NATIONAL PLANNING COMMISSION - I wouldn't waste 67 minutes on that! [Laughter.]
To the hon Shilowa, in the context of the speech: I want to ask him to ask his benchmate, the hon Dandala, to remind him of the words "by your deeds we shall know you". We know who you are, we know where you come from, we know who set up systems in Gauteng. By your deeds we shall know you, not your angry words here today! [Applause.]
The essential message of Wednesday's address is that notwithstanding our best endeavours of the past 15 years, we must now redouble our efforts to ensure better outcomes. Also, that we must understand that the prevailing circumstances are now much tougher than any we have had to confront hitherto. The President confirmed that we are now in recession, and deep as it is, our policies have spared us the worst ravages of the global recession. The contraction of 6,4% of GDP seen in the first quarter is still much lower than that of almost the entire industrialised world.
The global economic downturn has been worse than any forecast a year ago. OECD economies are expected to experience no or declining growth for nearly two years. For many developed economies, the slowdown started in about the second quarter of last year and will continue at least until the third quarter of 2009, perhaps longer.
The International Monetary Funf, IMF, revised down its world growth forecast six times last year, and thrice more in 2009. By April of this year, the fund's forecast for world growth had turned resolutely negative, - 1,3% for the global economy this year. Advanced economies are expected to contract by - 3,8% in 2009, and to experience zero growth next year.
In recent weeks, indicators of activity in the developing and developed world have stabilised, and in some instances even improved, as in China where industrial output for the first quarter was up strongly after a sharp drop in the fourth quarter of last year.
Despite these "green shoots", or "brown shoots", as people call them, some major risks loom perilously large. These include still high levels of indebtedness of households and the rising interest burden of governments, the negative effects of governments having to reduce their debt burdens, and the fact that employment may continue to fall for some time even after economic output recovers.
For South Africa, the growth forecast remains subject to the vagaries of the world economy and our own domestic risks. So, while inflation has made some progress in coming down from the highs of last year, and this has enabled a decline in interest rates, oil prices and nominal wage pressures present further risks.
The recently released results for the first quarter of 2009 were considerably worse than expected, but we do need to recognise that they are now water under the bridge, and we should see somewhat better figures in the latter part of this year. Sustained growth in public infrastructure, government consumption, better commodity prices, and an improved interest rate cycle, will tend to support the economy in the months ahead. A stronger recovery in the rest of the world would feed through into improvements in our domestic view as well.
But difficult as these issues are to deal with, they do not come as a surprise. In the Budget Speech tabled here on 11 February we said, and I quote:
The storm that we spoke of last year has broken, and is more severe than anyone has anticipated ... Our response to the present crisis is to face the challenges before us boldly, and as a nation united. Our duty is to construct a South African approach, founded on our own vision for a shared future. This approach can only be built on an engagement between social partners, not just at the level of national dialogue, but on factory floors and in community halls. Our resolve will be tested to the limits. We have to put self-interest aside. We have to face each other honestly and openly. Our task is to see through the challenges of economic vulnerability today to the construction of the new South Africa that is our passion and our pride. We can do this all the better as a united people.
That is what we said on 11 February. So we must forge this South African response, and the state of the nation address speaks very directly to this. A South African response must take account of the nature of the domestic impact of the global recession, must take account of our domestic institutional arrangements and must proffer distinctly South African solutions. The state of the nation address dealt with this in large measure when the President said, and I quote:
We take as our starting point the framework for South Africa's response to the international economic crisis, concluded by government, labour and business in February this year. We must act now to minimise the impact of this downturn on those most vulnerable. We have begun to act to reduce job losses. There is an in-principle agreement between government and the social partners on the introduction of a training layoff. Workers who would ordinarily be facing retrenchment due to economic difficulty would be kept in employment and re-skilled for a period of time.
Discussion on the practical detail is continuing between the social partners and the institutions that would be affected by such an initiative, including the Sector Education and Training Authorities, Setas.
So, there are the beginnings of firm plans and proposals on the table. These must be fully costed and tested, and widespread support generated to ensure that they are actually broadly owned by South Africans.
But, in addition, we are now committed to a significant improvement in outcomes by a focus on improved planning and performance management to ensure better outcomes. There are at least five distinct reasons for this.
Firstly, in recognising that we have a great, modern Constitution, we must acknowledge that the powers and functions in respect of service provision are highly dispersed across the three spheres of government. If we desire better outcomes, then we must improve on the co-ordination of effort.
Secondly, we will have to institutionalise the linkages between the three spheres of government to ensure appropriate initiation of programmes, and improve on the mechanisms for equalisation so that we can counteract the mass exodus from rural areas.
Thirdly, we must all agree that there is no market for many of the public services we are speaking of - issues such as employment, distribution, infrastructure, environment and human skills development demand a better co- ordinated push, because often the momentum is towards fragmentation.
Fourthly, we have to concentrate on building a more competent public administration which is both more focused and more accountable.
Fifthly, we have to deal with resources today to meet tomorrow's needs.
This will be the focus of our work over the next period. This will not be done in secret. I hope, Mr President, to place a Green Paper before Parliament in the course of the next few weeks to engage hon members on where and how planning would fit into the government system, what role we hope to play, what linkages are required and what thematic areas would be covered by the planning function. I repeat that we will forge a distinctly South African approach. Right now, we can recite chapter and verse on the operations and successes of planning commissions in countries as diverse as South Korea, India, Turkey and Brazil. To the hon Bhoola, who didn't stay for this discussion here today: The CV is not going to work, Mr President. But, we can recite the detail. But in acknowledging their efforts, we want to avoid the risk of merely attempting to supplant their experiences - we will forge a distinct approach tailored to the needs of our own situation. [Applause.]
In order to succeed, Parliament will have to be more involved in areas of planning and oversight. There must be a shift in emphasis from a cursory discussion on the allocation of resources to an intensive discourse on the outcomes. As we traverse this path, the luxury of talking past each other will have to be a speck in our collective history.
Let me admit here, Mr President, that I have been assigned many tasks that are easier than the challenge to develop a planning framework. Let me share briefly some of what the planning process will entail.
Firstly, the longer-term vision for at least a 15-year horizon must be developed as a statement that is clear, widely supported and eminently attainable. Secondly, we will then have to develop a series of shorter-term plans for 10 and 5 year periods that are more detailed, better costed and which contain more measurable development targets. Thirdly, there is the co- ordination of the development of the Medium-Term Strategic Framework and its unpacking into detailed plans for each of the strategic priority areas. Cabinet, advised by the Minister of Finance, would then align the Medium- Term Expenditure Framework with the strategic priorities of government.
Fourthly, though not quite in this sequence, we will have to ensure that the planning frames of the two other spheres of government are synchronised. Fifthly, we will continually undertake research to ensure that our choices are informed by evidence and good research on long-term plans and trends. While in many areas or sectors we have good quality long- term plans, we need to do more to encourage long-term planning throughout government and the state-owned enterprises.
Sixthly, we recognise that this approach will indelibly alter the way in which government operates, enhancing the sense of mutual accountability of Ministers, of public servants, of departments and of spheres of government to each other. Finally, whilst doing all of this, we must try to remain sane and be tolerated.
The development of good and coherent plans is only half the work. We need concerted action to avoid or prevent fragmentation in government. And so there is a co-ordination function that is essential to all of this, driving this plan through all the spheres and tentacles of government and ensuring that we are at least singing off the same hymn sheet.
The good news is that all of this will only work if Parliament is differently involved - not merely waving support to a passing 15-year vision, but actively participating in debating the options and overseeing its implementation. We will have to break through the tunnels down which we peer. The objective is what has loosely been termed "joined-up government". For us, it is about the massive construction of the developmental state that places the emphasis on those outcomes that are measured in the regular and significant improvements in the quality of life of the nation's poorest.
This is not a fantasy. This is the reality. This is an imperative that we draw directly from our Constitution.
I repeat that this is the more difficult path to pursue. It would be far easier to chirp from the sidelines, because that has defined the modus of too many for too long. Let me highlight a few examples from the debate of the past few days. The President, in his address, spoke of the challenge of education when he said: To improve the learning environment, we have to ensure during the term of this government, that all public schools will have water, sanitation, electricity, as well as critical facilities such as libraries, sufficient classrooms, laboratories and ICT infrastructure. Yet the hon Dandala missed this. He was waiting for a few simple words: "schools under trees". And I want to invite the hon Shilowa to go with me to Limpopo province, where I can show him this in action. [Applause.]
In respect of the health care issues, again, I want to invite the hon Kalyan not to count lines, but substance, and I think the hon Motsoaledi dealt with this in some detail.
The issue of jobs, of course, is uppermost on the list of ANC priorities. At the same time, there is a realism that explains that whilst the objective remains the creation of the maximum number of decent jobs, in order to get there and to ensure that there is food on the table of more households, there will have to be a short-term emphasis on sustainable livelihoods.
On this score, the President said:
As part of Phase 2 of the Expanded Public Works Programme, the Community Works Programme will be fast-tracked. It offers a minimum level of regular work to those who need it, while improving on the quality of life in communities. The economic downturn will affect the pace at which our country is able to address the social and economic challenges it faces. But it will not alter the direction of our development. The policy priorities that we have identified, and the plans that we placed before the electorate, remain at the core of the programme of this government.
He also said:
Another important element of our drive to create job opportunities is the Expanded Public Works Programme. The initial target of one million jobs has been achieved. The second phase of the programme aims to create about four million job opportunities by 2014. Between now and December 2009, we plan to create about 500 000 job opportunities.
The intention is clear. These are not permanent jobs. They are job opportunities and they serve to provide durable infrastructure or essential services, sustainable livelihoods and training opportunities. There is no promise of immediate industrial or service-sector jobs. This is the reality. You can howl. This is the reality - despite what both self-styled analysts the hon Trollip and now the hon Narend Singh raised here.
Public Works job opportunities are not the first prize, but they are important in dealing with the ravages of poverty. Virtually every country across the globe is instituting emergency measures such as this. And I want to plead with this august House, Mr President, not to pooh-pooh this initiative. On the one hand, it pays more than what most farmworkers earn, but, more importantly, it stands between poor families and absolute hunger. [Applause.]
The debate on economic policy will remain topical way beyond our lifetimes. It could not have been the intention of the state of the nation address this week to attempt to resolve it. I must admit to having had to check yesterday why the hon Dr Nzimande was sounding so distinguished. When I looked up I even thought that he was looking more distinguished than usual. It was only then that I realised that Dr Nzimande's arguments were emanating from the mouth of the hon Nkosi Buthelezi, who even invoked the name of his good friend Margaret Thatcher in support of his arguments. [Laughter.] I'm sure, Mr President, that stranger episodes may actually have occurred somewhere. Those, at least, would not be frequent sightings. [Laughter.]
So, I conclude that the hon Shenge set out from Mahlabathini and the hon Nzimande from Edendale. They met somewhere at Tugela Ferry; they exchanged notes; they reached an accord; and that's what we now have in the economic debate.
It is an important issue because I do hope that this Parliament will afford itself adequate time to have the economic debate. There are certain inescapable realities, among them is the fact that we have not been as badly affected as many other countries. The President reminded us of this and pointed to a way forward in saying,
While South Africa has not been affected to the extent that a number of other countries have, its effects are now being clearly seen in our economy. We have entered a recession. It is more important now than ever that we work in partnership on a common programme to respond to this crisis.
That partnership cuts across all that divides us - race, class, gender, geography and political party lines. The theme was raised on 11 February when we said, "Our resolve will be tested to its limits. We have to put self-interest aside. We have to face each other honestly and openly." This spirit is even more necessary now.
Finally, I want to admit that I marvel at the views of the hon Ryan Coetzee, if he could see. This morning, again, he pleaded for a big-type safety net for a wage subsidy for export processing zones, with substantially lower rates of taxes. He missed out this morning on the call for a general reduction in the corporate rate of 2%. All this and he arrives at the lower deficit that he chooses to lecture this government about. Can anybody in the House spare the gentleman a calculator? [Laughter.]
Now, I want to take the unusual step of expressing my appreciation to the 46 members of the DA caucus who spared us the insufferable fate of having this rabid Reaganite idealogue wear the mantle of Leader of the Opposition. [Laughter.] Thank you very much. [Applause.]