Hansard: JS: Unrevised hansard

House: Joint (NA + NCOP)

Date of Meeting: 26 Feb 2020


No summary available.



TAKE 17 - STARTS AT: 14:07




Watch Videohttps://www.youtube.com/watch?v=2ipO-hE4Crk






The House met at 14:00.


The Speaker took the Chair and requested members to observe a moment of silence for prayers or meditation.












The MINISTER OF FINANCE: Madam Speaker, His Excellency, the President of the Republic of South Africa, His Excellency, the Deputy President of the Republic of South Africa, Cabinet colleagues, the 10th Governor of the South African Reserve Bank, hon members, members of the executive committees responsible for finance, fellow South Africans, good afternoon. I brought that plant with me. [Interjections.]


It is my singular honour and privilege to introduce the first Budget of the sixth administration. Today, I table:

1. The Division of Revenue Bill;

2. The Appropriation Bill;

3. The 2020 Budget Review;

4. The 2020 estimates of national expenditure; and

5. The 2020 tax proposals.


1. Introduction

The Aloe Ferox survives and thrives when times are tough. It actually prefers less water. We actually gave too much water to the previous one we had and it did not work. It needs less water. It wins even when it seems the odds are against it.


Mr President, in your state of the nation address two weeks ago, you reminded us that our capacity to win is not diminished. We have it within ourselves to be the best in the world. Congratulations to Miss Universe, Zozibini Tunzi. Congratulations to the Springboks, and the Proteas, who won while we were preparing this Budget Speech. [Applause.] Our economy has won before, and it will win again.


Before democracy, our growth was pedestrian. Indeed, between 1990 and 1992, the economy contracted for three consecutive years. In the 15 years following democracy, economic growth averaged 3,6% a year. The gross debt-to-GDP ratio declined from 46% to 26%.


In the five years from 2003 to 2008, growth averaged around 5%, and South Africa was amongst the fastest-growing major economies in the world. The unemployment rate improved by 5%. Now, even after a decade of weak economic performance, South Africa still boasts with deep and liquid capital markets, strong institutions, the most diversified economy on the continent, and a young population.


We are part of the most vibrant continent in the world. As Pliny the Elder said: “Ex Africa semper aliquid novi.” There is always something new from Africa. Winning requires hard work, focus, time, patience and resilience. Achieving economic growth and higher employment levels requires a plan.


I quote 1 Corinthians chapter 9 verse 24:


Do you not know that those who run in a race all run, but only one receives the prize? Run in such a way that you may win.






2. Economic context

The MINISTER OF FINANCE: What are the conditions under which we must implement our plan to win? In 2020, global economic growth is expected to strengthen to 3,3%. Global inflation remains contained. Global monetary policy is supportive, and we are benefiting from demand for emerging market assets.


Asia, excluding Japan, is expected to grow by 5,8% in 2020. The virus that has plagued China is a source of uncertainty, as it spreads around the world. With growth of 3,5%, sub-Saharan Africa is forecast to be the second fastest-growing region in the world.


Against this backdrop, we forecast that the South African economy will grow by 0,9% and inflation will average 4,5% in 2020.


Over the next 18 months, the economy should get a number of jump starts. These include, amongst others:

1. The fruits of the reform agenda led by the President;

2. Lower inflation;

3. The interest rate reduction earlier this year;

4. The recent gains in platinum group metals prices;

5. The impending change to the electricity regulatory framework; and

6. The tax proposals we are setting out today.


Persistent electricity problems will, however, hold back growth. Over the next three years, we expect growth to average just over 1%. Therefore, a stable supply of electricity will be our number-one critical task.




3. Towards an economic strategy

Last year, the government embraced the ideas contained in the document, Towards an Economic Strategy for South Africa. This is our guiding plan, and it contains the basic and fundamental pillars of our approach:

1. Strengthening the macroeconomic framework to deliver certainty, transparency and lower borrowing costs;

2. Focusing spending on education, health and social development;

3. Modernising network industries and restructuring our state-owned enterprises;

4. Opening markets to trade with the rest of the continent;

5. Implementing a reimagined industrial strategy — Minister Patel, I thought you would clap. [Laughter.]

6. Lowering the cost of doing business; and

7. Focusing on job-creating sectors, such as agriculture and tourism.


Good bye! [Laughter.]

Underpinning all of this is the need for an efficient and capable state. We must also leverage the private sector, as far as possible.


Today, we report on our progress. We are moving forward!


3.1. Prudent Fiscal Policy

3.1.1. Outline of the Budget for 2020-21

A sound macroeconomic framework always lays the foundation for growth. Budgets are complex, but the numbers are quite simple. The numbers show that we have work to do. We have a lot of work to do. For 2020-21, revenue is projected to be R1,58 trillion, or 29,2% of GDP. Expenditure is projected at R1,95 trillion, or 36% of GDP. This means a consolidated budget deficit of R370,5 billion, or 6,8% of GDP in 2020-21. Gross national debt is projected to be R3,56 trillion, or 65,6% of GDP by the end of 2020-21.


3.1.2. Tax adjustments

To support growth, we therefore propose no major tax increases. [Applause.] I don’t know where people who talked about VAT increase got that from. Indeed, there is some real personal income tax relief. This Budget means that a teacher who earns on average R460 000 a year, will see their taxes reduced by nearly R3 400 a year.


Hardworking tax paying South Africans who earn on average R265 000 a year, will see their income tax reduced by over R1 500 a year. Our income tax system is progressive, and the adjustments reflect this. Someone earning R10 000 a month will pay 10% less in tax. [Applause.] Someone earning R100 000 a month will pay about 1,5% less.


We are also proposing broadening the corporate income tax base. This additional revenue will be used to reduce the corporate tax rate in the near future to help our businesses to grow.


Start-ups will ignite the economy. The tax system supports this in a number of ways, including the preferential small business tax regime, the VAT registration threshold and the turnover tax. We will review these to improve their effectiveness, while at the same time, reducing the scope for fraud and abuse. Sometimes, we are afraid to take bold measures, because we say that there will be abuse and fraud. However, in actual fact, if we want to grab the animal by the scruff of his neck, we must be bold and take chances sometimes to win and not to fail.


To support the property market, the threshold for transfer duties is hereby adjusted. Property costing R1 million or less will no longer be subject to transfer duty. [Applause.] I see you are about to buy that, yes.


There will be a renewed focus on illicit and criminal activity, including noncompliance by some religious public benefit organisations. [Applause.] Religious bodies must operate within the strict boundaries of the law, if they are to enjoy any tax exempt status.


The annual tax free savings account contribution limit rises to R36 000.


We have increased excise duties to keep pace with inflation. From today:

  • A 340ml can of beer or cider will cost only an extra eight cents.
  • A 750 ml bottle of wine will cost an extra 14 cents.
  • A 750 ml bottle of sparkling wine, Minister Mbalula, will only cost an extra 61 cents.
  • A bottle of 750 ml spirit, including whisky, gin or vodka will rise by R2,9.
  • A packet of 20 cigarettes, irrespective of the nice smile that the Deputy President is giving me, will be an extra 74 cents.
  • A 25 gram of piped tobacco, with due respect to some retired people, will cost 40 cents more.
  • A 23 gram cigar will cost an extra R6,73. [Interjections.]


I am again happy to report to this House that there is no increase in the price of sorghum beer. [Applause.] In line with the Department of Health policy, we will start taxing heated tobacco products, for example hubbly bubbly. The rate will be set at 75% of the rate of cigarettes. Electronic cigarettes, or so-called vapes, will be taxed from 2021.


To adjust for inflation, the fuel levy goes up by 25 cents per litre, of which 16 cents is for the general fuel levy and nine cents is for the Road Accident Fund.


Despite this increase, the liabilities of the Road Accident Fund are forecast to exceed R600 billion by 2022-23. We need to take urgent steps to reduce this risk to the fiscus and bring about a more equitable way of sharing these costs. One option is to introduce compulsory third-party insurance. We should debate this as quickly as possible


The carbon tax and other measures will help green the economy, and will bring in R1,75 billion over the next few months. This will be complemented by more focused spending on climate change mitigation. We remain extremely concerned about plastic bags throughout the length and breadth of our country. In this regard, we have increased the plastic bag levy to 25 cents.


3.1.3. Reducing structurally high spending

Our measures will support growth. But fiscal sustainability must be uppermost in our mind. Our Aloe Ferox can withstand the long dry season because it is unsentimental. Let me repeat this. Our Aloe Ferox can withstand the long dry season because it is unsentimental. It sheds dead weight, in order to direct increasingly scarce resources to what is young and vital.


Total consolidated government spending is expected to grow at an average annual rate of 5,1%, from R1,95 trillion in 2020-21 to R2,14 trillion in 2022-23. This is mainly due to mounting debt-service costs. Noninterest spending declines on average over the Medium-Term Expenditure Framework, MTEF, in real terms.


As a major step towards fiscal sustainability, today, we announce a net downward adjustment to main budget noninterest expenditure of R156,1 billion over the next three years, relative to the 2019 Budget projections.


The total reduction is mainly the result of lowering programme baselines and the wage bill by R261 billion. These are partially offset by additions and reallocations of R111 billion. Of this, more than half, or R60 billion, is for Eskom and the South African Airways.


3.1.4. Programme spending adjustments

Let me unpack the R261 billion in baseline spending reductions. The first part is adjustments on programme spending of about R100 billion. Some of these were announced in the Medium-Term Budget Policy Statement.


Adjustments are mainly in conditional grants for provinces and municipalities. For human settlements, adjustments amount to R14,6 billion over the MTEF. There are also adjustments of R2,8 billion to the municipal infrastructure grant.


Over the three years, public transport spending is adjusted by R13,2 billion, mainly on allocations to the Passenger Rail Agency of South Africa and the public transport network grant. The planning and implementation of integrated public transport networks will consequently be suspended in the Buffalo City, Mbombela and Msunduzi municipalities.


Education infrastructure allocations are adjusted by R5,2 billion over the medium term, while health is adjusted by R3,9 billion over the same period.


While some of these savings are good for the fiscus, in many cases, we are also making difficult and painful political sacrifices. It is therefore important that we direct our constrained resources to areas that have a high social impact and have the largest economic multipliers. We shall undertake spending reviews to ensure that we achieve this objective.


3.1.5. The wage bill

The second part is adjustments on the wage bill by about R160 billion over the medium term. Public servants do crucial work for our country, often unappreciated and in difficult conditions. The governing party is a firm believer in the critical role of the state in development. For this reason, we need qualified, motivated and effective staff members.


Working with the public sector unions, we have over the past 15 years sought to improve the lot of public servants, and we have committed significant resources for compensating them every year, and we have even tried to increase their numbers in recognition of their demanding workloads.


Between 2006-07 and 2011-12, we were able to add about 190 000 employees to the public service. However, at the same time, government wages also increased quite significantly.


To balance the books, which is the job of the Minister of Finance, we slowed hiring, and since 2011-12, the number of government employees has actually declined. We cannot go on like this. Classroom sizes are growing, hospitals are getting fuller and our communities are becoming increasingly unsafe.


Once we get wage growth under control, corruption and wasteful expenditure under control, we will focus our attention on hiring in important areas such as education, police, and health care. We can hire strategically, and better match skills with opportunities.


The employer has tabled an agenda item on the management of the public service wage bill at the Public Service Co-ordinating Bargaining Council. The focus is to discuss and negotiate the containment of costs in the final phase of implementation of the current wage agreement.


We aim to save R37,8 billion in the next financial year. There is more than one way in which this goal can be achieved. Organised labour understands where we are and share the pains of this government. They have made constructive proposals on a range of issues, which need to be discussed and negotiated. We must be open to negotiations and discussions.


3.1.6. Wasteful expenditure and corruption

Mr President, you have directed your government to deal with wasteful expenditure. This is a vital step in restoring the confidence of the public in the government. We must get more value for our money. The President’s instruction requires a dynamic and appropriate mix of quantity, quality, capacity and capability in the administration of the state.


We are moving forward with reforms to the procurement system with a focus on value for money and maximising the quality and quantity of services. Cabinet approved the publication of a new Public Procurement Bill for public comment. We will accelerate merging and consolidating public entities. We will propose a new law to stop excessive salaries in public entities.


We must also deal decisively with the excessive high cost of leasing government buildings. We are already acting on fruitless and wasteful expenditure. Last year, this House amended the Public Audit Act to empower the Auditor-General to:

1. Refer matters to a public body for investigation and prosecution;

2. Take binding remedial actions; and

3. Recover money directly from the responsible culprits.


To show the determination of the executive to deal with runaway costs, we will implement a number of steps.

These include:

1. Abolishing the current wasteful subsistence and travel system;

2. Replacing the cell phone policy; and

3. Requiring economy class travel for all domestic flights, except in exceptional circumstances like health or otherwise.


Mr President, Minister Pandor has been very helpful through this process and she wrote me a very nice contribution to this section. She is providing phenomenal leadership in building a better Africa and a better world. Her work is unlocking massive value for money from South Africa’s overseas missions by, amongst other things:

1. Closing and merging some missions;

2. Downgrading the level of representation;

3. Reducing the number of officials who are posted to these missions; and

4. Establishing a full-fledged diplomatic academy.




3.2. Appropriate monetary policy

The twin of our fiscal framework is appropriate monetary policy framework. Regular consultation on fiscal and monetary policy is critical to the sustainability of our fiscal accounts, to the balanced growth of the economy, and to protecting the welfare of our people. We would like to reiterate that the current inflation target band of 6 to 3% stays as the most appropriate monetary policy framework for a country like ours.


In line with that target, the moderate inflation outcomes for 2019 of 4,1% and the forecast for inflation to be about 4,5% over the next few years, has helped to lower the cost of capital to firms, households and the public sector. The South African Reserve Bank will continue to undertake its duties in line with section 224 of the Constitution, which is to perform its functions independently without fear, favour or prejudice in the interest of balanced and sustainable growth in the Republic of South Africa. [Applause.]




4. Aligning spending priorities to the economic growth plan

For our Aloe Ferox to grow to its full potential, we need to do things that will help it in the medium to long term, for example, augmenting the soil with the right amount of organic manure, providing the right amount of sun and the correct amount of water. For a fast-growing economy, we need to make sure all our children, black and white, are well educated, our people are healthy and our money is invested properly.


4.1. Learning, health and social development

Consequently, the largest spending areas will be learning and culture, which receives R396 billion, followed by health, R230 billion, and social development, R310 billion. [Applause.] In the education sector, investment goes to new schools, replacing old mud schools constructed with inappropriate materials, and providing them with water, electricity and sanitation.


In 2020-21 the Mathematics, Science and Technology grant will introduce coding and robotics to learners in Grade R to Grade 3, as announced by the President. [Applause.]


Transfers to provinces support schooling for 13 million children and health care for 49,1 million South Africans. It is in this context that taking forward consultation on the NHI is very, very important.


The President has been elected Chairperson of the African Union for this year. We need to support his work and prove that South Africa is fully behind the African Union agenda. There is a decision of the African Union to establish a Pan-African university and that the Space Sciences Institute will be located at a South African university. [Applause.] We therefore can announce today that this Space Sciences Institute will be located at the Cape Peninsula University of Technology and that funding will be made available immediately. [Applause.] The consultation process will take place with the relevant Ministers, Dr Nzimande.


The Department of Higher Education and Training will reallocate existing funds to undertake a feasibility study for the establishment of a new university of science and innovation in Ekurhuleni, as announced by the President. [Applause.]


Over the next three years, 48,2% of nationally raised funds are allocated to national government, 43% to provincial government and 8,8% to local government.


R500 million has been provisionally set aside for disaster management, to respond to the impact of recent floods and the ongoing drought.


4.1.1. The infrastructure fund

Funanani Sikhwivhilu from Limpopo told us that “infrastructure development should be a priority for the government” and we agree.


In fact, capital spending is the fastest-growing component of noninterest spending. This spending is complemented by the Infrastructure Fund. Over the next three years, the Development Bank of Southern Africa will package blended finance mega projects of at least R200 billion. Government has committed R10 billion over the next three years, in this regard. The public can now find information on infrastructure projects on the Vulekamali internet portal. You go on the portal, click on it and you will get information directly from that portal.


4.1.2. Youth employment

An amount of 8,2 million young people between the ages of 15 and 34 are not in education, employment or training. Government is committed to helping them. Raising skills and improving the matching of young people and jobs is an important focus of the Presidential Youth Employment Intervention.


To date, Jobs Fund projects have created approximately 175 O00 permanent jobs, and helped 21 O00 people into internships and created 59 900 short-term jobs in South Africa. [Applause.] Of these, 65% went to the youth. [Interjections.]


As the President announced, we will reprioritise resources to raise spending on this critical area. We will start work immediately, Mr President. I will provide more details in the 2020 Medium-Term Budget Policy Statement. We intend to make this intervention a resounding success because we cannot fail our youth.


4.1.3. Social grants

We are a caring society. We are a caring government. More than 18 million South Africans receive a grant of one sort or the other, which is a lifeline for many. Grants reduce inequality and protect the most vulnerable in society. I am happy to announce that grants are adjusted as follows:

1. R80 increase for the old age, disability and care dependency grants to R1 860 per month; [Interjections.]

2. R80 increase in the war veterans’ grant to R1 880;

3. R40 increase for the foster care grant to R1 040 per month; and

4. The child support grant will increase by R20 to R445 per month. [Interjections.]


Changing the way we provide social grants will generate many savings in our economy and Budget, which will be partly used to raise the daily subsidy per child.


4.2. Modernising network industries and restructuring the SOEs

The next component of our plan is to modernise network industries and to restructure the state-owned enterprises.


4.2.1. Electricity

Government will “do whatever it takes” to ensure a stable electricity supply. As I said, it is our number-one task. We have allocated R230 billion over 10 years to achieve the restructuring of the electricity sector.


The current electricity shortfall will ease as Eskom completes critical maintenance work that they are doing. Bid Window 4 of the renewable energy programme is being accelerated. The rapid decline in renewable energy prices will give new impetus or momentum to Bid Window 5.


Determinations to implement the Integrated Resource Plan of 2019 are finalised and await the concurrence of the National Energy Regulator of South Africa. It will shortly be possible for municipalities in financially good standing to purchase electricity from independent power producers. [Applause.]


4.2.2. South African airways

The SAA Sword of Damocles has fallen on us. SAA has been placed under business rescue, which will lead to a radically restructured airline. Over the medium term, government has allocated R16,4 billion to settle guaranteed debt and interest. The associated restructuring costs will be reprioritised within the Budget. It is the very sincere hope of many that this intervention will lead to a sustainable airline that is not a burden to the fiscus.


4.2.3. Rail

Cabinet approved the Economic Regulation of Transport Bill in November, which takes us toward a fairer process for third-party access into the rail network.


4.3. Opening up our markets to trade with the rest of the continent

In 2019, South Africa signed the African Continental Free Trade Agreement, which comes into force on 1 July 2020. This agreement will open up new markets, promote regional integration and contribute to economic growth. Today, we announce complementary measures to make it easier to do cross-border financial transactions, which will support trade and investment.


We want to encourage South Africans abroad to keep their ties with their home country. We will raise the exempt amount for foreign remuneration to R1,25 million. We will phase out the administratively burdensome and cumbersome process of emigration through the South Africa Reserve Bank. [Interjections.] Yes, that is a good idea. [Laughter.] Why did I not think about that?


4.4. Reimagining our industrial strategy

To implement the reimagined industrial strategy:

1. An innovation fund will be capitalised with R1,2 billion over the next three years;

2. Industrial business incentives worth R18,5 billion will create and retain approximately 56 500 jobs;

3. An additional R107 million is reprioritised for the refurbishment of 27 industrial parks, which we have spoken about before, in townships and rural economies; and

4. R6,5 billion is allocated for small business incentive programmes of which R2,2 billion will be transferred to the Small Enterprise Development Agency.


Together with the Department of Trade, Industry and Competition, we are considering various proposals from the International Trade Administration Commission of South Africa, ITAC, related to scrap metal and poultry.


4.5. Lowering the cost of doing business

Steps are being taken to address South Africa’s lagging productivity growth and reduce the cost of doing business. For example, the BizPortal will provide a streamlined way to register a new business with the Companies and Intellectual Property Commission, CIPC, Sars, the Unemployment Insurance Fund, UIF, and the Compensation Fund in one day. That is already happening.


The Competition Amendment Act came into force in July 2019, strengthening the Competition Commission’s powers. The commission has conducted inquiries into a number of sectors to strengthen competition.


South Africa is moving on with the Fourth Industrial Revolution. We are determined not to be left behind. We are relaxing regulations to help our flourishing fintech sector.


The spectrum licensing plan was released in November last year, preparing the way for auctioning a high-demand spectrum. The Independent Communications Authority of South Africa, ICASA, will be appropriately capacitated for this purpose. A voucher system will be introduced to allow households to acquire digital devices.


4.6. Supporting agriculture and tourism

Over the medium term, we will support agriculture and tourism. Government has allocated R495,1 million to the Department of Agriculture, Land Reform and Rural Development to improve compliance with biosecurity and the support for exports. [Applause.] You did not get that. It means to avoid animal diseases.


An additional R500 million is reprioritised over the medium term for the department to finalise land claims. [Applause.] To support tourism, we will engage with the tourism industry on formalising the tourism levy, not the tax, Minister.


4.7. Enforcing justice

Fighting corruption is a priority of this administration. There is no doubt about that. The NPA, the Special Investigating Unit and the Directorate for Priority Crime Investigation are allocated an additional R2,4 billion in this Budget. [Applause.] This will enable the appointment of approximately 800 investigators and 277 prosecutors who will assist with, among other things, the clearing of the backlog of cases such as those emanating from the Zondo Commission.


The disruptive actions of those ... Listen carefully. The disruptive actions of those who storm construction sites or mines harm growth and lead to job losses. Communities should expose such people to allow Ministers Cele and Lamola to ensure that the law takes its course. I hope all South Africans will join us in condemning this act of banditry. [Applause.]


4.8. Off-budget initiatives to grow the economy

4.8.1. Supporting lending

Working with the financial sector, a pilot of the Help to Buy scheme has supported over 2 000 families to buy their own homes. For every R1 subsidy provided by government, the scheme crowds in R8 from the private sector. In a single year, the Help to Buy scheme was supported by nearly R1 billion in new lending.


4.8.2. State bank

Last year, this House passed legislation which will allow state-owned enterprises to apply for banking licences. In July 2019, I tasked the Deputy Minister of Finance, Dr Masondo, with the responsibility to undertake the work towards the creation of a state bank.


I am pleased to inform the House that we now have preferred options for the establishment of a state bank and we are ready to move now. [Applause.] The architecture will be that of a retail bank operating on commercial principles. The state bank will be subject to the Banks Act, and will have an appropriate capital structure and performance parameters on investments and loan impairments. It will be regulated by the Prudential Authority on its own merits.


We will also consolidate the currently fragmented system of national, provincial and local finance institutions.


4.8.3. Sovereign wealth fund

Mr President, a sovereign wealth fund is an important long-term tool for saving and investment for future generations. It can also contribute to strengthening the fiscal framework. We must learn to save during the good times, and a sovereign wealth fund can play an important role as a countercyclical fiscal tool.


Today, we announce the formation of the South African Sovereign Wealth Fund with a capital injection of R30 billion, which easily converts to about US$2 billion. [Applause.] Given the legal, administrative and procedural issues involved, a relevant Bill will be submitted to this House during the course of this Parliament.


There are a variety of possible funding sources for this, such as the proceeds of spectrum allocation, petroleum, gas or minerals rights royalties, the sale of noncore state assets, future fiscal surpluses and money we set aside for this purpose. This will ensure that we continue to invest in the future generations of this country in a fiscally prudent manner.


4.9. An efficient and capable state

The National Development Plan calls for a capable and efficient state that creates the right environment for the private sector to flourish. Taxpayers deserve to feel that their money is going to a government that is efficient and capable. We thank all South Africans who continue paying their taxes.


Sars is an integral part of the capable state. We are focused on re-establishing institutional integrity and fighting criminality. Just this past week, two individuals were convicted for up to 168 years’ imprisonment for tax fraud.


4.9.1. Strengthening municipalities

For all South Africans, the state is their local municipality. Allocations to local government help municipalities provide basic services and are a powerful redistribution tool. Mr President, the National Treasury asked members of the public to provide tips to guide our thinking, as we shaped this Budget. Today, we are joined by Ms Akhona Mgwele from Gauteng who advised us to “support greater local economic development in municipalities”. We agree with her.


I am therefore pleased to announce that local government is allocated R426 billion from nationally raised funds over the MTEF. [Applause.]


The Minister of Co-operative Governance and Traditional Affairs and I have agreed that our officials will find a way to use the allocations made through the Municipal Infrastructure Grant, to ensure that municipalities not only build new infrastructure but also maintain the infrastructure they already have. This means that, in stead of saying that a municipality has not spent a particular allocation and therefore take it back, we should ensure, at national level, that expenditure does take place, investment does take place. Unfortunately, the people don’t move to national; they stay in the locality and they deserve the services that they need. [Applause.]


The President spoke about the need for smart cities. As part of preparing for this submission, Mr President, we took a basic look around to see where these smart cities will be. It turns out that the O R Tambo International Airport aerotropolis in Ekurhuleni is at an advanced stage of implementation and King Shaka International Airport in eThekwini is progressing well in that direction. Cape Town shall join them soon, in this regard. Meanwhile Lanseria has been identified as a potential smart city. We are proceeding in this regard. We must support the aerotropoli – the plural form.



4.9.2. Strengthening provinces

Provinces provide health care and education and are at the frontline of service delivery. I wish to thank my colleagues in the provinces, the MECs for Finance, for the work they are doing, for the inputs they make on a regular basis, and for sharing the difficulties with us, as we go along. I must truly appreciate the contribution of team finance in this regard.


4.9.3. Strengthening regulatory oversight

There are a number of entities that report to the Ministry of Finance. The report of the Commission of Inquiry into the Public Investment Corporation, PIC, highlights, amongst others, important lessons for us, including the need to implement and adhere to governance and financial controls, and to reduce risk appetite.


This House has passed legislation to strengthen the Independent Regulatory Board for Auditors, and further legislation is planned. We will shortly appoint an independent panel of experts to review practices and traditions of the auditing profession because the profession has let us down.


The country’s money laundering system is currently undergoing a peer review, which will help strengthen the fight against illegitimate and illegal flows. The South African Reserve Bank will in future play a more integral part in this fight.


The Financial Sector Conduct Authority has repositioned itself as a market conduct regulator, and we will shortly appoint a new commissioner. The National Treasury will take steps to strengthen the budget process. Since it is now agreed that the Budget process should ideally start after the first lekgotla in June, to provide the political leadership ... It is very important.


5. Conclusion

Winning is not easy. Less than two years before winning the World Cup, the Springboks lost 57-nil to the All Blacks. Our Miss Universe did not win her first attempt at Miss South Africa. Winning takes patience, prudence, perseverance and focus. As Saint Paul tells us, we must run in such a way that we may win.


To paraphrase Charles Dickens, who I quoted in my first address to this House, we will make these the best of times.


Mr President and Deputy President, thank you for your leadership. A word of appreciation goes to the Deputy Minister of Finance, the National Treasury Director-General and his team.


My thanks to the Sars Commissioner, to the 10th Governor of the South African Reserve Bank - because I am the eighth Governor - to colleagues in the Cabinet and in the Ministers’ Committee on the Budget. [Laughter.] I really thank you very much.


My gratitude goes also to the parliamentary committees who work tirelessly to process the legislation accompanying the Budget Speech.


I close by reflecting on the words of Adv Bram Fischer who said from the dock, and I quote:


With confidence we lay our case before the whole world, whether we win or die, freedom will rise in Africa, like the sun from the morning clouds.


I thank you very much.















TAKE 18 -  STARTS AT: 14:54:55






The SPEAKER: Thank you, hon Minister ...


The CHIEF WHIP OF THE OPPOSITION: Speaker, I rise on a point of order.


The SPEAKER: There is a point of order. Yes, hon Mazzone?


The CHIEF WHIP OF THE OPPOSITION: Madam Speaker, I rise on point 92(1) read together with Rule 78(1). The Powers, Privileges and Immunities of Parliaments and Provincial Legislatures Act, specifically chapter 3(7)(c), says that a person my not threaten or obstruct a member preceding to or leaving from a meeting of Parliament or a House committee.


I’m terribly sorry to have to inform this House that various members of the opposition, including the hon leader of the opposition, were stopped from entering the precinct, which is why the hon Steenhuisen arrived a little bit after the start of the Budget Speech ... [Interjections.] ... because the police would not allow him to ... [Interjections.]


The SPEAKER: No! No! No! Please proceed, ma’am.


The CHIEF WHIP OF THE OPPOSITION: Speaker, the police would not allow hon Steenhuisen to enter the precinct with his parliamentary members gold card, and he was required to produce an ID document which he did not have on hand.


The same thing happened to hon Tsepo Mhlongo. Various other members of the opposition were also stopped from entering the precinct.


Now, the safety of and access to the precinct is a responsibility that resides in your office. Unfortunately, I’m going to have to ask you to investigate why the SA Police Service deliberately obstructed a member from entering the precinct, thus breaking a Rule and creating an illegal act in terms of the Powers, Privileges and Immunities of Parliaments and Provincial Legislatures Act, and also bringing your good office into disrepute.


The SPEAKER: Thank you, ma’am.


Dr M Q NDLOZI: Speaker ...


The SPEAKER: Order, members! Allow me to rule on this matter.


Dr M Q NDLOZI: We just want to affirm that there is a terrible over-securitisation of Parliament. There is targeted searching of hon members in the precinct. It is a serious interference in a different and separate arm of the state by the executive. The police are not under our orders. They are not under our control. They are under the control of the executive.


Their treatment of us like that amounts to intimidation of Members of Parliament and is a direct violation of the Constitution. Please! They must stand down, or we must form our own parliamentary security order ...


The SPEAKER: Thank you, hon Ndlozi.


Dr M Q NDLOZI: Otherwise we are going to defy them and ... [Inaudible.]


The SPEAKER: Hon Ndlozi, you have made your point! [Interjections.] Order, members! Order!


Hon Mazzone is within the Rules to rise on a matter of privilege. Hon members, I will investigate the matter, and I will report back. Thank you. [Applause.]


The papers tabled by the Minister will be referred to the relevant committees.


The House adjourned at 14:57.










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