National Assembly debate on the occasion of Medium Term Budget Policy Statement by Ms Judith Tshabalala (ANC)

20 November 2012

Topic : MTBPS in relation to:the New Growth Path; National Development Plan and the Industrial Policy Action Plan

Honourable Speaker
Minister Gordhan
Deputy Minister Nene
Honourable Members
Guest/ DG and the Team

The central objective of this debate is to politically engage and articulate the strategic socio-economic and policy issues that arise from the Medium Term Budget Policy Statement (MTBPS). It is not a budget but rather a financial operational policy plan to give effect to existing policies. It is an indicator of how fiscal revenue and expenditure over the next year will evolve. Our debate must analyze what the MTBPS must respond to, the public spending priorities, and what informs these public spending priorities.

The Medium Term Budget Policy Statement (MTBPS) is a policy framework that informs spending influences the Medium-Term Expenditure Framework and is instructive on how revenue shall be divided between the spheres of Government, with emphasis on strengthening the capacity and efficiency particularly in implementing reforms in Provincial and Municipal Infrastructure planning and delivery.

The overall test for economic policy and public spending remains the commitment to fighting poverty, reducing unemployment and bringing about a more equitable society.

The MTBPS provides a number of indicators for changes to the Medium Term Expenditure Framework (MTEF) and these changes are guided by the Medium Term Strategic Framework (MTSF).

These policy directives are naturally informed by the ANC`s Medium Term Strategic Framework Priorities which inform the MTBPS. These 12 priorities
are:

  • An inclusive Economic Growth and transformation of the economy to create decent work and sustainable livelihoods
  • Massive programme of economic and social infrastructure that will ensure an efficient and responsive economic infrastructure network
  • Comprehensive rural development strategy that will ensure equitable and sustainable rural communities and food security for all
  • Improving the quality of Basic Education
  • A skilled and capable workforce to support inclusive growth
  • Improving health and life expectancy
  • Intensifying the fight against crime and corruption, protection and safety
  • Sustainable human settlements and improving the quality of household life (cohesive, caring and sustainable communities)
  • A responsive, accountable, effective and efficient local government system
  • Protection, management and enhancement of environmental assets and natural resources.
  • Pursuing advancement of the African agenda and international co-operation for a better South Africa, a better and safer Africa and world.
  • Building a developmental state, a developmental-orientated public service for improved public services and inclusive citizenship

MTBPS is part of an integrated strategy designed to address poverty inequality and unemployment and to ensure a better life for all. Within this context the MTBPS speaks to the New Growth Path, the National Development Plan and the Industrial Policy Action Plan.

Minister of Finance in both his Budget Speech and the delivery of the MTBPS draws the relationship between these respective policy instruments.

The National Development critically examines the vexed question of the underlying causes to the main and contradictory challenges facing the nation. Its approach is typically and correctly a research methodological approach, scientifically extrapolating the base of the contradictions and not the superstructure. It emphasizes cause and effect in its approach and that such an Overview would of necessity have multiple dimensions. It deals with the essence of the contradiction and not the form. Its approach therefore is dialectical.

Although domestic Structural constraints and imbalances are the main obstacles to faster growth, implementatation of the National Development Plan will begin to address these challenges.

The approach of the 2012 MTBPS is not different. It confronts the challenges of development in what the UNDP describes as a highly unequal society. The fiscal framework that it puts forward seeks to concretely address the promotion of growth and development. It responds to the National Development Plans "10 critical actions" by ensuring fiscal and revenue proposals that strengthen financing arrangements, planning, and cooperation between spheres of government.

The relationship of MTBPS`s with the industrialisation strategy is demonstrated in the provisions that allow for the state to increase its role in facilitating growth in sectors that are able to create employment on large scale. The financial support for the advanced sectors of our industries is vital to sustain long term.

The New Growth Path`s strategy is supported by practically providing the fiscal framework to ensure a comprehensive drive to enhance both social and economic equity; to bring about systemic changes in mobilising domestic investment that create sustainable employment; and encourages growth in employment-creating activities.

The New Growth Path identifies key areas where jobs can be created and the MTBPS provides this framework of support. The key structural challenges in the economy that the New Growth path identifies are taken up in the MTBPS and like the New Growth Path, the MTBPS cautions that these will only be achieved the social partners and government work together.

The aim of the New Growth Path and of the MTBPS is to target and focus capital and capacity on activities that maximise the creation of decent work opportunities and to this end, both macro and micro economic policies that create a favourable overall environment and support more labour-absorbing activities as the direction in which to steer the economy.

Conclusion

There is no denying the fact that far more rapid growth is needed to draw large numbers of unemployed South Africans, Youth in particular into Economic Activity, the NDP outlines an approach to eliminate Poverty and reduce inequality by raising levels of Employment, Productivity, and Earnings
Government needs to step up its efforts in combating waste, inefficiency and corruption. We need reforms that will focus on Procurement systems that prioritise Value for Money and strengthening the anti-corruption system as a whole.

Ndo livhua, Aaa

The ANC supports the MTBPS 2012