Thank you, programme Director,
Thanks to the colleagues, chairpersons of finance committees who are present here
The FFC Chairperson, Dr Mbava and your colleagues
PBO Director, Professor Junkies and other officials from the PBO
The support teams from Parliament
I will complement what the colleagues have said already that budget is an instrument for translating policies and plans into public goods and service delivery. We have got evidence as to what budget has done over the past 30 years and the processes that it has gone through.
I think in 1994 the South African budget was just over R200 billion, if I’m not mistaken, but now it has gone beyond R1 trillion. So, that must be acknowledged and the impact that the budget has made over the past 30 years, which I can’t go through here. If you go into the census 22 report, it outlines the impact of the budget over the past 30 years on water and electricity.
In the village where I come from around Giyani, there was no electricity in 1994, and we got electricity in 1996 and all the range of other services that were not there before. I couldn’t go to the University. I was admitted to the University of the North in 1987, but I couldn’t get there because my parents couldn’t even afford a registration fee even though I was admitted and had the letter. But today, a child of a farmer can access the University of Cape Town and Wits University which was unheard of before because of NSFAS and whole range of things that I can talk about as the impact that this budget had, more especially on the poor.
Today, children do not go hungry at school, they don’t bunk classes because they are hungry. The government is feeding them, but I’m sure whether it is two meals a day or so. We can go on and on about the positive side of the budget. Be that as it may, we find ourselves today having a fiscal cliff that we are facing. We, as the Standing Committee on Finance, are responsible for the fiscal framework as colleagues have outlined the broader process.
After tabling of the budget, the Speaker refers the budget to our committee to deal with the fiscal framework. After adopting the fiscal framework report, the next process is the Standing Committee on Appropriation, led by Mr Maimane. They deal with appropriation, the actual allocation of budget until Parliament passes what we call the Division of Revenue Act and then from there it goes to the NCOP.
Then there is a stage where we deal with the auditing and the assessment and that is where the Standing Committee on Public Accounts comes in because as Parliament, we have got an oversight role. There is an ecosystem amongst the committees that are here and then the same applies in the NCOP. With this fiscal cliff that we are facing, we also have geopolitical instability. Geopolitics have got serious challenges, and you can see for yourself.
Every day somebody wakes up and issues an Executive Order because of the powers that are bestowed on him, and you can’t ignore him because he is leading the biggest economy in the world. Whatever decision he takes has an impact throughout the world and that is geopolitics. So, we must deal with that, and the global economy has not yet fully recovered from the last time we had a financial crisis.
We have got a lot of problems since then and as South Africa and other countries were badly affected by Covid-19, which ended up in the retrenchment of more than 2 million workers and we had to bring in the Relief of Social Distress grant to cushion those who were badly affected by the Covid-19. We have a problem of climate change which we have got no control over. KZN is one of the most affected by climate change and recently provinces which are in the Eastern part of the country have been seriously affected by floods. This morning when I was coming down from OR Tambo Airport coming here, I was reading a newspaper of bridges that have been badly damaged in Johannesburg because of the floods.
With all these challenges that we are facing, what do we do because we have to provide a solution, and we are not here to pre-empt what the Minister is going to table on Wednesday. He is going g to table the budget, but we are the decision makers. Budget decision is taken by Parliament because it must be an Act of Parliament at the end of the day. We know what the challenges are as colleagues have spoken about the debt challenge and many other challenges, but some of the things that we must look at are to curb the illicit financial flow that we are facing and what do we do.
We must build the SARS capacity because SARS has identified that there is almost R800 billion uncollected tax revenue due to unpaid debts, overdue returns and fiscal leakages. We must enhance the revenue collection requirement to bolster SARS’ financial and institutional capacity. SARS has made a case with Parliament saying that if we allocate more resources to them, they would be able to collect more revenue and they have presented imperial evidence in that regard. What do we have to do specifically is to strengthen enforcement and compliance, modernize the tax infrastructure.
There is a lot of money which is not taxed, especially because of the advent of technology and we have been raising this issue with SARS, which said that they have got limitations because there are certain decisions that must be taken at the OECD level. However, as a sovereign state we must look at this issue of the digital economy, which is making a lot of money today, because that is the way to go.
For me to come here, I had to request Uber at the airport and the question is does Uber pay any license like other taxi operators on our roads. The last time when I was a Minister of transport there was an issue about Uber and the government was initiating what we call an e-hailing legislation to regulate those who operate in that space of digitalization in the transportation space. There are so many things we can talk about in the digital space that are not taxed and if we must expand the workforce of SARS and modernize their infrastructure, they would be able to collect more money.
We must promote inclusive economic growth, create jobs, reduce poverty, address high cost of living, build a capable, ethical and developmental state. We can't have an economy that exclude the majority. Three weeks ago, we held a meeting with the banking sector which is the biggest sector in the South African economy.
The financial sector as a whole controls R21 trillion worth of assets and we raised an issue with them that why are they not investing in the economy with the money that they have because if they can be able to release the money that they have as insurance, pension fund administrators and banks to partner with government we can go a long way in creating jobs for the South African people.
We must deal with the issue of lowering the debt, which is quite very high, and colleagues have spoken to that. Debt is one of the fastest growing budget items and we should not allow a situation where debt grows bigger than education and health because you are going to be in trouble as a country. As it stands, debt is going to surpass social development, health and education and we have always raised an issue with National Treasury that they must come with debt management strategy because we don't want a situation where debt would become unmanageable, and colleagues have spoken to that.
We need to improve public finance management to ensure that there is efficient and effective use of public funds and maximize the impact of government spending and promote industrial development.
Towards the conclusion, the issue of what we call gender responsive budgeting is something that has not been fully attended to. We can't have budget that doesn't respond to gender policies. Our budget should translate gender policies into concrete, trackable and pragmatic budget because black women suffered triple oppression more than all of us.
To reverse that, we have to take deliberate policy actions and allocate resources to address the triple oppression that women of South Africa suffered, and this is quite important for us. These are some of the issues that we are going to raise very sharply with Treasury and other departments that appear before us as the finance committee.
Thanks very much programme director.
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