The ANC welcomes the first budget of the fifth democratic administration. The budget strikes a chord with the priorities set out in the ANC’s 2014 elections manifesto. In the main, it seeks to ensure that these commitments are sufficiently resourced so as to overcome the triple challenges of poverty, unemployment and inequality.
The budget is unveiled during a depressed global economy. Most developing countries, like ours, are asked to make difficult choices of striking the right balance between meeting the development needs of our people and country and ensuring a growth oriented trajectory.
We also recognise the impact a constrained energy generation has on our developing economy. Noteworthy, however, the budget still aims to ensure that a further three million South Africans are connected so as to have access to electricity. This reaffirms our Government’s commitment to ensure that basic services are not a privilege for a few, but a right to be enjoyed by all our people.
Investment in infrastructure is vital to any economy, especially one such as ours. We commend Treasury’s intention to continue Government’s capital spending over the medium term in infrastructure roll out. This is reflected in the budget for local development and social infrastructure, which grows faster than other spending area. This includes over R80 billion allocated to water, sanitation and local roads over the next three years, and R105 billion for housing and bulk infrastructure, and R18 billion for electrification funding.
The budget directs spending towards the right social priorities. After deducting interest payments, social spending makes up 60 per cent of Government’s budget.
Education is the biggest beneficiary in this budget, underlining our understanding that educating our people is critical for our nation’s ability to participate in an ever-changing world. In this regard Government has committed R36 billion to school infrastructure over the next three years, and the standardisation of the design of school buildings. The ANC also welcomes the announcement that the procurement of textbooks will be centralised. This, in our view, will ensure efficiency in both the purchase and distribution of schools material, and have a further positive bearing on efficient management of related costs. Centralization of procurement of the school build programme is an important step forward in curbing the cost of building schools. Further, the allocation of R197 billion to higher education will go a long way to support post-school education.
In this context, both pre and post school education should seek to improve the quality of learning and teaching.
All South Africans must contribute their fair share to the transformation and development of the country. We, therefore, recognise the intention to ensure that those who earn more should make a greater contribution, while those in the lower rung of society should be uplifted. We are encouraged that Government is, however, mindful of the difficult economic environment all our people face; in particular the growing middle class. As a result, we welcome the fair and moderate increased tax rates aimed at sustaining the progressive nature of the tax system.
South Africans should continue to contribute to the national effort of reconstruction and development by paying their taxes fully and in time. In similar vein, the public service should support efforts of cutting costs. Further, corruption and waste should be eliminated as these stand the way of our objectives for a radical economic transformation.
The ANC welcomes the initiatives to support growth in the short term. The relief given to UIF contributors for one year only will increase demand in the economy whilst ensuring that benefits are not effected. It will put R15 billion back into the pockets of workers and employers. Government must ensure that UIF beneficiaries continue to receive their full benefits, and should speedily pass legislation to improve benefits that were announced in the State of the Nation Address (SONA).
Another critical aspect of support for the economy is the expansion of lending by development finance institutions. Between them, the IDC, the DBSA and the Land Bank will add another R44 billion in loans over the next two years. Government’s in itiative to increase investment in cities, by leveraging private sector infrastructure finance will also boost growth. These institutions must support our development and transformation agenda.
The ANC is confident that over the next two years its Government will make a concerted effort to unblock constraints to increased growth. We should work harder to achieve our humble target of 5% economic growth.
This budget shows that we are committed to a path for a better life for all. It underscores the astute leadership and management our Government has in the Treasury. The ability to balance between the national imperatives and an increasingly challenging global economy; is an indication that we will be able to emerge positive out of this current situation.