Chairperson, colleagues, the finance Minister and his team must be commended for doing an admirable job in a very difficult situation. A R70 million hole in the budget is a tough thing to fill. Unfortunately, it is not yet clear how we will be able to fill it or even if we will be able to fill it
The most alarming calculation in this Budget is that government debt, as a percentage of GDP, is now 30%, but it will rise to 40% in 2012. It hasn't been at these levels since the apartheid administration managed us into a fiscal hole.
Of course, this figure is partially a reflection of the Minister's stated approach to respond to a recession by maintaining the level of state expenditure - a response that the DA has supported in general. I say "in general" because we have serious problems with the fact that a large chunk of this expenditure will be ploughed into propping up poorly managed and often dysfunctional parastatals that should have been privatised long ago. The amounts concerned are staggering. In 2008-09, R200 billion worth of financial aid was provided to state-owned enterprises. Notwithstanding the dubious destinations of much of this government expenditure, we support the maintenance of spending levels during a recession as an important countercyclical strategy. The question is: What happens to the fiscal balance once the recovery kicks in? The answer is that the finance Minister and the Ministry will have to man up to the fact that expenditure growth needs to be seriously constrained from next year.
In this regard, the DA supports the finance committee's reports in general, but cannot support the theoretical proposals in that they are clearly unaffordable. The programming Whip outlined some of them a few moments ago. In this regard, my one regret is that the fine proposals of the chair of the Finance committee were not included in the committee report. I hope he's not nervous of putting forward his views in the sister committee of Appropriations, chaired by our young lion from the North West. This is because the budget deficit has doubled from February's estimates to a massive 7,6% of GDP. This is completely out of line with other emerging markets and is similar to deficit levels in rich countries that have many more resources to cope with higher debt levels. Yes, France has a budget deficit of 8,2%, Japan has 7,7% and the euro area as a whole has 6,5%. But look at Brazil, Poland and Argentina. Brazil's deficit is at 3,2%, Poland's is at 2,3% and Argentina's is at a humble 1%.
We are completely out of line with economies of a similar size and structure as ours. We have neither the natural resources nor the scale to easily work ourselves out of this debt situation, as developed economies do. More alarmingly, we are now the only economy in Africa that is shrinking. Every single other African economy is growing, but ours is shrinking by 1,9% a year. We are now a drag on the continent.
Of course, growth will return to the South African economy in time. With good management and a moderation of expenditure plans, Treasury will be able to see us back onto the path of fiscal sustainability. In the title to the first chapter of the policy statement, the Minister calls this objective "Supporting the Recovery".
That's all very well. But what kind of growth path will we return to? This is a million rand question for this administration. It's a question implied in the second part of that title, which is "Transforming the Economy". This is a question that the Treasury appears to have begun thinking about answering in this policy statement. This is because it is obvious to all that the jobs crisis remains our most pressing priority in South Africa. The old ideas we have rolled out for 15 years are not going to work. We need fresh thinking on creating what the statement calls "a massive expansion of employment".
Firstly, we need thinking like my party's proposals on opportunity vouchers to give young South Africans access to work and skills development. Secondly, we need wage subsidies to lower the cost of employment; and thirdly, we need tax incentives to stimulate job creation.
I am pleased to report that each of these proposals is in this document that we are debating today. If the hon members here haven't read it yet, I encourage them to read it. There are three proactive responses to creating jobs that go far beyond the spin-heavy job opportunities of the EPWP, and the DA fully endorses their development into legislation.
These three policy ideas didn't receive much press coverage, but they were bravely included in the statement by the Treasury that appears to have finally had enough of this country being crippled by an inability to employ our people.
Another brave inclusion was the extraordinary admission on page 23 of the statement - under the section "Global Lessons for Growth" that countries such as Australia and Korea, where prices and wages have adjusted more quickly to weak demand and rising unemployment, have been able to demonstrate a competitive edge.
I enquired about the policy implications of this statement in a question for oral reply that the Minister was meant to answer in this House today, but it was struck from the Question Paper under mysterious circumstances. Chair, you can be assured, as agreed between you and me earlier today, that I will ask the question again.
This is because the answer to this question, which is the reform of our real economy on the one hand, and on the other hand, our labour market to remove rigidities, is the key to a true transformation of our economy.
If the Treasury and other mainline economic Ministries like Trade and Industry, Economic Development, and the Ministry responsible for the planning commission can sort out their differences and appoint someone from among their ranks to drive this reform, then we will finally begin tackling unemployment in our country. I thank you. [Applause.]
UMntwana M M M ZULU: Sihlalo waleNdlu baba Mabhoko, iPhini likaSihlalo, mhlonishwa Ngqongqoshe nePhini lakho uMadlokovu, nabanye oNgqongqoshe abakhona namalunga ahloniphekile aleNdlu. Madlokovu, lesi sikhathi sesabiwomali sokuphela konyaka, yisikhathi esibaluleke kakhulu sokuthi kubhekelelwe thina esihlala emakhaya. Ngikusho lokhu nje ngoba mina ngihlala emakhaya, ezilalini- ezishiwo abaseKoloni. KwaNongoma yilapho ukuhlupheka kudlange kakhulu khona ngakho-ke kufanele nisibhekele impela ngoba laphaya eKhayelitsha babebhekwe kangconywana khona nakuba babebandlululwa nabo kodwa babengafani nathi thina esisemakhaya.
Sikholwa ukuthi ngeke siyithole imisebenzi thina ngoba akukho mafemu angakhiwa le ngakithi, ngakho-ke kufuneka nibheke emkhakheni wezolimo kube yiwona enifaka imali kakhulu kuwo ukuze abantu bakithi bazoba nokudla badle basuthe, bezilimela le emakhaya. Ayikho enye indlela esingabuye senze ngayo ngoba ayikho imisebenzi emakhaya ngoba awekho amafemu.
Ifemu yethu enkulu esiye sithembele kuyo uhulumeni uqobo oyaye asiqashe sibe ngomabhalane emahhovisini akhe. Ngizomshayela ihlombe uhulumeni wakho uma sengibone kahle ukuthi izidingo zabantu ziyafezeka ngokuthi kusetshenzwe ngokuhlanganyela. Kodwa-ke uhulumeni udinga ukulekelelwa ngazo zonke izindlela - ngokuthi uma esebheda, ashaywe kahle agxekwe ngendlela ekahle eyakhayo. Ngoba uma ezogxekwa ngokungakhi, mina njengendoda yakwaZulu angigxeki umuntu kodwa ngingenakho engikubekayo okungcono okungenziwa. Ngiyahambisana nalesi sabiwomali esikhona, kodwa ngicela ukuthi nibhekelele izindawo zasemakhaya. Indaba yamapulazi impela angiyizwa kahle, ngoba asinawo amapulazi ezindaweni zasemakhaya kodwa sinezindawo zokulima. Uma nithi nizobheka amapulazi thina esingebona abalimi nizosenzenjani? Yizinto ezifana nalezo mhlonishwa Ngqongqoshe ekufanele nizibhekelele kakhulu kubantu bakithi. Ngiyabonga. [Ihlombe.] (Translation of isiZulu speech follows.)
[Prince M M M ZULU: Chairperson of this House hon Mabhoko, Deputy Chairperson, hon Minister and your deputy hon Madlokovu, other Ministers present here as well as hon members of this House. Madlokovu, this year-end budget allocation is very important because it comes at a time when we, the people, who are living in the rural areas are supposed to be catered for. I am saying this because I live in the rural areas - ezilalini, as they are referred to by the people of the Eastern Cape. Poverty is rife in KwaNongoma; therefore you need to really look out for us because in Khayelitsha they are better catered for. Although they were also discriminated against, their situation was not the same as that for us who are living in the rural areas.
We think that we will never find employment as factories cannot be built in our area. You therefore need to look into the agricultural sector and you need to allocate more funds to it so that our people can have food to curb their hunger, through ploughing out there in the most remote areas. We have no other alternatives because there are no employment opportunities in the rural areas because there are no factories.
The biggest factory on which we pin our hopes is the government itself, as it appoints us as clerks in its offices. I will applaud your government once I have seen that the needs of the people are being met through working together. However, the government needs to be supported by all means - but it also needs to be called to order and criticised constructively if it is going astray. Because if it is destroyed, I as a man from KwaZulu-Natal will not just criticise someone without coming up with something better. I support this Budget allocation, but I am requesting you to cater for the rural areas. I really do not understand the issue regarding farms, because we do not have farms in the rural areas but ploughing fields. And if you say you are going to consider the farms, what are you going to do about us who are not farmers? It is such issues, hon Minister, that you must look at when it comes to our people. Thank you. [Applause.]]