Speaker, hon Deputy President, Ministers, Deputy Ministers, hon members, our guests, and the Director-General of the National Treasury, our debate on the Medium-Term Budget Policy Statement coincides with the release of the 20-year report by the US Bank Goldman Sachs on the state of South Africa. This report is titled: "Two decades of freedom: What South Africa is doing with it, and what now needs to be done". The report analyses both empirically and structurally how South Africa has changed in the past 20 years. It also looks into the challenges for the next two decades.
The relevance of the report to our work is that it independently reaffirms the correctness of our economic policies since 1994. Indeed, we have made bold and correct decisions in order to restore economic growth and maintain sustainable fiscal policy.
Yet there is still more to be done to improve the quality of life of millions of South Africans who are still yearning to be part of our young democracy and to benefit from it. Despite these outstanding socioeconomic deficits, we as South Africans have reason to celebrate the achievements of the last 19 years of our democracy under the leadership of the ANC. Indeed, the South Africa of today is far better for all, black and white, than the one we inherited in 1994.
The Goldman Sachs report concurs with what was said by the Minister of Finance in this House on 23 October. Let me remind South Africans and hon members of what the hon Minister said to South Africans about the 19 years of democracy. He said that our economy had indeed tripled and we had increased the economic base of South Africa. The national income per capita had increased by 40% in real terms. A total employment number of 3,5 million job opportunities had been created.
More than 16,1 million people were now eligible for social grants up from the 2,4 million people who received grants in 1994.
Seo se ra gore mphiwafela, e lego t?helete ya go thu?a bana, bakgekolo le bakgalabje, e oket?egile, eup?a gwa oket?ega le batho bao ba tsenego mo lenaneong la mphiwafela. (Translation of Sepedi paragraph follows.)
[This means that the child support grants and the old age grants have been increased. The number of social grant beneficiaries has increased as well.]
We have built more than three million homes, providing shelter to over 15 million people. I mention this so that we don't underestimate our own achievements. Fifteen million people now have proper shelter, shelter that the Freedom Charter anticipated and envisaged, stating, "There shall be houses, security and comfort" for all. Millions of our people also have access to electricity, water and sanitation.
In regard to transforming our economy, over the last 19 years we have seen over R600 billions worth of black economic empowerment transactions take place. In the last decade there was a dramatic rise in the middle class, the numbers of whom have risen from 4,5 million to 10 million people.
These are indeed the successes that we have realised in the last 19 years. We have not succeeded in solving all the problems, but we have made progress.
In regard to our inflation-targeting policy, we have reduced inflation from the 14% that there was between 1980 and 1994 to 6% to date, something that is very sustainable. Fixed investment has increased from 15% of gross domestic product in 1993 to over 20% over the past five years, despite the fact that we have not seen serious foreign direct investment taking place at the rate that we had anticipated over the years.
The observations that we made through the Medium-Term Budget Policy Statement are the following. The global economy remains subdued, though positive signs of potential and sluggish growth are visible. Due to political antics, the US annual debt ceiling poses a major risk for long- term world economic recovery. The debt ceiling debate has morphed into more than just a short-term political fight in the US Congress. Increasingly analysts are saying that the battle over the debt ceiling reflects a deeper constitutional struggle between Congress and the President in the United States of America. These are two of the issues that we have to take into consideration for our own economic planning as we look into the future. Domestically we must also acknowledge that we have seen slow economic growth, which has resulted in the tax revenue being revised down by R3 billion. We have seen high levels of unemployment, particularly among the youth. Government expenditure continues to exceed revenue, which we need to attend to. There is the challenge of low savings, which has impacted on our ability to invest in economic infrastructure. We have also observed overindebtedness of households and ...
... re re go magage?o, emi?ang ka dikoloto. [... we are appealing to you to stop getting into debt.]
Take it easy; don't rush!
We also acknowledge through this Medium-Term Budget Policy Statement that we have a high current account deficit, as well as high debt service level costs that we need to attend to. We also acknowledge and realise that in regard to the contingency grant we have started from a very low base, but over the next years, we will make sure that the contingency grant grows. The volatility of our currency also remains a point of concern.
What then do we need to do from here on, hon members? Countercyclical fiscal policy remains a central pillar of our revised Medium-Term Budget Policy Statement which seeks to: consolidate fiscal sustainability to support inclusive economic growth; maintain the expenditure ceiling to finance, and sustain social and economic infrastructure programmes through savings in the existing budget; shift expenditure from consumption to investment whilst ensuring that the principles of intergenerational equity are not sacrificed, so that future generations do not have to pay debts for our comfort today without our guaranteeing them a better future too; support job creation and promote manufacturing, particularly in the special economic zones; and support youth employment and skills development through the youth employment tax incentive programme. In line with the National Development Plan, the Goldman Sachs report suggests that in the next 20- year period the country should aim to raise its annual growth rate by more than 5%.
In summary, our countercyclical fiscal policy has responded positively and continues to reaffirm the principles of long-term sustainability and fiscal consolidation to support inclusive economic growth, in order to ensure service delivery. Over the medium term the Revised Fiscal Framework will ensure that government is able to do the following: meet the 2013-14 fiscal deficit target of 4,2%, as advised in the new format presented in the 2013 Budget Review; continue financing real increases in spending that enhance the social wage under a clear and explicit expenditure ceiling; reduce the deficit substantially to level off the public debt trajectory; and ensure that the government wage bill remains sustainable.
We also note through this Budget Policy Statement that the fastest growing expenditure item in the consolidated framework remains interest payments, reflecting a substantial increase in government debt stock in recent years. By 2016-17 more than R140 billion will be required to service public liabilities, an amount that exceeds current spending on health care. However, the recent International Monetary Fund Article IV report indicates that our debt level in relation to GDP is sustainable. Economic growth has been weaker and less than what we originally anticipated. As a result, tax revenue collection, as I have already said, has been revised down by R3 billion to R895 billion.
In conclusion, the committee's view is that global economic output remains uncertain and that domestic economic growth is expected to remain moderate, with recovery in economic growth in the outer years to create jobs, boost revenue and eventually reduce debt levels and budget deficits.
The pathway to economic transformation necessitates a coherent and effective approach, working together in partnership in order to free our people from poverty and unemployment. We need a major upscaling of our efforts towards economic transformation, consistent with our vision of a better life for all. We have to consolidate economic transformation and put it at the centre of development, recognising that we cannot achieve social cohesion and sustained economic development unless we create an economy that provides opportunities for more South Africans to engage in the productive sector of our economy.
The ANC supports the 2013 Medium-Term Budget Policy Statement. I thank you. [Applause.]
Speaker, on 23 October 2013 the hon Minister of Finance tabled the Medium-Term Budget Policy Statement, the Division of Revenue Amendment Bill and the Adjustments Appropriation Bill in this House for discussion.
The MTBPS contains some good features, but also some worrying ones. Worrying features remain the budget deficit, government debt as a percentage of GDP, a sharp reduction in the contingency reserve, the inclusion of extraordinary receipts to balance the Budget and the slow growth forecasts over the Medium-Term Expenditure Framework.
Gratifying, however, was the reduction in ministerial perks, the emphasis on aligning the Budget to the National Development Plan, the introduction of a youth wage subsidy, although substantially watered down, and the long overdue recoupment of more than R3 billion from departments who have failed to spend their budget allocations.
Much more can, however, be achieved to balance the Budget by simply starting to align the budget allocations with departmental outputs, as set out in their annual performance plans, and to further penalise those departments who consistently fail to spend their budgets due to plain ineptitude.
In a report to the Standing Committee on Appropriations, the Public Service Commission identified and investigated the 12 national departments most likely to have an influence on attaining the five main priorities of government, those being decent work and sustainable livelihoods; education; health; rural development, food security and land reform; and fighting crime and corruption. Most departments, with the exception of the Department of Economic Development, fared particularly badly when comparing their outputs with their annual expenditure and with the 2012-13 national Budget.
The relevant figures are as follows. The Department of Trade and Industry spent 99,2% of its budget but achieved only 64% of its outputs; the Department of Basic Education spent 91,9% but achieved 63% of its outputs; the Department of Agriculture, Forestry and Fisheries spent 99,5% but achieved 59% of its outputs; the Department of Human Settlements spent 97,3% of its budget but achieved 53% of its outputs; the Department of Labour spent 95% of its budget but achieved 53% of its outputs; the Department of Justice and Constitutional Development spent 99,9% of its budget but only reached 44% of its outputs; the Department of Co-operative Governance and Traditional Affairs spent 97,4% of its budget but only achieved 43% of its outputs; the Department of Rural Development and Land Reform spent 99,4% of its budget but achieved 31% of its outputs and, lastly, the SA Police Service spent 99,6% of its budget and achieved 22% of its outputs. In many cases, the senior management of these departments received performance bonuses! The nine departments that I have mentioned averaged spending against budget at a level of 97,68%, but they only averaged 48% on outputs.
At the time of compiling the report, the annual reports of the Department of Health and the Department of Public Works had not been submitted, but they have now been submitted. Of the 12 departments, the Department of Justice and Constitutional Development, as well as the Department of Rural Development and Land Reform, received qualified audit reports, whilst the Department of Public Works received a disclaimer. The other departments all received unqualified audit reports, but all with findings.
In respect of the National Anti-Corruption Hotline, details about the departments show that a mere 32% of corruption cases reported were, in fact, closed. Only three of the departments achieved a closure rate exceeding 60%, with the Department of Basic Education closing zero cases and the Department of Human Settlements only 1% of cases referred to it - so much for the fight against corruption!
All senior management service members are obliged to disclose particulars of their registrable interests by no later than 30 April each year, and only a 100% compliance rate is acceptable. The Department of Agriculture, Forestry and Fisheries, as well as the Department of Labour, achieved a 0% compliance rate, whilst the Department of Human Settlements dropped from a 100% compliance rate in 2012 to 0% in 2013.
The Management Performance Assessment Tool results, as obtained by the Department of Performance Monitoring and Evaluation as well as Administration in the Presidency, confirm that the state of management practices in the Public Service leaves much to be desired. In fact, we have seen deterioration in the MPAT scores in the state of management practices, from 74% noncompliant or partially compliant in respect of the 2011-12 financial year, increasing to 80% noncompliant or only partially compliant in 2012-13. The fields covered by the MPAT assessments included strategic management, governance, human resource management and financial management.
On the MPAT scores, other departments not investigated by the Public Service Commission fared equally badly. The Department of Women, Children and People with Disabilities, for instance, only partially met 14% of its key performance area objectives, with 86% being below acceptable levels.
The departments investigated by the Public Service Commission are all crucial to achieving the priorities of government, but other departments are equally important in order to attain value for money. Departments generally continue to seek valuable resources, but with no indication of return on investment. The Department of Water and Environmental Affairs is a good case in point, as it has received even higher budget allocations, but remains a persistently poor performer, in particular in not spending its budget on the capital assets so necessary to provide water to all households.
More often than not there is also a lack of appropriate management action in cases of poor performance. It is time for Parliament, and particularly portfolio committees, to perform their oversight role with more vigour, specifically as far as meeting outputs against performance indicators is concerned.
With the economy as tight as it is, all budgets should be geared towards being result-orientated and focused on achieving redress and service delivery, with a high premium on job creation, in order to achieve the objectives of the National Development Plan.
Simply cut the budgets and/or the existence of those departments that are not delivering value for money. Surely we do not want to become a country described by former US President Ronald Reagan, as one where the "government is like a baby: an alimentary canal with a big appetite at one end and no sense of responsibility at the other."
We must start operating more effectively. I thank you. [Applause.]
Mr Speaker, the financial crisis has exposed many countries' weak spots. We have not been saved in the process and, according to Sanlam's Jac Laubscher, it hit South Africa at a very bad time. In 2008 we were in a very volatile position politically - just after Polokwane - and, in fact, we saw the transformation from the Mbeki era to the Zuma era.
He emphasises that the crisis created a climate for a global weakening of fiscal parameters. Countercyclical fiscal policies were embraced, and those countries like South Africa, who had the fiscal room to stimulate their economies, did so. Then Laubscher concluded that the result was quite different. We have seen how a sharp increase in consumption spending, financed by loans, resulted in South Africa's showing the greatest reversal in its fiscal position for the smallest benefit in terms of growth and employment, compared to our peers. Therefore, the crisis laid the foundation for our predicament. Under the hon Pravin Gordhan's leadership we hit the brakes, but that was not enough. We are now part of the so- called "fragile five" world economies, which are running double deficits.
The big question now is: Will the world and our growth ever be as vibrant again, or has the crisis changed them forever? Unfortunately, in my opinion, the golden growth years are over. Growth projections of more than 5% are an illusion. We are linked to what is happening elsewhere in the world.
Four years ago, in the middle of the financial crisis, Brazil took off like a rocket. It barely stumbled in the world crisis, and it grew by 7,5%. But since 2012 Brazil has come down to earth with a bang. It grew by only 0,9% in 2012. Public unrest is the name of the game in Brazil now, and the economists refer to its economic boom as a "chicken flight". Why did Brazil flop? The sudden opening of trade coincided with commodity prices rocketing. We saw a big increase in credit and state consumption in Brazil, and policies have simply played themselves out. Brazil lost focus and did too little to reform the government in the boom years. Today in Brazil company taxes are too high, and 58% of the GDP goes towards the state wage bill. The spending on infrastructure in Brazil is a mere 1,5% of the GDP. It is too low. Brazil can only rectify it by cutting the red tape, merging ministries and curbing public spending.
This brings me to the European connection. Are we taking Europe seriously enough as our major trading partner? I put that question to the President yesterday. Yes, of course we should develop new markets and enter into new alliances, but to think that by belonging to the Brazil, Russia, India, China and South Africa group we can turn on Europe is simply wrong. Too many times I pick up on negative sentiment towards Europe in all quarters of the ruling party. I think our relationship is at a low, and it is dangerous.
Tim Cohen, editor of the Financial Mail, put it so eloquently:
If nothing else, the past few years have demonstrated something South Africans have appreciated too little about our economy: China might be an increasingly important trading partner, and the US remains crucial for capital markets, but the country remains very dependent for its overall growth on the European economy.
While growing other markets, you look after what you have carefully. I think South Africa has taken its eye off the ball and should refocus in regard to Europe. The continent remains our major trading partner. Minister, we want more positive news about South Africa in Europe. There is a huge underperformance by government departments in their relations with the European Union, and this has impacted on the roll-out of aid. My information is that more than half of the aid budgeted for is not yet rolled out, and there are only a few months left.
This is adding to the perceptions that we do not value European Union input and co-operation. I am concerned that in some circles in Europe the perception is growing that we are melting down. Now whether you like it or not, hon Minister, it is a serious perception. I want to suggest that you put on your running shoes and visit Europe, and that you invite your heads of mission back to South Africa and give them a renewed message to convey to Europe about what South Africa thinks about it.
Brics will not be the panacea people thought it would be. All the Brics economies are slowing down. Brics will not be the only engine of growth for us. We have to accept that growth figures beyond 5% are over for the majority of the world, including us. Growth in China will be higher but it will be inward. The African countries that grow more than 5% are doing it from a low base and against a very debatable set of human rights.
So, what should we do? We should firmly apply the brakes, cut government spending more, merge ministries, keep our good relationship with Europe, reform our labour regime, and emphasise the matters we are good at and do those things.
Cope will support the MTBPS and the Adjustments Appropriation Bill. [Applause.]
Speaker, South Africa finds itself today in a microeconomic situation characterised and influenced by global economic uncertainty, sweeping domestic unemployment, growing government debt, and an unstable political and labour environment that is slowly but surely turning away foreign investment. We have widespread service delivery failure, a multitier dysfunctional public service sector, and growing discontent within our population. Our tax base is being squeezed to the nth degree, and all manner of secondary taxation is coming to the fore, with e-tolling leading the charge. The bleak picture I seek to paint before this august House is intended as a reality check. We are on a slippery slope. This trajectory must be arrested and turned around before it is too late.
We know that international business is looking to expand into the African continent, with the IMF recently forecasting that African countries would hold 70% of the top places for economic growth over the next five years.
What are we doing as this Parliament, this government, and this country, to ensure that we are one of those African countries? What conducive environment are we creating to attract foreign investment and incubate future economic growth? This government must arrest the decay that has become so endemic in all aspects of our political and socioeconomic spheres. And there must be a resolve to do it immediately. I thank you, Speaker. [Applause.]
Speaker, Deputy President, Ministers and Deputy Ministers present here, hon members of this august House, and the chairperson of the Standing Committee on Finance, the ANC supports the MTBPS as presented by the hon Minister of Finance, Comrade Pravin Gordhan, who stated that the MTBPS indicates government's plan to build an efficient developmental state.
It should be borne in mind that the ANC views the developmental state as a state that does not only promptly and expeditiously deliver services, but as possessing, amongst others, strategic, organisational, and technical capacities to deliver on its core obligations. For the ANC, the need to build a developmental state with specific South African characteristics that take into account the evolution and current economic structure and social dynamics of South African society is central to how the MTBPS assists in achieving this.
A state such as ours has attributes and tasks that include the following capacities: to intervene in the economy in the interest of higher rates of growth and development; to lead society, influence the national agenda and the continent, and influence the international community in the battle of ideas; to address challenges of unemployment, poverty and underdevelopment; and to mobilise the people as a whole, especially the poor, to act as their liberators through participatory and representative democracy.
The MTBPS contributes to the building of state capacity to deliver on its core mandate and its focus of ensuring state efficiency in the delivery of services. It also contributes to the regulation of the economy. The MTBPS also suggests, amongst others, that the means of realising state efficiency will be sharing of skilled personnel, waste minimisation, and the improvement of procurement and management systems. These measures are rationally connected to efficiency. There is, of course, a relationship between efficiency and capacity. These must influence the debate on the public sector's remuneration. The reality is that government needs personnel to promptly deliver on its core obligations whilst, at the same time, it is committed to remunerating personnel justly and fairly. There is no contradiction; rather, this constitutes addressing the developmental needs of our society through the creation of decent jobs and sustainable livelihoods.
One of the essential measures to bolster and shore up government's capacity is the elimination of overreliance on tenders, where this is consistent with the delivery of effective services. The establishment, in April, of the Office of the Chief Procurement Officer has the potential to minimise wastage and corruption, as well as the potential to ensure that maximum benefits are realised from each rand spent.
The Strategy and Tactics document of the ANC provides that its vision is underpinned by values of caring and human solidarity. The ANC also strives to eliminate all manifestations and consequences of patriarchy, including the feminisation of poverty, and all forms of exclusion of women from positions of authority. In this regard, the developmental state is the instrument of socioeconomic inclusion.
The orientation of the developmental state should be to drive a people- centred and people-driven change and sustained development based on a high growth rate, a restructuring of the economy and socioeconomic inclusion. It should drive policy and implementing organs within its sphere and maintain effective intergovernmental relations and a stable management system. It has the ability to translate broad objectives into programmes and projects and to ensure implementation. This technical capacity hinges on, amongst others, the proper training, orientation and leadership of the Public Service, and on acquiring and retaining skilled personnel.
The National Development Plan also highlights the need for a developmental state that is capable of driving the country's development. It contends that building state capacity is the most important step toward achieving a developmental state. However, the National Development Plan also recognises that not all capable states are developmental and so emphasises the importance of building a capable and developmental state. Therefore, it asserts that a developmental state brings about transformation in the country's economy and conditions through an intensive and effective intervention in the structural causes of economic and social underdevelopment.
In response to some issues that have been raised by the opposition parties on my left, and in dealing with the negative perceptions that are rolled out on an annual basis by them, especially the DA and Cope, we need to say the following. The MTBPS ...
Won't be opposition for long!
You need to listen, because listening is a skill! The MTBPS continues to prioritise the social wage, correctly, as the main instrument in fighting poverty and building the capabilities that will drive longer- term growth and productivity. This includes education, infrastructure and a diversified industrial capacity.
The strategy is to invest in our human and physical capital whilst lowering the cost of living for the poor. It means regulating the economy to improve competitiveness, whilst raising beneficiation of our raw materials, and investing more time in developing a collaborative partnership with organised labour and the private sector, based on the principles of decent work and employment, strategic investment in the most productive sectors of our economy, and growth through development.
On the question of debt servicing costs, the central question is the price of debt and the cost to government. This only rises when other available investments yield a better return to investors than their purchase of the current government debt. All signals from the bond market, the financial markets, and the real economy suggest a more positive position than the opposition parties would want us to believe. Inflation is not a threat, because monetary policy and bond yields are low by historical standards, making it possible for government to finance its debt relatively well. The notion that government debt is crowding out private sector investment has no empirical evidence. No one can substantiate that. The alternative that the opposition parties want the ANC-led government to adopt is a reduction of government spending, which would reduce consumption growth. The economic facts are that lower government spending will further depress the economy in the short term. We all agree, on raising taxes to deal with the deficit when the economy is weak, that you cannot suspend service delivery in the face of what you want to save.
To those who advocate for that, the DA and Cope, the answer lies with austerity. That will send the right signal to the private sector, which will then spontaneously kick-start spending and stimulate our economy. However, it has failed to show a single country where this ill logic works. We in the ANC, would rather reaffirm the stance, as stated in the MTBPS, that we should adopt a balanced package that continues the pursuit of the countercyclical fiscal policy, broadens the social wage to fight poverty and inequality, and deals with inefficiencies in public spending.
Therefore, we in the ANC support all endeavours by the leader of this Ministry, Comrade Pravin Gordhan, to ensure that the gap between the haves and have-nots is not just minimised, but closed. In achieving that, it is only the responsible political party which is driving these processes that will also take responsibility where there are gaps. We are able to do that under the stewardship of this comrade who, since he came into office has been leading in Africa, if not the world. I thank you. [Applause.]
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.
Speaker, the MTBPS we are debating today is about sustainable public finances and national development. Building on the Budget that was tabled at the beginning of the year, it gives further expression to our efforts to implement the NDP. Our plan articulates the central priorities of public policy, which is to eliminate poverty and to reduce inequality with a focus on lowering the cost of living and doing business, to increase exports, to create more jobs and to make economic growth more inclusive. At the same time, our MTBPS recognises the increasingly limited fiscal space, to which some members have alluded, and reinforces our commitment to an expenditure ceiling. It provides a clear path towards debt stabilisation and our efforts to curb waste.
The budget framework that we tabled for the next three years reflects the goals of the NDP, particularly as it relates to reducing economic constraints and improving state efficiency.
A number of members have made statements. It is indeed puzzling that some members, whilst there are positive stories about our country, choose the negative ones when they read - and they read them quite selectively.
Hon member Koornhof from Cope quoted Mr Laubscher, and hemade a comparison. I don't know why he did not go on to compare this with the latest Goldman Sachs report. That report, as the chairperson of the committee indicated earlier, refers to a number of positives.
It says that this South Africa is not the same South Africa we lived in prior to 1994. It refers to a South Africa where social security has been extended to the broader majority of South Africans. It mentions a South Africa that has extended housing opportunities to more than three million households, and a South Africa whose economic growth has trebled since 1993. It points to employment numbers that have increased by 3,5% even though the labour force has increased. It discusses BEE empowerment, which the hon Deputy Minister of Agriculture, Forestry and Fisheries thinks is a crime. It is not a crime to empower black people in this country, because it was not a crime before to legislate against the employment of our people. [Applause.]
Hon Koornhof als talked about 2008 as being a bad time. Indeed, it was a bad time, but what is important is how South Africa acquitted itself during 2008 and after the crisis. The comparison with Brazil is quite puzzling to me. He also makes a comparison regarding our attitude towards Europe - which he calls "the European connection" - as though it is wrong for us to belong to Brics. Let me ... [Interjections.] That's what you implied.
Let me give you some statistics that will help you understand why the focus is where we are. Prior to the global financial crisis in 2008-09, 33% of South Africa's manufactured exports went to Europe. That has now fallen to 21%. This is not South Africa's choice. The European Union has registered negative growth for five years. The EU's economy has shrunk year after year for half a decade, as I correctly pointed out. We could not, therefore, expect the union to buy more of our exports when its income had fallen. This has nothing to do with our attitude towards the EU.
Instead, if you look east, our exports to China have increased from 10% of total exports in 2008 to nearly 15% today, as we speak. The Chinese economy is now the second largest in the world. Yet you say the economies of all the countries in Brics are shrinking. The African continent is but one area to which everybody is looking and, as a country, it would only be logical for us to focus on where the growth is.
I am also intrigued by the IFP's assertion. [Interjections.] At least she did say that she wanted to paint a bleak future. I don't think it helped. You say we are on a slippery slope? Please look carefully. We are not on a slippery slope; it is how we conduct ourselves. I also couldn't follow exactly what Mr Kwankwa from the UDM was saying. Maybe somebody will be able to decode what the hon member was saying. [Laughter.] The falling commodity prices, to which the Deputy Minister of Agriculture, Forestry and Fisheries referred, the weak currency, and more about BEE being a crime, I also find intriguing.
Ladies and gentlemen and hon members, the 2013 MTBPS has indeed been tabled at a challenging moment, with opportunities for change. While continued growth in a weak global environment demonstrates the resilience of the domestic economy, the pace of economic expansion, we agree, is inadequate to address our needs. South Africa has to give greater impetus to the investment and structural reforms that will lead to faster growth, generate jobs, and create new opportunities for emerging businesses. Challenging times require that South Africans - again, I repeat what the Minister has said - unite and give effect to the sound plans that we have adopted. While the global outlook is not expected to improve in the near future, there are many areas of opportunity, and those are the ones that we must take advantage of.
The sound fiscal framework that we have put in place supports the sustainable financing of government spending, while progressive alignment between departmental budgets and the objectives of the NDP will continue to bolster government's contribution to development. Thank you very much for the support that we receive in this House.
Deputy Speaker and Deputy President, the ACDP broadly supports this important MTBPS which gives an indication of government income and expenditure over the next three years. Most analysts believe that the hon Minister of Finance produced the best policy statement that he could, notwithstanding the uncertain global economic outlook, as well as domestic challenges arising, inter alia, from the strike action in the mining, motoring and transport sectors.
The government's countercyclical fiscal policy is firmly aligned with the National Development Plan. We in the ACDP support this, because it provides policy certainty. It also sends a very clear message to trade union movements, such as Cosatu, that the development plan is to be implemented. It also sends a message to reassure investors and credit rating agencies that the National Treasury will not deviate from trademark fiscal conservatism, notwithstanding political pressure, particularly from various quarters and the trade union movements.
This should be the narrative that we speak when we speak out: Yes, we do have many challenges, but it is very important that as we focus on those challenges, we also focus on what other economic analysts are saying, that this medium-term Budget is positive.
On the downside, we know that the weaker global economic outlook, together with fallout from the strikes, has impacted negatively on our economic growth forecasts, which are now down to 2,1% of the GDP, down from earlier forecasts. However, let us also be thankful. There are many countries that have no economic growth, such as we see in Europe.
Whilst we have lower growth, we also have lower tax revenues, and Sars is going to be hard pressed to meet its target. I hope that all Members of Parliament have filed their returns and that they are up to date with their taxes.
We also see the risk of the unwinding of quantitative easing in the US. That will impact on emerging markets and will further impact on our trade account deficit, as we rely heavily on external funding to meet obligations in that regard.
As a country we need to continue increasing exports where possible, particularly where our country has natural endowments and comparative advantages, such as in mining and manufacturing, to counter this risk. Clearly, we need policy certainty in those areas as well.
We in the ACDP have previously expressed concerns about the budget deficit, the projected state debt costs and the spiralling debt service costs. We need to look very carefully at the fiscal consolidation path. We are relatively on track. However, the year is now moved outward in the estimation of when we are going to reach that 3%; it is moved outward to 2016-17. We are relatively on track, and we need to monitor that very carefully. The size of the budget deficit, as we know, results in debt service costs increasing faster than any other category of spending, and that crowds out spending on developmental priorities. This we need to monitor very closely, from our side, to ensure that fiscal consolidation is on track.
The ACDP will support this Medium-Term Budget Policy Statement. I thank you. [Applause.]
Deputy Speaker, Deputy President and hon members, the mini Budget we are debating seems to have been prepared to ensure that South Africans are appeased, taking into account the debt that we are headed for. The austerity measures announced in the MTBPS bode well for ensuring that the economy is placed on even keel.
These announcements to some extent add value to the fight against corruption. We believe, however, that it would be appropriate if the Minister also gave an indication of how government intends to recover monies already lost in that way.
The fact that there are 15 million people dependent on social grants is really nothing to write home about. The UCDP believes that everyone has to live by the sweat of their brow. Government has to make sure that there are jobs and job opportunities within a reasonable distance of where people live.
We welcome the firm tone in regard to the implementation of the NDP. Government has a reputation for producing great papers and sitting on them. However, we hope that this time around, in these thirty years of planning, the whole exercise will come through and benefit this country in the long term.
We are concerned about the unchanged transfer duty and capital gains tax. Our view is that a drop in these would open the gates for the many first time homeowners who would otherwise be left out of the market because they cannot fork out the huge amounts required.
Fuel levies are also a huge pinch for ordinary citizens. It appears that the government is continuing to squeeze and squash every penny it can out of the ordinary man, and this has adverse effects on many other spheres of living.
The UCDP holds the view that as we proceed, total agreement with the belt- tightening measures proposed in the budget will be good for the country. The UCDP supports the 2013 Medium-Term Budget Policy Statement. [Applause.]
Deputy Speaker, hon Deputy President, hon Ministers, comrades and friends, it is said that the best time to plant a tree is 20 years ago. Perhaps I should start off by observing that next year we are celebrating 20 years of freedom and democracy. Our tree is blossoming and continuing to grow. The 2013 MTBPS adds another sprig to this growth period, as we forge ahead towards the realisation of Vision 2030.
Let me also take the opportunity to thank our Minister of Finance, the hon Pravin Gordhan, and his Deputy Minister Nene for their unwavering stewardship, focus, and resilience. Together with the director-general and his team, they are a formidable team. South Africa should thank them for the brilliant work they are doing. [Applause.]
The tabling of the 2013 MTBPS took place in October, a month in which we celebrated the 32nd annual World Food Day. South Africa, together with the global community, embraces "Sustainable food systems for food security and nutrition." World food month is even more important for South Africa, in the light of the Census 2011 revelation that South Africans spend 12,8% of their income on food. This figure will be even higher for those in low- income households.
It is against this backdrop that the ANC welcomes the adjustments made to the budget of the Department of Agriculture, Fisheries and Forestry. More specifically, the ANC welcomes the additional adjustment of R4,3 million allocated for the disaster relief component of the Comprehensive Agricultural Support Programme, CASP, grant.
The 2013 MTBPS revealed that agricultural output grew by 3,6% in the first half of 2013, compared to the same period in 2012. It is also pleasing to know that over the medium term agriculture will grow faster, owing to the growth in African markets. Improved management of water resources, and better integration of small-scale farmers through market access, financial support, and resolution of outstanding land claims will contribute to this faster growth. Census 2011 also noted the following fundamental points - that agriculture, as a sector, contributes about 2,2% of the country's GDP and 5,2% to employment, and that a total of 2,9 million households are involved in agriculture. When it comes to Rural Development and Land Reform, ...
... waarvoor ek baie lief is, en ek hou baie daarvan om oor daardie twee departemente te praat ... [... which I love, and I am fond of speaking about those two departments ...]
... we are pleased that the budget for the Department of Rural Development and Land Reform remains unchanged at R9,5 billion, as per our appropriation at the start of the financial year. It can be argued that the effective implementation of policy to improve the lives of the rural poor will, by definition, have a direct benefit for the rural poor and society in general. To this end, the department is committed. It is our responsibility to ensure this is expedited and achieved.
As I have mentioned in previous speeches in this House, the Department of Rural Development and Land Reform is a key priority of government. The Department of Rural Development and Land Reform carries the hopes and aspirations of our people who reside in rural areas. It is in this spirit that we are pleased that the department is on course to achieve its performance targets, as shown by the following midyear achievements: a total of 2 296 households are already producing their own food through the rural development programme; 87 318 ha of land have been acquired through the land reform programme; and 552 youth have participated in the National Rural Youth Services Corps. The department must ensure that small-scale farm households have access to state-sponsored agricultural development programmes.
We welcome the budget available for the Office of the Land Valuer-General. We believe that that office will play a very important role in transparent land reform.
Our support for this budget reaffirms our commitment to the provision of skills development and training support for emerging farmers and, most importantly, for job creation in land reform projects, with the aim of creating a world-class agricultural and agroprocessing industry.
The ongoing land reform process should be seen as a golden opportunity where we as South Africans can lay our differences to rest and focus on building a social compact for the benefit of future generations.
Perhaps I should take this opportunity to say that I concur with the sentiments that hon Minister Pravin Gordhan shared recently at the Nelson Mandela Foundation in Houghton when he said that "there is too much despair ... We need to recognise the good work we've done". Minister, there is too much, unnecessary, despair. This deliberate imposition of the doom-and- gloom mentality reminds me of the notion of the glass being half full or half empty. This notion is used to emphasise the difference between positive and negative thinking or optimism and pessimism. It is high time that we erase this irresponsible pessimism and focus on practical realism.
The reality is that South Africa is a land of many opportunities. [Interjections.] Ours is a garden of possibilities. Ours is the Garden of Eden. Let us all work together to build an agricultural sector that can support and underpin industrial growth, peace and prosperity. [Interjections.]
Daar is 'n ander aspek waaraan ons ook indringend moet aandag gee en waarvoor ons baie dankbaar is. Dit is die openbare sektor - die staatsdiensamptenare wat 'n akademie gaan kry en waarby hulle volledig en behoorlik opgelei sal word om 'n stabiele en 'n respekvolle staatsdienskorps daar te stel.
In ag genome wat vandag hier ges is, is dit mos so dat politieke partye voor verkiesings - veral die opposisie - negatief word. Wie het markte oopgemaak vir Suid-Afrika in hierdie land? [Tussenwerpsels.] Dit was die ANC-regering! [Applous.] Wie het markte vir lande oopgemaak in Afrika, in Asi en in Indi? Dit was hierdie ANC-regering! [Applous.] Wie het besighede in Afrika oopgemaak? Dit was hierdie ANC-regering! [Applous.]
Dit is wat gaan gebeur, want hier is lede aan hierdie kant wat redelik naby aan my sit, wat 'n klompie jare gelede ges het: As dit met Suid-Afrika swak gaan, gaan dit met die opposisie goed. Hier is nog 'n spreker van die DA wat later gaan praat, en ek kan nou vir u s wat hy gaan s. Hy gaan ook negatief wees, en hy gaan ook in elk geval pessimisties wees. [Tussenwerpsels.]
Hierdie land se finansile sake is in goeie hande, danksy Pravin Gordhan, danksy Adjunkminister Nene, en danksy die uitvoerende gesag. [Applous.] Ons salueer hulle. Suid-Afrika is op die regte pad. Ek dank u. [Applous.] (Translation of Afrikaans paragraphs follows.)
[There is another aspect we need to pay keen attention to and for which we are very grateful. It is the public sector - the government officials who will get an academy where they will be fully and properly trained to establish a stable and respected government corps.
Taking into consideration what was said here today, it is indeed the case that political parties become very negative before elections - especially the opposition. Who opened markets for South Africa in this country? [Interjections.] It was the ANC government! [Applause.] Who opened markets in Africa, in Asia and in India? It was this ANC government! [Applause.] Who opened businesses in Africa? It was this ANC government! [Applause.]
This is what is going to happen, because there are members on this side, who are sitting fairly close to me, who said a couple of years ago: When South Africa is doing badly, the opposition is doing well. There is another speaker from the DA who is going to speak later, and I can already tell you what he is going to say. He is going to be negative too, and he is also, in any case, going to be pessimistic. [Interjections.]
This country's financial affairs are in good hands, thanks to Pravin Gordhan, thanks to Deputy Minister Nene, and thanks to the executive authority. [Applause.] We salute them. South Africa is on the right path. I thank you. [Applause.]]
Order! I see the hon Singh. Can I appeal to the gallery that whilst we all appreciate your presence here, you cannot participate, in particular by clapping. Thank you.
Madam Deputy Speaker, I thought they were going to clap for me. [Laughter.]
Madam Deputy Speaker and hon colleagues, what is bleak is the fact that there are many government departments that are unable to spend taxpayers' money effectively and efficiently. This is confirmed by reports of the Auditor-General which cite wasteful and fruitless expenditure, corruption and all sorts of things. That is what is bleak, and these are things that we have to correct as we move forward.
It is a pity that we in the Standing Committee on Appropriations were not given more time to speak in this particular debate through the courtesy of the ANC on that side at the Chief Whip's office. I say this because the Standing Committee on Appropriations received input from a number of organisations, like the Public Service Commission, the Financial and Fiscal Commission the Human Rights Commission, and many departments. However, we are not in a position to express exactly what they said.
What they said, hon Minister, in one regard concerns the question of expenditure versus performance. In many instances you will find that 100% of a department's budget has been expended, but when you look at the performance and the targets met by the departments, some of them met less than half. Now, what is happening is that they are budgeting for money, and they are spending the money, but they are not meeting their own performance targets. Is it a question of fiscal dumping? Is it a question of their not planning properly? This is a matter of concern that you, hon Minister, need to look at.
When you look at the salary bill in the MTBPS, you see that it refers to the fact that the content suggests that over the medium term government will seek to ensure that growth in employment and earnings does not threaten the expenditure ceiling." There is also concern about the growth of managerial and administrative staffing across government.
The growth in the public sector wage bill has exceeded the rate of inflation over the past several years. This is indeed a cause for concern, especially when there is no yardstick to measure the productivity of the staff. We don't envy staff who get more money and salary adjustments, but we are asking: Are we getting commensurate productivity from them? We feel this is an area that should be looked at. Thank you. [Applause.] [Time expired.]
Deputy Speaker, I hate to give hon Gelderblom a self- fulfilling prophesy, but I am indeed slightly pessimistic about our so- called "Garden of Eden". We have an incredibly beautiful country, but unfortunately politically, hon Gelderblom, there are too many snakes in our "Garden of Eden". [Interjections.]
The Minister of Finance's Medium-Term Budget Policy Statement which we are debating today was full of welcome rhetoric, but it was not nearly bold enough in tackling our serious economic problems.
There are more than a million South Africans unemployed today than there were on the day that President Jacob Zuma took office.
We are also beset by lacklustre economic growth. In 2011 we were growing at 3,5% - that is after the global financial crisis, hon Minister. This year, however, we are growing at only 2%. We are being left behind by other developing countries. Members have heard me say the following, and let me remind them of it. Countries like Chile, Malaysia and Turkey which share many of our characteristics, are growing at twice the rate that we are in the same global economy.
This shows that the National Treasury is simply wrong when it blames global circumstances for our slow growth. Instead, we have to look at our domestic issues, especially the recent ones - what the Minister of Finance calls "labour disputes, electricity shortages and other supply-side disruptions".
The Minister identifies these as our problems, but he announces no significant measures from the NDP to address them. He points out what the problems are, but he doesn't table any of the actual new measures that we have all read about in the National Development Plan to tackle them. That plan would help, but far too few of the proposals in it show up in this Budget statement. The NDP talks about regulatory reform, but there is nothing in this Budget Statement. It talks about the removal of trade barriers, but there is nothing in this Budget Statement. Government has not managed to introduce anything like this since the NDP was adopted by this House.
We do welcome the cut in ministerial perks, of course. It is a pity that that does not take place immediately, rather than next year, because these government departments have already increased spending on items like accommodation, catering and entertainment by somewhere between 6% and 10% this year alone. These increases constrain, or rather compromise, the Minister of Finance's ability to limit spending to 2% increases.
The elephant in the room is how many of these spending cuts apply to the President. When I asked the Finance Minister in a committee meeting, he neatly dodged the question. [Interjections.] When we asked the President in the House yesterday, he dodged the question. [Interjections.] The best way to cut ministerial perks to tighten the belts of government leaders is to cut the R200 million that we are spending on the President's private home in Nkandla and to cancel the somewhere between R2 billion and R2,5 billion that we put on the table to procure VIP jets. That is where the big numbers are, hon Minister.
The chairperson of the Standing Committee on Finance did mention our twin deficits, the other area where the Budget falls short. However, like the Minister of Finance, he said nothing on how to tackle the shortfalls. The current account deficit is huge, because we do not make enough, and we do not export enough.
We can fix it by tackling the competitiveness of South Africa's economy. We can also build the infrastructure that we say we will. We underspent on infrastructure by 22%, based on the figures that the Minister of Finance announces every year. We can boost competitiveness by opening up trade with Africa. In 2011 we were the 10th biggest exporter to the rest of our continent. Countries like Spain, Holland and Korea exported more than us.
We can also constrain administered prices. The year before last the administered prices went up by over 10% - these are prices that government says. On a fiscal deficit, we are suffering because lower growth is hammering tax revenue, and we cannot constrain spending on the big numbers by the state.
So the Deputy Minister of Agriculture, Forestry and Fisheries gave us a good view inside Cabinet when he said the left hand does not know what the right hand is doing. It is a pity that Ministers Nzimande, Cronin and Patel are not here to tell us what they think about government's National Development Plan, which is meant to be implemented by all Ministers.
We can also end handouts to state-owned enterprises like SA Airways, and we can reform labour bargaining arrangements. These ideas would help us tackle our twin deficits. However, they were not in the Budget Statement.
On the matter of the Goldman Sachs report, which the chair raised, he neglected to mention that that report, shows that unemployment has increased by 5,3% in the past 20 years. When the ANC took over, unemployment was 5% lower; it is now higher. That is the legacy of this government. Thank you. [Applause.] [Time expired.]
Deputy Speaker, hon Deputy President, hon Members of Parliament, friends and comrades, on 27 April 1994 we opened a new chapter in the history of our struggle to build a common citizenship and equal rights for all South Africans. Our common struggle to build a better South Africa continues.
South Africa's democratic transition was about the aspirations and collective desire for a better South Africa and a better life for all. It was about a journey to bring to an end the legacy of apartheid and to build a united, nonracial, nonsexist, democratic and prosperous South Africa.
We need to remind ourselves that the ANC inherited a South Africa that was "Balkanised" into barren homelands that were reserved for black people and had no infrastructural development ... [Interjections.] ... no proper schools, no proper health facilities, no electricity, and no proper roads or sanitation. [Interjections.] You must listen! Since 1994 the ANC-led government has embarked on a journey to create a unitary state by reconstructing and developing those homelands into habitable places.
We must remind ourselves that apartheid concentrated infrastructure in the cities - and areas such as the Western Cape, which were mainly reserved for the white population - whilst creating a labour reserve on the periphery of the city. Hence the continued reminder by the Premier of the Western Cape that black South Africans living in the Western Cape are refugees. [Interjections.] No, she did say it in public! I guess she may be thinking about reintroducing influx control.
It does not end there, hon members. You must look at the budget of Cape Town and how it is distributed. How much goes to places like Khayelitsha and similar areas, and how much goes to other places? [Interjections.] We are talking about the budget of Cape Town which the hon members on my left here know very well. It was stated in the debate. [Interjections.]
Fortunately, our people in the homelands resisted that life by building their own infrastructure. They built mud schools and health facilities so that their children could have access to education and health.
The Freedom Charter, which guides the ANC, declares that "South Africa belongs to all who live in it". [Interjections.] The cities were the only centres for economic activity, whilst the rural areas were left undeveloped, thus contributing to a migratory labour system. The majority of the people who vote for the ANC today would want these apartheid legacies reversed, and these legacies can only be reversed by the ANC. [Interjections.] To succeed on this journey, the ANC must ensure that there is truly one South Africa that is guided by the ANC's manifesto and the Freedom Charter.
In December 2007 the ANC met in Polokwane. Delegates brought messages from South Africans from different cities, towns and rural areas about the problems of our people, such as high unemployment, poverty, deepening inequality and the challenges of service delivery. We heard and shared those experiences of many municipalities, schools, hospitals and government offices' not functioning properly. The ANC agreed on major measures to overcome these challenges. South Africa has a government that fully understands what needs to be done to address our apartheid past, a government that puts people first and builds a participatory democracy. It has spent the last 19 years rebuilding the economy, pushing back the frontiers of poverty, and improving the quality of life of millions of our people.
The ANC has identified five priority areas over the past five years. The manifesto of the ANC in 2009 declared:
These priorities will be tackled with all the means at our disposal - the resources of government, the vision of the Freedom Charter and the energy and commitment of our people. Our priorities will specifically target the needs of the youth, women, workers, the rural poor, the elderly, and people with disabilities.
Furthermore, the ANC resolved that education and health should be the two key priorities for the ANC for the next five years. It also reaffirmed the implementation of the national health insurance system by further strengthening the public health care system and ensuring that there was adequate provision of funding. We will accelerate programmes for hospital revitalisation, including innovative solutions that accommodate partnerships. This MTBPS is presented in the context of the NDP as a continuation of practical interventions in pursuit of changing the lives of our people. The ANC welcomes the infrastructure audit that was done by the Department of Health, from which it can modernise the health infrastructure in our country. This will contribute to a successful implementation of the National Health Insurance.
The ANC also welcomes the information that there are currently 2,4 million people that are receiving treatment for HIV/Aids. This is to be increased by 500 000 annually. However, the development indicators report that between 2009 and 2012 there was a stabilisation in HIV/Aids prevalence, due to the bold leadership of the ANC. In other words, it is no longer growing at the pace it was five years ago. Most importantly, at this current juncture, we believe that South Africa will meet the Millennium Development Goals as it fights the scourge of HIV/Aids.
The South African National Health and Nutrition Examination Survey 2012 assessed public perceptions of recent health service use, and it suggests that approximately 83% of the public sector inpatients and 80% of the outpatients were either satisfied or very satisfied with the care they had received at our hospitals.
On education, we welcome the introduction of the Accelerated Schools Infrastructure Delivery Initiative, though the spending has somehow been slow. The committee has, however, agreed with the Department of Basic Education on a plan to improve the implementation of this programme. This grant is responsible for building new schools and electrifying them.
The ANC welcomes the adjusted budget for the Department of Higher Education and Training, of R34 billion, which accounts for 3% of the overall allocation, and of which 53% goes to tertiary education specifically, where we need to enhance the level of research and development. The ANC supports the construction of the two new universities. They are the Sol Plaatje University in Kimberley in the Northern Cape and the University of Mpumalanga in Mbombela. This is a great achievement by this government for the benefit of the people of those provinces.
The Human Sciences Research Council welcomes the steady growth in the country's gross enrolment rate for higher education. It, however, raises concerns around the low participation in studies for postgraduate qualifications, especially at master's and doctoral levels. Per annum the NDP target is 5 000 doctoral graduates by 2030, but the results showe that there were fewer than 1 500 doctoral graduates in 2010.
The Public Service Commission, on the issue that was raised by hon Singh, reported that there were still challenges concerning the alignment of expenditure and predetermined objectives. However, hon members, we must indicate that there has been improvement since the report that we saw last year. As a committee we are proposing to National Treasury or the Department of Performance Monitoring and Evaluation - whoever is responsible - that they provide us with quarterly reports on the alignment, so that Parliament is able to monitor it and does not have to wait for the end of the year. The ANC welcomes the Budget. I thank you. [Applause.]
Deputy Speaker, Deputy President, Ministers, the chairpersons of the two committees, Mr Mufamadi and Mr Sogoni, hon members and our guests in the gallery, let me first reiterate what the hon Mufamadi, and indeed the Deputy Minister, said earlier on - that the MTBPS and the various reports that we have had on the progress that we as South Africa have made over the past 19 years is about a remarkable success story. It's about the progress we have made against formidable odds as a country that came from the kind of past that some of us tend to forget quite easily.
The MTBPS - setting aside the success factors - is about the following. It's about saying that we continue to support the economic recovery, that the total consolidated expenditure will grow from R1,1 trillion to R1,4 trillion in 2016-17, and that we are maintaining, notwithstanding our efforts of consolidation, real growth in expenditure of 2,2%. Let us also remind ourselves, despite all the doomsayers that we have heard here today, that in real terms the capital spending grows at 4,1%, so you add inflation to it and it's the fastest growing noninterest expenditure item over the Medium-Term Expenditure Framework. Job creation programmes and social security programmes receive 8% per year in real terms as well. The MTBPS is also about the National Development Plan, about government working to reduce growth bottlenecks in our country, which over the next two to three years will make a formidable impact on the growth patterns in this country.
How hon members that have spoken here - some of them - can say that they can't see any announcements which reflect the fact that we are addressing the constraints and the opportunities that we have as a country amazes me.
So, they can't see the fact that a giant power plant called Medupi is being built, as is Kusile. They can't seem to see that there is progressive implementation of the Renewable Energy Independent Power Producer Powerment Programmes, which have attracted over R50 billion in investments, 60% of which come from outside of this country. They can't see the fact that we have passed draft regulations for shale gas exploration, which, once it gets going, will begin to turn the energy situation in this country around.
They can't see the fact that we have taken measures to centralise all steps to acquire mining licences and the water licences that accompany mining licences, that we are strengthening the capacity of competition authorities, and that a draft Promotion and Protection of Investment Bill will reinforce investment rights, both for ourselves in South Africa and for those who come from abroad, to invest and give them greater certainty. In a similar vein, we have taken a number of other steps which continue to promote growth and development in South Africa.
We will also meet our fiscal target of 4,2% this year and we will work within the expenditure ceiling that we have indicated. We will continue with the fiscal consolidation programme that we have committed to, and we acknowledge that there needs to be better quality of spending.
There also needs to be better oversight from Parliament. So, that is not about the quotation of numbers. It's about consistent work by parliamentary committees, with departments, to ensure that they deliver better.
At the same time, I want to talk about the two hon members Swart. Both claim that they are the handsome guy, so it's hard to work out which exactly that is. Outputs and the way they are articulated are one thing, but we must acknowledge that no one can precisely articulate outputs, and so, some of the variances are about drafting. They are about the quality or precision, if you like, and we have started a process which over the next five years will give us far greater insight into what is actually happening. No one can argue that we need more efficient spending in government, and we need greater capacity in government as well, but we are a 19-year-old state. We are building a new state machinery in South Africa ... [Applause.] ... something which has hardly been done in the world in the past century. We will get there, but we have to take important incremental steps as we do so.
So we need to remind either the more or the less handsome hon Swart that we are not Reagan's baby. We are, if you like, a constipated baby: there is no pass through. A large part of the money that we collect from taxpayers in South Africa is spent well. On the margin, there is corruption, and on the margin there can be more efficient spending - no doubt about that - but pointing fingers does not give you the more efficient spending. We all have to do our piece of work in order to ensure that we get the better spend that we actually require.
Let me go to the other two hon members whom I want to twin as well - the hon Koornhof, who I thought was an optimist, and the hon Mulder, who I can understand is a bit of a pessimist. We in the ANC, I must confess, have a half-full approach, not a half-empty approach. We have an optimistic and a can-do approach, not a pessimistic approach to life. We know that we have a historical mission to rebuild this country in the spirit of the Constitution ... [Applause.] ... and that we will actually prosecute. To briefly address their points, let me say we are not as fragile as some people want to make us out to be in South Africa, that economists such as Mr Laubscher are certainly entitled to their view, but they need to understand what a great recession, a once in 70 years recession, actually means. Yes, there is no doubt that recessions will actually begin to expose weaknesses in any country in the world, particularly as the recession has done in Europe.
So, we will recover from those weaknesses. We will ensure that we build a South Africa that grows faster and creates more jobs for people who are sitting in the gallery. We will continue with our commitment to the social wage, support health, support education, support housing, create better sanitation environments, and create a better living environment for all South Africans - a commitment that very few parties in Parliament can actually make - but, above all, we will ensure that our children have a much better future. Thank you. [Applause.]
Debate concluded.
Bill read a first time.