Mr Speaker and hon members, it is always tricky to speak after the ruling party, because it may have raised a number of issues that you would like to respond to. However, I am not going to deviate from my script.
Last week, I followed with keen interest the debate in this House in which the Minister of Finance often accused opposition parties of electioneering when they sometimes offered a different view. The unfortunate perception this created is that government is more patriotic than some of us sitting in opposition benches, which is patently untrue. Mr Minister, that your government has taken almost five years to give practical expression to your clarion call for deep haircuts, and that this cost-cutting exercise is occurring in the run-up to the 2014 elections, is in itself, entirely and altogether, electioneering on the part of government as well.
I also noted the DA's attempt to suggest that there is a direct correlation between its march to Cosatu House last year, when it was protesting against the trade union's stonewalling of the youth wage subsidy, and government's decision to table the Employment Tax Incentive Bill here in Parliament last week. What that correlation is I do not know.
However, let us assume for a second that there is merit in the argument that party A can march on party B in order to get party C to behave in a manner that is desirable to party A. It then follows that the Economic Freedom Fighters should march on the SACP to get government to nationalise mines and banks or that the DA, as the main opposition party, should march on itself to get the ruling party to review party funding legislation so as to create an open opportunity political landscape for all. Oops! Pardon me, Mr Speaker. I digress, but perhaps I too am succumbing to the logical temptation to join my esteemed governing party in electioneering.
Coming back to the MTBPS, we are acutely aware that the Minister delivered his policy statement at a time when South Africa's economic outlook is moderated by a number of global risks and that global economic recovery remains sporadic. This makes the task of growing the economy at the rate required to create jobs extremely difficult.
In this regard, we welcome the Finance Minister's tabling of the Employment Tax Incentive Bill here last week, which proposes a youth wage subsidy aimed at encouraging employers, through tax incentives, to create job opportunities for young people. This strategy should be completed by steps to address the capacity constraints faced by many institutions set up to support small businesses, especially youth-owned business enterprises. I say this because the UDM has always argued not only that young people continue to occupy the periphery of economic activity, but that the problem of stubbornly high unemployment in South Africa appears to be one of youth unemployment. Government's decision to introduce a wide range of measures to cut down on wasteful expenditure in government is welcome, albeit a step long overdue. However, challenges of labour instability, as well as protracted and often violent strikes, hold back the economy and depress the currency and investor sentiment, particularly in the mining and manufacturing industries. South Africa needs to urgently address its fragile industrial relations, because they seem to be a major contributing factor in our losing our status of being a port of entry for trade in Africa for neighbouring countries such as Mauritius.
We also need to take steps to address the challenge of our twin deficits on the current account and the budget deficit. We also need to take urgent steps to address, or to try to rein in, the high and continuing-to-grow public sector wage bill.
The UDM supports the Bill. Thank you very much. [Applause.]
The DEPUTY MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES: Speaker, when South Africa's new Constitution was signed - that was in December 1996 - the overall index on the Johannesburg Stock Exchange stood at 6 600. Today it stands at 46 000. On that day the London gold price stood at $368. Today the gold price is $1 318.
But we must not bluff ourselves with numbers. Mining, which should have benefited from the gold price, has shrunk from a 15% contribution to the country's GDP to only 5,5% last year. Strikes and demands for unreasonable wage increases of 60% have played a role in this. On that day a US dollar cost R4,60; today it costs R10,15. Today the South African economy is slowly moving in the wrong direction. The economic growth rate remains low, the government is not succeeding in reducing unemployment, and problems of poverty remain very serious.
The hon Minister of Finance has, to a large degree, succeeded in maintaining a balance between financial restrictions, on the one hand, and the demands placed on government spending on the other. Without a radical change in economic direction, the Minister will not be able to maintain this balance for much longer.
What is the main reason for the economy's moving in the wrong direction? The main reason is the ANC's continual interference in the private sector and, specifically, the ANC's ambiguous message to the private sector and to foreign investors.
The Minister of Finance pleads for more foreign investment because, without it, we will not be able to increase our economic growth rate. The FF Plus agrees with this.
He and the National Development Plan promised less red tape and government interference to make it more attractive for national and international investors to invest in South Africa. We agree. But then, the next moment, another Minister announces stricter labour laws and more black economic empowerment measures. At the same time, we get a new Bill on foreign investments which will increase the red tape for foreign investors considerably and make it more difficult to invest here.
No wonder investors are confused about South Africa. Does the government's right hand know what its left hand is doing? Remember, investors have the memories of elephants, the hearts of lambs, and the legs of hares.
Hulle onthou lank, hulle is baie versigtig, en hulle hardloop gou weg. [They have good memories, they are very cautious, and they run away easily.]
The days when investors could invest despite the problems in South Africa have passed. They owe the ANC and South Africa nothing. There are many other countries that put a lot of effort into making investment as attractive as possible for investors. We in South Africa put new obstacles in the way, and then we are surprised when investments do not roll in.
Die VF Plus stel voor dat alle klein- en middelslagondernemings vry van arbeidswetgewing gestel word. Kom ons kyk hoe skep hulle dan werk. Kom ons gee beleidsekerheid aan beleggers deur die dubbelsinnige boodskappe te stop en ons kyk hoe nuwe beleggings instroom. Ons ekonomie sal ook nie baie langer kan voortgaan om aan 'n kwart van die bevolking, 16 miljoen Suid- Afrikaners, staatstoelae te laat betaal nie. (Translation of Afrikaans paragraphs follows.)
[The FF Plus proposes that all small and medium enterprises are exempted from labour law legislation. Then we will see how job opportunities are created. Let us give investors assurance about our policymaking by putting an end to ambiguous messages, and we will see new investments come pouring in. Our economy will also not be able much longer to pay out government allowances to a quarter of the population, 16 million South Africans.]
You can't indulge in a major programme of redistribution and welfare before experiencing a period of high economic growth. We need a radical change of economic direction to resolve South Africa's unemployment, poverty and economic growth problems, because the current policy is clearly not working.