Honourable members of the Limpopo Legislature Invited Guests
Fellow citizens of Limpopo
It is my Honour to present to this honourable house the 2016/17 Budget of Premier Mathabatha’s Administration
Honourable Speaker, despite what looks like a gloomy picture for our economic prospects as a country. I would like to quote and reiterate the simple but very relevant message the Minister of Finance said when tabling his National budget, that, as a country and a people “we are strong enough and resilient enough and creative enough to manage and overcome our economic challenges” close quote.
The Ministers optimism, honourable members, is informed by the past experience of our country and its people who made the miracle that became the 1994 democratic breakthrough possible despite the predictions of chaos and our country drowning in civil war.
That never happened due to what the minister states….our strength resilience and creativity
Many refer to this as a miracle but fail to recall that this miracle was actually the bold and foresighted leadership provided by the leadership of the ANC, Presidents OR Tambo and Mandela and their collectives who painstakingly mobilised our society and the international community to arrive at a consensus against the crime of apartheid.
This was due to the culmination of pressures resulting from the 4 pillars of the struggle, and the regime was brought to the table to discuss how to move our country forward without drowning it in chaos and anarchy.
This method of solving problems has subsequently been exported throughout the world, which is that we solve our problems through discussion, persuasion and the search for consensus moving forward. It is a deliberate and tiresome exercise but very effective in that the outcome is owned by everyone and not imposed
It is for this reason that most if not all South Africans own the 1994 democratic breakthrough.
Considering the challenges facing us as a country and a province, us as South Africans are once more called upon to be resourceful, resilient and as a collective find solutions to these serious challenges facing us.
Honourable Speaker and members of this august House, since we tabled the MTBPS in October 2015, the global economic crisis has deepened exposing the depth of our countries external vulnerabilities and internal constraints that limit our potential to grow our economy.
We need to narrow the budget deficit, and that burden must be borne by all of us in order to protect the health of the public fiscus. Reducing our budget deficit is fundamental in getting our economy back on track, it will be the clearest statement to our citizens that we are capable of managing our public purse prudently.
Inequality which is rising throughout the world, more so in our country, raises considerably longer term challenges.
With commodity prices at an all-time low after peaking in 2011, with China’s economy having slowed down considerably, economists are of the opinion that these commodity prices are not going to recover in the short to medium term.
The impact of these low commodity prices has had an impact on South Africa’s GDP, meaning that although there has been an increase in our population the actual per capita income has declined.
The consequence has been our economy has grown slower which in turn means that our revenue has been less as a country, meaning we must reprioritise our budgets to ensure that spending on our core social and economic programs remain resilient.
Talk about a double whammer Honourable Speaker, not only are our revenues declining but we are currently faced with the worst drought in the past 20 years. This will most certainly impact on food prices due to the decline in agricultural output as well as threaten a spike in the inflation. We must be aware of the risk that this poses on the poorest in our society which may result in increased hunger and poverty.
PULA
Honourable Speaker and honourable members, on the subject of our current account deficit, this has remained wide due to the slow growth meaning we have had to rely on foreign savings to fund our domestic investments. Of late our 10year government bonds have risen by 2% meaning that our debt service costs have increased substantially, the consequence is that over the next three years our cost to service debt will be R 15.3 billion.
We do predict that our GDP growth will recover over the medium term however this requires action on our part as the state to restore confidence in our ability to maintain fiscal sustainability.
Should this not happen Honourable members, we run the danger of finding ourselves in the same predicament as Brazil, in an economic recession, a situation we should definitely avoid with all our power.
Speaker and Honourable Members, this budget is designed to do exactly that, avoid any risk of slipping into a recession. It will mean that in the short term there will be some discomfort however the alternative is far worse.
We have no option but to stabilise our fiscal position and restore momentum for strong economic growth. Our public debt has risen substantially, to R 2 trillion, becoming fastest growing item in our expenditure. This debt just to remind us all was made in an attempt to stimulate our economy in late 2008 to 10. In fact honourable members, to pay this debt back for every rand that SARS collects 12 cents goes to paying debt.
Due to our current situation we anticipate that National Treasury will be producing a number of circulars to curb costs, one we anticipate is that there will be no appointments of non-core staff except for the likes of teachers, nurses and doctors.
In due course in consultation with National Treasury and the Provinces Executive Committee, we will issue strong cost containment instructions for the new financial year.
It is against this background Honourable Speakers and members that we call for a new consensus in our country and province, this time against wastage and corruption, which in our view Speaker is equal to holding our people in contempt, a serious form of disrespect to our communities, this consensus must include that our people will protect public property and public servants, police, emergency services workers and nurses and teachers in particular
We need a civil servant who will regard his or her serving the people as a calling and will treat our citizenry and public property with utmost respect
This being the decade of the cadre also calls for a new type of citizen, a citizen who will protect public property and as you pointed out Honourable Premier in SOPA, a citizen or community that will protect the rights of children and youth to acquire knowledge and that no matter how aggrieved our people or community are, schooling must not be disrupted nor should clinics or libraries be torched
President Zuma, Madame Speaker, in the January 8 statement aptly articulates this sentiment and I quote “it is imperative that the levels of cooperation between government and business be improved. It is equally important that the levels of cooperation and partnership between labour government, civil society and private sector is improved”
Referring to the economic difficulties the country is facing the President said that addressing the issue of low growth, the movement has identified a two pronged strategy to chart the way forward, which are, one, structural reforms to create and maintain a higher growth path and, two, reducing South Africa’s vulnerability by stabilising our debt….no more borrowing
The President called on all of us to ensure proper fiscal management and prudent utilisation of public money. It is important the president said that “we sustain social and economic progress by focussing on the identified developmental priorities.”
On corruption the President said ‘it is the responsibility of all of us to fight corruption, to expose corrupt people and to report them to the law-enforcement agencies. Silence is complicity and therefore we must act to eradicate this malaise’. In our province we call on all our people to call the Premiers anti-corruption hotline to report any act of corruption.
As far as our processes go Honourable Speaker to prevent corruption, we will be making our Supply Chain Process to be more digital to prevent temptation and the syphoning off of funds. This will be elaborated in our Treasury budget debate. Essentially we must ensure that all these procurement process are done according to the prescripts of the laws and regulations
We are convinced that with the amount of budget allocated to goods and services in this administration we must impact on the economy of this province by ensuring we purchase local and from SMME’s and cooperatives.
Our economy, Madam Speaker, is mainly driven by the Mining Sector, Community services and Trade sector which contributed 27, 24 and 16 percent respectively in 2014. The mining sector’s contribution to the local economy has been growing over the years. Mining sector only contributed 15 percent in 1996, and has grown by almost 10 percent since then. This has therefore put mining at a strategic position in the local economy as it is one of the major employers in the province. Provincial government has plans of utilising this competitive advantage to grow the manufacturing sector through beneficiation and by so doing fuelling economic growth and job creation.
The provincial economic summit that the Premier announced during the SOPA, will be of significance in this regard. It will hopefully provide us with pointers on the way forward and hopefully develop a consensus on how we move the economy of the province forward and address our triple challenge of inequality, unemployment and low economic growth, while at the same time implementing the suggestion made by the President that we should and must work closer with sectors of our society.
Honourable Speaker, our developmental indicators continue to show improvements, with less people living below the poverty line and more people becoming literate.
The significant growth in the number of people in the Province with matric & certificate/diploma is 13.7% and with matric & bachelors 15% and matric & postgraduate degrees 40.5%, this poses a challenge to the province, for both the public sector and private sector, as this will mean we have to create employment opportunities for these well-educated individuals
We also need to, Honourable Speaker, assist those amongst us with these types of skills to become entrepreneurs and job creators and they should also be encouraged as the Premier said to form cooperatives especially the youth. We also need to ensure that there is access to funding that is more user friendly and accessible
Madam Speaker, the provincial government has made significant strides in providing basic services to its citizens, as at 2014 about 89.5 percent of households in the province have electricity connections, while about 91.9 percent of the households occupy formal dwellings. More still needs to be done as there are only 21.8 percent of households that have formal refuse removal and only 47 percent of households that have hygienic toilets.
The share of Limpopo households with access to piped water is about 62 percent.
Full speech [PDF]
