Hansard: Debate on Vote No 10 — National Treasury
House: National Assembly
Date of Meeting: 21 May 2013
Summary
No summary available.
Minutes
UNREVISED HANSARD
EPC – OLD ASSEMBLY CHAMBER
Tuesday, 21 May 2013 Take: 82
START OF DAY
TUESDAY, 21 MAY 2013
Proceedings extended public committee – old assembly chamber
_____________________
members of the Extended Public Committee met in the Old Assembly Chamber at 14:04
Mr G T Snell, as Chairperson, took the Chair and requested members to observe a moment of silence for prayer or meditation.
VOTE No 10
START OF DAY
APPROPRIATION BILL
Debate on Vote No 10 - National Treasury:
The MINISTER OF FINANCE: Hon Chairperson, hon members, and colleagues that have joined us as well, it gives me great pleasure to present the National Treasury's 2013 Budget Vote for the consideration of the House. Allow me to reflect briefly on where we stand in meeting our long-term social and economic development objectives in doing so. The global economic outlook is still depressed, and so our own efforts to strengthen economic performance remain critically important. I will say a few things about this challenge shortly.
Even in the currently depressed environment, in which growth is lower than we would like and the revenue outlook leaves little room for fiscal expansion including increases for Members of Parliament as somebody approached us, we are continuing to make progress in the service delivery programmes that are central to development and transformation. Social and economic progress is best measured over the long-term.
In the past 19 years we have seen substantial advances on several fronts. Let's reflect on some of them: Our economy has grown by over 80% since 1993; national income per capita has increased by 40% in real terms; total employment has increased by more than 3,5 million since 1994; gross fixed capital formation increased from 15% of the Gross Domestic Product, the GDP, in 1993 to an average of 20% over the past five years; our social grants system now reaches over 15 million beneficiaries; over 3 million housing units have been built; access to electricity has increased from 50% to over 80% of the population; access to water and sanitation has similarly improved; over 1,6 million work opportunities were created in Phase I of the Expanded Public Works Programme, the EPWP, and for the period ahead, it aims to achieve over 500 000 full-time employment opportunities; the new tax administration has been established since 1994 in the SA Revenue Service and an overhaul and modernisation of the tax structure and the administration itself has taken place; over R600 billion in Black Economic Empowerment transactions has been recorded since 1995; and we have demonstrated our capacity to host major global sporting events, and South Africa remains a favoured destination for conferences and events.
We continue to see strong growth in tourism and after something of a lull since 2010; we are now seeing renewed investment in tourist accommodation. Major public infrastructure projects include our partnership with Lesotho to build the Highlands Water Project, the completion of the Gautrain rapid rail link, the expansion and rehabilitation of our main airports, major national road improvements and the expansion of power generation capacity and the rail transport that is now in progress. The total value of infrastructure projects currently under way and in planning amounts to over R3,6 trillion. As we have done these things, we are also restructuring the fragmented public administration system inherited from the apartheid era - which we tend to forget while restoring order to the overall public finances. Public debt was reduced from nearly 50% of the GDP in 1994 to 23% in 2008 just before the recession. The main budget revenue increased from R112 billion in 1994 to over R800 billion last year, while expenditure increased from R135 billion to around R1 trillion.
You will recall that in order to table the 2013 Budget in February, I drew attention to the National Development Plan, the NDP, which was published last year, and the contribution that it has made in focusing our policies and programmes on long-term growth and development challenges, and in a sense, building on the foundation that I have very briefly outlined.
We need the National Plan Development to be a catalyst of ideas, and a spur to further action in addressing the challenges of growth, employment, environmental sustainability and social cohesion amongst many aspects. On infrastructure investment, we also have the work of the Presidential Infrastructure Co-ordination Commission, the PICC. On industrial development, we have the Industrial Policy Action Plan, Ipap. On environmental protection, we also have the biodiversity and sustainable development strategies. All these plans complement each other.
Much of the work of the National Treasury is directed at understanding and reviewing the fiscal and financial implications of these strategies and plans. This is a job that is getting more demanding every year. We have many policies, strategies and action plans.
However, what we are not doing well enough is to convert these plans into actions and implementation. The House will welcome the new emphasis on performance and measuring results, in our budget documentation and also in the Treasury planning documents and the strategic plans of the SA Revenue Service, the Development Bank of Southern Africa, the DBSA, the Land Bank and other institutions that report to this Ministry, some of which will be covered by the Deputy Minister in his address to you.
Last week, the Portfolio Committee on Finance scrutinised the tabled plans and the plans for 2013-14 of both the Treasury and the SA Revenue Service. The Portfolio Committee on Finance rightly emphasised in its report to the House that not enough is being done to strengthen municipal governance and financial management. We agree.
Treasury has placed 1 800 interns in municipalities this year, and aims to expand further on this programme in the year ahead. There is one aspect that needs to be raised frankly with the House. The Pretoria Treasury can't run 250 ward municipalities. Municipalities, in terms of the Constitution, are the responsibility of municipal councils. It is primarily the municipal councils and political and administrative leadership in the municipalities that must take responsibility for what is happening with respect to financial management in municipalities.
The finance committee has requested a progress report on the establishment of the chief procurement office and steps taken to improve supply chain management processes to combat corruption. This is indeed a top priority, and a new organisational structure for this office has been agreed upon. New procurement rules will be implemented this year and steps are being taken to improve the capacity of procurement officials and there will indeed be plans to modernise systems and increase accountability and transparency.
The finance committee has also requested a progress report on provincial financial management interventions. The outcomes for the 2012-13 reveal marked improvements in financial performance of provinces in which the National Treasury has been active. The committee asked for reports on the new automated tax clearance certificate system and there is indeed progress in this regard, and on the single business registration project which involves several other agencies as well. We will briefly cover some of the progress that has been made on each of these matters. Let me turn to the outlook for the economy.
We have to face the reality of slow growth internationally and difficult challenges in our own economy. But it is time to construct a positive narrative and to work together to implement it. There are many countries in the world that have all sorts of instability even terrorist incursions, but when you look at the economic narrative around those countries they are extremely positive. If you look a little deeper, you will find all sorts of challenges in those countries. It appears that South Africans want to specialise in focusing on the negative. It is absolutely urgent that we start focusing on our own positive stories as I have outlined earlier in the speech. [Applause.] In this regard, let me quote John Maynard Keynes who says:
The future never resembles the past – as we well know. But, generally speaking, our imagination and our knowledge are too weak to tell us what particular changes to expect. We do not know what the future holds. Nevertheless, as living and moving beings, we are forced to act.
In other words, despite the uncertainty that we have around the globe, we have to ask ourselves: What is it that we can do for ourselves by ourselves for the 50 million people we are primarily responsible for? The burning question for South Africans is not only how we navigate through global uncertainty and risks but can we become more resilient and globally competitive? What will it take and can we up our game? We have much strength to build on and amongst them are: good infrastructure, many institutions at work, a robust democracy, a dynamic private sector, strong public finances and healthy financial institutions.
South Africa's GDP growth, as you know, was 2,5% in 2012, is likely to be 2,7% in 2013, accelerating to 3,5% next year - all things being equal; overall investment spending remained robust last year, growing by 5,7%; consumer confidence still remains weak; and business surveys also suggest fragile levels of confidence in the economic outlook. This is likely to constrain private household consumption and business investment during 2013. The formal sector non-agricultural employment has slowed in tandem with the slowdown in growth, with just 83 000 jobs created in 2012, up one per cent on an annual basis, but is nonetheless a positive growth in jobs.
Labour unrest and stoppages in the mining sector contributed to much of the weaker economic performance in 2012, as we have reported to the House before. In part, slower growth in South Africa reflects a weak global environment.
The International Monetary Fund, the IMF, has downgraded global GDP growth outlook for 2013 to 3,3% from 3,5% previously, although it kept its 2014 estimate unchanged at 4%. The IMF now has a new terminology for global growth. It sees, what they call, a three-speed global economy with emerging markets continuing to lead the recovery, and a growing divergence between resilient growth in the United States and contraction or sluggish growth in the euro area.
While global financial conditions have improved, the outlook remains weak with downside risks emanating from the eurozone debt crisis, the US fiscal policy challenges and the slower growth in major emerging markets, including China, India and Brazil. These are clearly circumstances in which we need to take bold steps to strengthen economic performance.
The present uncertainty in the labour relations environment in mining and other sectors requires concerted action by organised labour, business, civic leaders and government. There is no room for complacency here; we are all in this together. If we do not resolve our labour relations challenges, we will be losers; we will see deteriorating confidence, job losses and business failures. But if we find balanced, fair and socially responsible solutions, we all stand to gain and we will see higher investment, higher employment and improvements in living conditions. This is the choice that lies before us.
Infrastructure investment is also an arena in which we need to see concerted action. This is not just about building and maintaining the energy, water and transport networks we need for faster growth, but it is also about raising our savings performance so that we can finance more rapid investment and growth. In urban development, we need faster investment in housing. Regarding rural development and agriculture, we are addressing constraints to land reform and improving support for emerging farmers. With regard to further education and skills development, there is greater alignment between the skills that businesses need and the curricula that our colleges offer. And concerning regional development and trade, we are beginning to address the issues of infrastructure and institutions across national borders.
I need to stress that economic growth in our times requires new ideas and, if you like, the new heterodoxy and a diversity of approaches. In the words of the renowned economist, Michael Spence:
No one has a complete formula for restoring growth. We will have to be persistent, determined, pragmatic and experimental - a mindset familiar to policy-makers in emerging economies where these complex issues are being dealt with on a regular basis.
As part of strengthening our economic performance, a sustainable fiscal policy stance remains critical. Owing to sound management of the fiscus when economic growth was strong, government was able to enter the 2008-9 recessions with healthy public finances and a comparatively low level of debt, as we know. The counter-cyclical response to the downturn in economic conditions has been substantial and, by various measures, was amongst the largest in the world.
From the peak of the economic cycle in 2007-8 when we were doing very well as a country, the budget balance swung from a surplus of nearly 2% of the GDP to a deficit of 6,5% in 2009-10. In aggregate, the final outcome of tax revenue for the 2012-13 fiscal year amounted to R813,8 billion, a 9,6% increase or R71,2 billion higher than actual collections in the year 2011-12. We thank all of you for your contribution to this R813 billion. It's your taxes as well. [Applause.]
Revenue collected this year was R3,7 billion higher than the 2013 budget target. The persistence of economic weakness since 2009 has meant that government's share of the economy has remained substantial and the deficit has remained high. Counter-cyclicality is not just about supporting the economy and sustaining government spending when revenue declines due to economic conditions. It is also about reversing the accumulation of debt built up during difficult times when economic conditions improve, and that is the challenge that we have in the years that lie ahead. At the same time, we need to enhance our capacity to finance long-term infrastructure investments and municipal capacity.
I am pleased to report that the DBSA outlines a concerted effort to support basic and economic infrastructure development in South Africa and the region. If I get a chance during the answering part of this session, I will give you some details in this regard.
A wide range of measures have been taken to improve the environment for retirement savings and reduce costs and risks associated with financial services. A central proposal is that pension funds should transfer members' balances into a preservation fund when they change employer, as the default option, and should also identify suitable retirement annuity products for the years beyond retirement.
A harmonised tax treatment of pension and provident fund contributions and benefits is also proposed, together with higher caps on contributions. We have also proposed steps to enhance the governance of pension funds. I will shortly meet with business leaders in the life insurance industry to discuss the lowering of costs in this sector. A first draft of legislation dealing with these proposals will be published towards the end of the year.
We have taken a number of steps to improve our already world-class financial system. This includes a complete overhaul of our securities' legislation. Parliament passed the Financial Markets Act last year, and the President has agreed to it coming into operation on 3 June 2013 this year. In addition, over the past year, I have initiated a comprehensive process to deal with abuses in unsecured lending. In October last year, banks agreed to put in place measures to curb excessive lending to vulnerable households and the selling of inappropriate products. The ongoing monitoring of both these measures by market conduct regulators is playing a critical role, and they need to continue the excellent work they are doing.
The National Treasury is involved in a number of the following areas apart from the ones that I have mentioned: infrastructure investment that supports regional integration, reducing red tape, corruption and delays at border posts, the use our financial institutions to partner with businesses wanting to expand into the continent, and developing regional markets for food, energy and water together with other government departments.
Our participation in Africa-wide and regional bodies also contributes to regional co-operation: The Southern African Development Community, Finance and Investment Protocol are assisting in bringing about macroeconomic, monetary and financial sector convergence in this region. Reforming the Southern African Customs Union Agreement remains a priority for South Africa, to improve its contribution to trade promotion and development finance as well as fiscal sustainability for our neighbours. And trade facilitation is making progress through the creation of one-stop border posts and improved customs legislation to increase border efficiency.
The strategic plan for the Treasury covers, amongst others, changes in respect of the Chief Procurement Office, the CPO. The CPO is created in response to the need to improve public sector supply chain management. The objectives of the office include the following - and the work has already began in this regard: Modernising state procurement by taking advantage of information technology; improving compliance with relevant legislative frameworks; enhancing governance, and increasing accountability and transparency in state procurement; and improving capability and the performance of supply chain management practitioners. This office has already intervened in a number of procurement areas in order to ensure that we stop the unnecessary expenditure of state money either because of overpayment or other mishaps in the procurement process.
In conclusion, I submit the Budget Vote of the National Treasury for your consideration and trust that all the parties will support the good work that Treasury does. Thank you. [Applause.]
Mr T A MUFAMADI
The MINISTER OF FINANCE
Mr T A MUFAMADI: Hon Chairperson, hon members, Minister, Deputy Minister, Director-General of the National Treasury, Commissioner of the SA Revenue Service, Sars, comrades and distinguished guests I wish to invite you in joining millions of South African citizens in paying tribute to an outstanding son and patriot of our nation, bra Vuyo Mbuli, as he was affectionately known, whose mortal remains will be laid to rest this week.
His story of life will forever remain a lesson about what it means to be a, true South African, a true African and an apogee of what it means to be human. With all the pains visited upon his family, colleagues and many followers of Morning Live programme, let us all say, may his soul rest in peace!
Tshivenda:
Ndaa! Mudzulatshidulo, mirado ya Phalamennde, na vhueni ho ri kandaho namusi fhano Phalamenndeni, ri ri mukosi wo pfala kha la Afurika Tshipembe lothe na kha manwe mashango. Naho zwi tshi konda, kha ri tende, ri dovhe ri tanganedze zwe Mudzimu a ri nea zwone. Kha ri takalele vhutshilo na maduvha e Mudzimu a munea one na mishumo mivhuya ye a ri itela yone.
English:
In the preface of our Reconstruction and Development Programme, the RDP, the first democratically elected President of the Republic, Tata Nelson Mandela, reminded us of the following, and I quote:
We are building on the tradition of the Freedom Charter. In 1995, we actively involved people and their organisation in articulating their needs and aspirations. In 1994, we are about to assume the responsibility of government and must go beyond the Charter to an actual programme of government and that the RDP is a vital step in that process.
Furthermore, the RDP reminds us that democracy will have little content, and indeed, will be short lived if we cannot address our socioeconomic problem within an expanding and growing economy. The ANC committed itself to carrying out these programmes with the support of its allies and our people.
As we debate Budget Vote 10 - National Treasury and its medium-term strategic objectives, it is important to highlight and report how far and what progress have we made towards addressing the socioeconomic challenges to date, 19 years into democracy. It is the story of our journey, a reflection of the progress and the daunting challenges that constitute the immediate and remaining task of our government and its people. Certainly, South African people and all of us in this House have a proud story to tell.
Budget Vote 10 and its debate is about the sustainability of our fiscal framework, macro-economic policy co-ordination, sound and sustainable national budget, equitable division of revenue resources, raising fiscal revenue, competitiveness of our economy, to promote transparency and financial accountability, and amongst others, and most importantly, decent job and employment creation that is underpinned by inclusive economic growth.
However, it is not what is in the plan that matters, but the will to implement the plan in order to achieve the objectives of a developmental state. The plan should be about placing at the centre of government's programmes what I call people's entitlements, decent jobs, access to heath, education, sustainable and rural development, the creation of better and integrated communities and sustainable programme to fight the scourge of corruption. Today, I can proudly pronounce that significant progress has been made in all of the abovementioned and other areas of focus of National Treasury. I think the Minister has covered quite a number of those areas.
Firstly, through our countercyclical policy, a healthy balance between social and economic expansion in budgets were sustained even under the most difficult and trying volatile circumstances in the economic and global environment. Secondly, through our macroeconomic policies, we have realised expanded sustained average economic expansion, not growth, of 83% over the 19 years of the ANC-led government. [Applause.]
Of course the key challenges remain, and we need to answer the following question: How inclusive and redistributive has this expansion given to our people, given the high levels of inequalities and poverty in our society? This remains a challenge that not only National Treasury will have to address and find solutions for, but all South Africans, irrespective of political persuasions.
We have again managed successively to establish robust resilient and sound economic financial systems that play an important role in shaping and reconfiguring the world economic system as part of the family of emerging economies in the world, particularly, Brazil, Russia, India, China and South Africa, Brics. The position that South Africa earned was not given. We earned this position through our robust economic policies, tried and tested and our ability to grow even under the most difficult circumstances. We have also seen the reduction of poverty levels in our households through the social grant systems that we have sustained under very difficult circumstances.
The scourge of high unemployment levels in our country remains a serious matter of concern. It is important to note that the situation could have been much worse than it is today if it were not due to a sustained increased employment of more than 3,5 million since 1994. It is important to note this point.
On youth unemployment, we support and appreciate all efforts that support youth employment, particularly the initiative by the National Treasury that triggered a national debate to tackle youth unemployment at all levels and sectors of our economy and society.
The Youth Employment Accord Agreement entered into, is not by any means a contradiction of what National Treasury proposed, but it is a decisive and final step in addressing what the Minister of Finance tabled in his Budget Speech two years ago as youth wage subsidy initiative. It is important to make this point, because there are some amongst us who would want to insinuate that what the Minister tabled before was undermined by ourselves, particularly the ruling party. It is the continuation and finalisation of a very important debate that was initiated by the National Treasury. We are very proud that today we have got a solution to a problem that many of us would not have heard the opportunity to put forward, but only to sing and seek to score cheap political votes around it. [Applause.]
Once again, the RDP reminds us that the legacy of apartheid cannot be overcome with piecemeal and unco-ordinated policies. The RDP brings together strategies to harness all our resources in a coherent and purposeful effort that can be sustained into the future. It is in this spirit that the 53rd National Conference of the ANC in Mangaung adopted the National Development Plan precisely because it is in line with the injunction of the Reconstruction and Development Programme. It provides a common vision for all South Africans, irrespective of their political, religious or faith persuasions, to build a common South Africa and the capacity of a developmental state.
Through the RDP, we also recognise that the ANC has committed itself and said the following: The ANC and its alliance partners have principles and policies to which we are deeply committed. The ANC is committed to carrying out these programmes with the support of its alliance and our people.
Therefore, with the above understanding, the debate around the National Development Plan is not a counterproductive effort, but part of a process to enrich the plan as we continue to implement it. It is very important that we understand that the debate is not about stalling implementation of the National Development Plan.
The global economic environment is showing some positive signs of recovery due to the concerted effort by all global players, including the US. It is showing positive, though sluggish, signs of recovery and we can safely say that the economy has transited from 2008 crisis that characterised most of the developed economies. Most importantly, domestically, we continue to see warning signs in the mining sector which you must take very seriously and which has a potential to undermine investor confidence, internal revenue generation, give an opportunity to credit ratings to downgrade us and have difficulty in terms of accessing capital through very expensive borrowing interest rates.
With regard to credit ratings, the most worrying is the negative talk about us, as the Minister has talked about. We continue to talk badly about ourselves, create the high levels of great uncertainty and undermine all the positive efforts we have made since 1994. I have never seen people who can understand themselves like the South Africans. We need to desist and find a way to tell a story; the success story that indeed we are not creating or imagining, but one that is there, and that the South African people have created under the leadership of the ANC. [Applause.]
To cement our place as a destiny of choice, not only for investors but for tourists, the nation as a whole must be a champion of new forms of ruthless struggle against chaos and disorganisation in our society. Therefore, we must pay attention to the following issues: greed, conspicuous consumption and opulence of lives of the elite; we need to enforce a culture of discipline within the working people and the private sector, and the high level of discipline, particularly in the civil service; and we need to have an all round programme to engage civil society to desist from aimless despair and bitterness that leads to the destruction of public property in the name of service delivery and protest for better working conditions. You can't destroy what you have in order to have something new.
As we note the positive signs of an economic recovery, there are equally worrying signs that the policy on inflation targeting of the 3% to 6% band may not be sustainable as a result of high oil prices, transportation costs and food prices and most importantly, administered prices. Despite these concerns, it is important to note that we have, to date, experienced a 30-year low interest rate in the history of our economic performance in this country. It is important to note that.
Hon Minister, perhaps it is important to remind this House of what you said on the issue of the role of the Reserve Bank. I am repeating this for the second time, and I quote, you said:
It is clear I have expanded the mandate of the Reserve Bank. It says here is the target but it is flexible. In implementing the policy, the bank must be mindful of global circumstances and of South Africa's own growth and employment needs, as well as the need to preserve financial stability and avoid creating asset bubbles
The current budget indicates that it will be a deficit financed and the concern we should continue to raise as Parliament is how and where the recourses should be deployed. We should continue to support the fact that, firstly, borrowing should be directed to real investment in the productive sector of our economy where there is high propensity of jobs and poverty reduction such as in the agricultural sector, tourism, land reform, and stimulate growth; and secondly, we need to avoid deficit spending on current costs. Thus both in times of recession and upswings, South Africa needs to give more consideration to deficit finance expansionary fiscal policy in order to accelerate spending on development and infrastructure.
We must take this opportunity to congratulate the Commissioner of Sars and his team for keeping the home fires burning under the very difficult global and domestic economic environment. They continue to exceed even if it is revised revenue targets. Therefore, they continue to impact positively on our deficit spending. Whilst we appreciate their success and strategic plans, we also think it is important for their tax regime to address the peculiar circumstances of small, medium and micro-sized enterprises sector to encourage job creation and entrepreneurship development. We need industrialists and job creators. We don't need job seekers all the time. [Applause.]
The Financial Services Board just like Sars has continued to grapple with difficult white collar crimes that constitute the highest level of corrupt activities that impact on hard earned savings of poor people and their pension funds. We have noted with sadness in the past few years the extent to which pension funds have been abused for self-enrichment and urged the FSB to quickly address this matter and also look seriously into issue of pension fund surpluses which, in many ways than one, continues to disadvantage the poor and needy families.
The recent Fedentia court case outcome and penalty meted against those allegedly involved leaves a bitter taste for those who have lost their lifelong savings. It is a matter that our committee will be calling for a proper briefing and whether there will be a legal follow up on the matter.
Lastly, but not least important, we need to pay serious attention to the fiduciary powers and responsibilities of pension fund trustees. In the 2011 state of the nation address, the President of the Republic of South Africa, Jacob Zuma, outlined the challenges ahead of us and directed that all South Africans must rally and unite behind our common objectives. He said, and I quote: "Our shared commitment is to put South Africans to work. They must find work in the fields and factories, in repairing roads and building houses, in caring for children and protecting the environment. We must create jobs in every possible way that we can; 2011 must be a year of action."
Two years from then, the hon Minister just said to us that over 1,6 million job opportunities were created in the first phase of the Expanded Public Works Programme and now it aims to achieve another 500 000 fulltime employment opportunities. What can we say except to say, Halala Public Works Halala! Halala Public Works Halala! [Applause.]
Let me take this opportunity to thank the committee members for their hard work and the Minister, Deputy Minister, National Treasury's senior management under the leadership of the director-general, who is no longer new in this position, Lungisa Fuzile, for their commitment and patriotic spirit in executing their work. The ANC supports Budget Vote No 10. Thank you. [Applause.]
Mr D C ROSS
Mr T A MOFUMADI
Mr D C ROSS: Chairperson, hon Minister, ladies and gentlemen,
during her address to the Standing Committee of Finance in April, the Reserve Bank Governor, Gill Marcus, painted a concerning picture with regard to the South African economy.
Today, we accept the challenge by the Minister that we should all write a positive narrative. Although this will be problematic as the Governor warned that South Africa is confronted with a toxic mix of slow growth and high inflation and that the stagflation danger for South Africa needs urgent and thoughtful interventions. But no one in this House today can dispute the fact that South Africa's economy is facing serious challenges. The Minister has alluded to the fact that we are facing challenges in terms of implementation.
We have to successfully accelerate growth while at the same time containing inflation. Our economy is expected to grow at a very low rate, a revised rate of 2,7% in the next year, lagging far behind our peers in Sub-Saharan Africa, who are expected to grow at an average rate of 5,5%. Furthermore, the International Monetary Fund, the IMF, has unfortunate news for us and has also slashed our growth forecast for 2014 from 4,1% to 3,3%.
Noting the importance of unemployment, and it being the result of low growth, hon Minister, we note the Treasury's commitment to the National Development Plan, the NDP, and the achievement of decent employment through inclusive economic growth. But as the DA we are very concerned about the official unemployment rate which has increased to 25,2% in the first quarter of 2013.
Even more alarming is the number of discouraged workers which has increased to a staggering 2,3 million while the expanded definition unemployment rate peaked at 36,7% nationally. Further statistics are even more alarming, they indicate that two out of every three South Africans under the age of 24 are unable to find or sustain a job. By the end of this year our budget deficit will exceed 5% of the gross domestic product, the GDP, for the first time since 2009. The effect of the larger budget deficit will be to drive government debt higher over the medium term, topping 50% of the GDP in 2016 - a very high expected debt rate.
Debt levels, including the contingent liabilities - I expect we had to have a debate regarding this figure - extended beyond 150% indicating that debt levels could leave South Africa vulnerable if our economy declines. Treasury's projected reduction of the Budget deficit to 3,1% in 2015-16 may very well be a very ambitious target at best, given South Africa's slow growth prospects.
With regard to the important issue of inflation, it is noted that food and fuel prices have pushed up headline inflation to 5,9%, very close to 6%. Currency weakness compounded these effects and many of my colleagues today mentioned the rand trading at 5,9% and this will have compounded effects and is expected to place further upward pressure on inflation in 2013.
South Africans continue to face the burden of ever-increasing prices. The increase in electricity, fuel, food and public transport have all made the cost of living much more expensive, unaffordable for some people. Potential e-tolling, increases in rates and taxes in municipalities and increases in the cost of water are all further concerns in relation to rising prices.
The Minister mentioned the expansion of our power generation, but Eskom has a second application to National Energy Regulator of SA, Nersa, with regard to financing the six nuclear bills. Two Ministers spoke about this, that this is now a done deal. But what will the implications be on the economy where we had a fortunate reduction in electricity from 16 to 8%? If the second application comes into effect, it will, in effect, escalate prices to above 20%. What will the effect on inflation be? It will result into unaffordable electricity pricing being vital for economic growth. Eskom's application should rather consider the DA's point of view, which is that we should move towards inflation-related tariffs. The reality is that the poorest of the poor are the ones hardest hit by these factors.
In order to address these challenges, South Africa needs a clear plan. We have a clear plan. It is to direct us towards economic growth and prosperity. This plan will result in the achievement of job creating economic growth and the elimination of poverty. We have just the right plan and it is called the NDP. The Minister has alluded to the contributions that the NDP has made in terms of aspiring to job growth. The DA supports this plan with our own growth and jobs plan released last year, making many of the same proposals as the NDP.
National Treasury has a vital responsibility to ensure that the NDP is implemented across all departments in a co-ordinated manner. We have spoken about the lack of co-ordination in terms of the electricity pricing morals. We need to resolve in our policies and leadership when it comes to implementation. It remains to be seen whether Treasury will have sufficient political capital to oversee the implementation of the NDP. Let me tell you why. Cosatu's stiff opposition to the proposed youth wage subsidy and Treasury's resultant hesitation in implementing the youth employment tax incentives are prime examples of successful policy blocking by the union federation.
What is really concerning about Cosatu is that it has a history of blocking policies. It blocks policies that are aimed at tackling our greatest challenges and helping the poorest and the most vulnerable. And now Cosatu is growing ever louder in its opposition to the NDP. Will the Minister and President Zuma be able to stand up, lead and implement the NDP or like with the youth wage subsidy, will it also be held hostage by Cosatu?
The DA is concerned about the new Tax Administration Act that came into effect in October. We heed the call by Prof Dennis Davis, Head of the Tax Review Commission, that we should, in fact, perhaps review this legislation. Judge Davis has raised alarmed over the effects the Act may have on small businesses and is quoted as saying: "When it comes to small businesses we have to think very carefully if this Act has struck the right balance between rights of the taxpayer and SA Revenue Services powers."
Judge Davis then made specific reference to transactional costs and complexities of the legislation. These are serious concerns when taking into account our objectives of making it easier, cheaper and faster for small businesses to start up, grow and create jobs. If necessary, we should amend the Act. Increasing the burden of doing business in South Africa is definitely not the way to reach the goals of the NDP.
Another potential deterrent to growth that will be closely monitored by our committee, I believe, is the proposed carbon tax with expected implementation in January 2015. In principle, the DA is opposed to any tax increases that could stand in the way of stimulating growth, but I believe we have consensus in this. We believe that the proposal could result in unintended consequences that will have a negative effect on the economy. We believe that positive rather than punitive measures should be pursued to affect the behavioural changes required to build a green economy.
With regard to the retirement reform legislation - and the Minister has touched very briefly on that - currently tabled in Parliament, we call on the Minister to note the valid arguments presented by the savings industry in opposition to the prescribed assets approach. These concerns include that prescribed assets could undermine the value of members' and policy-holders' savings. Investments, Minister, at market competitive rates do not require prescription. The primary purpose of retirement savings should be to assist savers to achieve comfortable retirements.
In conclusion, the DA's top priority remains growing the economy and creating jobs. We congratulate the hon Minister in managing South Africa's finances under difficult global circumstances. The path is riddled with new and old challenges. The map and compass to steer us towards prosperity is the NDP. Where Treasury's actions reveal a commitment to this plan, we will support it; where it doesn't, we will oppose it. I thank you. [Applause.]
Mr N J J van R KOORNHOF
Mr D C ROSS
Mr N J J van R KOORNHOF: Chairperson, the hon Minister posed a question to our committee last week and today that economic growth and investment in some other countries was not even close to the financial management, the media freedom or the human rights culture that we have, which attracts far more investments resulting in economic growth higher than South Africa. Why?
I think it's unfair but there are reasons for it. Professor Seville of the Gordon Institute of Business Science, those who were there will remember, said that he is of the opinion that sentiment gets in the way big time, when investors look towards South Africa.
Our first monitoring policies are world class, but yet Wikipedia describes the country as a protest capital of the world. I said this morning in the Water Affairs debate. That is the perception.
Statistics show that service delivery protest occurs literally every second day since 2008, which involves more than 2 million South Africans annually. Statistics from the commodities and currency markets tell the story, and they are concerned. The behaviour of civil society and the trade unions are tramping the sentiment that our fiscal and monetary policies are world class. Investors are worried for the wrong reasons.
The magazine Leadership reports that we have seen 3 000 protests in the past four years driven by poor service delivery. There is no value for our rand. Research shows that 80% of these protests have become violent. During the first eight months of 2012 we saw 226 incidents. The factors that were outside the control of the Treasury are now shaping the perception of what the investors are thinking about South Africa.
Whether we like it or not, what credit rating agencies think about us remains unfortunately important. We are under review as we are having this debate. We are two notches away from junk bond status. It's not the position we want to be in. I am making this point to make us realise that we are in this country and this boat together, all of us - the unions, the strikers, the government, the Guptas, the President, the media, the opposition and the AfriForum. On the front page this morning, AfriForum attempted on a BBC Website to say that whites do not have a future in this country. What utter nonsense! What utter nonsense! [Applause.]
It is an unpatriotic behaviour, but you see, we are all shaping this perception which investors think about of us, and we start to think about ourselves in the similar fashion. If we do not realise that then we will be up for grabs for the wrong reasons. What should we do? I am again referring to Professor Seville. We have had our haircuts, Minister, and I think you gave us too. Now, we need a six- pack. [Laughter.] Last year we needed a six-pack.
South Africa is growing faster than the rich countries, but slower than the poorer countries. We urgently need new partners. The Gordon Institute has conducted a study amongst 100 countries, researching 100 years of data and they came up with the ingredients for what a country must do to develop a six-pack.
The six packs are that: All your citizens must have access to education, not necessarily world class but it must be functional and must improve year-on-year. Health care must be universal and accessible and good basic primary health care is vital, but it must improve every year. You can judge whether it is improving or not, I am not judging today. Population growth must be under control, not too fast but definitely not negative, you can judge were we are.
Further, savings and investment are vital for a good six-pack. On a saving side, we must remember that only households, companies and the government can save; households are buried in dept. The state unfortunately, had hiccups and has not set an example. This leaves only to companies and if you alienate your companies you alienate your savings.
Chile, with 17 million citizens has 700 000 companies. South Africa with 50 million people has only 600 000 companies. Ninety percent of all new jobs between 1985 and 2005 came from small companies. We need more companies and less red tape in this country and then we will see investments coming.
The other ingredient for our six-pack is openness and mobility. South Africans and the residents of our trading partners must be able to move freely and have the freedom to do business wherever they want. If your mobility improves, your income improves. If your immobility increases by 5%, your income increases by 40%.
The last ingredients are policies and institutions. According to Professor Seville it's not always the content of the policy that matters; but it is stability and the application thereof. Political stability and effective institutions are important. You break a promise if you speak with a forked tongue and you do not implement your policies - your default on these important ingredients of the six-pack.
The study shows that those countries that work on the six-pack are getting better and bigger by the day. It is interesting to know that only 12 countries representing 3 billion people are in this first division of six-pack study. Nigeria is the only one in Africa. Where is South Africa? We are in division 2, which is the only one in the SADC countries in that division. No chance that we would have been there 15 years ago. So, we have made advances of a golden opportunity. Unfortunately, as we stand, we do not have enough six- pack to grow beyond the 4,5%. Whether we like or not; it is a fact in the present economic situation.
Finally, we can but we are not going to. Unfortunately, we are the seventh out of ten fastest growing economies. Seven out of ten economies of the world are in Africa – what an opportunity! Let us join this African gym and start to concentrate on those issues which sway the sentiments and the negative perceptions about this country. We are all in this together and we must make sure that we don't drop this country for the wrong reasons. [Applause.]
Mr N SINGH
Mr N J J van R KOORNHOF
Mr N SINGH: Hon Chairperson, I trust we can enjoy that six-pack at about 5 o'clock this afternoon, hon Minister ... [Laughter.] ... with you being the host – you and the Deputy Minister. I think we are all looking forward to the six-pack at about 5 o'clock. [Interjections.]
Let me start off by saying to the hon Mufamadi, yes, South Africa is doing well, but we can do better. And we can only do better if we recognise the challenges and deal with them decisively, and the emphasis is on decisive. It is for that reason that I appreciate the frankness of the hon Minister when he indicated that many of the municipalities are in trouble and we really need to get them out of trouble.
Let me put the horse before the cart – normally, people put the cart before the horse – and start with the SA Revenue Service, Sars. Without money, you can't distribute the money. So, Sars is the most important aspect of this Vote 10. It is also indicated when you look at the budget. Almost 37% – R9,8 billion – of the budget of Vote 10 goes to Sars.
The IFP and I want to commend Sars, the commissioner and his staff on the excellent work that they are doing and continue to do. In particular, I want to say well done to them on their outreach programmes. I am very much in touch with the office in Durban and want to express appreciation for the work done by people like Ms Venessa Pather, who leads a team called Operations Taxpayer Engagement. They go out and meet teachers, policemen and ordinary citizens and talk to them about their responsibilities of paying tax and how, by paying tax, you are improving the lives of ordinary citizens in this country and improving your own life. So, that intervention goes a long way in boosting taxpayer confidence.
However, it is a bit of a concern – and the hon Koornhof referred to service delivery – that in the Sars document that we received, their annual performance plan, they said the following: Perception about the quality of service delivery is equally a serious concern. Recent protests about service delivery bear testimony to this. The media has published articles questioning the need for citizens to fulfil their tax obligations, when parts of the state are allegedly corrupt or incompetent.
The Sars says these factors affect its ability to achieve compliance. These factors affect Sars' ability to achieve compliance! So, we need to deal very, very seriously with this issue, and perhaps, Minister, you can tell us to what extent the whole question of corruption and mismanagement among some of our organisations leads to this noncompliance amongst taxpayers.
Another issue, I think, that Sars needs to grapple with is the porous borders. Now, it is not their problem. Borders are not controlled by Sars, but we received a briefing in one of our committee meetings that almost 50% of our borders are porous. The fences are down and people are just entering and exiting. We saw recently what happened at the Lesotho border, where people were caught with products that they were taking in through the border. Well done!
We saw here a Sars report about illicit tobacco. They said – and I was shocked to read these results, Mr Minister – there is over 10 million kilograms of raw tobacco entering Sars-controlled warehouses for export being unaccounted for. So, we think that Sars should get more money. Sars should get more than the R9,8 billion that is allocated to them so that they could have more enforcement to ensure that people who bring in these illicit cigarettes, and all sorts of things, and evade tax, get caught and be put behind bars.
This morning I was at another meeting. One of the concerns that we have in this committee that I serve on is underspending. One wonders sometimes whether it is plan, and then money, or is it the President saying something, then money, and then plans. If you look at the rural housing infrastructure grant, you look at the Jobs Fund, and you look at many of these other areas, you find that there is gross underspending. It shows a lack of planning by these departments. I think National Treasury really needs to be on top of this so that these departments that underspend get money taken from them.
I do know a colleague from the Department of Justice. I hear they constantly complained about lack of funds within the Department of Justice. They talk about the courts; they talk about all sorts of inadequacies within the department. Let us give money to those departments and take it away from those departments that are not performing. That is something that we need to do.
Regarding the support to municipalities, I was trying to scratch my head earlier on there, hon Mufamadi. You know, you get teasers, which are questions that are difficult to answer. Many of the municipalities are in trouble. The Auditor-General has reported that only 22% received clean audits. I was scratching my head thinking and asking myself about the party that's in control of most of the municipalities. I know the answer and you know the answer. [Laughter.]
We must deal with these issues apolitically. We must ensure that the civil servants that are employed in these municipalities are capable of doing the job, because, in many instances, it is the civil servants that give the politicians a bad name. People think that the politicians are corrupt and mismanagement takes place at the level that we are on, but it is actually taking place at the lowest level and we need to tighten up on that aspect.
We are also a bit concerned about the civil pensions and underspending. Hon Minister, I don't know whether ring-fencing is still a policy within National Treasury, because for many of these these things there should be this ring-fencing.
Lastly, I must say ... [Time expired.]
The TEMPORARY HOUSE CHAIRPERSON (Mr G T Snell): While you are on a high note, hon Singh, your time has expired. Thank you. [Laughter.]
Mr N SINGH: The IFP wholeheartedly supports this Vote. Thank you. [Applause.]
Dr W G JAMES
Mr N SINGH
Dr W G JAMES: Chairperson, fellow members, Minister, the hon Mufamadi was correct in pointing out that the 1994 Reconstruction and Development Programme, the RDP, was our inaugural democratic vision for economic growth. Later, fearing sovereignty-compromising dependence on international capital, a macroeconomic stabilisation effort for the Growth, Employment and Redistribution, Gear, project came into being, which aimed at keeping debt levels low and maintaining our national integrity.
More than a decade later, in the 2012 Medium-Term Budget Policy Statement, the National Treasury said that we need to rebuild the narrow fiscal space that we have today by stabilising our worryingly high debts levels; by ruthlessly combating corruption; and by putting the economy on a growth trajectory with well-targeted reforms. Both Treasury and the National Development Plan, the NDP, talk about creating growth at somewhere approximately 5% to 6% in the longer term. Left critics see the policy progression from the RDP to Gear to the National Development Plan as a narrative of betrayal – the story of how the pro–labour, expansionary, macroeconomic agenda of growth through redistribution was hijacked by pro-business, fiscally orthodox, neoliberal policies.
The NDP has also been rejected by some for its neoliberal proposals and abandonment of the RDP. This battle reflects conflict between the ANC and its alliance partner, Cosatu, over how precisely to engage with global capitalism and the labour market, in particular. [Interjections.] Cosatu styles itself as a "class-oriented trade union federation whose strategic objective is to achieve socialism". It favours economic policies that discipline capital, promote collective bargaining and minimum-wage setting and protect jobs from disruptive trade and capital flows.
For its part, the SA Communist Party prevaricates intellectually. Like Cosatu, the SACP is opposed, in principle ... [Interjections.] ... to ANC policies that have given more space to market forces, notably privatisation and trade- and capital-account liberalisation, and it has been successfully opposed to our wage-setting machinery. This has effectively blocked various attempts to boost employment through labour-market reforms or to facilitate social accords between labour and capital that seek to restrain wage growth. Now we are caught in a situation where the National Union of Mineworkers, the NUM, has effectively declared war on the mining sector, making unreasonably high wage claims, while companies like Amplats are forced to restructure operations at the cost of thousands of jobs to our economy. [Interjections.]
We have an unco-ordinated policy environment lacking in presidential leadership and promoting rising labour costs in the face of tight fiscal and monetary policies and falling tariff protection. Other countries that liberalised their trade regimes under rigid labour market conditions and fiscal austerity face similar job-loss problems. Facing prospects of stagflation and persistently high unemployment, the NDP has revived the call first made by Gear for a social accord to restrain wage growth – and organised labour is, once again, mobilising against it.
Now, one consequence of this is chronic youth unemployment. Sitting at 51,6%, youth unemployment is approximately double that of the general adult population. Indicators suggest that unemployment is generally higher among young women than young men. Most troubling of course, is the number of young South Africans – 2,8 million in all – who are neither in work nor at places of learning.
However, while the left has a lot to answer for keeping people out of jobs, the right cannot expect workers alone to swallow bitter medicine of austerity. This government is fat with excess and there are significant pockets of corruption. The private sector has an artificially small market of CEOs that have driven up executive pay. Universities and professional associations run cartels that restrict the number of medical doctors, engineers and professionals that are educated. [Time expired.]
May I finish by saying that we must swallow the medicine of austerity together; consume less together; save more together; work harder together; and sell our country proudly to investors both locally and globally, together. Thank you very much. [Interjections.]
Mr N M KGANYAGO
Dr W G JAMES
Mr N M KGANYAGO: Chairperson, Treasury stands at the heart of government. It is known all over that Treasury stands at the heart of all governance. Its policies directly affect the success or failure of all government programmes. Increasingly, Treasury and national government are revolving budgets and the responsibility for mayor national programmes to the provinces and local government.
A whole raft of critical national programmes is delegated downwards to these lower spheres of government. We must question the wisdom of this policy because the requisite capacity is lacking at these spheres of government. Daily, we read about the significant underspending of local and the provincial government levels. A cursory look at the conditional grants to municipalities bares testimony to this. For instance, Greater Giyani Municipality in Limpopo Province spent R1,1 million of its R36 million grant. Buffalo City Municipality in the Eastern Cape spent just 13% of its grant and North West Province spent only 23% of the total infrastructure budget. Now the same can be said about most municipalities in the provinces around the country. This shows the danger of devolving policy implementation before proper implementation mechanisms and capacities have been established. It is simply waste of taxpayer's money to increase critical budgets when annually more than half of the budget allocations are returned to treasury unspent.
Treasury must re-evaluate this policy. In addition to devolving budgets, billions of rands are wasted annually on corruption, irregular and wasteful expenditure. This occurred against the backdrop of a state that expects South Africans to pay more and more taxes and these are increasing all the time while the taxpayers are not getting value for money.
These challenges point to the need for Treasury to improve the oversight and monitoring capacity in order to root out corruption, wasteful and irregular expenditure because taxpayers deserve real value for money. Thank you very much for not chasing me away before I have concluded. [Laughter.]
Ms Z S DUBAZANA
Mr N M KGANYAGO
Ms Z S DUBAZANA: Hon Chairperson, Hon Minister of Finance, Mr Pravin Gordhan, hon Deputy Minister of Finance, Mr Nene, hon Ministers, Cabinet members that are present today, hon members...
IsiZulu: 15:16:50
...kuyekwaba khona isikhathi lapho ngidideka khona ukuthi ...
English:
...in which debate am I in, whether I am supposed to speak in the Fiscal Framework debate or in Budget Vote no 10.
IsiZulu:
Kukhona ukudideka, mhlonishwa uGordhan...
English:
...you need to teach members. There is a difference between ten programmes that you have got and the debate that we are having today and the other debate which involves the Fiscal Framework. This is except hon Singh, at least he has tried. [Laughter.]
The Budget Vote of the Treasury is the living example of the manner in which the ANC-led government is applying the constitutional principles of co-operative governance and intergovernmental relations amongst the three spheres of government. This Budget Vote practically assists Treasury in providing support to all the three spheres of government so as to ensure the building of effective and efficient public finance and budget management.
The constitutional principles of interrelated governance between the spheres mean that there is a duty on each sphere to co-operate with one another for the greater good of the country as a whole. Whilst respecting the distinctiveness of each sphere, the relationship is one of relative equity within the spirit and the duty of the corporate government.
Our intergovernmental fiscal system is based on a revenue sharing model with provinces largely dependent on transfers from the national government while local government partially depends on such transfers. The national government's main role is policy making while the provinces and local government perform the major roles of provision of social and basic services. Then, the question remains; what is national Treasury doing? It provides public finance and budget management. I am sure the DA now understands. That is the main the role of the Treasury in this budget.
IsiZulu:
Ngimzwile uBaba uGordhan ethi...
English:
... he is requesting all the parties to support this Budget Vote No 10.
IsiZulu:
Baba uGordhan, ngekhe bayixhase.
English:
I have witnessed almost all the Budget Votes, in particular the DA, and there is none that they have supported. [Interjections.] Now the question remains, - it is true. It is very true - if you are complaining about poor service; if you are complaining about fraud, corruption practises that are happening within, it could be any sphere of government, those things need to be corrected and you need resources to do that; you need capacity to tame the people. We are sitting with the people who came into this House being voted by their electorates to make sure that the services are being delivered, but they do not support anything. So Minister, even if we like or pray, they do not support the budget. They do not support anything. They cannot support anything because they do not have policies to support. [Interjections.]
The ANC-led government...[Interjections.] I think we need to listen to what this government has done. This ANC-led government has established what we call in a year management...
Mr J H STEENHUISEN: Hon Chairperson, on a point of order: Will the hon member take a question?
IsiZulu:
Nks Z S DUBAZANA: Hhayi anginaso isikhathi sakho mina!
English:
Ms Z S DUBAZANA: No, hon Chairperson. Hon Chairperson, the member is addressing you sitting down and that is not parliamentary. The ANC-led government has established in a year management monitoring and reporting system for local government. This system enables provincial and national government to exercise oversight over municipalities and identify possible problems in implementing municipal budget and conditional grants.
By the way, if you remember, when the ANC took over, we made sure that we drafted a Constitution that is feasible and achievable and within that Constitution there is what we call transparency. Through transparency we could not be able to actually share with you what we have done if it was not because of what is being said by our Constitution.
It is for this reason that the state of the local government finances and financial management, which is released annually at the end of June, provides a regular overview of the state of the municipality finances. If there is a need then you will find Treasury intervening because there is a problem. Nobody has actually said within the ANC that we are perfect and our municipalities are doing well. We are aware, but the bottom line is we are doing something about. We are aware that the local government is the core phase of delivery of public services. Therefore, if there are successes that have been achieved, we praise where praise is due but in the same breath scold where there is failure. You have heard the hon Minister acknowledging a problem. He did not shy away from the fact that there is a problem. [Applause.] It becomes a serious concern of the ANC.
This is due to the fact that the ANC made a promise to the South African citizenry that we shall make sure that all citizens, irrespective of the colour and creed, we shall provide better life for all. We will make sure that health services are there, education system is in place; provide descent jobs; provide safe environment for our citizens. However, we need resources; we need money; we need everybody to come on board and make sure that we correct those things. You can moan about it- I understand as an ANC member, that if you do not have anything to talk about, so why do you have to talk anyway.
Section 153 of Constitution requires that a municipality must:
structure and manage its administration and budgeting and planning processes to give priority to the basic needs of the community and to promote the social and economic development of the community.
I want to quote what hon Minister Gordhan has said that, "National Treasury cannot manage municipalities sitting in Pretoria". In other words the ANC-led government will never ever micromanage the municipalities because this is what is being said by the Constitution. We must respect our Constitution, it says, let them manage their administration, let them have their planning processes and deliver.
The political leadership of the municipality must take responsibility where acts of fraud, corruption and interference with tender processes have been proven. Councillors cannot hide behind ignorance of what is required of them. The Municipality Systems Act, Act 32 of 2000 clearly articulates the code of conduct for councillors. National Treasury had undertaken councillor training sessions throughout the country with the intentions to equip councillors with the necessary information to guide them in executing their responsibility. It is for this reason that we really say, as the ANC we are leading because if you lead, you look at the challenge and come up with a solution.
The root cause of many public finance and budget management problems is found in poor planning, poor leadership, poor implementation, not hiring the right people and not having the right determination to ensure that services are delivered as they are supposed to be.
As we are aware of that, the Treasury intervened and provided support to all spheres of government to improve the performance in infrastructure delivery and support programme. The other thing that they have done in dealing with the challenges of the management of the public finances and how this Budget Vote plays a direct role in developing capacity across the spheres of government, Treasury established technical assistant unit.
It is common knowledge that many municipalities have backlogs running into billions of rands that we are aware of and we acknowledge it. To address these challenges of inadequate investment in the building of new infrastructure and investing adequately in maintenance and renewal of existing infrastructure, national Treasury again has recommended that each municipality must set aside not less than 40% of its capital expenditure budget for the renewal of existing assets. In addition, not less than 8% of the written down value of a municipality plant, property and equipment must be set aside for repairs and maintenance. That must be done, because the ANC does not approve of poor social and economic structures.
The relevance of the role of this Budget Vote No 10 to the management of the public finances is echoed in the ... [Time expired.]
The ANC supports the Budget Vote 10. [Applause.]
The DEPUTY MINISTER OF FINANCE
Ms Z S DUBAZANA
The DEPUTY MINISTER OF FINANCE: Chairperson and hon members, it is indeed my singular honour to address you on this Budget Vote and to present the overview of the work of the finance family, a number of institutions whose activities underpin our political economy. In closing the debate on the state of the nation address in February 1999, our icon, Tata Nelson Mandela, had this to say, and I quote: "We are a democracy - young and fledgling, but one which can boast of firm institutions and a culture that no force can take from the people of South Africa."
We are a 19-year-old teenager, just a last year of our teenage years, but one which can boast of the calibre of institutions such as the SA Revenue Services, Sars; the Public Investment Corporation, the PIC; the Financial Intelligence Centre, the FIC; the Financial Services Board, the FSB; and the Government Pensions Administration Agency, Gpaa, to name but a few, because I will be focusing on them.
These institutions are among the pillars of our economic and political order. Nobel laureate, Douglas North, defines institutions as follows, and I quote:
Institutions are the humanly devised constraints that structure human interaction. They are made up of formal constraints - rules, laws, constitutions; informal constraints - norms of behaviour, conventions, and self-imposed codes of conduct; and their enforcement characteristics.
The finance family is therefore one of the constraints that structure human interaction within our borders. The Financial Intelligence Centre and the Financial Services Board ensure the integrity, security and strength of our financial system; Sars collects the revenue that makes it possible for government to pay for our collective ambitions as a nation; the Gpaa looks after the retirement needs of our civil servants; and the Public Investment Corporation, on the other hand, ensures that the Government Employees Pension Fund, the GEPF, and social security funds have sufficient funds to meet their obligations.
In their most recent paper, Taxation and Development, Professors Timothy Besley and Torsten Persson make the point that the power to tax lies at the heart of state development. Besley and Persson take their lead from Nicholas Kaldor who said, and I quote: "It is shortage of resources, and not inadequate incentives, which limits the pace of economic development. Indeed the importance of public revenue from the point of view of accelerated economic development could hardly be exaggerated."
Sars has played a crucial role in ensuring that successive ANC administrations have had the revenue to fund our collective ambitions as a nation. For the 2013-14 fiscal year, Sars is required to collect R898 billion of revenue, which is nearly 10% or R84 billion more than the previous year. Over the same period, our economy is expected to grow at 2,7%. Thanks Mr Singh for commending Sars for the good work that they do, but you have indicated that they need more money. I would imagine you will volunteer to pay more tax. [Laughter.]
Meeting this budget will not be easy, not only because of the tough economic environment in which South Africa and the rest of the world find themselves, but also because of corporate and wealthy individuals who organise their affairs in such a way that they do not pay their fair share of tax. I trust that no one amongst you falls in that category. They achieve this through sophisticated tax avoidance and evasion schemes.
South Africa is not alone in this. The Group of 20 nations, the G20, of which South Africa is a member, has picked up the cudgels against this scourge. At the G20 summit last month, the erosion of sovereign tax bases and the shifting of profit by corporate from jurisdictions, where it is generated to those where they can pay the least tax, were key topics of discussion based on an Organisation for Economic Co-operation and Development, the OECD, report which highlighted the potentially crippling effects this can have on the fiscal sustainability of nations.
This is not only unjustifiable, but immoral. South Africa has its fair share of multinational companies who rack up millions of rands in revenue, and yet pay almost no tax, because they use transfer pricing, profit shifting and other forms of tax evasion, and aggressive tax avoidance schemes which denude our fiscus. This is done at a time when governments are being forced by circumstances to support economic activity as the private sector has withdrawn to the sidelines.
The Financial Intelligence Centre, as I said, protects the integrity of our systems. Money laundering and the financing of terrorist activities pose a serious threat to the integrity and sustainability of financial markets and institutions. These activities can discourage foreign direct investment and distort capital flows. Money laundering, in particular, can also be a conduit through which unscrupulous taxpayers hide their income from the revenue collection agencies. It is for these reasons that the international community has made the fight against these activities a priority.
So, the Financial Intelligence Centre plays an important role in ensuring the integrity and sustainability of our financial system. Through ever closer working relationships with the law enforcement authorities and the SA Revenue Service, the FIC provides the financial intelligence which is increasingly being used in the investigation of priority crimes in South Africa, the so-called white collar crime.
In February this year, the Minister of Finance announced that he had requested the FIC to explore how we might bring South Africa in line with the international anticorruption and antimoney laundering standards in so far as the Politically Exposed Persons, the PEPs, are concerned and I believe you also belong to that category. The FIC has reissued guidelines to all accountable and reporting financial and other institutions on how they should treat clients who qualify as Politically Exposed Persons. In addition, the FIC has begun a process of amending the Financial Intelligence Centre Act to include explicit provisions to deal with this category.
The extent of reporting to the FIC and the referrals of matters to the law enforcement authorities continues to grow. Over the past year, the FIC referred 883 matters to the law enforcement agencies for investigation. The FIC estimates that the value of these referrals for the past year amounted to R76 billion. Many of these matters involve lengthy and complex analysis and often run over a long period of time. Last year alone, the FIC froze R334 million worth of goods which had been derived through fraud. At the request of law enforcement agencies, the FIC also helped in the investigation of an additional 1 445 cases.
Regarding the Financial Services Board, the recent financial crisis and subsequent events have been yet another reminder of the importance of sound financial institutions and the fair treatment by these institutions and their intermediaries of the people who buy financial services and products. The financial crisis and the scandals such as the Libor price fixing case have also been a reminder of the importance of integrity and stability of financial markets and institutions. Without strong regulators, we can have neither sound financial institutions nor financial markets with integrity.
So, it is against this backdrop that the Financial Service Board is girding its loins to promote the soundness of insurers and reinsurers through the effective application of international regulatory and supervisory standards. The Financial Services Board is developing a new risk-based solvency regime for the South African long and short-term insurance industries, namely, the Solvency Assessment and Management, Sam, regime. The Solvency Assessment and Management regime will be based on the principles of the Solvency II Directive, as adopted by the European parliament, but adapted where necessary to suit South African circumstances.
This is based on three pillars; firstly, quantitative requirements, dealing with issues such as the valuation of assets and liabilities and the setting of capital requirements; secondly, qualitative requirements, including standards and guidance on governance, internal controls, risk management and supervisory processes; and thirdly, reporting and disclosure. The proposed implementation date for Sam is 1 January 2016. However, interim transition mechanisms will be put into place in respect of governance, internal controls and risk management. Before then, there will be a number of other changes to the regulation of insurance companies and these will come into effect from January next year.
Moving towards twin peaks regulatory system, the FSB has been working together with the SA Reserve Bank and National Treasury on the preparations for the implementation of the twin peaks model of regulation and we have said that on time. This work will continue and is expected to intensify as we come closer and closer to the implementation stage.
Turning to the Public Investment Corporation, for the period 2013 to 2016, the PIC has the following areas of strategic focus. Firstly, is to contribute to education, health, housing, infrastructure and environmental projects. The Government Employees Pension Fund has set aside 5% of its total assets, equivalent to R62,5 billion, for investment in these types of projects. As at 31 March 2013, 46% of this has already been committed and or invested, this amounts to about R28,8 billion. In the year ahead, the PIC will continue to implement the developmental investment policy of the GEPF.
The second one is continued investment in Africa. South Africa's future economic growth and prosperity is tied to that of the African continent. It is for this reason, taking advantage, precisely, of the second and fastest growing economies in Africa, as you earlier alluded to hon Ross. Another 5% has been assigned to this. These investments will be particularly focused on private equity and developmental-type projects. This will be a key complementary intervention in the development of Africa's infrastructure, with long-term benefit of a more productive continental economy.
The third is the black economic empowerment, BEE, and transformation and that is economic freedom in the language of the young ones in this House and outside. The PIC has been, and will continue to focus, in the year going forward, on promoting BEE and transformation in a number of sectors. It will continue to do a number of the following: firstly, to contribute to enterprise development in the asset management and broker sectors; secondly, to develop small, medium and macro enterprises, and private equity; and thirdly, to promote transformation in the property sector by allocating assets to black entrepreneurs who demonstrate an ability to perform and meet the PIC's due diligence and investment criteria.
Regarding Government Pensions Administration Agency, we will continue to reiterate the importance of household savings, to ensure that fellow South Africans retire comfortably. From government's side, we are continuing to invest in pensions to ensure that the loyal service of government employees is rewarded when they retire. In this regard, we are modernising our systems to ensure that we pay benefits accurately and on time. To date, we are piloting this in the Western Cape and Gpaa's electronic document submission is already in place. This will allow us to reduce the time taken to make payments. For documents submitted using our traditional submission channels, during the 2012-13 financial year, more than 80% of benefits were paid on time. To improve further on this performance, Gpaa is also encouraging departments and entities to expedite submissions of information to the agency. Some of the delays in processing retirement benefits are due to the late submission by departments of information to the Gpaa. We have also begun an outreach programme which is called a Retiring Member campaign which ensures that public servants receive their pension in the same month as when they retire.
I just want to remind hon Ross that he made a serious mistake. After having said that he subscribes to the Minister's injunction of a positive narrative, he went on to see a half full glass as half empty. You must list the things he said. Go back to your speech Mr Ross, and just change the things that you have written. Indeed, we are labouring under a difficult economic environment. He said we are lagging behind, he does not say what needs to be done. He looks at unemployment, of all things; debt levels at 150%, I don't know where he gets his figures from. Just go and check them. If the hon shadow minister wrote the speech for you, call him and tell him that the 150% is wrong. There is no such a figure. [Interjections.] Fortunately, after you have spoken, he actually ... We don't fax anymore, the electronic advancement has gone beyond that. [Interjections.]
After advancing these arguments, fortunately, sobriety prevailed, because Mr Koornhof came in and worked through the six-pack. If you were given an opportunity, Mr Koornhof, this was our manifesto, you should have voted for the ANC. [Interjections.] You should have, if you had really looked at that. The hon James gave us a long misguided political lecture instead of sticking to the Budget Vote. Thank you very much. Your support would be appreciated. [Applause.]
Adv A de W ALBERTS
The DEPUTY MINISTER OF FINANCE
Adv A de W ALBERTS: Chairperson, the Minister has a difficult job, indeed. Whilst government is increasing the social security net indefinitely, and departments and state-owned enterprises, the SOEs, are spending money like there is no tomorrow, you have to find more money to spend.
Whilst government's plans to create a growing economy and more jobs are not making real inroads into the winds of entropy and decay, you have to find more fuel to keep the engines going. Whilst we are increasingly facing a state addicted to corruption, nepotism and name-dropping to get rich quick at the expense of the poor and the middle class, you have to stem the tide and the wind blowing good corporate governance into oblivion. It is indeed a difficult job you have, Minister – even more so morally, as you are financing state programmes with other people's money. The money that this government is using, abusing, and allowing to disappear into individual's pockets is not the government's money. It belongs to the taxpayers and the people of this country in general; and it doesn't seem like you get that message.
Afrikaans:
Die belastingbetaler het 'n reg dat belastinggeld rasioneel, sinvol en moreel korrek aangewend word. Die algemene bevolking het die reg dat belasting aangewend word vir die goeie, sodat werk geskep kan word. Dit weet ons egter gebeur nie na behore nie.
English:
You get some things right but most of the other things not.
Afrikaans:
Ons gee erkenning aan die Minister vir wat u regkry en u harde werk, veral om staatsaankope te polisieer. Minister, laat ek verduidelik hoe ons belasting verder gemors word. U is nie direk aanspreeklik vir hierdie probleme nie, maar u beheer die beursie, en daarom het u invloed om van die probleme wel aan te pak.
English:
You have influence over the problems, as you control the purse.
Afrikaans:
Ons belasting word eerstens aangewend om vir duur militêre avonture in Afrika te betaal wat nie op menseregte gebaseer is nie, maar op duistere agendas. Tweedens, rasgebaseerde arbeids- en besigheidsmaatreëls hou die ekonomie terug en skep nuwe slagoffers.
English:
Let me further repeat some of the problems that I had mentioned in last year's debate. Lack of service delivery, as mentioned before, at local government level is increasingly leading to service protests. The Auditor-General has indicated that the central reason for this is the lack of skilled people in local government due to cadre deployment. Wasteful and fruitless expenditure of tax money in all departments continue. Inadequate job-creation strategies and a static tax base is a problem. Most jobs are created by the state and not by private enterprise. There is inadequate policing of crime, corruption and so forth.
Afrikaans:
Ons wil die Minister graag aanraai om ernstig met sy mede-Ministers hieroor te praat. Indien die effektiewe aanwending van belasting nie daartoe lei dat die ekonomie begin groei nie, gaan ons ekonomie al hoe meer soos 'n piramide-skema begin funksioneer, en dit het waarskynlik al begin.
English:
So, let's not become another Greek tragedy. I thank you.
Mr S N SWART
Adv A de W ALBERTS
Mr S N SWART: Chairperson, the ACDP firstly wishes to commend the Minister, National Treasury and Sars on their exceptional work in managing the state finances. The Budget earlier this year was very broadly well received, and we, as opposition parties, sent a very positive message out on that, hon Minister, something which is very important.
The main thrust of this budget vote is about galvanising society behind a national effort to place the country on an investment-led growth path. This the ACDP clearly supports. We understand the need to stimulate economic growth in the short term to create more sustainable jobs. It is imperative however that if government wants real economic growth, it must create the environment to make South Africa more competitive, efficient and productive.
The National Development Plan, the NDP, which all opposition parties support together with the majority party, proposes a social compact to reduce poverty and inequality and raise employment and investment. Many of us have referred to sentiment before. It is all about investor sentiment. This National Development Plan is a significant positive step, and its alignment with the budget process is also positive. We have also seen very positive capital inflows into the country, and we need to bear that in mind.
When one speaks about the social compact, of great concern to us is the tremendous and significant weakening of the rand that we have seen today. The volatility of our currency – it is now at R9,51. To what has that been attributed? It has been attributed to trade union brinkmanship. We see the National Union of Mineworkers, the NUM, has demanded a 60% wage increase in the mining industry. This is clearly an attempt to bolster dwindling membership numbers, which have been lost to their rival, the Association of Mineworkers and Construction Union, Amcu. It is important to bear in mind what the International Labour Organisation's South African director, Vic van Vuuren, said. He warned that forcing employers into steep and unaffordable wage settlements will not only curb the growth of companies but could also mean job losses that the economy does not need and cannot afford. This warning should be heeded, as we already see what is happening in the platinum sector, with 6 000 jobs set to be lost at Anglo American Platinum, Amplats.
We, as the ACDP, share the sentiments expressed by the Minister, where we appeal to all parties in the spirit of a social compact to reach agreements that will strike the correct balance between what is affordable and what meets the expectations of employees but what companies can afford. The country cannot afford damaging industrial action, whether legal or particularly the violent wildcat strikes that we saw last year leading to the Marikana tragedy. Minister, we agree with you. We need concerted action; there is no room for complacency.
Balanced, fair, socially responsible choices must be made in the interest of the country as a whole. We are in this together. We will sink or swim together. Let us choose to swim together. The ACDP will support this Budget Vote. I thank you. [Applause.]
Mr D D VAN ROOYEN
Mr S N SWART
Mr D D VAN ROOYEN: Chairperson, it is an honour to participate in a session chaired by one of our women struggle icons, I feel very humbled. Hon Ministers, hon Deputy Ministers, my colleagues Members of Parliament, distinguished guests, the National Treasury team, we agreed as the ANC collective that SA Revenue Service, Sars, as an organ of state has a mandate to contribute directly to the economic and social development of the country in order for government to meet its priorities. Cognisance of that fact that our ANC-led government through the National Development Plan, the NDP, 2030 vision adopted a New Economic Growth Path to drive the economy. In order to achieve the noble objective of the NDP, Sars is expected to continue to effectively collect the revenue required by the government to meet its fiscal and policy responsibilities as well as continue to facilitate legitimate trade in order to grow the county's economy.
In addition, Sars is expected to promote effective government, strong leadership and active citizenry by among other things: continuing to improve service and raising compliance; continuing to partner with government units to improve the state's overall effectiveness and efficiency; engaging with other players in tax and custom administration, regionally and internationally; reducing the cost of compliance and the cost of doing business in South Africa; raising the competitiveness and export earnings of the country through the efficient and effective facilitation of legitimate trade; ensuring that Sars is corruption free and assisting in anticorrupton measures across government, particularly in procurement processes; and drawing all citizen and entities into a relationship with Sars.
It is crucial to note that this Budget Vote is set in the context of continuing global financial stability concerns. Developments in the global tax environment have implications in the manner in which Sars collects the revenue required to meet government's fiscal responsibilities. The current global economic environment, which inter alia is characterised by slow growth, has produce significant shocks worldwide that have led to drastic changes in tax revenue performances and large swings in government deficits and debts. As a country, South Africa has not been immune from the impact of this unfortunate environment.
To Compound matters proliferates the sophisticated tax avoidance and evasion schemes that lead to the erosion of tax base of countries and possibly causing major risks to the countries fiscus. A recent report, by the Organisation for Economic Co-operation and Development, the OECD, on addressing base erosion and profit shifting established that greedy and callous multinational corporations continue to use sophisticated schemes like intragroup transactions, transfer pricing manipulation, and hybrid mismatches to exploit loopholes in local tax codes, double taxation agreements and tax treaties to avoid or significantly minimise their tax obligations in countries where they operate and make profits.
The recent agreement by the Group of 20 of which South Africa is a member, adopted the proposals of the OECD report to counter these abusive schemes. As the ANC, we welcome this as a step in the right direction.
This Budget Vote inter alia undertakes to conduct research on large companies' deductions and benchmark findings against industries norms to establish gaps in order to strengthen risk profiling. This will go a long way in its efforts of enhancing compliance by large businesses.
Increased Sars involvement in international exchange of information programmes through continued engagements with other countries' tax authorities will improve Sars' ability to trace the flow of funds, and also ensure that Sars is familiarised with these ever changing schemes and develop the skills and collaborations needed to combat the erosion of the South African tax base. Subsequently, everyone who has the use of our beloved country's public resources will pay their fair share in taxes.
We are comforted by the fact that in order to strengthen external relationships in the custom environment in the region, Sars has resolved to place more focus on regional information exchange which seeks to reinforce customs ability to expedite regional trade. This will further be enhanced by electronically interconnected systems and aligned customs database. In order to minimise the administrative burden in customs for travellers, this Budget Vote confirms that Sars will be implementing the Passenger Processing System, the PPS. The PPS will ensure that the travellers experience when entering or leaving our country is improved to the best, but also easier security and data exchange between the different border agencies will be realised. It is hoped that through these initiatives long queues that our border posts are experiencing will be something of the past.
The Budget Vote further confirms that Sars will be deploying a batch of cargo, container and baggage scanners at selected ports. This will ensure that Sars risk management capabilities in customs are strengthen. The proliferation of illicit cigarettes is a major concern to our committee. As a country, we are currently experiencing significant losses in excess revenue. It is estimated that there is an annual loss of between R4,5 billion and R6 billion to the fiscus due to the smuggling and consumption of contraband cigarettes. The earmarked increase supervision of cigarettes exported via warehouses and targeted communications campaigns with industry and consumers is highly welcomed. This will empower our smokers to differentiate between "makoya" [Authentic.] and fake - "Fong kong" products, but also to understand the risks illicit cigarettes pose to their health and economy.
Taking cue from words of wisdom by our living legend Tata Mandela when he said, and I quote: "Our youth is our future. Whether our country will rise from the ashes of apartheid to become one of the world's success stories will to a large extent depend on what we invest in educating and training our youth "
This Budget Vote confirms that Sars will implement the youth employment incentive scheme. [Applause.] Unlike some who want everyone to believe that this is the only effort by our government to address the unemployment challenge. This scheme is one amongst a plethora of initiatives meant to deal with youth unemployment.
This initiative attempts to give effect to government and private sector commitment to the spirit and letter of the Youth Employment Accord as signed by government representatives and social partners, including those who all of a sudden are hell bent to peddle blue lies at a given opportunity about the accord.
It seems as if a certain Mr Gana Makashule who was sent to represent and sign on behalf of the blue liars, failed to report back on the outcome of a meeting where this accord was signed. Anyway, out of the Ubuntu values, that are in abundance and are exhibited by the ANC members, allow me to reiterate some of the key interventions meant for youth employment. Those are to improve education and training opportunities for the gap grouping between school-leaving and first employment; to connect young people with employment opportunities, through, amongst others, the support for job placement schemes and work readiness promotion programmes for young school-leavers; and to provide young people with work experience. By the way, youth entrepreneurship and co-operatives are also encouraged. [Interjections.]
I must indicate that no amount of howling will sway us from implementing an agreement. Howling is mere opportunism, political expediency and seeking to appropriate to themselves that which the ANC-led government has initiated.
As indicated by the Minister, South Africa needs leaders who can serve as good ambassadors not howlers or opportunists whose argument lacks content and substance. South Africa needs leaders with content.
IsiZulu:
Sifuna abaholi abakhuluma into enomqondo.
English:
The Budget Vote further confirms that Sars will continue to make improvements to its administrative systems and processes in order to reduce the administrative burden on taxpayers and traders. This will inter alia be realised by the rationalisation of corporate income tax return forms so as to minimise the administrative burden on the taxpayer.
As the ANC, we are satisfied that this Budget Vote will ensure delivery of cost-efficient, rapid and reliable service to all taxpayers and traders. Hence our unconditional support. Thank you. [Applause.]
Mr L W GREYLING
Mr D D VAN ROOYEN
Mr L W GREYLING: Chairperson, hon Minister, South Africa is currently underperforming economically, both in terms of our peers in sub-Saharan Africa and in terms of what is required to grow the number of jobs that our people so desperately need. We simply cannot be satisfied with South Africa's current level of economic growth and we have to implement bold policy initiatives that will make a real difference to our future growth prospects.
We believe it is unacceptable that the level of infrastructure investment is still only at 7% of our GDP, when we expect it to be more than 10%, given the 15 years of massive underinvestment that has plagued this sector.
We are seeing the impacts of this underinvestment throughout our country, from failing water treatment plants to decrepit electricity distribution grids. We realise that government can clearly not do this if alone. We must create an appropriate institutional environment that will bring the capital and the expertise of the private sector into this arena. Building public-private partnerships has proved to be highly effective in the Western Cape where the provincial government launched the Western Cape Economic Development Partnership, the EDP, last year. By March of this year the EDP had the support and input from 134 organisations and partners across six sectors of the regional economy, proving that the private sector is ready and willing to join hands with government to solve our problems.
We would also like to know when Treasury will finalise the financial model for the SA Renewables Initiative, as it is embarrassing that we are still unable to access the billions that progressive European countries have made available to support our renewable energy ambitions. We also urge Treasury to conduct a thorough economic feasibility study into the proposed nuclear build programme as it could impose long-term costs that our economy will simply not be able to endure.
It seems that in the absence of bold policy initiatives, all this government can produce are a whole host of hopeless accords. Minister, I am sure you are aware that an accord will not magically resolve the discord that resides amongst our youth given their shockingly high levels of unemployment. They need real solutions and not consensus-seeking statements that deliver nothing tangible.
I fail to see why after four years of stalling on the implementation of the youth wage subsidy, there is now the absurd statement that a policy initiative will only be implemented once there is consensus amongst all constituents as per the Youth Employment Accord.
Minister, we support your youth employment tax incentive announced in your budget but we will only believe it when we actually see it implemented. This Youth Employment Accord merely highlights the fundamental discord that resides in the heart of this government. It is time to stand up to vested interests and to ensure that the 4,7 million unemployed youth of this country are given the respect that they deserve in terms of real policy solutions that will address their plight.
Let us finally end the back and forth on this issue and implement the youth wage subsidy now. I thank you. [Interjections.] [Applause.]
Ms P E ADAMS
Mr L W GREYLING
Ms P E ADAMS: Hon Chairperson, hon Minister Gordhan, hon Deputy Minister Nene, hon members, ladies and gentlemen, comrades, in global terms, South Africa's international financial policy must be shaped by the interplay between diplomatic, political, environmental, economic and regional co-operative dynamics that define early 21st century international relations.
South Africa's foreign policy is therefore driven by a clear and critical understanding of our national, regional and continental priorities in a multipolar world where the geostrategic politics of the African continent are, once again, becoming increasingly central to global political economic competition for natural resources and market share.
In order for South Africa to achieve its national goals of eradicating poverty, lowering inequality and creating employment opportunities, foreign financial relations must be driven by our domestic, economic and social demands, as well as our regional, continental and global obligations.
This goal is driven by the Treasury's programme for international financial relations. Work in the programme is given effect by the international and regional economic policy divisions which facilitate the deepening of South Africa's role in regional and international economic integration.
The strategic objectives are: to advance South Africa's interests specifically, and those of Africa more generally; to actively promote South Africa's financial and economic relations in bilateral and multilateral forums; to formalise the process in which South Africa disseminates knowledge on regional, financial and economic development; and to participate in bilateral and multilateral forums.
Afrikaans:
Die Komitee oor Tien Afrika Finansministers en die Sentrale Bank Goewerneurs ontmoet gereeld met die hoofde van die Afrika Ontwikkelingsbank, die Afrika-unie Kommissie en die Verenigde Nasies se Ekonomiese Kommissie vir Afrika waar onderwerpe soos ondermeer die G20-agenda, sake van prioriteit vir Afrika, die rol van finansiële regulasies en Afrika se stem en verteenwoordiging in internasionale finansiële instellings bespreek word.
Die doel van die samekomste is om druk uit te oefen vir groter deelname en inspraak vir Suid-Afrika en Afrika-lande, asook substansiële hervormings van die Bretton Woods instellings en prosesse. Dit verseker dat die stem van Afrika in die forums vir internasionale ekonomiese beleidformulerings gehoor word.
Uitkomste in hierdie verband sluit in onderling-ooreengekome response wat by die G20 ingevoer word, asook die ontwikkeling van toekomstige werkprogramme en geleenthede om Afrika se sienswyses oor te dra.
English:
After the barriers to investment came down with the advent of democracy in South Africa, businesses moved quickly with the encouragement from the ANC-led government to take advantage of the market opportunities on the continent. The stock of South African direct investment in the rest of Africa equals approximately 5% of our GDP with a broad cross-section of the corporate community involved. South African banks appear to be well positioned to take advantage of expanding financial services throughout Africa.
In this regard, it is pleasing to note that South African financial institutions continue to consolidate their role as catalysts of financial development and regional integration within the SADC, and the continent at large. The strategic emphasis on regional financial development in Africa presents South Africa with a challenge to redouble our efforts.
It is therefore not surprising that the Treasury's programme for international financial relations also leads the reform of the governance and administration structures of African institutions which enhances South Africa's shareholding and influence at the African Development Bank, working towards ensuring effective financial administration of the SADC Financial Committee's Secretariat, and contributing towards the review of the SADC's Regional Indicative Strategic Development Plan.
On the international scene, the International Monetary Fund, the IMF, is committed to working with South Africa to provide the advice and analysis that can address and unleash our own and the continent's full economic capabilities. As a member of the G20 and being one of the largest economy in sub-Saharan Africa, South Africa has a clear role to play in ensuring global economic stability and contributing to sustained and balanced economic growth. The mobilisation of support for the African agenda is a key priority of South Africa's international financial relations.
South Africa's accession to the increasingly influential Brics formation, therefore, offers enormous opportunities, not only for the country, but also for our friends and neighbours in the continent. Financial co-operation mechanisms established within the Brics structure further enhance the potential to mobilise resources for development and regional integration within SADC.
Afrikaans:
Nader aan ons tuisfront, bevorder die Tesourie se Internasionale Finansiële Verhoudingseenheid, integrasie en die Tesourie versterk bande binne die substreek deur die skepping van 'n klimaat wat dien as 'n onderbou vir ekonomiese aktiwiteite met die lidlande van die Suider-Afrikaanse Doeane-Unie. Onderhandelings is aan die gang ten opsigte van 'n nuwe inkomste verdelingsooreenkoms vir die doeane-unie wat bestaan uit Botswana, Lesotho, Namibie, Swaziland en Suid-Afrika. Die eenbeid speel 'n leidende rol tydens die onderhandelings van Suld-Afrika se voorstelle ten opsigte van die hersiening van die doeane-unie-ooreenkoms. Die eenheid word ook deur die Department van Handel en Nywerheid bygestaan tydens multilaterale onderhandelings wat gerig is op die implementering van die doeane-unie se finansies en beleggingsprotokol. Die eenheid gaan ook Suid-Afrika se moontlike lidmaatskap van die Afria Uitvoer- en Invoerbank en die Afrika Herversekeringskorporasie ondersoek.
Die ontwikkeling en vooruitgang van Afrika bly die sentrale doelstelllng van die ANC se perspektiewe en beleidsrigtings vir die bevordering van die Afrika-renaissance en die transformasie van die instellings wat vir die globale finansiële bestuur verantwoordelik is.
In hierdie verband het President Jacob Zuma die afgevaardigdes van 60 lands tydens die openingsessie van die 21ste Wêreld Ekonomiese Forum oor Afrika meegedeel dat die internasionale finansiële en ekonomiese wêreld nie meer na die "ou" Afrika kan verwys nie, aangesien dit dringend nodig geword het om nuwe verhoudings te ontwikkel wat Afrika tot voordeel strek - verhoudings en vennootskappe wat verskil van die wat tot dusver gegeld het.
Dit is ANC-beleid dat verhoudings met internasionale finansiële instellings soos die Wêreldbank en die Internasionale Monitêre Fonds op so 'n wyse bedryf word dat dit die integriteit en die belange van die Suid-Afrikaanse ekonomie en bevolking bevorder. Maar bowenal moet ons self 'n beleid nastreef wat ons in staat stel om afhanklikheid van internasionale finansiële instellings te voorkom.
English:
South Africa is very fortunate to have capable financial managers who maintain the prudent international financial policies that can create an economic climate conducive to growth and job creation. At the same time, the medium-term strategy, as outlined in the 2013 Budget, is essential to rebuild fiscal buffers and reduce external vulnerabilities. These policies can provide the space to implement the reforms needed to increase growth and employment. These policies bring the most benefits to the entire population and continue building an inclusive country that can be a proud example to the international community. The ANC supports Budget Vote 10. I thank you. [Applause.]
Mr G G HILL-LEWIS
Ms P E ADAMS
Mr G G HILL-LEWIS: Hon Chairperson, I think the Minister has to forgive us for being doubting Thomases today. Minister, if something is announced during the state of the nation address and the Budget – the government's two most premier platforms for announcing new policy – and then three years later you still have not implemented it, you will forgive South Africa for never believing anything you say again.
I must respond to what the hon Van Rooyen said. We are very glad for yet another commitment with regard to the implementation of the youth wage subsidy, of which, to be frank, we have had many, many before. The question is: will we wait another three years ... Where is the hon Van Rooyen? ... [Interjections.] ... for the implementation? How long will it take? Minister, I am not sure whether you are aware of this, but today it is 1 195 days since you first announced the youth wage subsidy. South Africa has been waiting 1 195 days for a new plan to give young South African's a chance at getting their first job. [Interjections.]
Again, I say it was brave, innovative and exciting. This party does not oppose it. We supported it, hon member. Call it what you want, it is fundamentally a good idea that will help hundreds of thousands of young people to get their first break in life, by getting a job and by beginning to build a better future. If it had been implemented when the President first said, it would already have benefited ... listen to this, Minister, ... 442 935 young people. Today, you owe them an apology. [Interjections.]
All of my ANC colleagues should listen to the following. It is a commitment that you can take to the bank. Next year, when the DA gets into government in Gauteng ... [Interjections.] ... the youth wage subsidy will be implemented from day one. [Interjections.] [Applause.] That is what we have done in the Western Cape. We have already helped thousands of young people, who are still waiting, 1 200 days later, for your plan. They already have it in the Western Cape. Where the DA governs we see the crisis that you were speaking about, hon member. We see the crisis, we understand the solution and then we implement. [Interjections.] We would still like to see a national government programme. That is what we would like to see. [Interjections.] Where then is the youth wage subsidy and what happened to it? We are no closer today, 1 195 days later, than we were in February 2010.
We can't hide away from the facts. This policy has been singled out by the Minister's unionist opponents, both inside and outside his party, as a site of battle over who calls the shots in the ruling alliance ... [Interjections.] ... which everyone must now agree is an alliance in name only. ]Interjections.] Yet the Congress of South African Trade Unions, Cosatu, and Minister Patel, seem to be winning. The 1 195 days' delay so far confirms this impression.
Mr T A MUFAMADI: Will the hon member take a question? [Interjections.]
The TEMPORARY CHAIRPERSON (Mr G T Snell): Excuse me, hon member, no howling please! Hon Hill-Lewis, would you like to answer the question?
Mr G G HILL-LEWIS: Chair, I would like to finish my speech and then at the end I will answer his question. Thank you.
The TEMPORARY CHAIRPERSON (Mr G T Snell): Please continue.
Mr G G HILL-LEWIS: Now, instead of getting behind a genuinely decent and sensible policy proposal ... I want to answer your question so I am going to rush ... we have been presented with a half-baked Youth Employment Accord that makes vague and oblique references to incentives. It is one word in the entire document, without any detail or a timeline. The Minister was quick to point out that the accord makes way for private-sector measures ... [Interjections.] ... as long as they are "approved by all constituencies".
Allow me to ask the Minister whether, in his mind, more than three years after announcing this subsidy and 440 000 jobs lost, does the signing of the youth accord now means that he has got sufficient consensus to implement it? Why was it not implemented the day after that accord was signed? If so, please tell us when it will be implemented.
Sir, I will take your question now. [Laughter.]
AN HON MEMBER: Time up!
The TEMPORARY CHAIRPERSON (Mr G T Snell): Hon Mufamadi, please ask your question.
Mr G G HILL-LEWIS: Is there no question?
The TEMPORARY CHAIRPERSON (Mr G T Snell): He withdrew his previledge of asking a question. [Interjections.] [Laughter.]
Mr G G HILL-LEWIS: Hon Chairper, I cut my entire speech to make ... [Inaudible.] ... however, let me just say ...
The TEMPORARY CHAIRPERSON (Mr G T Snell): Just hold on please, hon Hill-Lewis.
Mr T A MUFAMADI: I wanted the hon member to answer this question honestly and genuinely. [Interjections.] Who wrote the speech? Is it the hon Harris or him? [Interjections.] We have heard this speech before. [Interjections.] [Time expired.]
Mr G G HILL-LEWIS: Chairperson, I will conclude by telling the Minister that we are not holding our breaths. [Applause.]
Dr Z LUYENGE
Mr G G HILL-LEWIS
Dr Z LUYENGE: Hon Chairperson, hon Minister of Finance, Mr Pravin Gordhan, Deputy Minister of Finance, Nhlanhla Nene and our chairperson of the committee, Comrade Mufamadi, my Whip, the hon members of this House, comrades and friends on my left, speaking on behalf of the ANC, I would want to avoid a situation whereby one would be deterred to respond to the prophecies of doom and dark horses that exist and would want to be in charge of this country when they have nothing to offer.
The National Treasury provides for the government's pension and post retirement medical benefit obligations to former employees of state departments and bodies, as well as retired members of the military.
Programme 7 of the Treasury's budget provides policy analysis and advice on an ongoing basis by completing annual reviews and implementing recommendations in accordance with stakeholder agreements reached on pension reforms, postretirement medical benefits, political office bearers and pension legislation.
The objectives and measures are follows: to pay pensions to people who made sacrifices or served the public interest in the democratisation of South Africa through full implementation of Special Pensions Amendment Act; to improve the turnaround time for pension payments by reviewing special pensions, medical pensions, military pensions and injury on duty processes and procedures; and lastly, to alleviate poverty by ensuring timely and accurate monthly payments of military pension funds, contributions to medical aid schemes, risk and administrative fees on behalf of members of the Political Office Bearers Pension Fund.
The Civil Pensions and Contributions Fund provides for the processing ... ungangxami ndiyabuya mfo wethu [Don't rush; I'm coming back to your point my brother.] ... and payment of pensions and medical subsidies to retired civil servants; the injured, the disabled and the dependants of deceased civil servants and former struggle veterans in terms of various statutes, collective bargaining agreements and other commitments. The military pensions and other benefits make provision for the processing and payment of military pension benefits and medical claims arising from injuries sustained during various wars, including South Africa's liberation wars – I don't know whether you were there, my friends.
Before the integration of the forces, statutory force members were contributing to the Government Employees Pension Fund and stood to receive pension benefits on termination of their service. The former nonstatutory forces members, on the other hand, did not have the opportunity to contribute to any pension fund. This created a disparity between the former natural statutory fund, members and the former statutory forces members in as far as pension benefits were concerned.
The ANC therefore has championed social transformation and human development, noted at its Polokwane conference that many former MK members remained destitute, unemployed, poor, and did not receive much assistance from the state and that some of these former members were demobilised from the SA National Defence Force, SANDF, with little safety nets for their survival. We applaud the department for conceding to the command of the ANC as the leader. [Applause.]
The conference went further and resolved that direct interest must be taken in the MK military veterans, and that has been done through the establishment of the Department of Defence and Military Veterans. This is a clear indication that the ANC, and the ANC alone, remains charged and bears the brunt of aspects that actually put our own comrades in the plight that they find themselves in just because not all of them could be absorbed into the system. Now, it is the ANC that is taking that responsibility and driving the process of meeting all their needs. [Interjections.] [Applause.]
The revised dispensation also brought about equity amongst members with more or less than 10 years service, to the extent that 50% recognition for members with less than 10 years service in the previous dispensation was cancelled. The Government Employees Pension Fund rules for the revised dispensation were approved, paving the way for implementation.
IsiXhosa:
Bangayilibala ke aba bangapha ngasekhohlo kum ukuba kumagqala namajoni esasinawo phambi kokuba sifumane inkululeko, awabo kwakukho imirhumo ayeyenza njengokuba ayesilwa egebenga abantwana babantu. Kodwa la wona alwela ukuba kukhululwe umntu, le nto ifunwa nguThixo, wona ayengenanto ayifumanayo – ayengenamivuzo. Kwakungenakurhunywa nto kakade!
English:
However, the ANC-led government...
IsiXhosa:
... uze ngaphambili wathi anisoze nife, nifele ilize. Namhlanje baneendawo zokuhlala. [Kwaqhwatywa.]
English:
The ANC, as the leading political party in this country, has the responsibility of ensuring that yesterday remains different to tomorrow; it will never be the same.
IsiXhosa:
Ungomso wohlukile kwizolo. Sifun' ukubulela ...
English:
... as the ANC for the deployment we did that ensured that the finances ...
IsiXhosa:
...ezijongene nokuba kulungiswe iinkxwaleko ezenziwa ngoorhulumente bangaphambili zabelwe oko. Umfo kaGordhan nomfo kaNene, beqhutyelwa ngumzukulwana kaFuzile, baqinisekisa ukuba ...
English:
... the gaps that exist between the haves and the have-nots are actually closed, including those who fought ...
IsiXhosa:
... phaya emahlathini, becunyuzwa iintloko ngooyihlomkhulu benu, nina makwedini! [Kwaqhwatywa.] Kufuneka siyitheth' icace ...
English:
... as the ANC that ...
IsiXhosa:
... ukususela ngowama-2010 ...
English:
... when we revised the national nonstatutory forces pension dispensation which was approved by Cabinet at its meeting on 24 November 2010, we made provision for 100% recognition of the service period of the former nonstatutory forces members. This report followed a Cabinet decision in 2009, to create a new service dispensation for the Defence Force.
IsiXhosa:
Ngubani ke ongathi lo rhulumente we-ANC akawenzelanga nto kwaye engazimiselanga kuwenzela nto amagqala namaxhoba okulwela inkululeko? Ndithi ...
English:
... down with the Blues, down! The ANC, and the ANC alone, remains committed to ...
Mr G G HILL-LEWIS: Will the hon member take a question?
The TEMPORARY HOUSE CHAIRPERSON (Mr G T SNELL): Will you take a question, hon member?
Dr Z LUYENGE: I don't respond to spokespersons here. I respond only to hon members of this committee, because the committee is the spokesperson for the hon Lewis.
IsiXhosa:
Makahlale phantsi, ndiza kubuya ngaye ... [Uwele-wele.]
English:
I therefore, on behalf of the ANC, call upon all those who have been moved out of our ranks to form a party on the basis of their anger to come back home. It is too cold out there. [Interjections.] As my own experience has taught me, it may just be one of them who has a problem with just one ANC member or leader and has decided to hang him or herself. So, there is no need for solidarity with someone who has an issue with an ANC member and not the ANC.
IsiXhosa:
Ndifuna ukuthi ke, Sihlalo, xa ndiza kuhlala phantsi, umbutho wesizwe ulithemba, uza kuhlala ulithemba lokugqibela labantu baseMzantsi Afrika.
English:
I want to correct hon Dubazana, when she said that we made promises that we have not fulfilled. Hon member and my comrade, it is not a promise on the part of a fish when it says, "As I am out of the water, if you can put me back into the water I will swim". That is a commitment because it is a swimmer by nature. [Applause.] It is not a promise on the part of the ANC to say, "There will be a better life for all" under its governance. That has been experienced from 1994. [Interjections.]
IsiXhosa:
Namhlanje sihleli nabo apha. Basimosha ooyisemkhulu kodwa siyabanga kuba sithi bangabantwana balapha. Bangahlala bejikeleza belahlekisa abantu, kodwa abantu baseMzantsi Afrika bayazazi apho basuka khona, bebona ukuba baphi, bezazi nalapho baya khona.
English:
It is therefore a notion that says, "Hon Comrade Bra V, drive this bus, chief. This bus belongs to your forefathers. You have an obligation to account on behalf of the ANC because whatever goes wrong, people will come and cry upon the shoulders of the ANC." [Interjections.]
When a Toyota vehicle has a breakdown and needs repairs, it cannot be repaired at Mercedes Benz; it will be returned to Toyota for repairs.
IsiXhosa:
Ngoko ke, xa abantu baseMzantsi Afrika besithi ikhona into ekufuneka yenzekile, bafanele ukuba bayitsho kuthi. Siyabaxolela naba kuba ikwangabantwana bethu; siyabamkelisa, balala bedlile ngenxa yakho, mfo kaGordhan. [Kwaqhwatywa.]
Siza kukucenga ke, mfo kaGordhan ukuba ungabi nomsindo, ubacenge, nawe mfo kaFuzile, niyenze le nto yokuphatha le mali phantsi kolawulo lukaMsholozi ngentliziyo entle ngoba sikhokelwa yindoda enentliziyo entle yokufikelela ebantwini, nokuba bona ababoni nokuba ziintambo zesigcawu okanye ziintambo zombane, kuvele kufane nje kubo.
Sinoxanduva ke, ...
English:
... as members of this House, of interpreting what has been done correctly and where there are still gaps, so that those can be resolved. I thank you very much. [Applause.]
The MINISTER OF FINANCE
Dr Z LUYENGE
The MINISTER OF FINANCE: Chairperson, firstly, let me thank all of the colleagues on both sides of the House for the spirited debate.
As the hon Luyenge was rounding up and started talking about a better life and what we, as the ANC, have done, it reminded me of a day just over 19 years ago when I first entered this Chamber as a member of the Transitional Executive Council. I sat up there looking at a very different House. Nobody of your colour was around at that time. [Interjections.] We were here to witness the passing of the Electoral Amendment Bill, I think, and the Independent Media Commission Bill, all of which were necessary in order to smooth the way to creating the conditions for the first democratic elections on 27 April 1994. Now, nobody on either side of the House can say that we have not travelled well since that day in 1994. [Applause.] Nobody can say that South Africa has not become a much better place for its 50 million people since then, whatever our differences. [Interjections.] [Applause.]
So, it is in that spirit ... [Interjections.] ... you know, it is interesting to hear different members on both sides of the House refer to a six-pack that is going to stand us in good stead – which we as the ANC have no problems agreeing with. It is something that we need to strive for. We have no problems with the sentiment which says we need to sink or swim together, and we want to swim, not sink, because we have a huge responsibility to 50 million South Africans to make sure they swim.
We also agree with the sentiment by the hon Swart, which says let us call on those in the mining industry to reach an agreement that is affordable to all so that all of them can lead a sustainable life. We can agree with the sentiment that says let us deal with municipalities on an apolitical basis, so that they actually do serve the citizens that they elected to serve.
We have no problems with the hon James – he actually belongs on this side of the House, by the way – when he said let us share in austerity; let us share in saving; and let us share in attracting investors to this country, because all of our futures will be much better if we can speak with one voice on those issues, rather than waste seven, eight, nine minutes talking about one topic. An immense amount of time must have gone into the calculator to calculate hours and days, etc, to score a simple political point, rather than focus on the big issues of the day, which will help us to take this country forward. [Interjections.]
So, it is true that sentiment and perceptions do matter. I have spent weeks overseas recently, talking to investors and interested people of all kinds, who have an interest in South Africa, either because they have billions of dollars invested here, or who would like to invest in South Africa because they understand that South Africa has the biggest economy on the African continent and South Africa, with the sophisticated business infrastructure that it has, is the best place to come to.
Now, we need to make up our minds on both sides of the House on how we contribute to a positive sentiment. How do we contribute to positive perceptions? How do we contribute to a constructive narrative that South Africa is a good place to come to; South Africa is open for business; and that, despite our political differences, we are interested in advancing the country, not just narrow political interests? That is something that I think all of us need to talk a lot more about and ensure that in fighting our very many, very, very minor political battles in the overall scheme of things, we are not actually uttering public statements and not engaging in disruptive activity in the mining sector, or any other sector. It is not just the labour unions that we must keep pointing to. All sides must take responsibility to ensure that they create the right climate for this affordable-for-all solution that we are actually looking for.
On the question of growth, the serious challenge which all of us are talking about, is, on the one hand, yes, how we get the confidence and investment, but on the other hand, there are two things that we need. Firstly, we need to ignite growth in the short term whilst many of our plans will probably materialise in the medium term.
Secondly, we do require a new energy from below, from amongst our people, where our masses become energised; where they become innovative; where they become entrepreneurial; where we, as institutions create the conditions, not to haggle in Parliament, but to create concrete conditions on the ground for them to actually advance their futures. Again, that is something that we need to talk about, as well.
When we talk about jobs, we talk about it fairly glibly. Do you know that 70% of the South African economy is the private sector in South Africa? If we are to get jobs, we must get investment in our economy, investment in creating new enterprises, because we have fewer enterprises than we actually need in South Africa. Some of that is related to our past, so let us not deny the past. Some of it is related to what we do not do adequately now. So, let us admit that also. [Interjections.] The more important thing, however, is not to focus on our negatives. Let us focus on exactly what it is that we need to do together in order to create a very different climate to energise people on the ground. [Interjections.]
The hon Mr van Rooyen from the ANC's side is obviously on the side of the majority in this House, and when he gives you an undertaking that something is going to happen in relation to the youth employment incentive, take his guarantee at his word and let us see where we get. To make this whole debate a single-issue debate, however, is a regrettable practice that does not get one anywhere at the end of the day. We agree that more needs to be done on small business and to reduce compliance costs and much is being done in this regard by many people in government.
The hon Ross, I think, in terms of the 150%, as the Deputy Minister pointed out, we just need to help you to check that number. Our current debt is at 40%. If you consolidate all of our debt, it still does not reach 60%. Clearly, there is pressure on the currency at the moment. I think the response of the markets is a bit of an over-reaction, but there is no doubt that sentiment is dragging some of these issues. Therefore all of us, like I said before, need to take the trouble to manage our utterances in a way in which we contribute positively to these sentiments.
The hon Koornhof, I think your six-pack is an excellent concept, of course, except that the hon Singh is waiting for the wrong kind of six-pack after this debate! [Laughter.] There is just one correction, hon Singh. You referred to underspending on civil pensions. This is, in fact, a saving, and the saving is due to the fact that pensioners who were entitled to post-retirement medical benefits were moved to the Government Employees Medical Scheme, Gems, which is a cheaper option for them. So, I hope that information helps you.
The hon James is not here. Much of his analysis might well be correct, but the key issue is not about who stands where. Politics is often a confusing and contentious business and there are many different views, even within the left-hand side of this House, and many variations of ideology there. So they cannot all say they come from the same background. We know some of them very well and we know where they come from. The key is how we focus on the main issues of the day and how we ensure we get enough consensus, but more importantly, action to move forward.
The hon Alberts, hyperbole is often the resort of the bankrupters, they say, but I do not understand where this pyramid scheme is. I do not understand when you say ... this is not government's money. All governments in the world, as long as there have been democracies and taxation, get their monies from taxes that people pay. The only question is how they account for that money and how that money is spent. It is never government's money at the end of the day. So, perhaps we need to do some public finance education in this regard, as well. [Interjections.]
An HON MEMBER: Educate President Zuma! What about Nkandla? [Interjections.]
The TEMPORARY HOUSE CHAIRPERSON (Mr G T Snell): Hon Minister, I am sorry. Heckling is fine, hon members. Shouting is not permissible. Please. Thank you. Continue.
The MINISTER OF FINANCE: We can talk afterwards. [Interjections.] We do not get intimidated easily. We have been through much worse than that, hon member.
The hon Greyling, regarding your point about 7% to 10%, we would agree with that ambition. It is a question of getting there and finding the resources, but more importantly, making the shift – as we have said repeatedly – making the shift from consumption to investment. As government and as the public, we need to work harder at that. With great respect, you are a bit too glib on public-private partnerships, PPPs, and how they work. The ANC-led government has actually implemented PPPs in many parts of the country, but regrettably, it is in the Western Cape that more recently you opposed a PPP in respect of this proposed toll road. So, perhaps you are having some ideological difficulties in there. [Interjections.]
Finally, let me thank the hon Mufamadi and De Beer and their committee for the excellent processing of our Budget Vote, the Deputy Minister, the director-general, the Acting Commissioner of Sars and the head of the Financial Intelligence Centre, the FIC, for all of their contributions. Let me repeat what the hon Luyenge said: It is the ANC that will guarantee a better life for all. Thank you. [Applause.]
Debate concluded.
The Committee rose at 16:44.
Audio
No related
Documents
No related documents