperson, and in comparison to the state of our nation addresses over the past number of years, it may be time for some reflection.
The fundamental challenge facing this nation is institutional leadership. In recent weeks we have experienced the shocking levels of moral standards among big businesses colluding amongst themselves in price fixing which has contributed significantly to inflation, especially in relation to basic food products. The levels of Public Service ethics and output have also been a matter of great concern for many years. Just last week we heard from joint committee report that the Department of Transport has spent only 6% of its budget over the first three quarters of the previous year. This is gross mismanagement of responsible government. And such is the picture we gain as we peruse over Auditor-General reports of other departments. Unspent budgets and qualified reports is the trend and directors-general are not held accountable enough.
The fiscal discipline over the past number of years, as proud as we may be of this achievement, has only added to reveal the great policy divide between government and the ruling party. It is this lack of cohesiveness in policy that impacts not only on our attraction for international investments but more so government's ability to appropriately address the issues of poverty, HIV/Aids and black economic empowerment. Billions of rands have been spent on education, health and social security over the past few years. So, it is not that there was a lack of funds but what may have hindered us from attaining significantly more growth in this and other sectors could be linked to intransigent policies, nepotism, management and leadership styles, slow reaction to corruption scandals, weakening oversight roles of bodies including Scopa and the deteriorating relations between government and the majority party. What the nation needs right now is unity within government which governs in the national interest of the country.
The National Treasury, in association with SARS have been impressive in keeping our economy on track despite our limitations.
Finally, as South Africans, hon Minister, we want you to inform the nation that our economy will continue to add money in the pockets, put on the table, generate a rise in the living standards and that the future of our government does matter in uniting the nation towards a better life for all. I thank you. [Time expired.]
Ms N N SIBHIDLA
END OF TAKE
Mr L M GREEN
Ms N N SIBHIDLA: Chairperson and hon members, the Appropriation Bill is not only about allocating funds but also about how and where do we get these funds. This Bill also assists us in ensuring that the ideals of our Freedom Charter, in particular the fundamental principle that says the people shall share in the country's wealth, become a reality.
My contribution will focus mainly on the taxation framework as proposed. Tax systems around the world are based on fundamental principles which have evolved over the years. The taxation principles of South Africa, being a developmental state, include elements of efficiency, equity, the benefit principle of taxation and transparency.
To put it differently, taxes imposed on individuals, households and business strive towards promoting a fair or equitable distribution of income. Taxes should be designed in such a manner that their distorting effects on the choices made by taxpayers are minimised. The tax regime must be simple and certain. And taxes should facilitate macro-economic stability and economic development.
These guiding principles determine the type of taxation that is imposed by our government. It is also often the case that these principles are used to strike the correct balance between direct and indirect taxes.
The 2008 Budget Review includes some significant tax proposals for the 2008-09 financial year.
These include amongst others tax relief for individuals and businesses, a reduction in the corporate tax rate from 29% to 28%, a simplified tax package for very small businesses with an annual turnover up to R1 million, an increase in the compulsory VAT registration threshold from an annual turnover of R300 000 to R1 million, incentives to encourage venture capital equity investment in small and medium-sized businesses and R5 billion in tax subsidies over the next three years to support our industrial policy.
According to the 2008-09 Estimates of National Revenue, the pre-tax proposals show increases in all major revenue categories as compared to the revised estimates of the 2007-08 financial year.
With regard to taxes on income and profits, the increase between 2007-08 and 2008-09 is estimated to be 15.7%. Revenue to be collected through domestic taxes on goods and services which refers to indirect taxes is estimated to increase by 11.9% between 2007-08 and 2008-09.
The budget review emphasises the fact that the South African tax policy framework supports economic growth.
Recognising the fact that especially indirect taxes have a distortionary impact, the proposals aim to minimise the potential distortionary impact that taxes might have on growth and employment creation, and simultaneously stimulate the supply side of the economy.
An efficient tax system depends to a large extent on the revenue collection ability of the tax authorities. The collection of tax revenues in South Africa is dependent on many factors. These factors include the level of employment changes in the real income of people at work, the collective tax base changes in asset prices and the rate of economic growth and the rate of inflation.
Through imposing taxation in the form of direct and indirect taxation, government in effect wants to achieve an array of objectives. These include the provision of services and changing the level and pattern of demand.
In addition to these two objectives, government also impose taxation to influence distribution of income and wealth and to correct certain market failures, hence the introduction of the electricity levy as a strategy to partially address the electricity shortage in the country.
The choice on the correct balance between direct and indirect taxes depends to a large extent on contribution that each category can make in terms of efficiency to the taxpayer, equity and the ease of collection of the taxes.
The Minister of Finance during his Budget Speech said that since 2006 direct taxes contributed more than indirect taxes. Part of the reason can be attributed to the rigorous tax collection efforts by the SA Revenue Services that resulted in the increase on the number of registered taxpayers. Over the medium-term, it shows that the proportion of indirect taxes to the sum of direct taxes remain at about 40%. It is forecasted that this proportional representation between direct and indirect taxes will not change. One therefore has to seek for reasons for this consistent trend between direct and indirect taxes over the past five years.
Indirect taxes such as VAT allow for tax savings to individuals as individuals can exercise their choice in deciding whether to consume certain goods and services in the same way income threshold as per personal income tax also allows for tax savings.
Indirect taxes on specific goods can be designed to correct externalities. For example, if we put more on sin-taxes we are indirectly encouraging healthy lifestyles - which speak directly to the ANC's commitment to a better life for all.
VAT is a regressive tax. It is a tax where all individuals pay the same fixed percentage. For example, if Jomo has R5 and Nkanyezi has R10 and the tax paid by them amounts to R1 each, then the percentage tax burden to Jomo comes to 20% and the percentage tax burden to Nkanyezi comes to 10%.
Based on this example, one can argue against a proposal of increasing VAT as some economists proposed during budget hearings. This increase in VAT will put more burden to low income earners and work against government's ``war room'' against poverty.
There were other lobby groups who were also calling for the reduction on VAT. This call, we think, cannot only benefit the poor but the rich who are currently paying less for basic needs compared to the poor.
Furthermore, there was a proposal that government should move from direct taxes to indirect taxes. The equitable effect of this can be explained in terms of savings and capital income. If such a move is effected, taking into account the fact that capital income is located at the top of the income distribution, then lower income earners would not benefit, thus increasing inequality.
The revenue collection efforts of the SA Revenue Services have grown considerably over the past ten years.
As the National Budget Review points out, robust revenue collection and improved administration has seen Sars collect in access R3 trillion over its first decade.
The review further states that improvements in SARS operation will be driven through the implementation of its modernisation agenda. The assessment of indirect taxes in terms of efficiency equity and ease of collection reveals that indirect taxes can create inequality as the effect of higher fixed rates is mostly evident among low income earners.
In making the assessment of indirect taxes, and specifically referring to the equity component of indirect taxes, one must make reference to government's poverty alleviating efforts through the introduction of certain forms of indirect taxes, notably VAT.
It is also so that through the imposition of indirect taxes that government ensures that the fixed rate is not set too high. This is necessary as higher tax rates can cause higher inflation through suppliers passing on a tax by raising prices.
The 2008 Budget Review highlights the fact that South African economy faces a number of constraints. It further states that these constraints suggest a need for supply side measures that can boost the growth and job creation potential of the economy. These supply side measures are aimed at improving the efficiency of market forces contribute to a higher level of productive potential and create conditions for better living standards.
The 2008 Budget Review makes reference to the supply side policies with specific reference to the labour market.
We support the Bill. [Time expired.] [Applause.]
Mr H J BEKKER
END OF TAKE
Ms N N SIBHIDLA
Mr H J BEKKER: Chairperson, on behalf of the House, may I congratulate the hon Sibhidla. I wish her all and all the best for the future and I am sure she is going to make a worthwhile contribution to this House.
The IFP is supportive of a policy of inflation targeting in order to control inflation. Irresponsible spending by the public and consumer must be controlled. The inflation target, however, should be realistic and take into consideration the reality of prevailing international conditions. Furthermore government itself should also take responsibility for its own role in fuelling inflation.
The spiralling international oil price is out of control and at a price of more that US$100 per barrel it has a devastating result on all forms of transport, and particularly on the price of capital and consumer good, as well as the effect on food prices. The serious setback of the banking system in the United States due to the collapse of the subprime housing mortgage resulted in dramatic pressures on the US economy, with the US$ dropping to 152c to the Euro. Strangely enough, the South African rand continues to follow the US$ and not the Euro, a factor that can hardly be controlled by the South African industry or the consumers. The sad irony about inflation targeting is that government, local government and statutory bodies seem to be outside the spectrum of the inflation target programme. Statutory increases, the Eskom fiasco with its resulting price hikes and local authorities that are increasing their tax regimes by charging rates way above the Reserve Bank's targeted inflation rates. Government must recognise that statutory entities and institutions, without increasing their rates and costs, that are higher than the targeted inflation rates, are completely outside the control of the victimised South African industry and public.
Surely this government is as much to blame for the out of control rise of the inflation rate as the devastating external international factors. Until government gets its own act together with regard to controlling its own departments, local government and statutory bodies and entities, we will know that inflation targeting is simply lip service and only discriminatory to the public and the private sector. In this regard even food price inflation cannot solely be blamed on the agricultural industry, since government's agricultural and land policy has much to do with the lack of food security.
Surely we cannot have a laissez-faire attitude about inflation and consumer spending. We should recognise the real cause of inflation as being too much money chasing too few goods. South Africa should stop looking at only curtailing the created money stream and credit, but should indeed focus, together with industry, on the manufacturing of more goods and products. In fact, the weakening of the rand should be a golden opportunity for mass industrial production and promoting exports.
I earlier referred to Eskom and the devastating effect of the hopeless planning and lack of skills base. Eskom has destroyed all confidence in itself. The latest blunder by advising the construction industry that they will not be supplied with licences or power for future large developments was about the last straw. Even the hon President Mbeki had to step in to restore confidence.
In America in hurricane affected areas there is a term know as "the perfect storm" and we should watch out that we're not going into this storm, because after Polokwane and the Eskom fiasco, we could be heading for that storm if we are again doing this. The inflation targets must be upwards adjusted. [Time Expired.]
Ms R J MASHIGO
END OF TAKE
Mr H J BEKKER
Ms R J MASHIGO: Chairperson, hon members of Parliament and the people of South Africa, the Appropriation Bill, known in the communities as the Budget, addresses the problems that we experience, such as poverty in the communities. It informed the Minister in his drawing up of the Appropriation Bill
The poverty reduction programmes and social securities have reference to the following achievements that are seen in the communities: Free health care services for children under the age of five; for mothers who are lactating; pensioners and disabled people. Many unemployed people have been employed through the Expanded Public Works Programme, through employment in this department and training as home-based care workers. Again, jobs have been created through the hospital revitalisation programmes and the improvements around the hospitals.
More clinics have been built in the communities, which are more accessible, and this will enable the communities to save money on transport. Essential drugs are also made available and in stock. We are able to reflect on the transition from an inhumane society to a society that is caring, open and democratic. Water and sanitation also have an impact, because by December 2007; 110 clinics that had no sanitation services received this service and 91 clinics that did not have water services, received this service.
The ANC believes that education and health should be prioritised as the core elements of social transformation. Health has, as a result, been allocated a reasonable sum – the main budget being R15 billion for 2008-09. The Department of Health needs to attend to infrastructure, which has also received allocations on all levels of government, and through this we will realise more as these allocations will support a range of improvements in the public health sector.
Reduction of child mortality and improvement on maternal care has also been addressed. Our Minister of Health, on 11 December 2007, while addressing the 7th Annual Conference of Midwifes of South Africa, stated that health care providers in general, and the midwives in particular, have an exceptional role to play in their endeavour to attain the millennium goals. The Minister referred to the millennium goal development for the reduction of child mortality rates by two thirds between 1990 and 2015 for children under the age of five. We have realised that in South Africa the stillborn rate is 19 for 20 children's lives and neonatal mortality is 14 for every thousand children born.
Despite poverty and other social factors, the department has introduced programmes like immunisation, prevention of mother-to-child transmission and other coverage of immunisation that have greatly decreased the perinatal mortality rate. In this it is internationally known that South Africa is seen as a caring society due to these intensive programmes that address perinatal care. The hospital revitalisation programme has also received a large sum of money, but the impact still has to be seen in the communities.
Both the committees in Parliament need to look at this, as it will in turn lead to problems that we will not be able to account for as representatives of the people. With good leadership and management, most problems in public hospitals can be addressed. There is a consolidated expenditure of R75 billion on health and I think we can address this issue of public health services.
Human resources, we know that the occupational-specific dispensation is a positive initiative taken by the department and has contributed greatly, as the Minister stated in the Budget review to the increase of personnel from 36 000 in the past five years, which will further lead to 25 000 post to be filled in the year 2010. The filling of vacancies is another challenge that needs to be addressed. During the state of the nation address in 2006, the President addressed the issue of the reopening of nursing colleges, which will address this skills shortage. We are aware of the disadvantages that effect the department in the staffing in order to reopen these nursing colleges, but let's at least see one of the hospitals being reopened.
The district health services also have a bottleneck, which affects the delivery of primary health care services in the communities. Rural public health services are also a problem, as much as I have said, there is an increase in clinics, and there is also a need for health facilities in the rural areas. In the rural areas we use more bad clinics, which definitely need to be audited, because we know they are there. How effective they are, we are not very sure.
The Business Report, hon Minister, of 19 February this year, had an article by the People's Budget Coalition, calling for the hon Minister to table a proposal to transform the current health care system through the introduction of a national health insurance and a need-based budget for health. This we see really as a challenge, because it needs the involvement, not only of the public health sector, but also of the private sector and the community as a whole. Together, as the President had said, we can address the issues and with all hands on deck we can have a better health for all.
In conclusion, I would like to call upon the portfolio committee to seriously conduct oversight, as this ensures that government policies are properly and efficiently implemented. Several documents are available in enabling Parliament to monitor government performances, as you all know, and through those documents we will be able to monitor and do oversight of all the programmes, as health is the core service. With healthy communities we can have a healthy economic growth. I would like to that you all. The ANC supports the Appropriation Bill. Thank you. [Applause.]
Dr P J RABIE
END OF TAKE
Ms R MASHIGO
Dr P J RABIE: Chairman, a well-known financial publication mentioned that the 2008 Budget Speech of the hon Minister, and I quote, "may be the hon Minister's last free hand". Whether this will be the case, remains to be seen.
The 2008 Budget Speech must be contextualised in terms of high fuel prices, rising interest rates, mounting inflation, stricter credit controls, a ratio of household-debt-to-personal-disposable-income of almost 70% and the emigration of thousands of highly skilled South Africans.
Power cuts have adversely affected the mining industry, the gold mines in particular. According to Statistics SA, gold production declined by 16,5% in January, while the platinum group metals production decreased by approximately 16%.
South Africa's economy relies upon commodity-driven exports, yet the rand is on the retreat against most of the major currencies. Allow me to mention that the Canadian dollar, Brazilian real and the Australian dollar have all outperformed the rand to a significant extent.
At present, business confidence is at a seven-year low. In addition, global economic factors such as the possibility of a US recession, threaten our growth prospects.
The 2008 Budget contains a number of measures designed to stimulate investment and labour-intensive manufacturing. The DA welcomes these measures. We particularly welcome the venture capital tax incentive for promoting hi-tech start-ups. This incentive is for small to medium companies with growth assets of R30 million to R50 million.
The DA also welcomes the additional R2,3 billion for infrastructure, spread over the next three years. However, we would like the hon Minister to address the following concern – that R300 million was earmarked for the Coega Aluminium Smelter despite Rio Tinto postponing construction of the smelter for an indefinite period amid electricity supply uncertainty.
The increases in the threshold for farmers and the businesses that submit VAT returns every four to six months from R1,2 million to R1,5 million is also welcomed. The VAT registration from R300 000 to R1 million is also noteworthy and will reduce unnecessary red tape for businesses.
Chairman, a per annum GDP growth of 6% is in the interest of all South Africans irrespective of political persuasion. However, by government's own admission, economic growth will remain well below the 6% growth target for a number of years. In order to accelerate growth, we must improve our present system of education, particularly on maths and science.
A much higher rate of savings is also required. To stimulate savings, government must reduce the tax rate on investment returns rolled up in life insurance policies. Further development by means of public-private partnerships to enable our roads, rails, ports, electricity grids, sewerage systems and telecommunications to reach international standards is also essential to accelerate economic growth.
Efficient government in terms of service delivery, law and order, macroeconomic management and an affordable health system that provides for all South Africans must replace the present inefficient system.
South Africa as an investment destination has been the subject of three very alarming reports, which is a cause for concern. Firstly, the Wold Economic Forum, WEF's global competitive index shows a fall of South Africa from the 36th position to the 44th position in 2007. Secondly, the World Bank's "Doing Business in 2008" survey, which reflects the global ease of doing business, has downwardly revised South Africa's ranking from 29 to 35.
And thirdly, the International Institute for Management Development's world competition's yearbook highlights South Africa's 12-place fall from grace. It has descended from the 38th position to the 50th position in the ranking of 55 countries.
Chairman, these particular findings are of great concern. Thank you.
[Time expired.]
Ms J L FUBBS
END OF TAKE
Dr P J RABIE
Ms J L FUBBS: Chairperson, hon members of this House, comrades and colleagues, I just have a couple of points that I wish to address that have gone on in this debate, particularly from the last speaker.
Of course, I haven't had the opportunity to study everything that he said, but one thing struck me with alarm. I wondered if we were both referring to the same World Bank and the same President. But indeed, there is only one World Bank and one World Bank President and, in fact, what I read was quite interesting.
He had this to say about the United States' economy, that, indeed it was in great stress and was likely to go down further. But then what was interesting is that he thought it highly unlikely that this would impact negatively, to the same degree, on developing and emergent economies, and he noted South Africa among them. But of course unless he had a touch of schizophrenia on that occasion, we may be talking about a split personality.
This Budget offers us an opportunity to distil the dynamics and dimensions of intergovernmental fiscal relations. It is indeed an enabling instrument in the hands of the three spheres of government to implement policy priorities.
South Africa, as a developmental state, will continue to pursue its political and socioeconomic objectives and to eradicate poverty. Indeed the clarion call in the Freedom Charter is that the people should share in our country's wealth, and that indeed, it is this instrument of the IGFR that will be utilised, particularly, at the local level, but indeed by all three spheres of government to implement this.
The tools utilised by government and the constitutional instruments in the IGFR in the national sphere are indeed used to develop policies and to share spending competencies. Provinces are informed by their respective provincial growth and development strategies and local government uses its integrated development plan.
Indeed, our Budget, for example, utilises and directs most of its financial resources to effect human capital changes through the provinces, which are expected to fulfil their constitutional obligation in respect of local government.
We cannot ignore the role, though, that the private sector and community should play in service delivery in the communities. The misalignment between three spheres of government often results, as we all know, in unintended consequences for the poor.
President Mbeki made a call to all South Africans to work together and to stop the silo syndrome. The ANC President, Comrade Zuma, has repeatedly called for renewed commitment to the people through a collective approach in service delivery by both public and private sectors.
Indeed the budget process is a sharp tool in the hands of those charged with service delivery. It enables the energies of three spheres of government to be exerted in one direction – accelerated, efficient, effective service delivery.
In this, our third term of participatory people's democracy, the IDPs are playing a critical instrument in a number of municipalities. And this Budget, in particular, directs an increased allocation of resources to the local government sphere.
Across many developing countries, including countries in Africa, Asia, Latin America, Eastern Europe, the IGFR has been used to enhance the capability and capacity of subnational governments, in South Africa's case provinces and local government.
South Africa's robust and rugged financial foundation developed during this period, run by the ANC, will enable our country to overcome the global storms. Our unique constitution is informed by our revolutionary struggle to transform our country from a balkanised political and socioeconomic oligarchy into a developmental state, one founded on co-operative governance and sustained, in part, through an evolving intergovernmental system of fiscal relations.
Our Constitution underpins certain basic rights that rely on the robust working relationship between these three spheres of government, which are interdependent.
While co-operative government acknowledges the integrity of each sphere of government, it also recognises the complex nature of government in a developing society that is transforming into a developmental state.
The ANC-led government has re-emphasised service delivery. A cohesive three-sphered government requires, among many other issues, a framework of mutual intervention, a cohesive society and multisectoral perspective in the interest of the country as a whole. It also requires co-ordinating activities to avoid harmful competition and costly duplication, utilising human resources effectively and settling disputes constructively without resorting to time-consuming investigative processes. It also involves rationally and clearly diving roles and responsibilities to minimise confusion and compliment service delivery.
The complementarity of policy, planning and implementation has a revolutionary impact in a people's democracy. Indeed, there is a conscious threat that can be traced from the national democratic revolution principles through the Freedom Charter and the RDP, and expressed by government in socioeconomic strategies, including among them, the IGFR.
The integrated development planning, using ward committees, creates a link between local government and communities. Intergovernmental transfers and tax policies play a critical role in the management and co-ordination of government relations. In this area of tax, from which we so succinctly heard and powerfully from a previous speaker in an amazing speech, it is important to note that while government has recently cut taxes to the corporate sector by 1%, that is 29% to 28% - and that is about R5 billion - what may be important for us to review when we further consider tax cuts to this sector, is just how effectively the corporate sector is used in generating different investment in South Africa itself.
In this debate, we have heard how certain departments and provinces underspent their allocations, which require a roll-back of allocated funds. Given the level of poverty in many communities, our ANC-led government believes it is irresponsible that money allocated for development is not effectively spent.
A concerted effort by all three spheres of government, working cohesively in an integrated manner, is required to identify fiscal leakages and capacity constraints. However, let us acknowledge in this House that Canada, India, Brazil and Nigeria, among many other developed and developing countries, are currently grappling with just this challenge.
The transformation required in South Africa will not arise spontaneously - certainly not from demand economics - but will require the direct intervention of the state to address the structural distortions that litter our economic, socio and political landscape.
The contract of the people in 2004 between the ANC and the people of South Africa committed the ANC-led government to job creation, fighting unemployment and poverty. What is different? Nothing. Our commitment has simply deepened our resolve which is reflected in the allocations in this budget.
This Budget recognises that municipalities with limited revenue-raising capacity to meet their developmental objectives need greater financial income from National Treasury. To this end, they have been allocated a much proportion of funds through the municipal infrastructure grant and financial management grant, among other support services.
However, in tackling the question of socioeconomic rights, indeed basic services, the ANC has consistently declared that these two are mutually inclusive. The ANC, let us not forget, fought not only against apartheid, it fought for human rights and basic rights, which include socioeconomic rights. Therefore, the constitution entrenches these socioeconomic rights.
The Appropriation Bill is one of the instruments through which the state regulates the manner in which the appropriated funds are spent within the framework of the Public Finance Management Act. Indeed this Budget has worked towards ensuring allocative efficiency. It is therefore the responsibility of every department, and every sphere of government, and every agency that gets and receives a portion of these funds, to expend them wisely in the interest of more effective service delivery.
In allocative efficiency, there is simply one way in which fiscal space is created, fiscal space that will enable a sustainable medium term budget that can be directed at increasing the financial resources for social development.
The ANC supports this Budget, which is driven by the eradication of poverty through a developmental process that recognises that poverty and unemployment are both the same coin, just different sides. These should therefore be addressed not only through economic development and socioeconomic support, but also through a focus on critical skills development. I thank you, hon Chairperson.
The HOUSE CHAIRPERSON (Mr M B Skosana): Thank you, hon member. That concludes the debate for today. The Minister will reply tomorrow. The House is adjourned.
Debate interrupted.
The House adjourned at 18:06.
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