House Chairperson, we wish to thank Minister Gordhan for having heard us in respect of the perverted nature of the Reserve Bank. His draft Bill is a small step in the wrong direction, but, at least, for the right reasons. The Reserve Bank remains a fiefdom, acting in the interest of a few. The strength of the rand, in spite of both the Minister of Finance and the Minister of Trade and Industry agreeing on the rand having been devalued, proves this.
We will engage the Minister more on this issue as the Bill gets discussed. I now wish to point out that the scope of these discussions must be broadened to consider a reform of the monetary system, failing which we will not even have begun to deal with the root causes of inequality and poverty.
I suspect that in Minister Gordhan's chest, a socialist heart beats hard, as it does in mine. But I am also a libertarian. We must grow out of the nineteenth century model and define a 21st century path towards the emancipation of the socially oppressed. This path is not about creating a proletariat state, but rather a state of bourgeois citizens with decent and dignifying sources of employment - a very large bell-curved middle class with small fringes of poverty and extreme wealth at its ends.
Yet the Minister told me in the committee that the priority is to take care of the poor and not the middle class. Where is the poor going to grow into, if not into the middle class? Looking at where we are currently and where we are moving towards, one almost suspects that, in adherence to a nineteenth century strategy, the conditions for a popular uprising are progressively being created.
We have an unemployment rate of more than 25%, which will grow dramatically after this opium-like soccer extravaganza is finished. It has dislocated so much of our scarce resources with little or no compounding long-term financial benefits. The nation's debt is being raised from R526 billion to R1,3 trillion by 2013 in the hope of stabilising it by 2015 on a deficit of revenue over expenses limited to 4% of gross domestic product, GDP. If it grows at the same rate, by 2015 the debt will rise to R1,7 trillion, with the possible annual debt servicing cost nearing the budget of education. These figures do not include the explosive and skyrocketing municipal debt. The only way of servicing this stabilised budget with a deficit of 4% of GDP or starting to repay the debt is through raising taxes, cutting expenditure, and hyperinflation, unless we believe in a miraculous vast broadening of the tax base flowing from a not foreseeable period of immediate economic prosperity.
We are heading for higher taxes and inflation, no matter how strongly one denies it. Eskom has told us that it still requires an additional R200 billion in funding, and has no plan to meet its costs beyond 2017. There was no reason for us to borrow from the World Bank for the present financing, but it was expedient for the fiscus to keep this as a merely contingent liability. The next financing will undoubtedly be done through taxes. Eskom will also require additional inflationary tariff increases over and above the absurdly high one it has just received.
Minister, there are about five million taxpayers - this includes all the members of this House - who support a population of 50 million, most of whom receive one or more items of social assistance.
Proportionally, we are one of the largest welfare states on the planet. According to a recent KPMG report, we are subjected to some of the highest personal income and corporate taxes in the developed and semideveloped world. Even Sweden has a corporate tax lower than ours to balance its high personal income tax. Being at the top of both such tax categories is unheard of.
Rightly or wrongly, the five million taxpayers have to use the after-tax money on private security, private schools, private retirement funds and private hospitals. Their tax money doesn't provide them with satisfactory policing, education, social security and health care. We parliamentarians have even passed a law to make sure that we do not go to public health facilities for which we will not need medical insurance.
The present fiscal policies will push vast segments of the middle class into poverty or conditions in which they will not have a significant disposable income. [Time expired.]