Chairperson, Mr President, Deputy President, hon members and comrades, I welcome the opportunity to participate in this important budget debate. This is not my maiden speech, so I'm continuing where I left off in 1999.
I would like to address an important matter that the President has consistently and correctly raised: How to minimise the impact of the current global economic crisis on the most vulnerable.
Umyalezo wethu Sihlalo, obalulekile namhlanje ukuthi lengxaki esikuyo yezomnotho, yinkinga edalwe ngongxowa akungabi-ke abantu bakithi abahluphekayo okufanele kube yibona abakhokhayo bekhokhela inkinga engadalwanga yibona. (Translation of isiZulu paragraph follows.)
[Chairperson, our message which is important regarding the financial crisis that we are in today is that it was created by the rich people. Our poor people must not be the ones who are paying for the problem which was not created by them.]
In order also to appreciate the enormity of the challenges at hand, it is important that we must properly understand the genesis of the current economic crisis. It can be argued that its genesis is two-fold: Firstly, crises are no accidents, but are inherent in the capitalist system itself, as it is by its very nature a system sustained through the exploitation of a global impoverished majority by an increasingly globalised privileged minority; its unsustainable levels of consumption; the enormous ecological damage it inflicts on our environment as a result of its insatiable pursuit of private profit; and the accompanying cycles of overproduction and underconsumption.
But the most immediate genesis of this crisis was the unregulated financial markets in the US and the crass capitalism that sought to extract maximum returns from those who could least afford it, starting in the subprime housing market. The burden and suffering of this has proportionately fallen on the workers and the poor, with millions of job losses across the world. This constitutes incontrovertible proof that contemporary neoliberal approaches to the global economy have failed.
In fact, it strikes me that when I left Parliament, there was an organisation here called the Democratic Party, DP; now I come back and there is an organisation here called the DA. I had thought that the poverty that faces the majority of our people constitutes the biggest threat to our country, but there is another form of poverty that is coming a close second - the poverty of ideas from the hon Trollip and the Chief Whip of the DA. Here is an opportunity provided by the President to say this is what we want, to try and improve the functioning of government as well as to co- ordinate government better. There are absolutely no ideas.
It is interesting, in fact, that most of the ideas that were pushed by the DA are the very same ideas that have led to the current global economic crisis that we face, but they are unable to tell us how to get out of this. [Interjections.] In any case, the less said about that, the better.
Our starting point in dealing with this crisis must be the framework agreement collectively agreed to by Nedlac. This document correctly argues that low-income workers, the unemployed and the vulnerable groups can lose much through even a relatively brief economic shock. It can destabilise their welfare, including their jobs, health and education, and increase inequality and poverty; and that our first concern must be to avoid these outcomes.
We are very proud that South Africa is just about the only country in the world that adopted a collective approach to this crisis. Therefore Parliament has a very crucial role to ensure that indeed this agreement is implemented. Parliament should play its oversight role so that it becomes part of the solution, rather than part of the problem.
The framework agreement also differs from most responses in other parts of the world in that it is anchored around a state-led, multibillion rand investment into infrastructure, including EPWPs. The significance of this strategy is threefold: Firstly, it is not a bailout-driven strategy, necessary as bailouts may be; secondly, it rests on a job-creating strategy, including skills training and retraining; and thirdly, it underlines that state-owned enterprises are vital in our economic development agenda, now and into the future.
These are all key elements of an integrated industrial strategy. The framework agreement also continues to commit to protecting and expanding decent work and maintains that the conditions of the workers and the poor have to be addressed directly, through employment creation programmes, promoting sustainable livelihoods, public investment, and effective social relief and support.
South Africa has now entered its first postapartheid recession. The global economic situation presents for South Africa both constraints and opportunities. It is for this reason that we need both defensive and offensive strategies in response to the crisis. These require a bold vision, not dictated to by the intellectual and policy bankruptcy of the very same forces that brought about this crisis.
The best way to protect the vulnerable is to keep workers' jobs and create new ones. The framework agreement commits us to minimising retrenchments, as well as investment in public infrastructure. We want to assure you, Deputy President, that in so far as the national human resources development strategy is concerned, my department is indeed going to be working closely with your office in order to make sure that this strategy does two things at the same time: contributing to dealing with the immediate crises, but also laying a foundation for building the productive capacity of South Africa's economy.
Government is also committed to accelerating essential social transfers, including increasing access to free basic services, such as water and electricity, to the poor. Government will also, through the framework agreement, progressively and steadily, starting in 2009, extend the Child Support Grant to age 18 - to be phased in, as captured in the agreement.
An even bigger effort is called for on the part of public sector workers to ensure that all social assistance programmes by government are vigorously and timeously delivered. The progressive sections of the organised working class understand clearly what we mean when we say this, that this is a call to revolutionary duty to deepen and defend our democracy.
I am not talking about fly-by-night trade unions that are being formed through the newspapers every day. [Applause.] I am talking about a genuinely revolutionary trade union movement. The framework agreement also emphasises the importance of co-operatives. This is something that has huge potential in our country and we need to make sure that we strengthen this. I would also like to turn our attention to something that we are not talking enough about: This crisis originated in the financial sector and spread to affect the rest of the economy, but we seem to have forgotten now about looking at our own financial sector. What role is it playing in the light of the call by the President to say that working together, we need to tackle this crisis.
Worryingly, we hear that the most vulnerable workers are prematurely taking retrenchment packages; banks are repossessing 6 000 cars and 4 000 houses a month, and auctioning off properties. The National Credit Regulator has received over 80 000 applications for debt counselling, and continues to receive them at a rate of 7 500 per month. Of those, 60% include debts for mortgage bonds from banks averaging R500 000.
This means that R16 billion in mortgages is affected by debt counselling, yet, unfortunately, the banks are obstructing the debt counselling process. This has forced the National Credit Regulator to go to court to seek a declaratory order to restructure these debts, as banks are refusing to co- operate. I think it is important that we call for the banks to engage in the Financial Sector Charter Council to discuss concrete ways to shield consumers from losing their homes and other possessions.
Most consumers, in any case, are in trouble because of credit extended during the wave of reckless lending by banks immediately before the National Credit Act was passed in 2007. [Applause.] The Governor of the Reserve Bank has recently and correctly expressed his frustration at the high interest rates charged by all our banks. The Competition Commission has found that bank charges in South Africa are excessively high, with no competition amongst banks.
It was the private financial institutions in the first place that got us where we are, and therefore we need to closely examine how our own banks are conducting themselves in this period of deep economic crisis. That is why we are saying we should go back to the Financial Sector Charter Council and actually discuss the role, hon Trollip, that these banks should be playing in a collective manner through structures that have been created to deal with this.
Credit bureau blacklisting is proceeding as if we do not appreciate the economic crisis. Should we not be having a national debate on the need for a moratorium on blacklisting of those directly affected by the recession?
Only if all of us collectively and positively respond to this crisis shall we minimise its impact on the workers and the poor in our country. That is why this Budget must be supported, because it is about improving and co- ordinating better government performance under the leadership of our President. There is one plea I would like to make, maybe not to you, hon Mfundisi Dandala, but directly maybe to the gentleman sitting next to you. [Laughter.] Frankly, I think Cope must stop lecturing us on democracy. You have not gone through a single democratic process since your convention. [Applause.] You are sitting here in this Parliament on a list that was concocted at Emperor's Palace behind people's backs. I think that we need to follow what uMama Madikizela-Mandela was saying, that we do need to build people's power in order to have democracy. You can't tell me that an organisation born out of fleeing from democracy in Polokwane has a right to come and tell us about democracy. [Applause.]