Chairperson, hon member, it is the view of the government that the stimulus package is cushioning the economy against the worst effects of the global economic crisis. The cushioning has been achieved in a number of ways. In the first instance, government took the deliberate stance that we would not cut spending levels despite the decrease in revenues and a likely increase in the budget deficit.
Public sector expenditure and investment levels have been maintained in the face of the serious contraction in private sector investment. By pumping liquidity into the economy in recessionary conditions, government is using what economists refer to as countercyclical measures aimed at maintaining economic activity in the face of international and domestic demand contraction.
The R787 billion Infrastructure Investment Programme is illustrative of the significant increase in capital spending by the broader public sector. This investment programme has two broad effects: Firstly, it has directly created thousands of jobs during the construction period, assuring our businesses in several supplies sectors of the economy. A cursory glance at either the employment data or the gross domestic product, GDP, data shows that construction and civil engineering have been leading performers in the economy. If it was not for these projects, the economy would have contracted faster and more jobs would have been lost.
Secondly, these investments raise the future growth in South Africa through lifting the infrastructure bottlenecks in electricity generation, roads, ports, rail, water and other social sectors. These investments provide a platform for private sector investment that is reliant on reliable, affordable and efficient public infrastructure.
Now, we recognise that government spending can only partially cushion the economy against a decline in demand in its exports. For example, if the global demand for motor vehicles were to fall, as it has now, then, we would export less platinum. While fiscal spending in itself cannot create jobs in other sectors, it is not likely to be able to offset job losses in the platinum mining sector. For this reason government has decided to defer the introduction of the mining royalty tax by a year to help companies in the sector to cope with lower demand. So, we've tried to give a few illustrations of different aspects of - if you like - the fiscal stimulus.
Regarding the second part of the question, clearly, the recession is the critical factor that has led to job losses, as cited by the hon member. The recession, of course, is the expression of the contraction of the economic activity which resulted in job losses. The collapse in global demand was the trigger which has resulted in global commodity prices and the falling of our exports causing retrenchments, particularly in mining and manufacturing. And that, of course, has a knock- on effect in the domestic economy. Nevertheless, some structural features of our economy clearly make us more vulnerable to this spirit of the economic turmoil and government is now working on policy initiatives to address this.
Regarding the third part of the question yes, we believe that the measures we have announced will minimise the rate of job losses. For example, the training layoff scheme that my colleague, the hon Minister of Labour, referred to earlier, will have three positive effects on jobs. Firstly, it is an alternative to retrenchment. So, instead of the company laying off a worker, they can be enrolled on the training layoff. Secondly, it's an opportunity ... [Time expired.]