Hon Chairperson, hon Deputy President and hon members, economies around the world, including ours, have since the financial crisis in 2008 struggled to return to pre-subprime economic performance levels. This decline in business activity has resulted in massive job losses and business closures, and many families are finding it difficult to make ends meet.
Despite these challenges, good strides have been made in economic and social development to boost the economy, create jobs and reduce poverty.
One of the good things that the Minister and the department have done over the past few months is that they have heeded the call to reduce costs by keeping an eye on and actively seeking ways to moderate the public sector wage bill and by introducing a wide range of measures to try to cut costs in the system.
We also commend the government for ensuring that the consolidated budget deficit came down from the 4,2% in October last year to about 4%.
However, while it makes sense, in the light of the current general economic decline, to run a budget deficit of 4% in the medium-term to support our developmental objectives, the budget deficit, viewed together with the rising public debt, which stands at just over 40% of gross domestic product, gives the impression that government is struggling to embark on a fiscal consolidation programme. Yes, we are aware that the rising global interest rates have been a major contributing factor to the rise in debt service costs for government. We are also cognisant of the fact that significant steps have been taken to improve the management of the public debt and that currently only about 10% of public debt is in foreign currency.
However, the UDM believes that more needs to done to improve efficiency in government - fight corruption! This is essential to reduce South Africa's debt levels to sustainable levels.
Labour unrest is hurting the South African economy and it results in the loss of our country's competitiveness. Nowhere is this loss of competitiveness more evident than in the current account deficit of approximately 6% and the fact that South Africa's net portfolio investments declined to R24,3 billion in 2013, from R88,8 billion in 2012. Mr Minister, it concerns us that South Africa's large current account deficit, together with the budget deficits, are beginning to attract the attention of rating agencies, which already have a negative outlook on South Africa.
The UDM calls on government to take steps to improve the depressing investment climate in South Africa in order to ensure that private investment, both portfolio and in particular foreign direct investment, is rekindled. This is one of the most essential ways to achieve the economic growth rates that are necessary to arrest poverty in South Africa.
Mr Minister, it makes us uneasy to see that government's debt and deficit reduction programme seems to principally depend on optimistic economic growth forecasts. I thank you. [Time expired.] [Applause.]