Hon Chairperson, Minister, Deputy Minister, members of the House, Cope supports this Budget Vote and commends the Minister and his department for their immense amount of labour in developing the New Growth Path. However, the NGP is a top-down model which needs to be supplemented with a bottom-up component. Growth must be fuelled from the top as well as from the bottom.
Also, any growth path must, of necessity, interrogate the global economy. Through such analysis, the country must determine which niche market it can fully exploit because of the competitive edge it possesses. In our view, such an analysis is missing and, as a result, no niche has been identified. To us this is regrettable.
The NGP aims to create five million jobs over the next 10 years. This will require growth to double from 3,5% at present to 7%. At that future stage, all things being equal, unemployment should have come down by 10%. Will this happen exactly as envisaged? And if it doesn't happen, what's next?
In the past three years, 1,5 million jobs have been lost. As we speak, 4,4 million people are unemployed. Of this, two million people are so-called discouraged workseekers. Meanwhile, government is spending R979,3 billion whilst the revenue is R666,6 billion. This means that we are overspending by about a third, and this is mainly on the consumption side. "Where does this lead to?", is a question that needs to be asked.
At present, our country spends an estimated R134,2 billion on social grants and there are approximately 13,8 million recipients. How sustainable is this and how advisable is it to hand out benefits rather than create jobs? Some of these grants must go with certain conditions of skilling. This will have the effect of liberating people from a dependency syndrome and achieve reinstatement of dignity, as envisaged in the Constitution.
The New Growth Path will see heavy government expenditure directed towards energy, transport, communications, water and housing. This prioritising is correct, except that it omits one fundamental area pivotal to stability, and that is food security. I plead with government to recognise the gravity of leaving out major investment in food security.
Whilst we agree with the mantra of "jobs, jobs, jobs", we, however, are concerned about the silence on who will be the main creator of these jobs: the state or the private sector? That is the question. The Minister must pronounce clearly as to who will be the prime creator of jobs. Everything else should hang on this. What needs to be done is, in the main, clear, with a few exceptions. But how each of the identified new growth objectives is going to be realised must still be fleshed out.
The New Growth Path is premised on skills development, smart government and better co-ordination. That is the new growth path on the dream side. On the nightmare side, we have a mere 7 000 matriculants with passes in mathematics, and tens of thousands of educators who are unqualified or underqualified.
How will the massive skills development take place necessary to support the NGP? Firstly, the basics have to be addressed. The issue of mathematics has to be given centrality. While our budget for education is one of the highest on the continent, by contrast our educational performance is one of the poorest. Minister, there can be no NGP without correcting the mathematics deficiency.
Bangalore in India is dubbed the "Silicon Valley of the East". There 80% of all engineering graduates come from privately funded engineering colleges. Today, these graduates, working mainly in IT, account for 6% of India's GDP. Engineering colleges, both public and private, need to be pursued vigorously. These newly trained engineers will be able to assist in establishing our own niche as a country.
Minister, here is a fresh proposal from Cope: Cope believes that city-based investment corporations should be encouraged. These will be listed on the JSE to enable a large number of citizens of a city to invest in the corporation, which will fund projects in the city related to energy, transport, communications, water, housing, education, food security and tourism. Investors will earn dividends and the city will experience economic growth by making idle money work. This will fuel economic growth in a sustainable manner at the council level. This can be one of the staircases for ordinary people to participate in the main economy.
The SA Micro-Finance Apex Fund indeed has a very important role to play in the development of this country. It is disconcerting to note the qualified audit opinion given to Samaf by the Auditor-General for the 2009-10 financial year. The lax attitude displayed by officials of Samaf towards irregular expenditure and credibility of information provided is a grave concern.
The SA Micro-Finance Apex Fund has the potential to become the Grameen Bank of South Africa. It needs to be professionally managed by people who are head-hunted for their expertise, passion for the cause, and their understanding of the needs of the people they are serving. Although the process of merging is under way, the issues I listed nevertheless remain pertinent.
Another major impediment to the NGP is the cancer of corruption. It is a hammer blow to the poor. This cancer has a heavy cost for the economy. It impedes the NGP. Wisdom holds that what the eye doesn't see, the heart doesn't grieve over. It must not be the case with regard to poverty, which is deepening and worsening because of rampant corruption.
Cope believes that a master organogram should be developed into which the pieces of the economic jigsaw puzzle can be fitted so that a clear, big and coherent picture emerges. Economic knowledge and crucial information remain scattered, and the synergy which should have been created does not exist at present. Resource poverty is therefore made worse with information paucity.
Cope commends the Economic Development department for the dashboard model, which needs to be a flagship for all the departments and needs to be emulated by all the departments.
People are demanding solutions. I have provided some practical alternatives to some of the key challenges. I trust that government will welcome solutions from wherever they may come. I also hope my presentation will be received constructively. I thank you.