Chairperson, the hon Bhoola once again surprised me with his unfounded attack on the DA, and once again there was not very much substance. Let me just note that his application to become a member of the DA and to serve the DA has been rejected. [Interjections.] However, we wish him all the best. We wish him a happy retirement and a good story in his retirement.
This year Minister Gordhan tabled a Budget that held the line against populist pressure to spend more. The Budget holds the line in committing government to a spending limit of R1,25 trillion in 2014-15. Whilst the fiscal consolidation is an impressive accomplishment, we have noted the global crisis, as the chairperson mentioned, and we know that some good work has been done, it is the hard realities in the Budget framework and in the Economic Outlook that forced government to implement prudent policies to achieve a decline in expenditure.
Hard realities in the Budget framework indicate, inter alia, a Budget deficit of 4% to GDP, whilst the current account deficit is expected to average at 5,7% of GDP, and debt peaking at 44% of GDP.
With regard to debt, it is the way a government handles its debts that is crucial to any economy, more so in a developing economy like South Africa's. With debt at 44%, Moody's did send us a very clear message: Our debt levels should not increase. But the risk of its happening still exists, especially noting that salary payments to public servants remained unchanged. The public sector wage bill constitutes 57% of expenditure - and I think the Minister shares my concern in this regard - in the Budget and is 6,5% of GDP.
The challenge of meeting debt service costs of R114 billion in 2014-15 and R126 billion and R139 billion in the medium term will have an effect on our ability to reduce the Budget deficit. Noting these challenges, it is evident that the fiscal boat could hit some turbulent waters with regard to costs and expenditure. The Minister indicated that Treasury was running a safe and stable fiscal ship. Therefore, I think the Minister will agree with me, boosting economic growth becomes essential. It is essential because we know that if we don't get growth going there will be no money. The GDP growth is projected at 2,7% in 2014. The current 2% growth is way below the growth of our peers in Africa. Major rating agencies and analysts appear to be skeptical about the forecast in the Budget for growth and the current account deficit. However, I seem to differ a bit with my colleague and chairperson in the Finance Committee about the response by agencies and critics.
It is also evident that in the event of the economy underperforming in growth, the fiscal boat could indeed hit some rough waters this year. In a crisis like the current energy crisis, which undermines our potential to achieve the economic growth required, it is essential that we take the right steps.
Load shedding has a devastating effect on the economy, and we saw it in 2008, where the blackouts cost the country an estimated R200 million per day. The costs today are perhaps double that. Yet, what is worse about the present energy crisis is that it could have been entirely avoided.
Indeed, for several years South Africa has been told that excessive electricity price increases were necessary, precisely to avoid the blackouts and to keep the lights burning. What has happened is that we have seen flaws with regard to Eskom's pricing formula, and some misunderstanding with regard to the costs of the replacement of assets and the return on assets for government. Although we have moved closer to inflation-related tariffs, there is a further 8% average increase in electricity prices scheduled for 1 April.
What can we do? That is what the Minister asked. Do we have any proposals? Yes, indeed we have those proposals. The DA will request a full National Energy Regulator of South Africa investigation into the causes of the current electricity supply shortages, including recommendations regarding who should be held accountable.
We will ask once again that Eskom provide us with all the documentation and contracts relating to the Medupi Power Station project. It is clear that infrastructure investment of 10% to GDP cannot be funded solely through the national fiscus.
I agree with the Minister that we need to consider innovative funding models and we spoke about it in the question and answer session. Thank you. [Time expired.] [Applause.]