The following speech was delivered today in the National Assembly by DA Shadow Minister of Finance, David Maynier MP.
The new Minister of Finance, Tito Mboweni, is an island of sanity in a sea of madness in the governing party.
He supports reducing the size of the Cabinet, he supports slashing the public-sector wage bill, and … wait for it … he supports closing down South African Airways.
This must come as a shock to the governing party, which is stuck in the past still fighting the Cold War, structural adjustment and nuclear disarmament, and which fondly reminisces about Aeroflot, Potemkin Villages and the Trabant.
That is probably why the minister delivered his “maiden” medium-term budget policy statement and then promptly disappeared, never to be seen again in Parliament.
We are here to debate the revised fiscal framework for 2018/19.
Which is a disaster because economic growth is down by 0.8%, the budget deficit is up by R21.5 billion, and national debt is up by R46.7 billion in 2018/19.
We now have a staggering national debt of R2.8 trillion, or 55.8% of GDP, which will cost R181.7 billion, or 3.6% of GDP, in debt service costs in 2018/19.
We are, believe it or not, borrowing, and accumulating debt, to pay the salaries of public servants, many of whom are looting, or enabling the looting of the state that employs them.
We think there are at least three “red lights” that make the revised fiscal framework hard to stomach.
First, we are spending too little on infrastructure, which supports economic growth and job creation.
The fact is that spending on economic development, which includes spending on infrastructure, has been revised down by R6.5 billion in 2018/19.
Second, we are spending too much on the public service, which crowds out spending that supports economic growth and job creation.
The fact is that ordinary people who are battling to make ends meet, and who are struggling to put bread on the table, will have to fork out R6.9 billion more on an above-inflation public-sector wage agreement.
Third, we are spending much too much on bailouts of zombie state-owned enterprises, such as South African Airways.
The fact is that ordinary people who are battling to make ends meet, and who are struggling to put bread on the table, will now have to fork out:
- R5.7 billion in bailouts for the Gauteng Freeway Improvement Project (aka “e-tolls”); and
- R9.2 billion in bailouts for zombie state-owned enterprises, including a R5 billion bailout of South African Airways.
The fact is that:
- had we not been forced to agree to an above-inflation public-sector wage agreement, we could have put 43 000 more police on our streets, or 37 000 more nurses on our wards, or 60 000 more teachers in our classrooms; and
- had we not been forced to bailout zombie state-owned enterprises, we could have put 92 000 more police on our streets, or 80 000 more nurses on our wards, or 129 000 more teachers in our classrooms.
We are in deep economic trouble, with ordinary people, who are battling to make ends meet, experiencing an income squeeze, and with 9.75 million people who do not have jobs, or who have given up looking for jobs.
We have the finance minister reaching into our left pockets, helping himself to more tax. We have the energy minister reaching into our right pockets, imposing higher petrol prices. And all this is because we have the governing party looting billions from our back pockets.
Which is why, in the end, we have proposed a Comprehensive Spending Review aimed at reviewing the efficiency of spending, the composition of spending, future spending priorities, with a view to stabilising our public finances in South Africa.