Thank you, Chairperson. Government exists to deliver services to the people. It collects tax generated from economic activity to do this. After 1994, South Africa enjoyed the dual benefits of being fully integrated into the global economy and the rising tide of global economic growth. Under these conditions, the National Treasury was able to pursue prudent macroeconomic policies that eventually resulted in the budget surplus and relatively low levels of debt that existed before the global economic crisis hit home.
During this time of relative plenty the opportunity arose for government to apply our money to develop effective people-centred departments that would focus on service delivery. But the opportunity was lost. A recurring theme during the current budget debates is government's failure to deliver service and the need for departments to be turned around, for public enterprises to be rescued and for a renewed commitment by public servants to actually service the public. The people have not received value for their money.
As economic activity reverses into recession, so too does the tax revenue stream. Under these conditions, the National Treasury must ensure that government departments understand the need for appropriate austerity budgets that should be reflected in the adjusted estimates of national expenditure in October.
The National Treasury aims to promote economic development. To appease its alliance partners, government has now established an entire Ministry of Economic Development, but without a budget, without resources and with a duplicate mandate. At a time when the national Budget is already in deficit, that is likely to widen ...