Tag Archives: Republic of South Africa

2013 State of the Nation Address by Jacob G Zuma, President of South Africa

Honourable Speaker of the National Assembly,
Chairperson of the National Council of Provinces;
Deputy Speaker of the National Assembly and Deputy Chairperson of the NCOP;
Deputy President of the Republic, Honourable Kgalema Motlanthe;
Former President Thabo Mbeki and Mrs Mbeki,
Former President De Klerk and Mrs De Klerk,
Former Deputy Presidents Ms Phumzile Mlambo-Ngcuka and Baleka Mbete,
Honourable Chief Justice of the Republic, and all esteemed members of the Judiciary;
Honourable Peeroo, Chairperson of the SADC Parliamentary Forum,
Honourable Ministers and Deputy Ministers,
Distinguished Premiers and Speakers of our Provinces;
Chairperson of SALGA, and all local government leadership;
Chairperson of the National House of Traditional Leaders;
The Heads of Chapter 9 Institutions;
The Governor of the Reserve Bank; Ms Gill Marcus,
The Deputy Chairperson of the National Planning Commission and Deputy President of the ANC, Mr Cyril Ramaphosa and all ANC Officials,
Leaders from business, sports, traditional, religious and all sectors,
Members of the diplomatic corps, Special and distinguished guests,
Honourable members,
Fellow South Africans,
Good evening to you all, sanibonani nonke, molweni, dumelang.
Let me thank the Presiding Officers for affording me this opportunity to share our 2013 programme of action with the joint sitting of Parliament.
We greet all who are watching this broadcast from their homes and at GCIS viewing centres around the country, including those in Khayelitsha, Nyanga and Gugulethu here in Cape Town.
Let me also extend my gratitude to all who contributed to the preparation of this address.  I received several messages via email, twitter and Facebook.
I also spent some time with Grade 12 learners who shared their own views on what should be contained in the speech. I found the inputs very informative and enriching.
Honourable Members,
Compatriots and friends,
On the 15th of August last year, the National Planning Commission handed over the National Development Plan, the vision of the country for the next 20 years, to the President in this august house.
The NDP contains proposals for tackling the problems of poverty, inequality and unemployment.
It is a roadmap to a South Africa where all will have water, electricity, sanitation, jobs, housing, public transport, adequate nutrition, education, social protection, quality healthcare, recreation and a clean environment.
The achievement of these goals has proven to be difficult in the recent past, due the global economic recession.
The crisis in the Eurozone affects our economy as the Eurozone is our major trading partner, accounting for around 21 per cent of our exports.
Our GDP growth is expected to average at 2.5% cent, down from 3.1% in the previous year.  We need growth rates in excess of five per cent to create more jobs.
The National Development Plan outlines interventions that can put the economy on a better footing. The target for job creation is set at 11 million by 2030 and the economy needs to grow threefold to create the desired jobs.
In my last meeting with the business community, the sector indicated that for the economy to grow three-fold, we must remove certain obstacles.
We will engage business, labour and other social partners in pursuit of solutions. No single force acting individually can achieve the objectives we have set for ourselves.
Honourable Members,
I would now like to report on progress made since the last State of the Nation Address and also to discuss our programme of action for 2013.
I will look at the five priorities – education, health, the fight against crime, creating decent work as well as rural development and land reform.
Last year, I addressed the nation on government’s infrastructure plans. 
By the end of March this year, starting from 2009, government will have spent about 860 billion rand on infrastructure. Various projects are being implemented around the country. I will discuss just a few.
The construction of the first phase of the Mokolo and Crocodile River Water Augmentation has commenced and it will provide part of the water required for the Matimba and the Medupi power stations.
The construction of the bulk water distribution system for the De Hoop Dam began in October 2012, to supply water to the Greater Sekhukhune, Waterberg and Capricorn district municipalities.
We have to shift the transportation of coal from road to rail in Mpumalanga, in order to protect the provincial roads. Thus the construction of the Majuba Rail coal line will begin soon.
We have also committed to improve the movement of goods and economic integration through a Durban-Free State-Gauteng logistics and industrial corridor.
In this regard, substantial work is now underway to develop the City Deep inland terminal in Gauteng.
Initial work has commenced in the expansion of the Pier 2 in the Durban Port.
And thirdly, land has been purchased for the development of a new dug-out port at the Old Durban airport.
In the Eastern Cape, I officially opened the port of Ngqura and construction is now underway to develop a major new transhipment hub.
The Umzimvubu Dam is critical for rural livelihoods. Preparatory work has commenced for the construction to begin next year.
The upgrading of Mthatha airport runway and terminal and the construction of the Nkosi Dalibhunga Mandela Legacy Road and Bridge are currently underway.
I have asked for work in the North West to be fast-tracked further in light of the huge backlogs in that province, especially electricity, schools, clinics, roads and water in the next two years.
To improve the transportation of iron-ore and open up the west coast of the country, we have expanded the rail capacity through the delivery of 11 locomotives.
The first phase of the expansion – to increase iron ore port capacity at Saldanha to 60 million tons per annum – was officially completed in September last year.
Construction work is taking place in five cities – Cape Town, Nelson Mandela Bay, Rustenburg, eThekwini, Tshwane to integrate the different modes of transport – bus, taxi and train.
In the energy sector, we have now laid 675 kilometres of electricity transmission lines to connect fast-growing economic centres and also to bring power to rural areas.
In addition, government signed contracts to the value of R47 billion in the renewable energy programme. 
This involves 28 projects in wind, solar and small hydro technologies, to be developed in the Eastern Cape, Western Cape, Northern Cape and in the Free State.
We established an 800 million rand national green fund last year.  To date, over 400 million rand investments in green economy projects has already been approved for municipalities, other organs of state, community organisations and the private sector across all provinces.
We have also rolled out 315 000 solar water geysers as of January this year, most of which were given to poor households, many of whom had never had running hot water before.
We have scored successes in extending basic services through the infrastructure programme. Close to 200 000 households have been connected to the national electricity grid in 2012.
You will also recall that Census 2011 outlined the successes in extending basic services. The report said the number of households with access to electricity is now at 12.1 million, which translates to 85%. Nine out of 10 households have access to water.
To prepare for the advanced economy we need to develop, we will expand the broadband network.
Last year, the private and public sector laid about 7000 new fibre optic cables. The plan is to achieve 100% broadband internet penetration by 2020.
With regard to social infrastructure, a total of 98 new schools will have been built by the end of March, of which more than 40 are in the Eastern Cape that are replacing mud schools.
Construction is expected to begin in September at the sites of two new universities in the Northern Cape and Mpumalanga.
Last week, we published an Infrastructure Development Bill for public comment.
We are cracking down on corruption, tender fraud and price fixing in the infrastructure programme.
The state has collected a substantial dossier of information on improper conduct by large construction companies.
This is now the subject of formal processes of the competition commission and other law enforcement authorities.
The infrastructure development programme has been a valuable source of learning for government. In the year ahead, we will fast-track many of the projects that the PICC has announced.
The lessons are that we must coordinate, integrate and focus on implementation.
Honourable Members,
The past two years have demonstrated that where the state intervenes strongly and consistently, it can turn around key industries that face external or internal threats as has happened in our manufacturing sector.
We have seen the revitalization of train and bus production in South Africa, largely because of the drive for local procurement. 
PRASA and Transnet have committed hundreds of billions of rands to improving our commuter and freight train network.
The clothing, textiles and footwear industry has stabilised after 15 years of steadily falling employment. A clothing support scheme provides broad financial support, saving a number of factories and jobs.
On broader economic transformation, revised Broad-based Black Economic Empowerment Act and codes are being finalised.  The development of black owned enterprises and black industrialists will be prioritised.
Government has several programmes of supporting small business.  A key project for the Presidency currently is to get government departments to pay SMMEs within 30 days.
Departments are required to submit monthly reports so that we can monitor progress in this regard.
We have taken a decision that accounting officers who fail to execute this directive, should face consequences.
In the 2010 State of the Nation Address, I announced the Job fund, and three billion rand has been approved for projects that will create jobs.
Honourable Members,
Just over a third of the population is under the age of 15. Our country, like many others, has a crisis of youth unemployment.
Last May I asked constituencies at NEDLAC to discuss youth employment incentives. I am pleased that discussions have been concluded and that agreement has been reached on key principles. The parties will sign the Accord later this month.
The incentives will add to what Government is already doing to empower the youth.
State owned companies provide apprenticeships and learnerships and we urge that these be increased.  We appeal to the private sector to absorb 11 000 FET graduates who are awaiting placements.
The Department of Rural Development and Land Reform runs the National Rural Youth Services Corps, which has enrolled 11 740 young people in various training programmes.
The Department is also planning nine Rural Youth Hubs per province, including in the 23 poorest districts in the country.
We will also use the Expanded Public Works Programme and the Community Work programme to absorb young people.
Working together we will find a solution to youth unemployment.
Honourable members,
We identified tourism as one of our job drivers.
Tourist arrivals grew at an impressive 10.7 percent between January and September 2012, which is higher than the global average of 4% for last year.
Ironically, the very success of South Africa’s national conservation effort resulting in over 73% of the worlds’ rhino population being conserved here, has resulted in our country being targeted by international poaching syndicates.
We are working with recipient and transit countries such as Vietnam, Thailand and China and are intensifying our efforts to combat this increasing scourge.
Honourable Speaker
Honourable Chairperson,
Mining, which is historically the backbone of the economy, has faced difficulties in recent months.
Last year the sector was hit by wild cat strikes and the tragedy in Marikana where more than 44 people were killed.
We established an Inter-Ministerial Committee made up of senior cabinet Ministers to assist families during that difficult period. The Judicial Commission of Inquiry led by Judge Ian Farlam continues its work.
Through working together we were able to restore social stability in the area.
Government, labour in the form of COSATU, NACTU and FEDUSA, Business Unity SA, Black Business Council and the community sector met in October and reached an agreement which laid the basis for a return to work across the mining industry.
In particular, we agreed to work together to strengthen collective bargaining; to address the housing problems in the mining towns; to support the National infrastructure Programme; to address youth unemployment; and to identify measures to reduce inequalities.
Work is underway and the team will report in due course with specific plans for Rustenburg, Lephalale, Emalahleni, West Rand, Welkom, Klerksdorp, Burgersfort/Steelport, Carletonville and Madibeng.
Two weeks ago, I had a meeting in Pretoria with Sir John Parker, the chairman of Anglo-American Plc to discuss the reported plans to restructure and retrench 14 000 workers at Anglo American Platinum.
Honourable Members,
We believe that at a policy level we have managed to bring about certainty in the mining sector. The nationalisation debate was laid to rest in December at the ruling party’s national conference.
Ensuring that the public services we provide our people today can continue to be provided to our people tomorrow, requires that we have suitable tax policies to generate sufficient revenue to pay for these services.
From time to time, we have commissioned studies into our tax policies, to evaluate the extent to which they meet the requirements of the fiscus.
Later this year, the Minister of Finance will be commissioning a study of our current tax policies, to make sure that we have an appropriate revenue base to support public spending.
Part of this study, will evaluate the current mining royalties regime, with regard to its ability to suitably serve our people.
Honourable Members,
Distinguished guests,
In last year’s address we raised the issue of the gap market, the people who earn too much to qualify for an RDP house and too little for a bank mortgage bond.
From April 2012 to December 2012, Provincial Departments committed a budget of 126 million rand of the Human Settlements Development Grant for this programme, known as the Finance Linked Individual Subsidy programme.
The money is being used through the National Housing Finance Corporation, which has been appointed to deliver houses to people within the Gap market in twelve registered projects.
A total of 70 million rand of this amount has been used to date.
Projects include Walmer Link in the Eastern Cape, Lady Selbourne, Nelmapius, Bohlabela Borwa, Cosmo City and Fleurhof in Gauteng, Intabazwe Corridor Housing in the Free State and Seraleng in North West.
The implementation of these eight GAP housing projects is currently underway.
Compatriots and friends,
Honourable Members,
On education, we are pleased that the Grade 12 pass rate is finally on an upward trend. We congratulate the Class of 2012, their teachers, parents and communities for the continued improvement.
We congratulate the top province for 2012, Gauteng and top grade 12 learner, Miss Madikgetho Komane, from Sekhukhune district, Limpopo, who is our special guest.
Honourable members,
The Annual National Assessments in our schools, have become a powerful tool of assessing the health of our education system.
We welcome the improvement each year in the ANA results, but more must be done to improve maths, science and technology.
The Department of Basic Education will establish a national task team to strengthen the implementation of the Mathematics, Science and Technology Strategy.
We urge the private sector to partner government through establishing, adopting or sponsoring maths and science academies or Saturday schools.
We are pleased with the growth of our early childhood education programmes, including Grade R.
We are also pleased with our adult education programme, Khari Gude, which has reached more than 2,2 million people between 2008 and 2011.
We also continue to encourage people from all walks never to stop learning.  Many were inspired when accomplished musician and my special guest, Mr Sipho Hotstix Mabuse obtained his matric last year, at the age of 60.
Honourable Members,
We declared education as an apex priority in 2009. We want to see everyone in the country realising that education is an essential service for our nation.
By saying education is an essential service we are not taking away the Constitutional rights of teachers as workers such as the right to strike.
It means we want the education sector and society as a whole to take education more seriously than is happening currently.
All successful societies have one thing in common – they invested in education. Decent salaries and conditions of service will play an important role in attracting, motivating and retaining skilled teachers.
In this regard, we will establish a Presidential Remuneration Commission which will investigate the appropriateness of the remuneration and conditions of service provided by the State to all its employees.
I have directed that the first priority should be teachers.
The Commission will also assess the return on investment.
In elevating education to its rightful place, we want to see an improvement in the quality of learning and teaching and the management of schools. We want to see an improvement in attitudes, posture and outcomes.
Working with educators, parents, the community and various stakeholders, we will be able to turn our schools into centres of excellence.
Honourable Members,
Five years ago, South Africa had such a low life expectancy that experts suggested that by 2015, our life expectancy would have been exactly where it was in 1955.
It was with good reason that we were delighted when late last year, studies from the Medical Research Council, the Lancet medical journal and others began reporting a dramatic increase in life expectancy from an average baseline of 56 years in 2009 to 60 years in 2011. These reports also noted significant decreases in infant and under five mortality.
Increased life expectancy is a key to the country’s development. People are returning to work, they are being productive, economically and socially.  The family structure is increasingly stable and parents live longer and are able to take care of their children.
We should not become complacent, in light of these achievements.
Given the high co-infection rate between HIV and TB, we have integrated these services.
Work is also continuing on the research side. South Africa has discovered a candidate drug to treat Malaria.
In addition, researchers at the Centre for the Aids Programme of Research in South Africa consortium, also discovered broad neutralising antibodies against HIV.
Deputy President Motlanthe has appointed new members of the South African National Aids Council Trust. We congratulate the team, which is led by retired Judge Zac Yacoob, as chairperson.
Diseases of lifestyle are on an alarming increase.  We have to combat and lower the levels of smoking, harmful effects of alcohol, poor diets and obesity.
Honourable members,
In 2014 we will create the National Health Insurance Fund. The Department of Health will accelerate and intensify progress in the pilot districts.
In that regard, as from April this year, the first group of approximately 600 private medical practitioners will be contracted to provide medical services at 533 clinics within villages and townships in 10 of the pilot districts.
Compatriots and friends,
In June we will mark the centenary of the 1913 Land Act which turned black people into wanderers, labourers and pariahs in their own land.
Former ANC President Sefako Makgatho outlined as such in his 1919 ANC conference presidential address.
He said;
“The Native Land Act still operates as mercilessly in different parts of the Union, and as a result many native families are still working for white farmers only for their food’’.
We are also honoured, in this year of the anniversary of the 1913 Land Act, to have present among us, Mrs Nomhlangano Beauty Mkhize, one of the veterans who together with her husband, Saul Mkhize, led the struggle against forced removals in Driefontein and Daggaskraal, in the present Mpumalanga Province.
The land question is a highly emotive matter.
We need to resolve it amicably within the framework of the Constitution and the law.
I received a message on Facebook from Thulani Zondi who raised his concern about the slow pace of land redistribution. He said:  “Mr President, as we are commemorating 100 years since the Land act of 1913 was introduced to dispossess the African majority.
I urge you to accelerate redistribution of the land to the landless African people.
“When we do the redistribution we need to be mindful of food security. Training and mentorship of emerging black commercial farmers must take place”.
From 1994, we have been addressing the land reform problem through restitution, redistribution and tenure reform.
As stated before, we will not be able to meet our redistribution targets.
Government’s mid-term review last year revealed a number of shortcomings in our land reform implementation programme. We will use those lessons to improve implementation.
Firstly, we must shorten the time it takes to finalise a claim. In this regard, Government will now pursue the ‘just and equitable’ principle for compensation, as set out in the Constitution instead of the “willing buyer, willing seller” principle, which forces the state to  pay more for land than the actual value.
Secondly there are proposed amendments to the Restitution of Land Rights Act, 1994 in order to provide for the re-opening of the lodgement of restitution claims, by people who missed the deadline of 31 December 1998.
Also to be explored, are exceptions to the June 1913 cut-off date to accommodate claims by the descendants of the Khoi and San as well as heritage sites and historical landmarks.
Another key lesson is to provide adequate post-settlement support to new landowners so that land continues to be productive.
We also need to provide better incentives for commercial farmers that are willing and capable of mentoring smallholder farmers.
Another challenge we have faced is the preference for money instead of land by some claimants, which also does not help us to change land ownership patterns.
As part of the Presidency stakeholder engagement programme ahead of the State of the Nation Address, Deputy President Motlanthe held a meeting with both farmers and farm workers in Paarl on Tuesday.
Stakeholders agreed that there should be peace and stability in the agriculture sector and that the living and working conditions of farm workers should be improved urgently.
It is also encouraging that even the farmers called for the fast tracking of land reform and support to emerging farmers.
We will continue the engagement with both farmers and farm workers.
Compatriots and friends,
We should also remain mindful of rapid urbanisation that is taking place. The Census Statistics reveal that 63% of the population are living in urban areas. This is likely to increase to over 70% by 2030.
Apartheid spatial patterns still persist in our towns and cities. Municipalities alone cannot deal with the challenges. We need a national approach. 
While rural development remains a priority of government, it is crucial that we also develop a national integrated urban development framework to assist municipalities to effectively manage rapid urbanisation.
As part of implementing the National Development Plan, all three spheres of government need to manage the new wave of urbanisation in ways that also contribute to rural development.
Honourable Members,
Improving the status of women remains a critical priority for this government.
The Bill on Gender Equality and Women Empowerment has been approved by Cabinet for public comment. The Bill criminalizes practices that have adverse effects on women and girls.
It also legislates the 50/50 policy position with regard to the representation of women in decision making structures.
Honourable members,
The brutal gang rape and murder of Anene Booysen and other women and girls in recent times has brought into sharp focus the need for unity in action to eradicate this scourge.
The brutality and cruelty meted out to defenceless women is unacceptable and has no place in our country. Last year the National Council on Gender Based Violence was established.
It comprises government, non-governmental Organizations, Community-Based Organizations, Faith-Based organizations, academia, research institutions, government, men’s groupings, and representation from women, children and persons with disabilities.
We urge this coordinating structure to make the campaign of fighting violence against women an everyday campaign.
We applaud all sectors for the campaigns that have taken place already, highlighting that such acts will not be tolerated.
I have directed law enforcement agencies to treat these cases with the utmost urgency and importance. The Family Violence, Child Protection and Sexual Offences Units, which were re-established in 2010, have increased personnel.
During the last financial year, the Units secured over 363 life sentences, with a conviction rate of 73% for crimes against women above 18 years old and 70% for crimes against children under 18 years of age. 
Masibhunkule sisebenze sonke, silwe nalenkinga esibhekene nayo yabantu abadlwengula omame nezingane, ngisho nezalukazi imbala. Ihlazo nobunswelaboya obesabekayo lokhu abakwenzayo. Izigilamkhuba kufanele zibikwe emaphoyiseni ziboshwe.
Government is adding other mechanisms to protect women, such as the Protection from Harassment Bill. While the Domestic Violence Act also provides protection, it only applies to persons who are in a domestic relationship.
The Protection from Harassment Bill also deals with harassment by persons who stalk their victims by means of electronic communications.
In addition, the Combating of Trafficking in Persons Bill was passed by the National Assembly last year and is now at the National Council of Provinces.
Once implemented, the law will  assist women and children, who are often victims of this heinous crime.
Compatriots and friends,
There is increased visibility of the police which contributes to the reduction in the levels of serious crime.
The operations focusing on illegal firearms, stolen and robbed vehicles, liquor and drugs which are regarded as main generators of crime have assisted in crime reduction.
Compatriots and friends,
Government continues to wage a war against corruption.
The capacity of the Special Investigating Unit has grown from an initial 70 staff members to more than 600 at present.
I have since 2009, signed 34 proclamations directing the SIU to investigate allegations of corruption, fraud or maladministration in various government departments and state entities.
Criminal Investigations were initiated against 203 accused persons in 67 priority cases under investigation by the end September 2012.
In total, pre-trial proceedings have been initiated against 191 persons. A total of 66 persons under investigation are alleged to have received R5 million or more benefits through corruption. Freezing Orders were obtained against 46 persons.
In other successes, in the past financial year, 107 officials working within the criminal justice system were convicted.
The Asset Forfeiture Unit seized assets valued at more than R541 million. A total of R61 million of these assets have already been forfeited to the State. The assets are channelled back to fighting crime and corruption through the Criminal Asset Recovery Account.
Last year, additional funding of R150 million from the Criminal Assets Recovery Account was approved for the work of the Anti-Corruption Task Team which comprises the Hawks, the Special Investigating Unit and the National Prosecuting Authority.
These resources are aimed at strengthening the capacity of these law enforcement agencies in our resolve to fight corruption.
We urge the private sector to also take this fight against corruption seriously so that we tackle it from all angles.
To further boost the fight against corruption, we will fill all vacant posts at the upper echelons of the criminal justice system.
Compatriots and friends,
Honourable Members,
There are some lessons from Marikana and other incidents that we cannot allow to recur in our country.
Our Constitution is truly one of our greatest national achievements.   Everything that we do as a government is guided by our Constitution and its vision of the society we are building.
We call on all citizens to celebrate, promote and defend our Constitution.
Our Bill of Rights guarantees that “everyone has the right, peacefully and unarmed,  to assemble, to demonstrate, to picket and to present petitions”.
We therefore call on our people to exercise their rights to protest in a peaceful and orderly manner.
It is unacceptable when people’s rights are violated by perpetrators of violent actions, such as actions that lead to injury and death of persons, damage to property and the destruction of valuable public infrastructure.
We are duty bound to uphold, defend and respect the Constitution as the supreme law of the Republic. We will spare no effort in doing so.
For this reason, I have instructed the Justice, Crime Prevention and Security Cluster to put measures in place, with immediate effect, to ensure that any incidents of violent protest are acted upon, investigated and prosecuted.
Courts will be allocated to deal with such cases on a prioritised roll. The law must be enforced and it must be seen to be enforced – fairly, effectively and expeditiously.
The citizens of our country have a right to expect that their democratic state will exercise its authority in defence of the Constitution that so many struggled so long and hard for. We cannot disappoint this expectation.
The JCPS Cluster has therefore put measures in place at national, provincial and local level to deal with such incidents effectively.
Let me hasten to add that government departments at all levels must work closely with communities and ensure that all concerns are attended to before they escalate.  That responsibility remains. We are a caring government.
Honourable Members,
This year we celebrate the 50th anniversary of the birth of the Organization of African Unity which has been succeeded by the African Union.
We pay tribute to the OAU for its relentless struggle for the decolonization of our continent, including contributing to our own freedom.
We will continue to work for a stronger and more effective organization of our Union.
The NEPAD programme as well as the African Peer Review Mechanism have just celebrated their tenth year of existence.
As the convener of the NEPAD Presidential Infrastructure Championing Initiative, South Africa continues to work with other champions to implement high impact infrastructure projects in the continent.
On peace and security, we stand by the people of Mali in their effort to claim and assert the territorial integrity of their country.
We urge the leadership in the Central African Republic, Guinea Bissau and Somalia to continue their march towards lasting peace for the sake of their people. We remain firmly opposed to unconstitutional change of government.
We are encouraged by the developments between Sudan and South Sudan. We commend our former President Thabo Mbeki and other members of the AU High Level Panel for the dedicated manner in which they have been working with the two sides.
We are in solidarity with the DRC as the country battles the menace to its security.
South Africa will continue supporting Africa’s peace efforts including through mediation, troop contribution for peace keeping, and by providing material and financial assistance.
In this regard, we look forward to the conclusion of political dialogues in Zimbabwe and Madagascar.
Our vision of a better Africa in a better world will receive great impetus when we host the 5th BRICS Summit next month in Durban.
We are inspired by the exponential growth of bilateral relations, diplomatically and economically, between South Africa and other BRICS countries.
Strengthening North-South relations remains central to our foreign policy agenda.
We reaffirm our partnership with countries of the North, especially the USA, Europe and Japan.
The UN’s 70th anniversary provides an opportunity to take forward the transformation of the UN Security Council.
We shall continue to use the G20 to represent the aspirations of the people of Africa and push for the transformation of Bretton Woods institutions.
South Africa’s internationalism has a strong element of solidarity to it.  We stand with the people of Palestine as they strive to turn a new leaf in their struggle for their right to self-determination; hence we supported their bid for statehood.
The expansion of Israeli settlements into Palestinian territories is a serious stumbling block to the resolution of the conflict.
The right of self determination for the people of Western Sahara has to be realised.
We remain firm in our call for the lifting of the economic embargo against Cuba.
Working together we can do more to create a better Africa and a better world.
In the year 2012, we focused on preserving and promoting our country’s cultural heritage with particular emphasis on our liberation heritage.
We also hosted a historic National Summit on Social Cohesion, focusing on building a socially inclusive, caring and proud nation.
In the implementation of our programme we will work with our Social Cohesion Advocates; eminent South Africans drawn from a variety of sectors within our society.
We are proud to have in our midst this evening, two of our eminent social cohesion advocates, Judge Yvonne Mokgoro and Advocate George Bizos.
This year marks the 50th anniversary of the Raid on Liliesleaf Farm, the Escape from Marshall Square as well as the Start of the Rivonia Trial.
A series of events are being planned throughout the year to mark the three events, culminating in a national commemoration on the 11th of July.
Honourable Members
We have just concluded a highly successful Africa Cup of Nations tournament. We extend hearty congratulations to the African champions, the Federal Republic of Nigeria and also to all participating teams for their contribution to showcasing the standard of African football.
We thank all our people for being excellent hosts and fans.
I had the opportunity to personally thank CAF President Honourable Issa Hayatou for affording us the honour of hosting the AFCON.
Compatriots and friends,
As I said earlier, this programme of action will be implemented differently as the activities of departments must be aligned with the National Development Plan.
Before concluding, let me take this opportunity to extend our heartfelt condolences to the family of struggle stalwart and prominent human rights lawyer, Comrade Phyllis Naidoo who passed on today.
Only recently, we lost Comrade Amina Cachalia.
We are truly saddened by the loss.
Honourable Members,
As South Africans, we should continue to have one primary goal – to make our country a truly great and prosperous nation.
Happy Valentine’s Day to you all!
I thank you.

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South Africa must treat to prevent #HIV

This week over 4 000 South Africans will meet in Durban at the bi-annual national AIDS conference.

At the same time, thousands of kilometres away – on the other side of the Atlantic – more than 30 Heads of State and Governments will gather at the United Nations High Level Meeting on AIDS  in New York.

The political declaration coming out of the UN meeting is supposed to serve as a blueprint for the global response to AIDS in the next decade.

As one of the countries most affected by the epidemic, South Africa has a responsibility to take the lead in ensuring that an ambitious declaration is adopted.

South Africa’s HIV response has been a regular source of headline stories over the years, for a long time during the Thabo Mbeki era for the wrong reasons. But more recently, because the country is at the forefront of finding new ways to tackle the epidemics of HIV and tuberculosis.

In Durban this week, at the 5th South African AIDS Conference, delegates will share details on the groundbreaking HPTN 052 trial which was terminated last month and for the first time offers real hope in preventing the further spread of HIV.

AIDS researchers announced that the study, conducted in nine countries, including South Africa, proved that people living with HIV and on antiretroviral treatment were much less likely to transmit the virus than those not taking the drugs.

The study was terminated four years ahead of schedule because the results were so dramatic. It found that HIV-negative men and women, whose sexual partners were HIV positive, were almost completely protected from transmission of HIV if the partner took triple-therapy anti-retrovirals (ARVs).

The immediate significance this news has for South Africa is that it is urgent to scale up treatment to break the back of the HIV and TB epidemics.

South Africa needs to increase HIV testing and ensure that all people infected with HIV start treatment as soon as possible.

The health department is under pressure to urgently adopt the World Health Organisation (WHO) HIV treatment guidelines which recommends that anyone with a CD4 count under 350 is started on ARVs.

Currently, anyone with a CD4 count (measure of immunity) below 200 is placed on triple therapy ARV treatment. Pregnant women and those co-infected with tuberculosis and a CD4 count below 350 are also immediately started on treatment.

Health minister Dr Aaron Motsoaledi shared some grim statistics in his budget speech last week.  Although South Africa has 0,7% of the world’s population, the country is carrying 17% of the HIV/AIDS burden in the world.

South Africa has the highest TB infection rate per population in the world, as well as the highest TB and HIV co-infection rate of 73 percent

At least 35% of child mortality and 43% of maternal mortality are attributable to HIV and AIDS and one in every three pregnant women at public antenatal clinics are HIV positive.

“Surely this needs very serious and extraordinary measure,” said Motsoaledi.

He then added: “We are looking forward to the day, not far away whereby commencing the treatment at a CD4 count of 350 will be universal and not only for specific target groups. This is imperative in the light of new research released recently that starting ARVs very early has given huge benefits for prevention of HIV and for protecting individuals against TB.”

Motsoaledi has often lamented that there is no way that South Africa can treat its way out of this epidemic. That was before the HPTN 052 results.

Motsoaledi has apparently already tasked his officials with costing the expansion of ART access to everyone with a CD4 below 350.

It is critical that this not a long, drawn-out exercise and that it happens very quickly in the light of the fact that the country will be receiving a sizeable amount of money from the Global Fund to fight Tuberculosis, AIDS and Malaria.

Recently a number of South Africa’s foremost HIV advocates sent a letter to among others President Zuma and Motsoaledi, calling on the country to again take the lead this week when the UN meeting takes place.

It urges South Africa to continue to set an example with its approach to tackling HIV and TB by publically committing to ambitious national targets, calling on other African states to do the same and pushing developed countries to commit to ambitious global treatment and funding targets.

Sources have expressed some concern that South Africa’s voice has been silent in the African block during consultations in the run-up to this week’s meeting, leading to the draft declaration being somewhat conservative.

The letter drafted by Medecins Sans Frontieres (MSF), the Treatment Action Campaign, Section27, the World AIDS Campaign and the AIDS and Rights Alliance of Southern Africa, urges South Africa to use this important opportunity to ensure “we do not miss the chance to build on the successes achieved over the last decade and combine these with the promising new scientific developments to begin to turn around the HIV epidemic”.

HPTN 052 is not the only study pointing towards treatment being the future of HIV prevention.

Several observational studies have shown that early ARV treatment is unlikely to be harmful while others show the benefits The United States and European Union countries already changing their guidelines to initiate treatment at a CD4 count below 500.

Further observational data from a Cape Town township has also shown if a lot of HIV-positive people in a community with high TB prevalence – are on ARVs, there is a low TB transmission rate.

HPTN 052 also showed reduced cases of extra-pulmonary TB in those who started treatment at a CD4 count between 350 and 550.

Two randomised controlled studies are currently ongoing and should help to answer once and for all whether ARVs should be offered to all people with HIV. However, there is a growing international sentiment that the world cannot afford to wait in the light of the HPTN 052 results.

It is no secret that there will be significant cost implications of offering ARVs to all people with HIV, but reduced new infections may help offset the long-term costs.

Dr. Gilles van Cutsem, Medical Coordinator, MSF South Africa is unequivocal that the HPTN 052 study confirms that getting people on treatment sooner could break the back of the epidemic.

“Here in Khayelitsha, we are seeing early signs that HIV infections have been on the decline since the introduction of large-scale HIV/AIDS programs that have put many people on treatment.  This means that treatment is a form of prevention,” said Van Cutsem.

“ARVs knockdown the levels of HIV in the blood – individuals benefit because they avoid getting opportunistic infections, while the community benefits because fewer people get infected.

He said the New York meeting could only be a success if governments wrote a blueprint to speed up and intensify the response.

So, while the mantra has always been that the world cannot afford to treat its way out of this epidemic, ARV treatment may offer the one real hope of making headway on the prevention front. And in the long run the results will not only be measured against the decrease in dollars spent now, but the human lives saved.

New York and Durban need to take the first real steps towards making this a reality.

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Ruminating on the Services SETA Saga

I have been watching with great interest and concern the developments around the Services SETA and in particular the wrangle over the new SETA constitution. It is impossible for an outsider to comment on the constitution itself, because I have not seen it. I can only comment based on the principles that have been mentioned as driving the revision of the SETA constitutions over the last year to 18 months. As I recall, these related to the need to standardise constitutions and to tighten up the governance of SETAs. There were also questions about the size (and in number of members) of some of the boards, and how board members are/were remunerated. Fair enough.

I don’t recall anyone suggesting that this type of reform was inappropriate. On the contrary, it was welcome. What seems to be playing itself out around the Services SETA is the undermining of bodies that were established as autonomous, but accountable in terms of the relevant legislation and associated regulations,in this instance, the Skills Development and Skills Development Levies Acts. While I carry no torch for any particular SETA, it strikes me as perverse that one of the SETAs that has, by and large, adequately fulfilled its mandate, is put under administration because it uses the law to challenge the steps being taken by the Ministry of Higher Education and Training (MHET). Is this how things should happen in a democracy?

That the Services SETA CEO has been personally threatened as a consequence of the SETA’s actions is alarming. These bullying tactics that should be nipped in the bud before we leave school. Adults should able to engage in dialogue and debate, able to come to a solution that best suits the needs of the skills development sector and the people of South Africa, even if that debate must be mediated in a court of law.

While the court found in favour of the Services SETA, the MHET intends to appeal this judgement. That is the department’s right. In the same statement announcing this, DHET also makes reference to planned, sweeping legislative changes. We have just spent two years waiting for the amendments to the Skills Development and for the NQF Acts to come into full effect, as well as the full operationalisation of the QCTO. Regardless of how loudly, or how often, we have been told that it was “business as usual” the environment has nevertheless been charactarised by a sense of limbo and a great deal of uncertainty. Can we afford for this type of uncertainty and limbo to carry on?

Not disagreeing that reform is necessary, it can be acknowledge that skills authorities (or councils as they are know in other parts of the world), can make a vital contribution to the development of skills in South Africa. We have had SETAs for more than 10 years and although often misunderstood and maligned, some of them have done good work; riding rough shod over them puts us in danger of losing institutional depth and history (as well as knowledge and skills around technical and vocational education and training).

I hope it is possible for all the various stakeholders to take a step back and look at what needs to be done in a rational way, not tied up in personal agendas, but rather with the interests of South Africa, her people and our economy at it the centre.
Fiona Cameron-Brown

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Full 2011 Budget speech by Minister of Finance, Pravin Gordan, 23 Feb 2011

(I’ve added an expenditure chart at the bottom of the speech, 25/02/2011)

Honourable Speaker

It is my privilege to introduce the Second Budget of President Zuma’s administration.

Mister President, you outlined our programme of action in the State of the Nation Address two weeks ago. Your vision for the future is abundantly clear:

“We want to have a country where millions more South Africans have decent employment opportunities, which has a modern infrastructure and vibrant economy and where the quality of life is high.”

This Budget, Mister President, reflects the collective determination of the Government to address with energy the challenges of creating jobs, reducing poverty, building infrastructure and expanding our economy.

The Budget sets out a financial framework for implementing this vision, a framework that is sound and sustainable. It recognises that building South Africa is a multi-decade project that must invigorate our capacity to grow, and must include all South Africans in that growth.

This Budget sets us on a path, Honourable Members, that will be neither easy nor uncontested – hard work and difficult choices lie ahead. But the journey is under way. We have embarked on the long walk to economic freedom. All South Africans aspire to these freedoms:
2011 Budget Speech Freedom from poverty,
* Freedom from need,
* Freedom to exercise our talents and thrive as individuals,
* Freedom to work together as communities, as organised social formations, as business enterprises, as a proud and forward- looking nation.
This Budget is about making South Africa work smarter, harder, and differently.

What does this Budget offer?

Mister Speaker, the 2011 Budget ensures

* That government can intensify activities that make a difference to the lives and prospects of all South Africans,
* That priority programmes required for implementing the New Growth Path are funded,
* That macroeconomic stability is maintained, with necessary adjustments supporting enterprise and job creation.

In tabling another weighty load of documentation today, our aim is to display transparently how South Africans benefit from government’s programmes and policies and how their tax contributions are spent.

For the poor, the Budget continues to expand spending on housing, rural development, better community services and social assistance grants for the elderly, the disabled and children in need.

For workers, the Budget emphasises job creation and expenditure on the “social wage,” including access to health services, education, social security, transport and municipal infrastructure.

For the business sector, the Budget expands investment in modernising our infrastructure and transport logistics, accelerating further education and skills development and supporting research, technology and industrial investment. For the small business sector, there are targeted financial and enterprise development programmes, and tax relief measures.

For the youth, there is expanded access and financial assistance for further education, and a range of initiatives aimed at expanding job opportunities.

All of this, and more, we must do within a sound fiscal framework. We must also recognise that we are taking steps, this year and next, on a long-term growth path, a decades-long transformation and expansion of our social and economic possibilities.

In reflecting on commitments made in last year’s budget, we can point to progress on several fronts:

* Savings have again been identified in low-priority categories of spending, releasing over R30 billion to frontline service delivery allocations.
* Support for the Industrial Policy Action Plan is further enhanced. Tax and spending measures are proposed to improve investment and trade performance, enhance science and technology, accelerate job creation, boost small enterprise development and to strengthen rural development and emerging farmer support.
* Education and skills development are bolstered over the period ahead through expanding further education colleges and student financial assistance, and a new school building programme.
* Spending on economic and social infrastwcture of over R800 billion is projected over the next three years.
* A new community-based family health-care programme is to be introduced as part of national health insurance, while work is proceeding on the design and consolidation of our social security arrangements.
* At Parliament’s request, we are tabling guidelines on long-term fiscal sustainability and debt management.

An opportunity to create hope for young people

Mister Speaker, we live in an extraordinary time in human history – a time of immense transition, of profound risks, but also of great opportunities.
We are in the midst of epoch-changing shifts in the global economy as large fast-growing countries, particularly China and India, have become major world producers and consumers. Their weight in world trade, finance and investment and in restructuring the world’s industries affects every country, every firm and every family.

Fast-growing economies that are raising living standards and creating jobs have one thing in common. They are continually moving into new products and improving the ways of producing the things they sell. Adaptation to the disciplines and the productive possibilities of the new global economy opens up new vistas of opportunity for improving living standards and expanding employment. But it also presents great challenges.

We shoulder the responsibility to build a better South Africa. We have taken on the challenge that the legacy of apartheid left us – a legacy of disempowerment, landlessness, inequality of opportunity, and millions of unemployed young people who cannot see a realistic prospect for a decent life. Confronting these realities is not about blaming the past or denying our own shortcomings.

It is about recognising that now is the time to do extraordinary things, in dealing with our particular development circumstances. It requires new ideas and bold efforts from all: government, business, labour, communities and every family.

We must show, across the economy, the game-changing strengths we have shown on big issues, from creating our democracy to hosting Africa’s first Soccer World Cup festival.

Now we have to ignite the flame of higher inclusive growth, and sustain it.

We cannot view the fact that 42 per cent of young people between the ages of 18 and 29 are unemployed as merely a statistic. Young men and women in cities, informal settlements, towns and villages may not have jobs, but have skills in life. They possess the awareness and the ability to learn, they drive fashion and inspire with their music, yet they know their local traditions. And they have hope, and look to us to give meaning to that hope.

In response we must take measures to ensure that our young people can look forward to decent work in productive, competitive enterprises. It means that we will continue to strengthen social expenditure, enabling families to commit to participating in education and community activities, while supporting the old and sick.

Inclusive growth means strenuous efforts to cut back poverty and shrink the inequality that continue to blight us. The South African growth path we envision is not measurable by GDP alone. It must be an inclusive growth, which especially benefits the many South Africans who have been left behind.

Inclusive growth also means addressing the climate change challenges that confront the long-term global outlook. This year South Africa will host the 17th United Nations Conference of the Parties on climate change. Our own efforts to green our economy will come under special scwtiny. Mitigation initiatives are not just about reducing the dangers associated with a hotter future, but they also offer significant opportunities to create jobs and reduce costs in our economy.

And so in mapping a New Growth Path that will lead to rapid creation of jobs, that will ensure an equitable distribution of benefits, that will reduce inequality, ignite industrial development and transform rural and urban communities – in charting this course, we are mindful of the specific realities of our circumstances and the changing shape of the global economy.

As comrade Chris Hani so rightly said, “We want to build a nation free from hunger, disease and poverty, free from ignorance, homelessness and humiliation, a country in which there is peace, security and jobs.”

It is time to celebrate and embrace the potential of our unemployed young, knowing that they are our future. How we meet this challenge will shape the quality of life that our children and their children will enjoy.

Economic outlook

Mister Speaker, there are encouraging signs of stronger recovery in the global economy as we enter 2011. But it remains essentially a two-speed recovery. There is moderate growth in the United States and parts of Europe again, whereas China and many other emerging economies continue to expand rapidly.

The roots of this divergent growth pattern lie in the unbalanced structure of world growth in the years leading up to the financial crisis. World growth came to rely too heavily on countries that exhibited overly high consumption, financed by countries with high savings and large trade surpluses.

The financial crisis and subsequent recession brought painful adjustments. However, the shift in world trade, investment, manufacturing, incomes and consumption is a structural transition that will take many years, as a multi-polar world evolves.

Up until the turn of the century, developing countries accounted for about 20 percent of global output. This will increase to 40 per cent by about 2015. Developing economies in Africa, Latin America and South Asia will play an increasingly important role in the global economy in coming years as incomes rise and poverty falls.

South Africa’s invitation to join the BRIC economies [Brazil, Russia, India and China] reflects this broadening of the sources of economic growth. Over the next five years, these economies will account for 36 per cent of world economic growth. We have to construct our own growth and development strategies to propel our economy forward, create jobs and compete on the global stage.

The New Growth Path outlines our approach to accelerate growth and employment, focusing on several key drivers:

* Continuing and broadening public investment in infrastructure,
* Targeting more labour-absorbing activities in the agricultural and mining value chains, manufacturing, construction and services,
* Promoting innovation through “green economy” initiatives, and
* Supporting rural development and regional integration.

The latest estimate released by the Statistician-General is that the domestic economy grew by 2.8 per cent in 2010. Strong commodity prices, low interest rates, and faster global growth, have been the main forces behind our economic recovery. Improving household consumption and accelerating investment will support an increase in economic growth over the medium term. Real GDP growth is projected to reach 3.4 per cent in 2011, 4.1 per cent in 2012 and 4.4 percent in 2013.

Steady employment gains – of about 2 per cent a year – will raise disposable incomes, supporting household consumption and investment.

Private gross fixed-capital formation increased in the second and third quarters of 2010 – a marked turnaround after five successive quarters of decline. Total investment is expected to grow by 3.9 per cent in 2011, rising to 6.8 per cent in 2013. The buoyancy of the investment recovery is an important determinant of future economic growth.

Real growth in exports is expected to average 6.5 per cent a year over the medium term as commodity exports benefit from strong demand and high prices.

Inflation is forecast to remain within the target range of 3 – 6 per cent, edging towards the upper end of the range in 2013 as the economy strengthens. Increasing food and oil prices represent risks to the inflation outlook. The price of Brent crude reached US$107 yesterday – further increases will put upward pressure on prices more broadly.

The improved terms of trade for South Africa contributed to a better current account deficit for 2010 than was expected a year ago. As it widens from the 3.2 per cent of GDP expected this year to 5 per cent in 2013, we would like it to reflect rapidly rising investment rather than higher consumption.

Macroeconomic stability in an uncertain world

Mister Speaker, the growth and transformation of financial markets in recent decades has seen increased volatility of exchange rates and capital flows. Global commodity markets now account for significant fluctuations in prices for our energy imports, mineral exports, and food supplies.

The macroeconomic environment facing South Africans – through interest rates, exchange rates, inflation, and credit conditions – can be destabilised by those international shocks. The macroeconomic policy task is to provide a stable and predictable economic environment by offsetting such shocks as far as possible.

Our monetary policy, designed to target inflation, has been conducted successfully by the South African Reserve Bank, achieving the current low rate of inflation and interest rates.

Fiscal and monetary policy will continue to work in partnership. Monetary policy, operated by the Reserve Bank, will continue to be focused on controlling inflation, and we will continue to ensure that fiscal policy is counter- cyclical within a sustainable long-term framework.

Movements in the exchange rate affect different sectors of the economy in different ways, and present difficulties in macroeconomic policy for many countries.

Recognising the impact of rand strength on the manufacturing industry, in particular, we announced measures in October to moderate the potential effect of capital inflows.

* Foreign exchange regulations were amended to permit greater foreign investment by South African institutions.
* Stepped up foreign exchange purchases by the Reserve Bank have partially offset upward pressures on the rand.

As a result of these policy adjustments, and in line with shifts in investor sentiment globally, the rand depreciated from December 2010 to midF ebwary 2011 by about 10 per cent against the US dollar, the euro and sterling.

During 2010 South Africa received net inflows of R92 billion in liquid foreign capital, which contributed to upward pressure on the exchange rate. Since the fourth quarter of last year, South Africa experienced capital outflows. Along with uncertainties and volatility in global financial markets this contributed to the depreciation of the rand.

Furthermore the increase in oil and food prices is posing new risks to the inflation outlook.

Government will continue to assist the Reserve Bank to accumulate foreign exchange reserves when market conditions are favourable and engage in foreign currency swaps to moderate the effect of capital flows on the exchange rate.

Overly rapid currency depreciation carries risks to macroeconomic stability, however, and so we expect the Governor of the Reserve Bank to be vigilant in monitoring inflationary pressures and ensuring that monetary policy is effective in meeting our inflation targets. The credibility of monetary policy in achieving our target inflation range, combined with our commitment to fiscal discipline, are important foundations for moderating exchange rate volatility.

Changes in the volume and direction of capital flows may be significant over the year ahead, and are largely beyond our control or influence. We will allow the actions announced in the MTBPS to have their full effect and continue to monitor capital flows.

Other countries, too, experienced high capital inflows in 2010. Several, including Brazil, South Korea, and Thailand, introduced tax or regulatory measures to deter such investment flows and currency speculation. We have examined these options and their impact, and will continue to monitor the adjustments made in other countries, while recognising that circumstances vary from country to country. National Treasury is cognisant of the risk that financial instability and currency volatility can arise from large capital movements. If necessary, appropriate steps to moderate these effects will be taken, together with the Reserve Bank.

Transformation of the financial sector

Mister President, you pointed out in your State of the Nation Address that our financial sector proved to be remarkably resilient in the face of the recent financial crisis and the global economic meltdown.

In line with global developments, there are further steps to be taken to enhance the regulatory framework and improve financial services. The proposed reforms include a shift to a “twin peak” system of financial regulation, with market conduct under the Financial Services Board, and prudential regulation in the Reserve Bank. An inter-agency financial stability oversight committee will be formed, and a Council of Financial Regulators. A policy discussion paper sets out the new framework for how the financial sector could better serve South Africa.

Among the issues to be addressed are the findings of Judge Jali’s Enquiry into Competition in Banking – findings that are echoed by many people’s complaints that bank charges are high and opaque. As senior citizen Mr Bill Nobile wrote to me last week, “We do not fully understand the complexity of the payment systems for credit and other cards but there does appear to be considerable leeway in reducing costs to the consumer, including the elderly.” I have met with the chief executives of our banks to take up this issue, and I believe it is time to put in place measures that will ensure that banking charges are fairly set, are transparent and do not create undue hardship.

As part of the work of modernising and harmonising our investment framework, Treasury is releasing two further discussion papers – one on the regulation of foreign direct investment, and another on the prudential framework for institutional investors. We look forward to consultation with stakeholders on these issues over the coming months.

The fiscal framework

South Africa adopted a countercyclical fiscal stance two years ahead of the crisis. We entered the recent recession with a healthy fiscal position and a comparatively low level of debt. This allowed us to maintain government spending despite a sharp deterioration in revenue.

Government spending continues to grow over the next three years, though at a slower rate than in the recent past. Since the Medium Term Budget Policy Statement, several additional spending allocations have been made, including provision for a response to the damage caused by last year’s floods.

The impact of slightly slower growth in revenue and the additional expenditures is that the deficit for next year is half a percentage point of GDP higher than we projected in October. The trend remains downwards however, with a deficit of 3.8 per cent of GDP expected in 2013/14. This reduction in the deficit over the next three years is consistent with stabilising the growth in our debt and the conduct of a countercyclical fiscal policy. National government net debt is set to rise from R526 billion at the end of 2008/09 to over R1.3 trillion in 2013/14.

Mister Speaker, to ensure that our spending on schools, hospitals and roads is not crowded out by an ever-rising interest burden, government debt needs to be managed sustainably. We don’t want an unmanageable increase in expenditure, nor do we want the severe austerity measures some western countries have had to adopt.

In view of these considerations, Parliament asked the National Treasury to investigate how we might reinforce long-term sustainability of our public finances. For the further consideration of the House, I will be proposing a set of fiscal guidelines, informed by three principles:

* A counter-cyclical fiscal stance, to counteract variations over the business cycle,
* Long-term debt sustainability, to ensure that financing costs do not crowd out expenditure on public services, and
* Inter-generational equity, so that our children’s wellbeing is not compromised by short-term interests.

Developing fiscal and budgetary guidelines will strengthen parliamentary oversight, encourage transparency and enhance accountability.

Division of revenue

Mister Speaker, our Constitution sets out specific criteria for the sharing of nationally-raised revenue between national departments, provinces and municipalities. Proposals for this division are set out in the Division of Revenue Bill.

Total expenditure from the National Revenue Fund of R889 billion is provided for in 2011/12, which is 9.8 per cent more than the revised estimate for 2010/11.

* Debt service costs will amount to R77 billion next year, rising to R104 billion in 2013/14. Though our overall debt burden remains moderate, the size of the budget deficit at present results in debt service costs rising faster than any other category of spending over the period ahead.
* In keeping with established practice, the budget framework includes an unallocated contingency reserve of R4 billion in 201 1/12, Ru billion in 2012/13 and R23 billion in 2013/14. This allows for unforeseeable and unavoidable spending requirements next year, and future policy priorities over the medium term.
* This leaves R808 billion to be allocated between national, provincial and local government in 2011/12, up from R743 billion in 2010/11 and rising to R926 billion by the end of the MTEF period. National departments are allocated 47 per cent of the total, provinces 44 per cent and municipalities just under 9 per cent. National transfers to local government have increased substantially, and will amount to over R70 billion in budgetary assistance and infrastructure grants in the 2011/12 year.

Revisions to baseline, savings and reprioritisation

Mister Speaker, the proposed medium-term expenditure framework has been structured to enable government’s policy priorities to be implemented, in accordance with delivery agreements.

The 2011 Budget makes available R94 billion in addition to baseline allocations over the next three years. Savings of R30.6 billion were identified, of which R21 .6 billion was reprioritised within departmental baselines to meet existing commitments. In order to accommodate additional funding for the National Student Finance Aid Scheme, all departments were required to effect unprecedented spending cuts of 0.3 per cent, amounting to R6 billion. I want to place on record our appreciation to Cabinet colleagues and departmental accounting officers for their co-operation.

Part of this revision to baseline allocations is the carry-through cost of the 2010 wage agreement, which requires an additional R39.4 billion for remuneration of employees over the MTEF period. The public service salary bill has doubled over the past five years, from R156 billion to R314 billion. This constitutes just under 40 per cent of consolidated non-interest expenditure.

Consolidated government expenditure

Members of the House will know that the spending plans of national government departments, public entities and social security funds are set out in considerable detail in the Estimates of National Expenditure. Estimates of consolidated government expenditure for the period ahead are set out in chapter 8 of the Budget Review.

Consolidated expenditure is projected to increase from R897 billion in 2010/11 to R1.2 trillion in 2013/14, with non-interest spending on public services growing by an average of 8 per cent a year.

Creating jobs

As you have emphasised, Mister President, our aim is to put development first, and not dependence on welfare.

The Budget therefore proposes a range of measures to accelerate employment creation over the period ahead:

* As announced by the President, R9 billion has been set aside over the next three years for a Jobs Fund to co-finance innovative public- and private-sector employment projects.
* Further education and training colleges are allocated over R14 billion for the period ahead, and student financial assistance will be stepped up.
* Over R20 billion goes to Sector Education and Training Authorities and R5 billion to the National Skills Fund, which have key responsibilities for training work-seekers.
* The expanded public works programme is R73 billion over the next three years, including community-based projects, environmental and social programmes and maintenance of roads and infrastructure.
* Tax incentives have been renewed for manufacturing investment of R20 billion, with a focus on job-creation potential.
* Investment will be increased in housing, and residential infrastructure and services.
* Small enterprise development initiatives will be strengthened, including a focus on employment activation by the National Youth Development Agency.
* Initiatives are under way to promote rural employment, and provide stepped up support for agricultural producers.
* Funding is allocated for renewable energy, environmental protection and “green” economy initiatives.
* As promised last year, details of a R5 billion youth employment subsidy are set out in a discussion paper, for further consideration in the House and at Nedlac.

We must offer young work-seekers real hope where at present there is despair. We need to do things differently. We need to have the courage to pilot new approaches and build new partnerships, promoting innovation throughout our economy.

Improving the quality of education

Education takes up the largest share of government spending – 21 per cent of non-interest allocations – and receives the largest share of the additional allocations.

* An amount of R8.3 billion over the MTEF period is added for schools infrastructure. A programme to address backlogs in school facilities over a three-year period will be administered by Minister Motshekga’s department.
* Just under Ri billion is added for funza lushaka teacher bursaries and bursaries for postgraduate students in natural sciences.
* R9.5 billion is provided for expanding further education and training colleges and skills development.

Including adjustments for the remuneration of teachers, a total of R24.3 billion will be added to education and skills spending over the next three years, which rises from R190 billion next year to R215 billion in 2013/14.

Minister Nzimande and Minister Motshekga exercise stewardship, Mister Speaker, over the largest network of service providers in our economy, and the most important programme of investment in future growth and redistribution.

Enhancing health services

Several further steps in implementing Minister Motsoaledi’s ten-point plan for reform of health services are accommodated in this Budget.

Total spending on public health services has increased strongly over the past three years, from R63 billion in 2007/08 to Ri 13 billion projected for next year. In addition to provision for higher personnel expenditure over the period ahead, over R8 billion is added to specific health service interventions, laying the foundations for National Health Insurance. This includes:

* R1.2 billion to introduce family health care teams,
* R2.9 billion to improve quality in health facilities, medical equipment and hospital systems,
* R1.4 billion for improved district-based maternal and child health services,
* A new Office of Standards Compliance to inspect and certify hospitals,
* Funding for the Department of Health to lead the necessary institutional and management reforms,
* Revitalising health infrastructure, including a new infrastructure grant for provinces,
* Expanding capacity to train medical doctors and nurses.
Total expenditure on the Comprehensive HIV/Aids conditional grant will amount to R26.9 billion over the MTEF period, based on an increase in the number of people on treatment from 1.2 million this year to 2.6 million by 2013/14.

The phasing in of National Health Insurance will require substantial reforms to address imbalances across the public and private sectors and expand health professional training. The financial and organisational implications of these reforms are being jointly addressed by the Department of Health and the Treasury.

Making communities safer

Additional resources are also allocated to the safety and security cluster led by Ministers Radebe, Mthethwa, Cwele and Mapisa-Nqakula for the period ahead. A total of R12.8 billion goes to the departments of Police, Justice and Constitutional Development, Correctional Services and the Independent Complaints Directorate. The budget provides R2.1 billion for the increase in police personnel to 202 260 in 2013/14, from about 190 000 at present. An additional R670 million is allocated for the upgrade of information technology over the MTEF period, and R490 million is for construction of courts, including new high courts in Nelspruit and Polokwane.
Total expenditure on public order and safety functions will amount to R91 billion next year, rising to R105 billion in 201 3/14.


On Minister Sisulu’s Defence vote, further allocations are made for assistance in safeguarding the country’s borders, and to upgrade and maintain border facilities and equipment.

Additional funding of R1.3 billion in 201 1/12, rising to R2 billion in 2013/14, will bring total expenditure on defence and state security to R38.4 billion next year, rising to R43.9 billion in the outer year.

Economic development and industrial promotion

Additional allocations in support of industrial and economic development over the period ahead include:

* R600 million for enterprise investment incentives,
* R735 million for the Competition Commission and other economic regulatory agencies,
* R250 million to the Industrial Development Corporation to support agro-processing businesses,
* R120 million for the national tooling initiative,
* R282 million for the Micro-finance Apex Fund, and
* R55 million for Khula Enterprises to pilot a new approach to small business lending.

Under the guidance of Minister Davies, about R10billion will be spent on Industrial Policy Action Plan investment promotion over the MTEF period, including the automotive production and development programme, clothing and textiles production incentives, the film and television production incentive and support for small manufacturing and tourism enterprises.

Small businesses are an important source of jobs. Businesses that employ fewer than 50 workers account for 68 per cent of private sector employment.

We need to get our small business sector growing. Allow me to share just a few inspiring examples.

* Miondolozi Kosi is a young man with a passion for building skills in his community, Willowvale. He has set up a small ICT training Centre where he has trained more than 120 people IT skills.
* Norman Mpedi is an ex-MK combatant, who after being forced to live off the bush in Angola discovered the umviyo fruit and has grown this into a thriving juice-making, Nguni Juice.
* Antonio Pooe started Exactech Fraud Solutions in 2007 as a small one-man business operating out of his home and has since grown it to a company with offices in Johannesburg, Cape Town and Durban and he now employs 24 people.

These are a few examples of thousands of small and micro businesses which have taken root and fill a vital place in our economy. In many instances they have been supported by financing from both the private sector and programme of the Department of Trade and Industry.

Rural development and agriculture

Under Minister Joemat-Petterssen and Minister Nkwinti, government’s land reform and agricultural development programmes are focused on rural job creation and poverty reduction, while expanding agricultural production and improving food security.

Additional allocations amounting to R2.2 billion go to these functions, including a further R400 million for the comprehensive agricultural support programme and the land care programme grant and funding to enable a further 5 000 recruits into the National Rural Youth Services corps.

Including provincial allocations for agricultural support, a total of R19 billion will be spent on rural development and agriculture in 2011/12, rising to R21 billion in 201 3/14.


Additional allocations of R10.3 billion are made over the MTEF for transport infrastructure and services on Minister Ndebele’s vote.

* This includes R3.8 billion for maintenance of the coal haulage road network, financed from the increased levy on electricity collected from Eskom.
* An additional Ri .5 billion goes to provinces for road maintenance and weighbridges, as part of a new conditional grant for roads infrastructure.
* Funds are also stepped up for the Passenger Rail Agency of South Africa, for replacing signaling infrastructure and refurbishing rail coaches.
* A further R2.5 billion goes to municipalities for public transport systems and infrastructure.
Consolidated government transport spending will amount to R66 billion next year, rising to R80 billion by 201 3/14.

Environmental protection and adapting to climate change

Funding amounting to R800 million has been set aside over the next three years for “green economy” initiatives. Specific allocations will be made in the Adjustments Budget.

Additional allocations for research into energy-efficiency technologies are proposed, efforts to prevent wildlife trafficking and improved air quality, waste disposal and coastline management. A total of R2.2 billion is allocated for environmental employment programmes over the medium term period and funding is provided on Minister Molewa’s vote for hosting the Conference on Climate Change in November this year.

Total spending on the integrated national electrification programme will increase to R3.2 billion in 2013/14.

Housing and community amenities

Mister Speaker, recent research published by the Development Policy Research Unit confirms that significant progress has been made in the delivery of housing, water, sanitation and electricity.

* The proportion of poor households living in formal dwellings has increased from 47 per cent in 1994 to 66 per cent,
* Households with piped water have increased from 28 per cent to 53 per cent,
* Those with electricity for lighting, from 20 per cent to 75 per cent, and
* With flush or chemical sanitation, from 18 per cent to 37 per cent.

Additional allocations to Minister Sexwale’s vote for human settlements upgrading and municipal services amount to R4.9 billion over the MTEF period.

Two new grants to provinces and municipalities are proposed under Minister Shiceka’s oversight, to respond more rapidly to disasters.

A further R3.6 billion is added for water infrastructure and services, including funding for the acid water drainage threat associated with abandoned underground mines. A report on this by a team of experts has been approved by Cabinet, and Minister Molewa is taking the lead in consulting with industry on a shared and coordinated response.

Government aims to upgrade 400 000 homes in informal settlements by 2014. A new urban settlements development grant contributes R21 .8 billion over the next three years for these projects.

Total spending on the housing, water and community amenities social wage will amount to R122 billion in 201 1/12, rising to R138 billion in 2013/14.

Social protection

The social protection budget is another substantial part of the social wage. This practical expression of a caring society amounts to R147 billion in 2011/12, rising to R172 billion in 2013/14. Income support to poor households has been extended over the past decade, mainly through the phased extension of the child support grant to older children.

At present close to 15 million fellow citizens receive social grants on Minister Dlamini’s vote, equivalent to more than a quarter of the population. Social grant payments mainly go to pensioners (38 per cent), children in poor households (35 per cent) and the disabled (19 per cent).

With effect from April:

* The monthly state old age grant and the disability and care dependency grants will rise by R60 a month to R1140,
* For pensioners over the age of 75, the old age grant will rise by a further R20 a month to Ri 160,
* Foster care grants will increase by R30 to R740,
* The child support grant will increase from R250 to R260 in April, and to R270 in October.
* Revisions are also proposed to the means test thresholds, which will benefit households with modest incomes that reduce their grant entitlements.

Social protection also includes unemployment insurance, occupational injury compensation and the road accident fund. Proposals are now well advanced for alignment and consolidation of these social security arrangements, together with the introduction of a mandatory basic retirement savings plan. Over R9 billion a year is currently spent in administering our fragmented social security system. An integrated and better coordinated social security system will offer better protection to vulnerable households, at a lower administrative cost.

Revenue estimates and tax proposals

Let me turn, Mister Speaker, to the revenue required for these spending plans.

Members of the House have been very patient, and may be thinking of the need for liquid refreshment, and the cost thereof! I will say something about that in a moment. But first let me report on revenue.

Revenue outcomes and tax expenditures

I am pleased to report that tax revenue has recovered during 2010/11. The revised estimate is R672 billion, or 12.3 per cent higher than last year. Personal income tax has increased strongly as have VAT receipts and customs duties. However, corporate income tax revenue has remained below projections, indicating the effect of the 2009 recession on company profits.

Total budget revenue, including provincial receipts, and income of social security funds and public entities, is R755 billion, or 13.6 per cent above the 2009/10 estimate.

This Budget Review includes, for the first time, a tax expenditure statement. This is a summary of potential tax revenues foregone as a result of various tax incentives. The purpose of the statement is to make transparent those fiscal incentives or indirect subsidies that lie behind the headline revenue and spending numbers. The initial estimate puts the value of tax expenditures at R78 billion a year. We are also publishing the latest edition of the annual Tax Statistics which provides the most detailed view to date of our tax base and revenue contributions and helps to complete the overall picture of the budget system.

Tax proposals – individuals, trusts and non-business entities

Mister Speaker, revisions to the personal income tax brackets and rebates are proposed which represent relief for individuals of R8.1 billion. These adjustments compensate for the effects of inflation for the coming year and the balance of the fiscal drag effect that could not be accommodated last year.

From March 2011:

* Tax will be payable only on income above R59 750 for taxpayers below age 65, and R93 150 for those 65 and older.
* A third rebate of R2 000 per year is proposed, increasing the tax threshold for taxpayers aged 75 and older to Ri 04 261.
* An increase in the annual tax-free interest income to R22 800 for individuals below 65 years is proposed, and to R33 000 for individuals 65 years and over. The treasury is exploring the possibility of incentivised savings schemes for housing or for education as alternatives to this exemption.
* The tax-free lump sum benefit upon retirement will increase from R300 000 to R315 000.
As in past years, inflation-related increases will be made to the monthly thresholds for tax-deductible contributions to medical schemes. These deductions and those for qualifying out-of-pocket medical expenses will be converted into tax credits with effect from March 2012. A tax credit is more equitable since it provides for an equal benefit to all taxpayers regardless of their income.

Changes to the tax treatment and administration of contributions to retirement funds are also proposed. These will simplify administration and improve the fairness of the system. There will be extensive consultation on the matter. The proposals include treatment of employer contributions as a fringe benefit, limits on tax deductible contributions and alignment of the tax treatment of provident and pension funds.

From March 2012, an employer’s contribution will be treated as a taxable fringe benefit, and employees will be allowed to deduct up to 22.5 per cent of taxable income for contributions to approved retirement funds. A maximum of R200 000 a year will be deductible. With a view to protecting workers’ savings, it is proposed that the one-third lump-sum withdrawal limit applicable to pension and retirement annuity funds should also apply to provident funds.

The following capital gains exclusion amounts will be increased from 1 March 2011:

* For individuals and special trusts, from R17 500 to R20 000 annually,
* On death, from R120 000 to R200 000,
* On disposal of a small business when a person is 55 years or older, from R750 000 to R900 000.

The annual trading income exemption for public benefit organisations will increase from R150 000 to R200 000, and for recreational clubs from RiCO 000 to R120 000.

Withholding tax on gambling winnings

Mister Speaker, last year we indicated that the taxation of gambling winnings would come under review. With effect from April 2012, all winnings above R25 000, including pay-outs from the National Lottery, will be subject to a final 15 per cent withholding tax. This is in line with practice in a number of other countries, such as the United States. I hope it will assist in discouraging excessive gambling. Despite the obvious merits of this argument, I expect vigorous debate dunng the Parliamentary process.

National health insurance

Proposals are under review for a national health insurance system, as part of the broader restructuring and enhancement of health services. There will be substantial cost implications. We will consider and consult on options for meeting the funding requirements, including a payroll tax (payable by employers), an increase in the VAT rate and a surcharge on individuals’ taxable income. The fiscal and financial implications of health system reform, and alternative revenue sources, will be examined in the year ahead.

Tax proposals – businesses

For businesses, the following is proposed:

* As indicated in previous years, a dividends tax will take effect on 1 April 2012, replacing the secondary tax on companies.
* Dividend schemes that undermine the tax base will be closed by treating the dividends at issue as ordinary revenue. These include dividend cessions, where taxpayers effectively purchase tax-free dividends without any stake in the underlying shares.
* Government introduced the concept of a venture capital company into the Income Tax Act in 2009, but the response has been poor. The approach will be refined so as to facilitate greater access to equity finance by small and medium businesses and junior mining companies.
* From March 2011, the turnover tax for micro businesses with annual turnover up to R1million will be adjusted so that tax will be payable only if turnover exceeds R150 000 a year. The rate structure will also be reviewed.
* Also, from 1 March 2012, micro businesses that register for VAT will no longer be barred from registering for turnover tax.
* The learnership tax incentive, designed to support youth employment, will expire in September 2011. Government proposes to extend this for a further five years, subject to an analysis of its effectiveness with all stakeholders.
* A youth employment subsidy is proposed. Subject to completion of consultations, it will take the form of a tax credit costing R5 billion over three years to be administered by the South African Revenue Service through the PAYE system.
* To support the objectives of the industrial policy action plan and the New Growth Path, certain investments qualify for tax relief. Consideration will be given to expanding such incentives for labour intensive projects in Industrial Development Zones (IDZ5).

Indirect taxes

* The transfer duty exemption threshold will be increased from R500 000 to R600 000.
* Excise duties on alcoholic beverages will be increased by between 4.5 and 10.3 per cent – an increase of 6.4 cents for a 340m1 can of beer, 13.5 cents per bottle of wine, or R2.86 for a bottle of spirits.
* Taxes on tobacco products will increase between 6 and 10.2 per cent – 80 cents more for a packet of 20 cigarettes.
* Currently there is an ad valorem excise tax on new motor vehicles. The rate increases as the price of the vehicle increases. These rates will remain unchanged below a purchase price of R900 000. For vehicles above R900 000, the tax rate will increase to a maximum of 25 per cent, from 20 per cent at present.
* The general fuel levy will increase by 10 cents a litre on both petrol and diesel on 6 April 2011.
* The Road Accident Fund levy will be increased by 8 cents to 80 cents a litre.
* Increases will take effect on 1 October 2011 in the air passenger departure tax on flights to international destinations.
* The levy on electricity generated from non-renewable and nuclear energy sources will increase by 0.5c/kWh to 2.5c/kWh from April 2011. The increase should not impact on electricity tariffs, as it has already been taken into account in the National Energy Regulator’s approved tariff structure.

Tax administration

Mister Speaker, allow me to pay tribute again to the continued support received from millions of honest taxpayers. Their contributions are reflected in the recovery of tax revenue this year. We have been able to expand spending where other nations have been forced into austerity adjustments. Even those who have not contributed fully to date have begun to come forward to take advantage of the Reserve Bank and SARS’s voluntary disclosure programmes. Others who wish to have until the end of October this year to join the 1200 applicants to date.

Administrative reforms will continue to focus on ensuring that all those who earn an income through employment or other economic activity pay what is due to the fiscus.

This year, SARS will turn its attention to enhancements to the business tax process including corporate income tax, VAT and an enhanced Turnover Tax for emerging businesses. As with personal income tax, a pre-requisite for these improvements is an accurate picture of all business entities no matter their size or tax liability. SARS, in partnership with other state institutions, will make significant improvements to the business registration process this year – including conducting a door-to-door drive in the informal sector to help complete the picture.

Tax and customs evasion remains a serious threat. Working together, the police, the prosecuting authority, the Financial Intelligence Centre and SARS ensured that more than 200 taxpayers were convicted of fraud and tax evasion during the last six months.

Recently, customs officers with the support of the police impounded nearly 3 000 illegally imported second-hand vehicles, two significant tobaccos smuggling rings have been snuffed out and a tobacco manufacturer has been shut down in the last month. We are also, in conjunction with the tobacco industry, investigating a new method of marking and authenticating legal cigarettes with a counterfeit-proof digital system to replace the current “diamond mark”.

Mister Speaker, the sector most visibly affected by the illicit economy in recent years has been the clothing and textile industry, resulting in significant loss of jobs in local manufacturing plants. In the coming months a multidisciplinary task team comprising representatives of the manufacturing, importing and retail industries and a range of public sector stakeholders, will begin interventions across the entire supply chain to clamp down on illicit clothing and textiles imports.

Measures to combat fraud and corruption

Mister Speaker, public procurement plays a significant part in the economy and is central to government service delivery. However, citizens and taxpayers do not get full value for money, because this is an area vulnerable to waste and corruption. This compromises the integrity of governance and frustrates the pace of service delivery.

Alongside the work of the competition authorities in addressing supplier collusion and tender-rigging, a strong procurement framework is critical to boosting jobs and service delivery.

The first round of measures announced in October will come into effect this year:

* Government departments will be required to establish rigorous demand management procedures, including submission of advance tender programmes for the next financial year to the relevant treasury authority.
* Limits will be prescribed for variation orders, to restrict significant changes to procurement orders and bring our system in line with international standards.
* Companies bidding for tenders will be required to disclose the identity of all directors, to determine whether any of the directors are government officials or tax non-compliant.

There are currently 53 investigations involving procurement irregularities, involving contracts worth R3 billion. Minister Radebe recently reported that 65 people linked to some of these investigations have been arrested and brought before the courts. More than R250 million has been seized by the state.

SARS is investigating another 9 cases of tender fraud, with a total value of approximately R1.7 billion.

SARS has also increased its analytical capacity with the aim of ensuring that vendors winning state contracts satisfy their tax obligations fully. As at the end January 2011, SARS had identified some 13 000 vendors who have won state contracts and who owe taxes amounting to over R1billion.

Mister Speaker, we have a shared responsibility to prevent corruption and we call on all citizens to blow the whistle on corruption and to report any procurement irregularities to the relevant authorities.

Equally important is the call of this Government to its managers to ensure that our communities and our taxpayers get full value for their money. Poor delivery and stealing from the fiscus are never acceptable. Senior managers of our institutions and municipalities are expected to work actively to improve their procurement processes and oversight.

Infrastructure investment, city planning and development finance

Public sector infrastructure spending

Mister Speaker, government and state-owned enterprises will spend more than R800 billion over the next 3 years on new power stations, road networks, dams and water supply pipelines, rail and ports facilities, schools, hospitals and government buildings. This builds on the steady progress made over the past decade which saw the contribution of government and public enterprises to gross fixed capital formation rise from 4 per cent of GDP in 2000 to 8.6 per cent in 2009. These are long-term investments in the future of our country, and in the capacity of the economy to grow and create jobs for generations to come.

Major projects under way include:

* Medupi power station, which will generate 4 700 MW at a projected investment cost of R125 billion,
* The R23 billion Transnet multi-product pipeline which will secure our inland fuel supplies,
* And the R21 billion freeway improvement scheme, which has already significantly eased congestion on Gauteng roads.

These investments are largely financed through borrowing, with costs recovered from future electricity consumers and road-users.

As part of a long-term strategy for modemising public transport in metropolitan areas, the Passenger Rail Agency of South Africa is embarking on an 18-year programme to replace its coach and locomotive fleet, at an estimated cost of R86 billion.

While infrastructure spending in the lead-up to the Soccer World Cup assisted in moderating the impact of the recession on South Africa, there has been an apparent deterioration in government construction spending over the past year. The challenge of intensifying infrastructure spending over the period ahead will require attention to planning, budgeting and contract management in national and provincial departments and municipalities.

Planning and financing cities for inclusive growth

It is time for special initiatives to accelerate growth and development in South Africa’s cities, which have immense potential for inclusive growth and are home to many millions of poor people.

The public finance challenge is to balance investment in expanding urban capacity while also providing key public services – electricity, water, sanitation, refuse removal and public transport. An efficient and cost-effective public transport system is crucial because the majority of our people live too far from where job opportunities are. In addition, through better land use management, we need to deliver integrated human settlements that break from the apartheid past.

A start is made in this budget, in the allocation of funds directly to cities to upgrade informal settlements. Minister Sexwale will implement the accreditation of municipalities which have demonstrated their capacity to manage the low-income housing subsidy system. The public transport function, including the management of rail, has been delegated by Minister Ndebele to metropolitan municipalities in terms of the National Land Transport Act. These are steps that create direct responsibilities for city councils, and open up opportunities for accelerating investment and change in the urban landscape and how cities promote their local economic development.

Development finance institutions

Mister Speaker, a Development Finance Institutions Council has been established, as recommended by a review committee. One of its primary tasks is to ensure alignment between the programmes of these institutions and government’s development agenda.

Members will recall that in last year’s budget we agreed to support an expanded lending capacity of several development finance institutions. The recapitalisation of the Land Bank is under way. So far, Ri .7 billion has been transferred to the Land Bank, and its finances are improving. The Land Bank board has agreed to step up the Bank’s support for emerging farmers. In cooperation with the Departments of Rural Development and Land Reform, and Agriculture, Forestry and Fisheries, steps are in progress to turn failing farms that were transferred to emerging farmers under the land reform programme into successful business enterprises.

The lending capacity of the Development Bank of Southern Africa has also been enhanced, by providing an interim guarantee while processing the necessary legislative amendment. The DBSA is now working closely with National Treasury and the departments of Health and Water Affairs, amongst others, on strengthening infrastructure project management – revitalising five major hospitals and their medical faculties, and preliminary planning of nine bulk water schemes. The Bank also plays a key role in supporting municipal financial capacity, and will assist in operationalising the new Jobs Fund. Our agreement is that the delivery capacity and excellence we mobilised at national level to build stadiums and host the World Cup, will be the benchmark for undertaking these initiatives.

Including the investment and lending capability of the Industrial Development Corporation, our development finance institutions are ready to expand financing substantially over the next three years. The challenge is to ensure available funds are allocated effectively and efficiently, to contribute to raising productive capacity and to complement the investment activities of the wider financial sector.


Mister Speaker, I extend my sincere appreciation to the President and Deputy President for their unwavering support and wise counsel. Keeping our country on a steady course through the Great Recession has been a challenging task for all of us and the support of the Presidency has been both indispensable and inspirational.

I would like to thank my Cabinet colleagues for their support. The Budget is our collective statement. Your positive and encouraging contributions have been most helpful.

The Members of the Ministers Committee on the Budget have shouldered an immense responsibility to restwcture and reform our fiscal system and make bold recommendations to Cabinet. Theirs has been an excellent and enduring team effort.

Deputy Minister Nene has offered wise insights and shared many responsibilities. He forms an invaluable part of a maturing ministry.

Thanks also go to the MEC5 for Finance, who play a vital role in managing over 40 per cent of the budget.

Our collective thanks go to:

* Governor Gill Marcus and the staff of the South African Reserve Bank,
* Commissioner Oupa Magashula and the South African Revenue Service,
* Jabu Moleketi, chair of the DBSA, and CEO Paul Baloyi,
* The Financial and Fiscal Commission and its acting chair Bongani Khumalo,
* NEDLAC, its Managing Director, Herbert Mkhize, and representatives of the business, labour and community constituencies on the Public Finance and Monetary Chamber,
* The Honourable Thaba Mufamadi and Honourable Charel de Beer who chair the Standing and Select Committees on Finance respectively and to the two chairs of the Appropriations committees, the Honourable Eliot Sogoni and Honourable Teboho Chaane,
* Lesetja Kganyago and the National Treasury team, who continue to surpass their own high standards and remain wonderful examples of loyal and professional public servants, and are an invaluable asset to our democratic state,
* Staff of the Ministry who make my work easier and give vital support daily.

I thank my family for their support and sacrifices so that I may serve our country.

Once again my sincere appreciation to the wide range of South Africans who provide positive feedback and ideas on how government could work better and differently.

Fellow South Africans, the President has clearly stated that job creation is our number one priority. This budget outlines what government’s capabilities and finances can do to support the delivery of jobs.

Now it is time for all of us to say “making South Africa work begins with you and me.”

Giving every South African the dignity of a job, the security of an income, the prospect of training, the support to launch new businesses, the confidence to be an entrepreneur and the sheer passion and optimism to break the shackles of unemployment – is the best legacy this generation can leave for the next.

The world is full of opportunities. Ours is the task of transforming these opportunities into real, tangible outcomes which all of our people can experience and call their own.

Or as Mandisa Motha-Ngumla advised me in a budget tip: “Government must teach its people to fish; not be suppliers of fish. The latter is not sustainable; the government pond will never be able to supply more fish in twenty years than it is doing now to the ever growing masses of people of this countiy. Let’s work to reduce dependency and give back dignity that was eroded by our past.”

We repeat, with jobs comes dignity. With dignity comes participation. And from participation emerges prosperity for all.

In Madiba’s words “In judging our progress as individuals we tend to concentrate on external factors, such as one’s social position, influence and popularity, wealth and standard of education… It is perfectly understandable if many people exert themselves mainly to achieve all these. But internal factors may be even more crucial. . .Honesty, sincerity, simplicity, humility, pure generosity, absence of vanity, readiness to seive others qualities which are within easy reach of every soul.”

How the budget will be spent

How the budget will be spent


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This better be false

South Africa has been through a lot of service delivery strikes last year and the beginning of this year, most of them cannot be really explained how they suddenly went quiet. As a typical curious non-practicing journo I thought I should do my own intelligence (can’t rely on state’s intelligence reports their truth is often their hypothesis, if not as my dad would say ‘inyani bayayinkinkisha’ [through comes out in bits and pieces over a period of time]).

So I went out and had conversations with various people, just checking what has happened since their last strikes. Started of at areas I worked in and to my surprise they have something up their sleeve for the General (yes the one with muscle shirts or cow boy hats also known as Beki Cele) he’s about to be a very busy men post Soccer Word Cup.

After meeting parents of a group of dedicated high school learners (Future Fighters) who are determined to make a difference in their communities over the weekend, I initiated a chat with security guys who seemed irritated by some non-South African (pimps) who are lifting their hands against their employees (women of the night). This conversation went on and on until their supervisor came and join us. He shared their concern and was with them all the way, I was taken aback by this due to his level of education but it seems his heart was touched by the screams (from women of the night) he hears every night especially over weekends. He was also concerned about the easy access to drugs the youth has since the arrival of “illegal Nigerians”, how these are destroying their future. Further how they bribe their way out of arrest while South African citizens pay exorbitant amounts of money through the legal processes to clear their name.

I gathered from all the people I spoke to thus far that all their actions are on hold until after the World Cup, this was a surprise for me because in most countries the world cup is targeted by protesters or those who feel aggrieved to send a strong message and get maximum media exposure. So I probed (Xolani Gwala or Debra Patta’s style) I guess I shouldn’t have probed as xenophobic tendencies came up and the anger on their faces was more than enough to tell that these guys have had it.

So if you’re close to the General (yes the one who can dance until the morning comes) you’d better warn him to use these 2 months (May, June) to prepare his entourage for the challenges ahead. I for one wouldn’t like us to make international news for the wrong reasons. If you’ve got our President’s ear, you better advise him of the possible challenges ahead, advise him to ensure that his entourage use these two months to engage communities and ensure that they understand what their service delivery plans are, what are the time-lines etc. If what I’m hearing is true I wouldn’t be a proudly South African as I am right now post Soccer World Cup.

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Filed under Commentary, community development, Education, Health, Politics, South African Government



President of the Republic of South Africa, Jacob Zuma

President of the Republic of South Africa, Jacob Zuma



03 JUNE 2009




Honourable Speaker;
Chairperson of the National Council of Provinces;
Deputy Speaker of the National Assembly and Deputy Chairperson of the NCOP;
Deputy President of the Republic, Kgalema Motlanthe
Former President of the Republic, Thabo Mbeki, 
Our icon, the First President of a democratic South Africa, Isithwalandwe Nelson Rolihlahla Mandela, 
Former Deputy Presidents,
Distinguished Premiers and Speakers of our Provinces;
Esteemed members of the Judiciary;
Chairperson of SALGA, mayors and leaders in our system of local government;
Chairperson of the National House of Traditional Leaders and our honoured traditional leaders;

Heads of Chapter 9 Institutions;
Governor of the Reserve Bank,
Religious leaders,
Directors-General and other leaders of the public service;
President of the Pan African Parliament, Honourable Idriss Endele Moussa,
Your Excellencies Ambassadors and High Commissioners;
Distinguished guests, comrades and friends;
Fellow South Africans,

Dumelang, Abusheni, Molweni, 

On the 22nd of April, millions of South Africans went out to cast their votes. They exercised their democratic right spurred on by the desire to change their lives for the better. In their overwhelming numbers, they confirmed that working together we can do more to fight poverty and build a better life for all. They were encouraged by the vision of an inclusive society, a South Africa that belongs to all, a nation united in its diversity, a people working together for the greater good of all. We are humbled by this decisive electoral mandate given by the people of our country, who have chosen their government in a most convincing manner. 

Honourable Members, Our nation has over the past few years gone through very challenging times. It is thanks to the fact that we have a strong and fully functional constitutional democratic system, with solid institutions, that we overcame these difficulties smoothly and with dignity. Today’s occasion is a celebration of what makes this democracy work. It is also a celebration of our culture of continuity and collective responsibility. This is evidenced by the presence here of our icon Madiba, who laid the foundation for the country’s achievements, and that of former President Thabo Mbeki, who built on that foundation. The continuity is also evident in the fact that former President Kgalema Motlanthe is now the Deputy President of the Republic, after a seamless transition, making us a unique country in many respects.

Fellow South Africans, 

As you would be aware, the fight against poverty remains the cornerstone of our government’s focus. On the 9th of May, during the Presidential inauguration, we made a commitment to our people and the world that:

For as long as there are South Africans who die from preventable disease;
For as long as there are workers who struggle to feed their families and who battle to find work;
For as long as there are communities without clean water, decent shelter or proper sanitation;
For as long as there are rural dwellers unable to make a decent living from the land on which they live;
For as long as there are women who are subjected to discrimination, exploitation or abuse;
For as long as there are children who do not have the means nor the opportunity to receive a decent education;

We shall not rest, and we dare not falter, in our drive to eradicate poverty.

In pursuit of these goals, our government has identified 10 priority areas, which form part of our Medium Term Strategic Framework for 2009 to 2014. The programme is being introduced under difficult economic conditions. The past year has seen the global economy enter a period of crisis unprecedented in recent decades. While South Africa has not been affected to the extent that a number of other countries have, its effects are now being clearly seen in our economy. We have entered a recession. It is more important now than ever that we work in partnership on a common programme to respond to this crisis. We take as our starting point the framework for South Africa’s response to the international economic crisis, concluded by government, labour and business in February this year. We must act now to minimise the impact of this downturn on those most vulnerable.

We have begun to act to reduce job losses. There is an agreement in principle between government and the social partners on the introduction of a training layoff. Workers who would ordinarily be facing retrenchment due to economic difficulty would be kept in employment, for a period of time and re-skilled. Discussion on the practical detail is continuing between the social partners and the institutions that would be affected by such an initiative, including the Sector Education and Training Authorities. We will support the work of the Commission for Conciliation Mediation and Arbitration (CCMA) to assist employers and workers to find alternatives to retrenchments through the relevant legal process. To date, CCMA commissioners have saved over four thousand jobs through facilitation processes, and provided ongoing advice and support to retrenched workers.

The Industrial Development Corporation has developed a programme to fund companies in distress. We will also ensure that government buys more goods and services locally, without undermining our global competitiveness or pushing up costs beyond acceptable levels. Building on the successes of our industrial policy interventions, a scaled up Industrial Policy Action Plan will be developed. The lead sectors already identified are automobile, chemicals, metal fabrication, tourism, clothing and textiles as well as forestry. In addition, attention will also be paid to services, light manufacturing and construction amongst others, in the quest to create decent jobs.

As part of Phase 2 of the Expanded Public Works Programme, the Community Work Programme will be fast-tracked. It offers a minimum level of regular work to those who need it, while improving the quality of life in communities. The economic downturn will affect the pace at which our country is able to address the social and economic challenges it faces. But it will not alter the direction of our development. The policy priorities that we have identified, and the plans that we placed before the electorate, remain at the core of the programme of this government.

Laat ons mekaar se hande vat, en saam oplossings vind in die gees van n Suid Afrikaanse gemeenskap. Die tyd het gekom om harder te werk. Ons regering gaan vorentoe kyk, nie agtertoe nie! 

The steps outlined in our Medium Term Strategic Framework had to take into account the constraints posed by the economic crisis. The downturn should not cause us to change these plans. Instead it should urge us to implement these with speed and determination.

The Framework focuses on 10 priorities.
We make a commitment that working together we will speed up economic growth and transform the economy to create decent work and sustainable livelihoods. We will introduce a massive programme to build economic and social infrastructure. We will develop and implement a comprehensive rural development strategy linked to land and agrarian reform and food security. We will strengthen the skills and human resource base. We will improve the health profile of all South Africans. Working together with all South Africans, we will intensify the fight against crime and corruption. We will build cohesive, caring and sustainable communities. Working with Africa and the rest of the world, we will pursue African advancement and enhanced international co-operation. We will ensure sustainable resource management and use. And, working with the people and supported by our public servants, we will build a developmental state, improve public services and strengthen democratic institutions.

It is my pleasure and honour to highlight the key elements of our programme of action.

The creation of decent work will be at the centre of our economic policies and will influence our investment attraction and job-creation initiatives. In line with our undertakings, we have to forge ahead to promote a more inclusive economy. In this regard, we will utilise state levers such as procurement, licensing and financial support to assist small medium enterprises as well as to promote the implementation of Broad-Based Black Economic Empowerment and affirmative action policies. The implementation will be done in recognition of the need to correct the imbalances of the past. The transformation will be undertaken in support of women, youth and people with disabilities. We will reduce the regulatory burden on small businesses. The matter of being stifled by regulations has been raised by the sector several times. 

In another intervention to create an enabling environment for investment, government will move towards a single integrated business registration system. This will improve customer service and reduce the cost of doing business in South Africa. Another important element of our drive to create job opportunities is the Expanded Public Works Programme (EPWP). The initial target of one million jobs has been achieved. 

The second phase of the programme aims to create about four million job opportunities by 2014. Between now and December 2009, we plan to create about 500 000 job opportunities. While creating an environment for jobs and business opportunities, government recognises that some citizens will continue to require state social assistance. Social grants remain the most effective form of poverty alleviation. As of 31 March 2009, more than 13 million people received social grants, more than 8 million of whom are children. We are mindful of the need to link the social grants to jobs or economic activity in order to encourage self-reliance amongst the able-bodied. Most importantly during this period, neighbours should assist each other. 

Jwale ke nako yakopano. Are thusaneng jwale ka baahisane. 

Are dumalaneng hore ho sebane le ngwana ya tla robalang ka tlala hobane batswadi bahae bafeletswe ke mosebetsi. Hare ka kopana ra sebetsa kaofela re ka etsa ho feta mo.

Distinguished guests, as part of the second strategic priority we will continue with our programme to build economic and social infrastructure. The newly-formed Infrastructure Development Cluster of government will ensure that the planned R787 billion infrastructure expenditure as provided for in the budget earlier this year is properly planned for and executed. This funding includes allocations for the school building programme, public transport including the bus rapid transit system, housing, water and sanitation. 

One of the biggest infrastructure investment projects is in the 2010 FIFA Soccer World Cup. We have, as government and the nation at large, pledged that the World Cup will leave a proud legacy from which Our children and our communities will benefit for many years to come. We are on track to meet all our obligations and are determined to give the world the best World Cup ever. We are putting all systems in place to make the Confederations Cup, which kicks off on the 14th of June, a huge success. 

In April this year, I gave an undertaking to the taxi industry leadership to defer negotiations relating to the operation of the Bus Integrated Rapid Transit system until after the elections. We undertook to allow more time to deal properly with the concerns of the industry. On the 11th of June the Minister of Transport will resume discussions with the industry. The meeting will kick-start a series of engagements with the stakeholders affected by the BRT system. We are confident that unresolved issues will be dealt with to the satisfaction of all parties. This will include the important issue of how all stakeholders will benefit from the initiative.

Honourable Members,

Another development which should boost the World Cup is the roll-out of the digital broadcasting infrastructure and signal distribution transmitters. Overall, we will ensure that the cost of telecommunications is reduced through the projects under way to expand broadband capacity. We have to ensure that we do not leave rural areas behind in these exciting developments. As part of social infrastructure development we will provide suitably located and affordable housing and decent human settlements. 

We will proceed from the understanding that human settlement is not just about building houses. It is about transforming our cities and towns and building cohesive, sustainable and caring communities with closer access to work and social amenities, including sports and recreation facilities. In this spirit, we will work with Parliament to speed up the processing of the Land Use Management Bill. 

Working together with our people in the rural areas, we will ensure a comprehensive rural development strategy linked to land and agrarian reform and food security, as our third priority. I would like to use this opportunity to extend our condolences to the family of the Deputy Minister of Agriculture, Dirk du Toit, who passed away this week. His contribution will be sorely missed.

Abantu basemakhaya nabo banelungelo lokuba nogesi namanzi, izindlu zangasese ezigijima amanzi, imigwaqo, izindawo zokuqeda isizungu nezemidlalo kanye nezindawo zokuthenga eziphucukile njengasemadolobheni. Nabo banelungelo lokusizwa kwezolimo ukuze bazitshalele imifino nokunye, bafuye nemfuyo bakwazi ukuziphilisa. 

Sizimisele ukuwuqala lomkhankaso wokwakha izingqalasizinda ezindaweni zasemakhaya. Uma sibambisene nezakhamizi, amakhosi, amakhansela nezinduna siyokwazi ukuwusheshisa lomsebenzi. 

Sicela abahlala ezindaweni zasemakhaya baqale balungiselele ukutshela uhulumeni ukuthi yiziphi izinto abazidinga ngokushesha. Uma sisebenza ngokubambisana sizokwenza okuningi. 

Hon. Speaker and Chairperson,

While having drawn the necessary lessons from earlier rural development initiatives, we have chosen the Greater Giyani Local Municipality in Limpopo as the first of the pilot projects for the campaign. Out of these projects will emerge lessons for the whole country. 

In addition, we will work on the targeted renewal of rural towns, through grants such as the Neighbourhood Development Grant programme. In this way, areas around the towns will benefit from the economic boost. With all these interventions, we are poised to change the face of rural areas in our country. Compatriots, Education will be a key priority for the next five years. We want our teachers, learners and parents to work with government to turn our schools into thriving centres of excellence. The Early Childhood Development programme will be stepped up, with the aim of ensuring universal access to Grade R and doubling the number of 0-4 year old children by 2014.

We reiterate our non-negotiables. Teachers should be in school, in class, on time, teaching, with no neglect of duty and no abuse of pupils! The children should be in class, on time, learning, be respectful of their teachers and each other, and do their homework. To improve school management, formal training will be a pre-condition for promoting teachers to become principals or heads of department.  I will meet school principals to share our vision on the revival of our education system.

Fellow South Africans, 

We will increase our efforts to encourage all pupils to complete their secondary education. The target is to increase enrolment rates in secondary schools to 95 per cent by 2014. We are also looking at innovative measures to bring back into the system pupils who dropped out of school, and to provide support.

Honourable Members, we are very concerned about reports of teachers who sexually harass and abuse children, particularly girls. We will ensure that the Guidelines on Sexual Harassment and Violence in Public Schools are widely disseminated, and that learners and teachers are familiar with and observe them. We will take very serious, and very decisive, action against any teachers who abuse their authority and power by entering into sexual relationships with children.  To promote lifelong learning, the Adult Basic Education and Training Kha ri Gude programme will be intensified. 

Compatriots, Honourable Members, 

We have to ensure that training and skills development initiatives in the country respond to the requirements of the economy. The Further Education and Training sector with its 50 colleges and 160 campuses nationally will be the primary site for skills development training. We will improve the access to higher education of children from poor families and ensure a sustainable funding structure for universities. 

Fellow South Africans,
We are seriously concerned about the deterioration of the quality of health care, aggravated by the steady increase in the burden of disease in the past decade and a half. We have set ourselves the goals of further reducing inequalities in health care provision, to boost human resource capacity, revitalise hospitals and clinics and step up the fight against the scourge of HIV and AIDS, TB and other diseases.

We must work together to improve the implementation of the Comprehensive Plan for the Treatment, Management and Care of HIV and AIDS so as to reduce the rate of new HIV infections by 50% by the year 2011. We want to reach 80% of those in need of ARV treatment also by 2011. We will introduce a National Health Insurance scheme in a phased and incremental manner. In order to initiate the NHI, the urgent rehabilitation of public hospitals will be undertaken through Public-Private Partnerships.

We are also paying urgent attention to the issues of remuneration of health professionals to remove uncertainty in our health services. Working together let us do more to promote quality health care, in line with the United Nations Millennium Development Goals to halve poverty by 2014.

Fellow citizens, 

Together we must do more to fight crime. Our aim is to establish a transformed, integrated, modernised, properly-resourced and well-managed criminal justice system. It is also critically important to improve the efficiency of the courts and the performance of prosecutors and to enhance detective, forensic and intelligence services. This work has started in earnest, and it will be undertaken with new energy and vigour.

Among the immediate targets is to ensure that we increase the number of prosecutors and Legal Aid Board personnel. We will do the same with police detectives. We changed the name of the relevant Ministry from Safety and Security to Police to emphasise that we want real operational energy in police work. This will contribute to the reduction of serious and violent crimes by the set target of 7% to 10% per annum.  The most serious attention will also be given to combating organised crime, as well as crimes against women and children.
Honourable Speaker and Chairperson, 

While appreciating the investment of the private sector in the security industry, we will improve the regulation of this industry. Amongst other key initiatives, we will start the process of setting up a Border Management Agency; we shall intensify our efforts against cyber crime and identity theft, and improve systems in our jails to reduce repeat offending.
Compatriots, I wish to underline our support for the continued transformation of the judiciary. The transformation should address key issues such as the enhancement of judicial independence, entrenching internal systems of judicial accountability as well as ensuring full access to justice by all. The success of the democratic system as a whole depends on good relations of mutual respect and a spirit of partnership among the Executive, the Legislature and the Judiciary. This is very important for our constitutional democracy.
Honourable Speaker and Chairperson, 

We have repeatedly stated our commitment to fight corruption in the public service. We will pay particular attention to combating corruption and fraud in procurement and tender processes, application for drivers? licences, social grants, IDs, and theft of police case dockets. Let me emphasise that we all have a role to play in this war against crime. We must actively participate in Community Policing Forums. We must stop buying stolen goods, which encourages crime. We must report crime and assist the police with information to catch wrongdoers. In this way, we will move forward towards a crime-free society.

Honourable Members, since 1994 we have sought to create a united cohesive society out of our fragmented past. We are called upon to continue this mission of promoting unity in diversity and to develop a shared value system, based on the spirit of community solidarity and a caring society. Our shared value system should encourage us to become active citizens in the renewal of our country. We must build a common national identity and patriotism. We must develop a common attachment to our country, our Constitution and the national symbols. In this spirit, we will promote the National Anthem and our country?s flag and all other national symbols.

Our children, from an early age, must be taught to pay allegiance to the Constitution and the national symbols, and know what it means to be South African citizens. We will ensure a common national approach to the changing of geographic and place names. This must provide an opportunity to involve all South Africans in forging an inclusive national identity, to deepen our understanding of our history and heritage.

Sport is a powerful nation-building tool. Working together we must support all our national teams from Bafana Bafana to the Proteas and the Springboks; from Banyana Banyana to Paralympians.

Our teams can only do well with our support.
Allow me to use this opportunity to congratulate our national teams for their performances in the past week, indeed in pulling off a hatrick.  The country’s women’s netball team has done us proud by winning the Tri-Nations Netball Challenge. Congratulations to the Sevens Springboks who have become the IRB Sevens World Series Champions – and not forgetting the Blue Bulls who have won the Super 14 finals in a convincing fashion! We take this opportunity to wish the Springboks well in the upcoming series against the British and Irish Lions. It is clear that we need to invest on a large scale in sports development. We will speed up the revival of school sport and ensure that it forms part of the school curriculum. In addition we will ensure that the provision of sport facilities in poorer communities receives priority.

Hon. Speaker and Chairperson,

We have committed ourselves over the years to contribute to building a better Africa and a better world. 
The main goal of government for the medium term is to ensure that our foreign relations contribute to the creation of an environment conducive to sustainable economic growth and development. To this effect, we will continue to prioritise the African continent by strengthening the African Union and its structures, and give special focus to the implementation of the New Partnership for Africa’s Development.

Equally important, and closer to home, is the strengthening of regional integration with particular emphasis on improving the political and economic integration of SADC, towards the AU goal of a Union government. We will establish a South African Development Partnership Agency to promote developmental partnerships with other countries on the continent. South Africa will continue to assist in the reconstruction and development of the African continent especially in post-conflict situations. We will continue to encourage a peaceful and sustainable settlement to the Israeli-Palestinian conflict based on the two- state solution.

We will support the peace efforts of the African Union and the United Nations on the African continent, including in the Saharawi Arab Republic and Darfur in Sudan. As the Chairperson of SADC and Facilitator, we will participate in promoting inclusive government until free and fair elections are held in Zimbabwe. 

The plight of the Zimbabwean people has had a negative impact on the SADC region, especially South Africa. We call upon all peace-loving countries in the world to support the inclusive government to achieve economic recovery. We will support efforts of the SADC region to resolve the situation in Madagascar.

Allow me, distinguished guests, to pay tribute to the SA National Defence Force for their sterling role in peace building in the continent. Through continental and regional bodies, we will work towards the entrenchment of democracy and the respect for human rights on the African continent. We will contribute to the strengthening of South-South relations and pursue mutually beneficial agreements with key countries of the South.

We will continue to enhance relations with the developed North including the G8, and our strategic partnership with the European Union. We will continue to play an active role in ensuring the conclusion of the WTO Doha Development round of negotiations.

Honourable Speaker and Chairperson, 
South Africa, being a dry country requires urgent action to mitigate adverse environmental changes and to ensure the provision of water to citizens.  Amongst various programmes, we will implement the Water for Growth and Development strategy, which will strengthen water management. We will continue to improve our energy efficiency and reliance on renewable energy.

Honourable Members,
A developmental state requires the improvement of public services and strengthening of democratic institutions. We have established two Ministries in the Presidency to strengthen both strategic planning as well as performance monitoring and evaluation. To ensure delivery on our commitments, we will hold Cabinet Ministers accountable through performance instruments, using established targets and output measures, starting in July. We will also involve State-Owned Enterprises and Development Finance Institutions in the government planning processes and improve the monitoring and evaluation of their performance.

Honourable Members, fellow South Africans,

To ensure that all three spheres – local, provincial and national – improve service delivery, we will speed up the establishment of a single Public Service. This administration will insist on putting people first in service delivery. We will ensure courteous and efficient service from front-counter staff in the provision of services in all government departments. In this era of renewal, we will move towards a more interactive government. To lead by example, work has begun on the establishment of a public liaison capacity in the Presidency. 

In addition to receiving letters and emails from the public, we will also establish a hotline for easier access. Staff will handle each public inquiry as if it was the only one, following it through all the channels until it receives the attention it deserves.

Honourable Speaker and Chairperson,

The National Youth Development Agency, formed through the merger of Umsobomvu Youth Fund and the National Youth Commission will be launched on June 16 in Ekurhuleni. The institutions are being merged to enhance service and development opportunities provided to the youth. The Agency will link up unemployed young graduates with economic opportunities; strengthen efforts to expand the National Youth Service Programme and support young entrepreneurs. 

Speaker and Chairperson, Distinguished Guests,

Next month our beloved Madiba will turn 91. People all over the world still continue to clamour for his presence and for him to address their crises. His values and his example of dedication to the service of humanity is a shining example in today’s troubled world. An international campaign has been initiated by the Nelson Mandela Foundation and related organisations, called Mandela Day, which sums up what Tata stands for. Mandela Day will be celebrated on the 18th of July each year. It will give people in South Africa and all over the world the opportunity to do something good to help others. 

Madiba was politically active for 67 years, and on Mandela Day people all over the world, in the workplace, at home and in schools, will be called upon to spend at least 67 minutes of their time doing something useful within their communities, especially among the less fortunate. Let us wholeheartedly support Mandela Day and encourage the world to join us in this wonderful campaign.

Honourable Speaker and Chairperson Fellow South Africans,

We have presented to the nation our programme for the next five years. Attached to each commitment we make is a detailed project plan, with targets and critical milestones. This information will in due course be made public. Indeed as citizens we should at the same time ask ourselves what is it that we can do on our own to help promote this national programme. To be a citizen is not only about rights, it is also about responsibility, to make a contribution to make ours a better country.

We also expect to work well with Opposition parties in Parliament, in the spirit of putting the country first. In addition, Madiba taught us well that this country belongs to all, black and white. Working for reconciliation and unity will remain important as we move forward.

Since the implementation of our programme will take place in the face of the economic downturn, we will have to act prudently – no wastage, no rollovers of funds – every cent must be spent wisely and fruitfully. We must cut our cloth according to our size. 

Fellow South Africans, working together we can do more to realise our common vision of a better and more prosperous nation!

This is the partnership we are calling for.

I thank you!

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Race is still the issue (will South Africans’ vote depend on it?)

In 1994 when African National Congerss (ANC) campaigned for power and a number of promises were made to All South Africans amongst them a better life for all. 15 years later the same promises are still being made by the same organisation. On the other hand DA took less than 4 years to deliver services that would have taken the ANC more than 15 years to deliver (see Eastern Cape for evidence). This is a personal take on possible Western Cape 2009 election results and what would be the possible cause for such an outcome.


This blog/note is inspired by two discussions I’ve had with one of my friends working for NSFAS and a few MK veterans I happened to have had a discussion with over the weekend (after Jacob Zuma’s ‘human rights speech’).


The first discussion with my NSAFS friend revolved around Helen Zille’s DA delivery in the Western Cape within a short space of time versus ANC’s delivery record in the same province over a longer period and all other provinces over 15 years (with EC as prime example).


From the discussions it emerged that ANC KNOWS HOW TO PROMISE AND THE DEMOCRATIC ALLIANCE (DA) KNOWS HOW TO DELIVER, this at the time I couldn’t agree nor disagree with as I haven’t at the time witnessed the changes in the Western Cape since my last visit. But have certainly witnessed ANC’s failures to deliver within the Eastern Cape Province.


I’ve only been in Cape Town for 3 weeks but I have to say compared to my last visit in 1996 and 2002 I have witnessed a lot of positive changes or progress as compared to the Eastern Cape (ANC’s ‘strong hold’ (COPE’s loyalists may differ).


Amongst the excuses that one got was that DA has qualified and experienced personnel while ANC is dominated by under qualified inexperienced personnel but with great political history and this converts to votes with each election. First question I had in mind when I heard this, could it be true that ANC employs personnel based on their political loyalty rather than ability to deliver (needless to say the answer was a big no with various weightless defensive arguments).


To go back to my subject, could it be true then that those who vote for other parties other than DA in the Western Cape which delivered to them services that ANC failed to deliver over a 10 year period do so out of race rather than delivery. This question was an interesting question which I struggled to find answers for until I came to Cape Town and experienced that race is till the issue.


Like most people’s experiences I was amongst those who were certain that Mandela’s dream of a rainbow nation is just around the corner for South Africa, well not until my recent relocation to Cape Town. There are restaurants where your service is fast tracked just so they can get rid of you as if your presence is costing them business. This has shown me how Cape Town is plain racist. Even coloured people are racist towards blacks. How has this phenomenon lasted for so long in CT could it be the fact that most Cape blacks are predominantly based in non-developed places and are still aspiring towards middle class statuses – therefore they don’t have the confidence to undermine and brush racists aside.


Just yesterday I watched Hellen Zille on the news dancing with a number of black people singing and they were not singing “umshini wam”, a song which has proved to make people dance recently both those who like it and those who don’t but dance out of poking fun at someone.


If Western Cape votes will be based on delivery then DA will win with a 2/3 majority but if race is still the issue they’ll achieve non of the above. Did I mention to you that Western Cape’s RDP houses are by far decent with dignity compared to the Eastern Cape’s open plan RDP houses.


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