THURSDAY, 14 MARCH 2002 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:50.

The Deputy Speaker took the Chair.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

                          NOTICES OF MOTION

Miss M N MAGAZI: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes that the United Nations Security Council called for an immediate ceasefire and the establishment of a Palestinian state; (2) believes that everlasting peace in the Middle East lies in the peaceful co-existence of the state of Palestine and the state of Israel;

(3) supports the call by the UN Security Council for a ceasefire; and

(4) calls on all parties to work towards a peaceful resolution of the conflict in the Middle East.

[Applause.]

Mr W J SEREMANE: Madam Speaker, I give notice that on the next sitting day I shall move:

That the House -

(1) notes with disappointment the findings of the South African Government’s observer mission that the Zimbabwe elections were legitimate;

(2) expresses its concern that the abuses which characterised this election are considered acceptable by this Government; (3) believes that unless President Mbeki distances South Africa from the abuses culminating in the Zimbabwe election result, we will embark on the same road towards contempt for the rule of law and abuse of executive power to thwart the will of the people; and

(4) calls on President Mbeki to repudiate both the findings of the Motsuenyane mission and the Mugabe victory as fundamentally flawed, in the interests of the people of Zimbabwe and the whole Southern African region.

[Interjections.] [Applause.]

Mr J H SLABBERT: Madam Speaker, I hereby give notice that on the next sitting day I shall move on behalf of the IFP:

That the House -

(1) sadly notes the reports that cemetery space in both KwaZulu-Natal and Gauteng is diminishing due to the HIV/Aids pandemic;

(2) further notes that on occasion people have had to be turned back at cemeteries, forcing them to opt for burials at places not demarcated for such a purpose;

(3) realises that cemetery authorities are gradually introducing a method of recycling graves and/or cremation to African communities, which runs against their tradition, due to the ecological impact and seepage into water supplies that these informal burials may cause;

(4) therefore calls on the two metro areas to find alternative land even as they embark on a public relations campaign to introduce the perceived new methods; and

(5) earnestly prays that the Government’s pilot projects on the effects of nevirapine could yield positive results in eliminating the scourge of HIV/Aids.

Mr D C MABENA: Madam Speaker, I hereby give notice that on the next sitting day I shall move on behalf of the ANC:

That the House - (1) notes that -

   (a)  the community of Mamelodi responded to the President's  call  of
       Vukuzenzele by joining police reservists;


   (b)  the success of this move resulted in the arrest of 48  criminals
       between February and March 2002; and


   (c)  two stolen cars, two cellphones and several other  stolen  items
       were recovered; and

(2) commends the people of Mamelodi for heeding the call of Vukuzenzele and working with police in fighting crime in the area.

[Applause.]

Mr A BLAAS: Madam Speaker, I hereby give notice that on the next sitting day I shall move:

That the House notes that -

(1) fourteen national Government departments and constitutional entities did not submit annual reports and audited financial statements within the period prescribed by the PFMA;

(2) seven Schedule 2 entities did not submit such reports within the prescribed period;

(3) in only four instances were written explanations tabled by the executive as is required by the PFMA when a report is submitted late;

(4) where such explanations were tabled the nature and content were not always factually correct; and

(5) the New NP finds it unacceptable that certain Government departments do not comply with the rules of the PFMA and calls on the Ministers of the departments in question to get their act together.

Mr S ABRAM: Madam Speaker, I give notice that I shall move:

That the House -

(1) notes a report in Die Burger newspaper that highly sophisticated bugging and monitoring devices have been allegedly discovered in the Western Cape Legislature buildings;

(2) acknowledges that this discovery has the potential of becoming South Africa’s own Watergate scandal;

(3) further notes that the equipment is allegedly capable of monitoring activities up to 4 km from its base;

(4) condemns in the strongest terms the monitoring and covert surveillance of public representatives and their legitimate activities;

(5) calls upon Parliament’s Joint Standing Committee on Intelligence to fully investigate the origins of the sophisticated equipment, the reasons for its installation, and whether as a result thereof any person has suffered victimisation; and

(6) further calls upon the relevant authorities to take action against the perpetrators.

Mr B A RADEBE: Madam Speaker, I shall move on behalf of the ANC:

That the House -

(1) notes the recommendation by the Black Economic Empowerment Commission of a legislative framework that will promote black economic empowerment by requiring companies to set targets and submit progress reports on the extent to which black economic empowerment has been achieved;

(2) further notes that the Government has accepted this recommendation and is going to develop a legal framework for this purpose;

(3) believes that this move will contribute positively to the economic empowerment of historically disadvantaged people; and

(4) welcomes the plans by Government to introduce a legal framework for black economic empowerment as this will correct the historical imbalances created by apartheid colonialism. [Applause.]

Mr P H K DITSHETELO: Madam Speaker, I shall move on behalf of the UCDP:

That the House -

(1) notes the concern of the law society about lawyers who conduct themselves in an unprofessional manner by allegedly enriching themselves;

(2) notes further that 50 lawyers have been struck off the roll for various forms of unprofessional conduct;

(3) welcomes the stand taken by the National Association of Democratic Lawyers in condemning the conduct of such lawyers; and

(4) urges the legal profession to remain honourable as it is constituted by people of integrity.

Dr P W A MULDER: Geagte Speaker, ek gee hiermee kennis dat ek namens die VF op die volgende sittingsdag sal voorstel:

Dat die Huis daarvan kennis neem dat -

(1) dit uit verskeie verslae duidelik blyk dat die pas afgelope verkiesing in Zimbabwe geensins as vry en regverdig beskou kan word nie aangesien president Mugabe as polisieman, aanklaer, regter en jurie in die verkiesing opgetree het;

(2) die verkiesing in Zimbabwe deur die wêreld as ‘n eerste toets vir president Mbeki en Afrika se Nepad-inisiatief gesien word - ‘n inisiatief vir die bevordering van demokrasie en menseregte in Afrika;

(3) die gebeure in Zimbabwe daartoe lei dat die wêreld se gevolgtrekking is dat hierdie inisiatief duidelik sy eerste toets gedruip het;

(4) indien die Suid-Afrikaanse Regering die verkiesing as vry en regverdig sou verklaar, Suid-Afrika onvermydelik baie internasionale aansien en geloofwaardigheid sal verloor; en

(5) wysheid en koelkoppe nodig sal wees om Zimbabwe en Suidelike Afrika met geloofwaardigheid uit hierdie krisis te stuur (Translation of Afrikaans notice of motion follows.)

[Dr P W A MULDER: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the FF:

That the House takes note that -

(1) from different reports it is clear that the recent election in Zimbabwe could by no means be regarded as free and fair, since President Mugabe acted as policeman, prosecutor, judge and jury during the election;

(2) the election in Zimbabwe is seen as a first test by the world for President Mbeki and Africa’s Nepad initiative- an initiative for the promotion of democracy and human rights in Africa;

(3) the occurrences in Zimbabwe have led to the world’s conclusion being that this initiative has clearly failed its first test;

(4) if the South African Government declares this election as free and fair, South Africa would inevitably lose a lot of international esteem and credibility; and

(5) wisdom and cool heads will be needed to steer South Africa and Zimbabwe out of this crisis with credibility.]

Ms P K MOTHOAGAE: Madam Speaker, I hereby give notice that on the next sitting day I shall move on behalf of the ANC:

That the House -

(1) notes that there is no international practice or principle that Public Accounts Committees are chaired by opposition parties;

(2) further notes that this was confirmed during a recent Scopa delegation visit to Europe and also by the Auditors-General of France and the Philippines during their recent visits to South Africa;

(3) therefore rejects the assertions of the DP that the appointment of the hon Vincent Smith is permanent, when they know that this is temporary and in an acting capacity; and

(4) confirms the commitment of the ANC to its policy of sound financial management and, notwithstanding international conventions and practices, also confirms the commitment of the ANC - which it has held since the transition to a democratic dispensation in 1994 - to the appointment of a chairperson of the Standing Committee on Public Accounts from the ranks of the opposition.

[Interjections.] [Applause.]

Mrs G M BORMAN: Madam Speaker, I hereby give notice that I shall move:

That the House -

(1) notes that -

   (a)  the  scandals  surrounding  the  mayor  of  the  Nelson  Mandela
       Metropole and his gross mismanagement of public funds  cost  the
       public dearly, damage the reputation  of  the  city  and  impact
       negatively on the council's debt crisis;


   (b)  after 15 months the mayor has still not  appointed  a  municipal
       manager;


   (c)  bad debt has grown to R728 million, with  no  credit  policy  in
       place;


   (d)  the poorest of the poor are not receiving free  basic  services;
       and


   (e)  the municipal police force has not been established; and

(2) requests the President to intervene to have Mayor Faku removed from office and so to meet his commitment that ``all of our mayors and councillors who fail to serve the people or engage in corrupt practice, will be exposed and removed from their positions.’’

[Applause.]

Mr H J BEKKER: Madam Speaker, I hereby give notice that on the next sitting day I shall move on behalf of the IFP:

That the House -

(1) takes delight in the news that the microlending business plans to hold public workshops to shape up the loan-shark image of this industry;

(2) notes that registered microlenders contemplate deregistering with the Micro Finance Regulatory Council because there are many unregistered microlenders who got away with it, as there are no effective monitoring mechanisms to deal with the unregistered microlenders; and

(3) appeals to the Department of Trade and Industry to address this matter in order to protect consumers who might find themselves immersed in unscrupulous deals without any recourse to justice.

Mr R J B MOHLALA: Madam Speaker, I hereby give notice that I shall move on behalf of the ANC:

That the House -

(1) notes -

   (a)  that the Minister of Public Enterprises, the  hon  Jeff  Radebe,
       announced that  Zama  Resources  Corporation  is  the  preferred
       bidder for 75% of Safcol forestry interests  in  Mpumalanga  and
       the Northern Province; and


   (b)  the statement by Safcol chairman, Mr David Gevisser, that ``Zama
       is the totally South African, 100% black empowerment group whose
       members have close affiliations with the forestry industry'';

(2) believes that this reflects the commitment of the ANC-led Government to empower the historically disadvantaged communities and to transform the economy in a manner that contributes to a better life for all our people;

(3) welcomes the announcement by the Minister of Public Enterprises, the hon Jeff Radebe; and

(4) congratulates Zama Resources Corporation on winning the bid.

[Applause.]

Mnr F BEUKMAN: Speaker, ek gee kennis namens die Nuwe NP dat ek op die volgende sittingsdag sal voorstel:

Dat die Raad -

(1) met kommer kennis neem van die dood van die Italiaanse vryskutjoernalis, Raffaele Ciriello, gister in Ramallah aan die Wesbank;

(2) terreuraanvalle op joernaliste betreur, soos die moord op die Wall Street Journal -joernalis, Daniel Pearl, onlangs in Pakistan; (3) sy simpatie uitspreek teenoor die gesinne en naasbestaandes van die oorledenes;

(4) ‘n beroep op regerings wêreldwyd doen om toe te sien dat joernaliste sonder inmenging, hetsy deur die staat of politieke organisasies, hulle werk kan doen;

(5) saamstem dat die aanslag op joernaliste se fisiese veiligheid ‘n inbreuk maak op hulle vryheid van beweging en hulle reg om te rapporteer, en dit ten sterkste veroordeel;

(6) die situasie betreur dat ‘n bekroonde joernalis soos Basildon Peta van Zimbabwe nie vryelik en sonder teistering van staatsagentskappe in sy vaderland kan werk nie; en

(7) ‘n beroep op regerings doen en om toe te sien dat die reg tot inligting beskerm word, en die boodskapper nie die slagoffer van ideologiese strydpunte word nie. (Translation of Afrikaans notice of motion follows.)

[Mr F BEUKMAN: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the New NP:

That the House -

(1) notes with concern the death of the Italian freelance journalist, Raffaele Ciriello, yesterday in Ramallah on the West Bank;

(2) regrets terror attacks on journalists, such as the murder of the Wall Street Journal journalist, Daniel Pearl, in Pakistan recently;

(3) expresses its sympathy towards the families and next of kin of the deceased;

(4) appeals to governments worldwide to see to it that journalists can do their jobs without interference, be it by the state or political organisations;

(5) agrees that the attack on journalists’ physical safety restricts their freedom of movement and their right to report, and condemns this most strongly; (6) regrets the situation in which an award-winning journalist like Basildon Peta from Zimbabwe cannot work freely and without harassment by state agencies in his fatherland; and

(7) appeals to governments to see to it that the right to information is protected, and that the messenger does not become the victim of ideological issues of dispute.]

Mr T ABRAHAMS: Madam Speaker, I hereby give notice that at the next sitting I shall move on behalf of the UDM:

That the House -

(1) notes with caution the approval by Cabinet to increase low-cost housing subsidies;

(2) is of the opinion that the project increase in spending for the next financial year should be welcomed, with the proviso that it translates into better-quality houses as the quality of the houses built at present is questionable, and as there have been countless cases reported of defective and even dangerously inappropriate houses being erected;

(3) proposes that the focus on housing policy should shift towards ensuring the beneficiaries are provided with adequately sized, serviced plots on which houses are built; and

(4) calls on the Government to ensure that, rather than the present track record, the housing subsidy keep pace with the rate of inflation.

CONGRATULATIONS TO DEPARTMENT OF WATER AFFAIRS AND FORESTRY ON WATER GLOBE AWARD

                         (Draft Resolution)

The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:

That the House -

(1) notes that South Africa received a Water Globe Award amongst 1 300 entrants from 98 countries; (2) recognises that the Department of Water Affairs and Forestry is addressing an enormous backlog in the delivery of basic water services to all the people of South Africa through its Community Water Sanitation Programme;

(3) acknowledges that in meeting the water security and sanitation needs of the poor, our Government is giving life to human rights enshrined in our Constitution;

(4) believes South Africa remains committed to the Millennium target set by President Thabo Mbeki and 100 other heads of state at the United Nations to halve the number of people without safe water by 2015; and

(5) congratulates the Department of Water Affairs on winning such a prestigious award.

Agreed to.

    CONGRATULATIONS TO MINISTER OF FINANCE ON HONORARY DOCTORATE
                         (Draft Resolution)

The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move without notice:

That the House -

(1) notes that -

   (a)  the  University  of  the  Western  Cape  conferred  an  honorary
       doctorate on the Minister of Finance, hon Trevor Manuel; and


   (b)  this was done in recognition of his role in the sound management
       of economic policies; and

(2) congratulates Minister Manuel on receiving this doctorate.

Agreed to.

             NOMINATIONS FOR SA HUMAN RIGHTS COMMISSION

                         (Draft Resolution) The DEPUTY CHIEF WHIP OF THE MAJORITY  PARTY:  Madam  Speaker,  I  move  the draft resolution printed on today's Order Paper in the  name  of  the  Chief Whip of the Majority Party, as follows:

That the terms of reference of the ad hoc committee appointed by the House on 2 November 2001 to nominate persons to fill pending vacancies on the South African Human Rights Commission be altered as follows:

The Committee to nominate persons to fill the vacancies -

(1) caused by the resignation of Dr N B Pityana, Adv F P Tlakula and Mr J Nkeli and report to the House thereon by 6 May 2002; and

(2) that will arise as a result of the term of office of commissioners expiring in September 2002 and report to the House thereon by 25 June 2002.

Agreed to.

Mr G Q M DOIDGE: Madam Speaker, I am sorry to do this to you, but may I address you on an issue that is not in keeping with the decorum of the House?

The DEPUTY SPEAKER: Yes, hon member, address me.

Mr G Q M DOIDGE: I am reluctant to call it a point of order, Madam Speaker, because I am not sure what, in fact, it is. However, the hon Lee, a highly paid public representative, tends to spend his whole afternoon in the Chamber waving around the DA logo. Firstly, that party does not exist in this House. Secondly, I do not think it would be in keeping with the decorum of this House if we all started doing it.

The DEPUTY SPEAKER: Hon Lee, do you want to respond on that issue? [Interjections.]

Mr D H M GIBSON: Madam Speaker, the hon Mr Doidge said that it was not a point of order, so I am not quite sure what it is, but perhaps I could point out that the hon Mr Lee does spend his whole time in the House in the afternoons and he does not fall asleep as very many other members do. So I think it is quite good that he is showing how active he is. There is no rule which prevents him from having something which reflects the DA, and that is a party which has the support of 2,5 million South Africans.

The DEPUTY SPEAKER: Hon Gibson, please! I do not want you to make a speech. Could you just take your seat now. [Interjections.] I want to respond to the issue.

I would like to have an opportunity to reflect on this matter because, although it might not be an ordinary point of order as we understand them, it does, however, raise an important matter of policy in terms of advertisement of a party, logos, and the extent to which that is acceptable in the House. So I would like to come back to this issue.

                         APPROPRIATION BILL

                       (First Reading debate)

Mr K A MOLOTO: Madam Speaker and hon members, this Budget, though innovative in many respects, is a continuation of the strategic objectives of the ANC Government set out, with the advent of democracy, in order to realise growth objectives. It continues to balance, in a creative way, the needs for development, growth, equity, fiscal discipline and revenue collection.

This Budget has the hallmark of judicious management of public finances and continues in the well-established tradition of transparency and accountability in the expenditure of public finances.

The economic challenges facing this country are enormous, and it is quite understandable that a debate on the country’s Budget draws such great interest and expectations, especially from the poor of this country.

A budget is always perceived to be a powerful tool for the redistribution of income and the allocation of resources, and to ensure overall economic efficiency. It is an expression of the political orientation of any government and exposes its character and position in relation to the poor.

Since its inception in 1994, the ANC Government has channelled massive resources towards the improvement of the lives of the poor. Major Public Works programmes, the provision of basic health care, especially free health care to pregnant women and children, have contributed towards tightening the fabric of our society.

Indeed, I concede that the challenges are enormous. These economic challenges occur within the context of a slowdown in the economies of most developed countries. It is worth noting that the diversification of South African manufacturing exports cushioned us from experiencing the full impact of the slowdown in global economic growth. Manufactured exports increased from 9% in 1990, to 27% of total exports in 2001. On the positive side, the depreciation of the rand helped the performance of our exports. These exports will continue to rise as the global economy recovers.

We highlight the importance of these exports as our tax base and ability to address these socioeconomic challenges are linked to the performance of our economy. Indeed, economic growth is necessary for the redistribution of income, but it is not sufficient. Tax and expenditure measures serve to distribute income and alleviate poverty.

This Budget continues to advance our conviction and national desire to redistribute income and services to the most vulnerable. There can never be enough. The challenge of poverty eradication is huge. The plight of the unemployed will continue to provoke our thoughts and emotions to use all Government resources to address this problem.

Equally, all efforts should be taken to simplify and consolidate the tax system where applicable in order to minimise compliance costs of the business sector and enhance the competitiveness of the South African economy.

It gives me pleasure to realise the tax relief that is extended to small businesses. A R3 million turnover threshold relief is proposed for small businesses. Small businesses contribute in bringing innovation and diversification to our economy. The entrepreneurship spirit needs to be rekindled in the lives of all South Africans. They know the local economic dynamics are in a better position to respond with precision.

Tax allowance is introduced to encourage learnerships. Accelerated depreciation allowances are proposed to encourage business investment and employment. New manufacturing assets acquired within the three years from 1 March 2002 will be depreciated over four years. Forty per cent of the cost of the asset will be deducted in the first year, and 20% of the cost in the subsequent three years. This allowance will only be available to taxpayers in respect of assets used directly in the manufacturing businesses. This will also serve to ease the impact of the recent depreciation in the currency.

The 2002 Budget is expansionary. Oriented towards growth, the Budget broadens the scope of benefits in social services and infrastructure investments. Real spending on services will grow by 4,1% over a three-year period, while capital spending growth is budgeted to grow by 18% per annum over the next three years. Let us acknowledge that investment in social services is as important as capital investment.

Provinces will receive R132,4 billion to cater for improved funding of tertiary hospitals and an advanced response to HIV/Aids; to provide for an increase in old age and disability grants; and to provide for additional funding for roads, schools, clinics and rural development.

Human resource development is a necessary requirement for participation in complex manufacturing processes and the knowledge economy. Therefore, education remains the Government’s first priority, rising to R59,5 billion next year. Investment in education and skills is critical for redistribution of economic opportunities, which is necessary to address the inequalities and injustices of the past.

South Africans have a right to live in a safe environment. After all, their forebears, who drafted the Freedom Charter, laid down their lives for the attainment of a peaceful and safe South Africa. To fight crime, R31,8 billion goes to the police, Justice and Correctional Services in 2002-03, while R20,6 billion is allocated to Defence and Intelligence. This is a right the ANC will fight for and marshall all resources to attain.

The ANC has committed itself to the creation of a better life for our people. This Budget is a concrete reflection of that commitment. [Applause.]

Mr K M ANDREW: Madam Speaker, it is a pleasure to follow Mr Moloto. May I congratulate him on being appointed the lead speaker from the ANC.

David Shezi stole water for his eight children after he could no longer take the humiliation of seeing them begging for water from neighbours. Five years ago, he saved enough money to get water connected to his hut on KwaZulu-Natal’s South Coast, but then school fees, transport and food costs drove him into debt and his water was cut off.

When she could no longer bear the darkness or the cold that settles into her arthritic knees or the thought of sacrificing another piece of furniture for firewood, unemployed Agnes Mohapi of Soweto cursed the powers that had cut off her electricity. She then summoned a neighbourhood service to illegally reconnect it.

David Shezi and Agnes Mohapi are just two of millions of people struggling to benefit from the roll-out of services.

In Soweto about 20 000 homes a month had their electricity disconnected last year for nonpayment. Sixty-one per cent of households have had their service shut off within a 12-month period.

Telkom’s CEO has pointed out that while Telkom had now connected 85% of lines, the problem is that people cannot afford it, and nearly one third of all lines installed between 1997 and 2001 have subsequently been disconnected. In the year 2000 alone, 500 000 fixed lines were disconnected for fraud or nonpayment.

Similar stories can, of course, be told in respect of housing and water provision as well. The challenge which we face is to create sustainable jobs and eradicate poverty so that families across our land will be able to afford the basic amenities which many of us take for granted.

This challenge can only be met by increased savings, more domestic and foreign direct investment and substantially faster and sustained economic growth. These goals have to be achieved if we are to reduce unemployment and poverty, but we cannot ignore the need to alleviate poverty now while the medium and long-term positive impacts of economic growth take effect.

In the short term, much more must be done to assist those who are destitute and without hope. For three years now, the DA has called for a basic income grant of about R100 per month. Poverty, destitution and unemployment are all on the increase, and the welfare system in South Africa, as the Minister will tell us, is failing those most in need.

The hon the Minister of Finance has challenged us to explain how such a scheme would work and be sustainable. I shall now do so by answering some questions and outline a framework that the DA has in mind.

Firstly, who should qualify? Every person with an annual income of less than R7 500, except people already receiving a state pension or grant and personal income taxpayers, their partners and dependants.

Would a means test apply? No, it would not, but for income tax purposes, the basic income grant will be multiplied by about 20 to ensure that it is unprofitable for anyone with an income in excess of R7 500 per year to apply for a basic income grant.

Would the administration be difficult? Reaching large numbers, particularly in rural areas, is never easy, but a process linked to identity numbers and subsequently relayed to the SA Revenue Service could be fairly simple. The biggest challenge would be to prevent fraudulent or duplicate payments based on false identity documents.

How many people would qualify? One can only estimate, but after excluding the 6,3 million personal income taxpayers, their partners and dependants, individuals earning between R7 500 and R27 000 per year and the 5,5 million people already receiving pensions or grants, one is left with about 10 to 12 million potentially eligible people.

For budgeting purposes, one has to estimate how many would apply in the first year, what the percentage take-up would be in the medium term, and how quickly successful economic policies would translate into job creation, resulting in people moving above the R7 500 per year income level and no longer qualifying.

Where would the money come from? There are a number of sources which could be tapped in a fiscally sound and sustainable way. If one looks at this year’s Budget, one could have found more than would be needed by using a mix of some or all of: one-third of the tax bonanza, which would amount to R5 billion; sticking to the medium-term budget policy statement budget deficit of 2,6%, which would amount to R5,4 billion; increasing VAT by 1%, which would give us R4,7 billion; and cancelling the second and third tranches of the arms deal, which would yield more than R1 billion per year in savings in interest. These sources would yield far more than would be required for the basic income grant.

The DA believes that an appropriate basic income grant is practical and desirable. What is needed is a serious commitment to implement such a scheme and, in doing so, give hope to millions of South Africans who have no regular income, live in dire poverty and are reduced, at present, to begging, borrowing or stealing.

The Minister is able to find R80 billion to buy arms without batting an eyelid, while he seems determined to resist the introduction of a basic income grant rather than seek innovative and fiscally sound ways of doing so.

Turning to our medium- and long-term objectives of economic growth, job creation and poverty eradication, it is of great concern to me that there is an unwillingness to acknowledge unpalatable truths, such as the total collapse in the value of the rand last year.

When it was R6,00 to the US dollar, Government told us that the rand was undervalued and that the economic fundamentals were sound. It was the same story when it was R8,00, R10,00 and R12,00 to the dollar.

If, as we are told, there is no logical reason for the collapse of the rand, what were the illogical reasons? Or is our logic suspect? If the rand drops on rumours, why does it not recover fully when the rumours are proven to be unfounded? If, as we are told, the economic fundamentals are in place, what is it that is not in place?

Economic fundamentals such as decreased debt, budget deficits and inflation are essential elements and important achievements. But are investors not also looking at low levels of saving, sluggish economic growth, rising unemployment and poverty, and a fast depreciating currency? Are these not economic fundamentals as well? Last year I made the observations that if there is a lack of domestic investment, this will deter most foreign investors'', and that if an individual is feeling disillusioned, unhappy or insecure, it is going to impact on investment decisions that he or she makes’’. The Minister responded by insulting me, suggesting that I must forget about my so-called European past and help build Africa.

In an interview in January this year, the Director-General of the National Treasury said that, and I quote:

Domestic sentiment has been one of the prime reasons behind the decline of the rand. Unless you get domestic investment going, you are never going to get foreign investment coming in.

I trust that the hon the Minister is not going to tell the director-general to forget about her European past and help build Africa [Interjections.]

The issue of confidence, or lack of it, is of critical importance to the success of our economy. All the economists giving evidence before the Portfolio Committee on Finance cited lack of confidence in our economy as a problem. So did most, if not all, of the economists giving evidence to the Myburgh commission.

The decline in Sacob’s business confidence index in December 2001 was the third largest monthly drop since the index was introduced in 1985. The Bureau for Economic Research’s consumer confidence index has been in steady decline since 1996, including black consumers.

In this House last month, the hon the Minister of Home Affairs indicated that, and I quote: the harsh reality is that international perceptions of South Africa are now very poor'' and were likely to be a contributing factor to the downfall of our national currency’’.

The Budget Review, on page 19, lists a variety of possible factors behind the rand’s depreciation, but does not mention a lack of confidence in South Africa’s economy as a contributory factor at all. This denial of reality will not enable us to correctly identify the causes of low levels of investment and growth. We must restore confidence in our economy if we are to prosper.

Let me make two specific suggestions. Firstly, we should abolish exchange control without further delay. If Government does not show confidence in our currency and our economy, we cannot expect others to do so. Secondly, as I requested in this debate last year, we need to try to achieve a consensus and a unity of purpose on the way forward in terms of economic policy. We need a new agreed strategy for investment, growth, job creation and poverty eradication, which will include all stakeholders.

I am pleased, therefore, to see that there is to be a growth and development summit and welcome the Minister’s comment in the Budget Speech when he said that Government alone cannot take responsibility for growth and development. It is a collective responsibility. We need, all of us, to accept that and commit to a compact that recognises that the power to make a difference rests with all of us. Such a compact would need to address a key element in our economic and social landscape. This element, which is hard to define precisely or adequately quantify in economic models, is confidence.

Let us get on with it. The Minister should make sure that all the stakeholders are involved from the beginning and should not imagine that a one-day-showpiece jamboree such as the jobs summit will have a lasting impact.

Poverty and unemployment are on the increase in South Africa. Savings, investment and growth are unsatisfactory. We need to restore the confidence of investors and give hope to the destitute. Current government policies will not bring about the necessary improvements. The DP cannot support a Budget introduced to finance more of the same. [Applause.]

The DEPUTY MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: The Minister of Finance, in his Budget Speech, named seven priority areas of delivery for the 2002 Budget. I shall, of course, focus on those areas that pertain directly to the Department of Justice and Constitutional Development. In cross-referencing our department’s budget priorities with those of the national Budget, I have taken the liberty of quoting Minister Manuel from time to time. A little reflected glory is hard to resist.

In regard to those pertaining directly to my department, I highlight the following: strengthening the fight against crime, improving police and justice services, and enhancing administrative services for citizens.

The Minister for Justice and Constitutional Development, Dr Penuell Maduna, has defined the strategic framework for the department for the upcoming financial year and the remainder of the three-year medium-term cycle. In so doing, he has provided a vision, mission and value statement that will guide the department’s activities and undertakings for the period.

The statement is simple, succinct and straightforward and, essentially, these policy directives represent choices that provide the focus and direction for the executive management of the department.

Our programme will be guided by five key messages, and I will elaborate on these: Justice is a virtue, justice is for all, justice is charged with upholding human rights, and justice delayed is justice denied.

With regard to justice being a virtue, the Department of Justice is the only government portfolio named after a virtue. This tenet of ethical merit commands that we maintain moral excellence in all that we do. When dealing with justice for all, our mission is to ensure equitable and accessible justice. We must give special attention to vulnerable groups such as women, children, the aged and the disabled. We must also ensure that justice serves the needs of those in remote rural parts of our country as well as it serves the needs of those in our cities.

In the same vein, we feel strongly that justice delayed is justice denied. The department must deliver improved services. Our civil and criminal justice system must meet the needs of court users in a manner that is efficient, effective and transparent. Key areas have been defined in the improvement of our service delivery, and these include facilities management, management of moneys in trust, specialised services such as the prosecution of car hijackers, commercial crime, maintenance defaulters, sexual offences, domestic violence and child abuse.

In order to effect the preceding principles, justice must be managed. Our processes and practices must be effective and economic as laid down by the PFMA. Accountability and improved service delivery must be the department’s key performance indicators. Given the task at hand, the department cannot afford to carry passengers. Performance excellence must guide every action of those tasked with the administration of justice, and failure to comply with these performance requirements will result in appropriate and speedy disciplinary action.

I now turn to the fact that justice is charged with upholding human rights. Given the luminary spirit of our Constitution - the pre-eminent law of the land - both the civil and criminal justice systems must uphold the principles and values espoused by that founding document. Accordingly, those tasked with the administration of justice have a particular responsibility: They must commit themselves to a work ethic and practice that give effect to the human rights framework that lies at the heart of our transforming legal system. In addition, all who make use of our services must be assured of a transparent, fair and efficient legal system that promotes and protects the rights of all court users.

In acknowledging these directives, the department’s strategic plan takes cognisance of the magnitude of the challenges related to providing the wide range of services associated with the administration of justice. Within such a wide spectrum it is, of course, necessary to prioritise. This overview of the strategic plan seeks to highlight the plan’s most important components and to evaluate these against the strategic objectives of the national Budget and broader Government policy.

To meet the principle imperatives underlining the national Budget, the core performance areas which, in the department’s view, must be prioritised for improved service delivery are: developing appropriate policies and procedures for the recruitment and, most importantly, the retention of highly skilled officials; improving the effectiveness and efficiency of prosecution and adjudication of criminal and civil trials; upgrading 50 major court complexes and the procurement and erection of 26 new facilities; meeting the legal needs of vulnerable groups such as women, children, the aged and the disabled through the provision of specialised services; developing appropriate IT systems for capturing and processing data on transactions within the maintenance system and Master’s Offices, thereby appropriately managing the trust account moneys that are essential to these units; using improved crime intelligence mechanisms within the Scorpions unit to prosecute criminals and syndicates; the development of modern systems for the effective management and tracking of cases through courts; and ensuring that the resources are distributed according to the needs of the users and recipients of the department’s services.

These performance areas are prioritised because of the enormous importance Government and the department attach to the fight against crime, the vital role the maintenance system plays in the alleviation of poverty and the support of children, and the need to ensure that moneys held in trust by the masters are secured and efficiently handled.

Perhaps hon members will allow me an aside here. Nowhere is the Government’s determination to succeed in the fight against crime made clearer than in the new Budget. Amongst other items, our Minister indicated that an additional 16 000 policemen and policewomen will be provided in the current budget, and, of course, this itself leads to the need for greater effort and expenditure throughout the cluster - from Safety and Security, through Justice to the Correctional Services.

If we are to meet the national Budget expectations of improved service delivery and strengthening the fight against crime, the JCPS cluster must work in an integrated and co-ordinated fashion. This is, of course, not new. But we must continue to improve the flow of work in and between the participating departments in such a way that it genuinely provides a seamless service delivery process. This seamless experience must be true from the time that a crime is reported, through prosecution and ultimately to conviction and sentencing.

The Integrated Justice System task team has been created to give impetus to this process. In this regard, the IJS Court Centre Project aims to reduce the average case cycle time by managing court rolls, tracing cases through the system and controlling the awaiting-trial period of each detained accused.

The second IJS initiative, the Court Process Project, is our flagship and provides for the automation of both civil and criminal court and case management. The pilot project initiated at both Johannesburg and Durban effectively allows for a criminal case to be managed electronically from the SA Police Service, through prosecution to adjudication. It allows for the necessary interaction with both the Department of Social Development and that of Correctional Services.

We have proven the system’s functionality in real-life application. This pilot project is due to be concluded at the end of this month and is scheduled for enhancement and rollout to further sites later this year. I would like members to note that this system is a world first in justice ICT. We should heartily congratulate all those involved.

The department’s contribution to these initiatives comes under the banner of our e-justice programme. Aside from the CCP, there are other equally dramatic developments scheduled for delivery this year. They include the digital nervous system, a project which is designed to provide 11 300 officials of the department with electronic infrastructure, total connectivity including Internet access and intranet and court training over a period of two years. Thus far we have delivered and implemented this project at 45 sites and have a further 60 sites scheduled for delivery over the next six months. In total we have provided 3 500 officials with this infrastructure and plan to extend this to a further 3 000 over the coming period. The Guardian Fund’s Digital Management Project, which addresses the financial administration of estates, has been developed and will be piloted in Kimberley in April this year. The project is scheduled for rollout to all masters’ offices during the course of the year and we are particularly pleased to address this area, which has been a problem cited in several of the Auditor-General’s reports.

The IJS Court Centre Project is an outstanding example of an integrated approach to project implementation and speaks to the heart of the national Budget’s call for improved service delivery. Appropriate diversion mechanisms for cases that can be dealt with through alternative dispute resolution mechanisms are currently being explored. This and the implementation of the recently promulgated plea-bargaining legislation is expected to have an exceedingly positive impact on the numbers of awaiting- trial prisoners and therefore on the budget of Correctional Services. The initiative to reduce case backlogs with the introduction of Saturday and additional courts has been extremely successful, with a total of 17 232 cases being finalised by February this year.

I wish now to turn to a subject that has been causing deep concern to the Government and the public alike. The prevalence of sexual violence and child abuse in our society has necessitated the expansion of the existing 20 sexual offences courts to 30 such centres during the upcoming year. In terms of strengthening the fight against crime, the deterrent effect of appropriately harsh sentencing for crimes against the women and children of this country cannot be overstated. In this regard I would like to point out that our courts handed down no less than 97 life sentences for violent crimes against children last year. Perhaps if more people knew about these sentences the tide would turn.

Preliminary research at our Thuthuzela project has shown that when women are provided with a supportive, survivor-centred court environment, they are more willing to stay the distance and see matters through to prosecution. We will continue to refine our protocol, upgrade the skills of the specialist teams dealing with rape and expand the customised infrastructure required for such programmes. The participating departments, Health, Justice and Social Development, are currently seeking ways to roll out similar centres to other provinces. As Justice improves and refines its management information systems, the Ministry is firmly in favour of providing gender analyses of our budget and actual expenditure. We hope that this will be achieved before March 2004. We would then be reinforcing our Government’s commitment at Beijing to incorporate a gender perspective into the design, development, adoption and execution of all budgetary processes in our department.

Promoting equitable, effective and appropriate resource allocation to support gender equality and to enhance women’s empowerment not only meets the imperatives of our Constitution, it makes good financial and economic sense. Indeed Noeleen Heyzer, in her recent statement to the UN Development Fund for Women, UNIFEM, said:

A financial architecture that promotes the progress of women will not just promote gender equality; it will also promote poverty reduction, human development and the realisation of human rights.

In summing up the department’s plans for the effective and efficient use of the financial resources made available to us, I can do no better than to quote once again from the Minister of Finance’s Budget speech. He said in his preamble:

We know that the society to which we aspire - compassionate, democratic, egalitarian - will not come about by belief alone. It is a society we seek to create.

We will continue to invite the public to support and to participate in Letsima programmes in and around our courts. In this and in the way we do our work, I hope it will become clear that the Department of Justice and Constitutional Development is entirely focused on maximising the speed and efficiency through which our contribution can help to deliver a truly compassionate, democratic and egalitarian society.

Mr H J BEKKER: Madam Speaker, special congratulations to Dr Trevor Manuel. He is a very deserving recipient of this honour.

Today I have also found myself a few times in agreement with the hon Andrew. Maybe it is because he is now wearing a different hat from the finance section. The Minister and the Department of Finance must again be congratulated on the presentation of a well-constructed and user-friendly Budget Speech.

The financial policy, the fiscal discipline, the narrowing of the margin of the deficit before borrowing and the social commitment must be applauded. Inkatha welcomes the relief for the poor and the indigent and, although it is not happening now, in future attention should be given to the introduction of a basic income grant. The Minister, of course, had an excellent window of opportunity due to the substantial surplus income from taxation. The IFP’s congratulatory comments must therefore be shared with the SA Revenue Service.

The higher inflation increases in social pensions and income grants could have been expected. However, with the extra windfall from the SA Revenue Service, the IFP believes more could have been done.

Income relief for particularly the lower and middle income earners will put more food on the table. The IFP would also like to have a much greater increase in the tax exemption on savings or the taxation should at least be on par with the taxation on dividends. The IFP would have put more emphasis on the creation of employment and stimulation of economic growth. More could have been done to encourage tourism to South Africa whilst the new approach is needed to stimulate agriculture and particularly the formation of integrated farming units. In this regard, we would have welcomed a clear sectoral approach where incentives for these sectors could have been spelled out.

HIV/Aids is a national emergency with catastrophic consequences for the economy. Training and practical education programmes for HIV/Aids could be financed from the vast untaxed skills levy fund and particularly the training of health workers and volunteers assisting with the roll-out of nevirapine to HIV-positive pregnant mothers could have been considered.

All the fundamentals are, however, in place, and South Africa should be set for growth. The president of the IFP, the hon Dr M G Buthelezi, has praised the Minister, calling him the best Minister of Finance that this country has ever had, or even the best Minister of Finance in the world. The question Dr Buthelezi posed, however, is the crucial one that we must find answers to. If all the fundamentals are in place and if we have the blessing and co-operation of both the Western and the Eastern countries, why is our economic growth so slow?

South Africa is further blessed with an excellent Governor and Deputy Governor of the Reserve Bank. The Governor received an award as the Central Banker of the year in October 2001. I put a question to the Governor of the Reserve Bank after congratulating Mr Mboweni on achieving the upper level of the inflation targeting. My question to the governor was: What is the worse evil for South Africa, an annual inflation rate of 10% and a devaluation in the rand of 10% or an inflation rate of 6% and a devaluation in the rand of 20%?

Crucial to my question would be whether we can afford to sacrifice economic growth and the wiping out of our international wealth when our currency goes into free fall. Yes, when the rand went into free fall it was necessary for Government to interfere in the financial markets.

We, in the IFP, can also understand the reasoning behind the raising of the repo rate, and thereby the increasing of interest rates on the volatile short-term money markets. What the IFP, however, cannot understand is why, in the process, South Africa must punish the long-term lenders and particularly borrowers with mortgage bonds. The Minister, at the same time, tarred with the same brush the unruly speculators and the hard-pressed home owners of the country. In my mind, it is possible to differentiate between long-term interest rates and the short to medium-term factors. Again, why must the innocent home owners or long-term lenders be punished because of the misbehaviour and speculative nature of the short-term lenders and money- market speculators?

If the Minister cannot find an administrative way of separating long-term interest factors from the short-term money market factors, there are other ways in which this can be done. One way would be for Government to subsidise long-term housing by the equivalent of the relevant rate increase. Should the cost factor be too high for Government, then the increased portion of the interest rate on the short-term factor could be treated as a penalty or form of taxation in order to supply the necessary funding for the required subsidisation of the long-term bonds.

What is the message that we are sending to business development when we increase interest rates, and how do business entrepreneurs interpret these increases? Entrepreneurs and industrialists still clearly remember that a few years ago interest rates escalated to over 20% with a devastating effect on their capital repayments. One must imagine them competing with American, European and Japanese institutions with a comparative prime interest rate below 6% and with almost zero devaluation in currency value.

With the tendency during 2001 of gradually lowering interest rates, entrepreneurs and home owners gave a sigh of relief, only to be kicked in the teeth again by the recent increase in the repo rate in January 2002, followed by similar increases in bank interest rates. Now it would seem that a further interest rate hike is apparently unavoidable. We know that the Governor of the Reserve Bank will probably announce today another hike in interest rates.

There, I would like to say to the Minister, is the fear of the realities that are dawning on us. What South Africa and investors need is good news. And we desperately need a positive spin in this country. Business and long- term lenders’ greatest apprehension is that their long-term capital commitments will be negatively affected with another spate of interest rate increases.

I sincerely consider higher interest rates, higher inflation and particularly the devaluation of the rand as a motion of no confidence, unfortunately in the Minister and in our country. I would like to say to the Minister that something must be done to create hope and a positive investment environment out here.

My leader clearly indicated the negative factors and perceptions that South Africa must overcome in order to stimulate foreign direct investment in South Africa. Featuring primarily in this regard is that we must break away from the negative perceptions that South Africa is just another unstable African state. Unfortunately, our silent diplomacy foreign policy position on Zimbabwe has not reversed these perceptions. In fact, the present situation has even contributed to the totally wrong perception that it could just be a matter of time before South Africa slips into a situation similar to Zimbabwe. We, of course, disagree with these perceptions.

With regard to the election outcome in Zimbabwe, we in the IFP are highly critical about the actions of the governing party in the run-up to the elections as well as during the physical voting process.

The attention of the world has been focused on Africa during the past few weeks, and the establishment of the African Union is very much on the forefront.

The IFP fully supports the Nepad initiative and the ideals of an African Union. Yes, we must be an integral part of a major trade bloc and even an African Union government. However, we must ensure that our country belongs in the camp of countries which are genuinely committed to democracy and to the blessing of development, progress and prosperity, which come only in a genuinely open and free society. We cannot hesitate or falter when it comes to drawing a distinction between those African countries which are truly democratic and those which are not.

We have noticed with interest the aspirations of the African Union, and particularly the future introduction of a single African currency for all African states. Theoretically, this is a great idea. If there can be a single European currency, that is the euro, then surely we in Africa can also have an African or Afro dollar, or even an African Elephant currency. The death knell, however, would be if that currency were not strictly controlled by a single, trustworthy central bank. Perhaps with the excellent relationship with and commitment of the West to the upliftment of Africa, my personal suggestion would be that the African dollar should be issued by the European Central Bank, or at an equivalent value and directly linked to the euro.

Although the IFP is comfortable with the appointment of the Myburgh commission of inquiry into the fall of the rand, we believe that in the end it will just be an expensive lesson into the reality of how market forces operate.

South Africans tend to be critical and judgmental of those disloyal citizens that are sending their moneys out of the country. Let us, however, look at the reality. For more than 20 years now the rand has declined on a constant basis. The value of the rand against the dollar and other currencies shows a single downward trend. If the rand had traded as a share on the stock exchange, one can think for oneself what could have happened to that share. If it were not delisted, the shareholders would try to get rid of it timeously.

The same types of jitters, indeed, occurred in December 2001, when the rand slipped proportionately much more than the declining graph, and then one saw a run on the money reserves. People were panicking and trying to safeguard at least some of their savings and hard work over the past years. The SA Reserve Bank, just like any other banking institution, cannot withstand such a run on their reserves and on our money, and then automatically the money depreciates more than substantially.

What are our alternatives? How are we going to stop the rot? Several options are open, and these can be investigated and researched. Government does have the capacity to research the phenomenon and even our universities could look into alternatives and models. Of course, we in the IFP would like to get involved, but we simply do not have the research capacity. The IFP, despite our misgivings about the political influence of outside factors on our economy, will nevertheless vote for this Budget.

Ms C M P RAMOTSAMAI: Madam Speaker, hon members, I want to focus my contribution to this debate on our struggle against poverty. The President, in his state of the nation address, called on all of us to work together to push back the frontiers of poverty.

The President also reminded us to look at what we could do for our country when he raised the principle of Vukuzenzele. But these calls are not new to ANC members. In fact, we have repeated, since 1994, that our struggle is not over, but is now against poverty. Although some members on the other side of the House have recently jumped on the bandwagon, our approach to poverty has been consistent and systematic.

Our single biggest contribution to the relief of poverty is in the form of direct cash transfer. We pay social grants to more than four million beneficiaries every month. This is a direct transfer of nearly R18 billion into the homes of the poorest of our people. The amount is still growing as we strive to ensure that we reach the target of three million of the poorest children through the child support grant.

The old age grant and disability grant increase from R570 per month to R620 per month, while the child support increases from R110 to R130, and this increase is above the level of the inflation rate. We welcome the increase awarded to the social grants and we welcome the fact that the date on which this increase takes effect has been brought forward to 1 April 2002.

However, it is critical that we make sure that the transfer system works, and that different Government departments that have to work together to ensure access make every effort to ensure that blockages in the registration of beneficiaries and issuing of identity documents are eliminated. The same goes for the assessment panels that must assist disabled persons to get their grants.

With regard to the many of our people who have been turned away from social services offices with a ``no’’ answer, meaning that there is no grant, we must expose those officials that take these benefits for themselves through laziness and corruption. The message must be clear: we will not tolerate their getting away with this at the expense of those entitled to these benefits. When these people have been exposed, Government must take action instead of allowing these civil servants to stay in jobs indefinitely.

The Government appointed a committee of inquiry into a comprehensive social security system in February 2000. This committee’s report is currently before the Cabinet. Perhaps we need to put the work of the committee into perspective, as there seems to be a particular focus on one possible outcome of the committee’s deliberations.

When it was set up, it had the task to investigate a national pension system, old age protection, the social assistance grant, and unemployment insurance, as well as health funding and insurance. The outcome of the report can therefore not be singularly focused as many would suggest. However, we do look forward to the report making a significant contribution to our ability to advance from a fragmented and unsustainable system to one where, through solidarity with one another as a society, we can establish a system with a social safety net that catches all those who are unable to support themselves.

We also note the allocation in the Budget that is aimed specifically at improving the administration of grants. The most important here are the introduction of norms and standards for the delivery of social security services, as well as the replacement of the Socpen system. We trust that the department will be able to meet its target so that we can ensure that beneficiaries who are entitled to grants are not disadvantaged because of administrative inefficiency.

The other significant part of the fight against poverty within the field of social development is a special allocation for poverty relief. We know that the total amount of R1,5 billion has been allocated to 12 Government departments, with the Department of Social Development receiving R100 million in its financial year.

We all know that we have come a long way from an allocation of this kind where projects in the provincial departments did not always have the capacity to apply money they received. As Government we did the responsible thing, which was to go back to the project to see what was working and what was not.

The allocation to the Department of Social Development was reduced to R50 million so as to ensure that these funds could be managed well, and that we avoided the spending pressures of the past years.

The Department of Social Development has indicated that 30% of the projects that will receive funding form part of the nodal points in the integrated rural development strategy. This is to encourage and urge hon members to ensure that they know where these nodal points are, and to follow the progress of projects supported by the Department of Social Development.

What is also encouraging is that for the first time the concept of fostering longer-term sustainability and independence from these special allocations, by way of improving access to microfinance, is now being introduced. A total of 20% of projects will be targeted for this programme and we would be keen to revisit the issue six months from now to establish to what extent the department has succeeded in meeting this target.

Let me now turn to the department’s role in empowering communities and individuals to cope with the devastating effects of and the impact of HIV and Aids. We have made a clear decision in favour of supporting community initiatives for the care and the support of individuals affected and infected by HIV and Aids. The allocation to this department has increased significantly, this year, from R12,5 million to R46,5 million, which suggests that the capacity to assess projects and provide immediate assistance has since increased significantly. In fact, the funds allocated will go to a minimum of 300 projects nationwide, many of which are run by voluntary organisations and faith-based institutions.

We would like to encourage such organisations to continue with their work and call on the Department of Social Development to do everything possible to ensure that the partnerships that these projects represent are strengthened. Without such partnership community development work will not advance, and therefore we must support the social accord between Government and civil society.

Many of the organisations have repeatedly noted that they have great difficulty in accessing sufficient funds for their work. We commend the spirit of volunteerism which sustains such organisations. This also means that, as Government, we must also do our part to ensure that the funding system functions well.

Last year the Treasury announced that a range of public benefit activities, for which donors can receive tax rebates, had been broadened. This now includes nonprofit organisations which provide services in the fields of care for the older person, HIV and education. This form of strengthening the volunteer sector must be welcomed. We encourage all stakeholders to continue in the process of discussion with the Treasury and Sars to ensure that the list of activities is fully representative of the public benefit activities that are so crucial to the development of our people.

The Budget is clearly focused on developing our people’s ability to reach their full potential. We have learnt from our difficulties in the past and we have put into place measures to improve the service we deliver to our people.

Let us not allow anyone to say that we do not care about the poor. Let us rather encourage each other in the spirit of Vukuzenzele to work together and push back the frontiers of poverty. [Applause.] Mr M C J VAN SCHALKWYK: Madam Speaker, since the early 1990s there has been a great deal of talk about the need for a real national consensus. In effect, we all agree on the need to agree, but it seems as though we never really get to the point.

On what precisely do we need consensus? The answer, above all, is the importance of human dignity. The huge challenge facing our country must give us pause. The work ahead of us, if we are going to give meaning to our agreement on the importance of human dignity, is not the work of a day, a year or even five years. Ours is the work of a decade. The measure of our success will be if, at the end of this decade, we can confidently say that all our people have dignity to match the excellence of their spirit.

The first step toward building human dignity is to heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights. Contrary to what some believe, this process is far from over.

The second phase is to improve the quality of life of all our citizens and free the potential of each person. This Budget is the strongest indication yet that we are achieving the right balance between the responsibility of Government and freeing the potential of their people. It is a Budget that takes forward the process of building human dignity and encourages people to increasingly accept personal responsibility.

A vital element in building human dignity is the equality of all people. In a country such as ours, this means a deeper understanding of reconciling the interests of the majority and the minorities. These interests should be taken out of their competitive context. It is possible for the interests of the majority and the minorities to complement each other. Minority communities have a responsibility to be part of the building process in South Africa. Majority communities have the responsibility to let them be a significant part of that process.

This is what the majority and the minority in Zimbabwe denied each other. In South Africa there is enough goodwill and commitment to avert that. That is exactly what we are busy achieving in this country.

Building a nonracial society, where we can nurture this mutual respect, is not a simple theoretical exercise; it requires ongoing practical initiatives. In this regard, I have to commend former President Mandela for unveiling the Danie Theron statue in Pretoria at the Voortrekker Monument last week.

Danie Theron is a heroic figure in the Afrikaans community and its struggle against colonialism. President Mandela’s action touched a deep core which words alone could not have achieved. It is this generosity of spirit which contributes the vital energy necessary to build a united nation of which mutual respect and accommodation of all communities are the hallmarks.

Like the majority, many minority communities have also experienced indignity and therefore know how important human dignity is. It is much more important than just rands and cents. During the Anglo-Boer War, the prevailing sentiment taught Afrikaners was: ``These country boers could never be an asset to the British. They are uncivilised Afrikaner savages with a thin white veneer, savages produced by generations of lonely life on the veld. Their expulsion would make room for decent British settlers.’’

Next month will see the return of the remains of Saartjie Baartman, who has become for many a symbol of the denial and the violation of human dignity of people during colonial times. Many people do not appreciate the emotional significance of her return. French scientists considered her to be, ``the lowest form of humanity and the highest form of animal life, a kind of preDarwinist missing link.’’ Innocence was perceived as barbarism, lack of education was seen as stupidity and difference was labelled as subhumanity.

Dr Verwoerd’s Bantu education policy encapsulated the violation of human dignity. He wanted to condemn people on the basis of skin colour to the permanent status of hewers of wood and drawers of water when he said:

The school must equip the Bantu to meet the demands which economic life will impose on him. What is the use of teaching a Bantu child mathematics when it cannot use it in practice?

The fact that we share this historic experience of the violation of our human dignity must make the building of human dignity our first and foremost national goal. But we need more than this; we also need to unlock the expertise and skills of the minority communities in this country to contribute to a better life for the nation as a whole. The fact is that the privileged education which only a part of our nation was privy to should be seen as an underutilised resource that must now be fully utilised for the benefit of all. The willingness is there.

In this regard, black economic empowerment is a vital element in building human dignity. Many people feel threatened by it, but if executed correctly, empowerment is not at the expense of any group but to the benefit of all.

Communities who went through this process before, like the Afrikaans and Indian communities, have a lot to offer in terms of what worked and what did not work. Black economic empowerment is often criticised as being to the benefit of only the few. Although some of this criticism may be valid, the creation of role models is essential to kick-start the process of empowerment.

The building and support of human dignity is a universal imperative. If we, as South Africans, work tirelessly to nurture human dignity within our borders but turn our backs on the inhumane treatment of our regional neighbours, we achieve nothing. The situation in Zimbabwe is the embodiment of this principle.

The people of Zimbabwe have been intimidated, repressed and victimised by agents of their own government. It is our duty, not just as fellow Africans and neighbours, but also as fellow men and women, to do everything in our power to assist in the restoration of human dignity to the people of Zimbabwe. We cannot allow any individual to trample that dignity with impunity.

In a very significant development, only a few hours before this debate, the Nigerian head of the Commonwealth mission and former head of the state, Abdulsalami Abubakar, announced that the Zimbabwean election was held ``in a climate of fear, which did not adequately allow free and fair expression of the will of the electorate’’. This forthright opinion gives new hope that institutions which have thus far been hesitant to criticise are now willing to stand up and be counted. It is easy to denounce the election results and process in Zimbabwe. But, unlike many other countries with whom we agree about the undemocratic behaviour of Mr Mugabe, we in South Africa do not have the luxury of closing our hearts, our minds or our conscience to the plight of our Zimbabwean neighbours.

South Africa has carefully built the image that a new generation of leaders with a commitment to democratic ideals is going to change the African continent. Siding with President Mugabe, creating the impression that we defend his erosion of free and fair elections, will seriously damage our carefully built-up credibility. Our economy will pay the price. Stability in our region will pay the price. Our credibility in being one of the guardians of the African Renaissance, and of democratic ideals on our continent, will certainly pay the price.

Although not the ideal solution, the African solution of a government of national unity in circumstances such as these may move the Zimbabwean situation forward. It will lock the two main parties into a process of accepting coresponsibility for stability in their own country. It has the potential to convince the international community that there is a way out, and it will enable Zimbabweans themselves to start addressing the massive developmental challenges which, above all, require a consensus- seeking government.

In conclusion, let us consolidate our gains since 1994. Let us build on our credentials as a country where democratic ideals are not merely words on paper. Let us proceed with the process to enable our citizens to cherish their freedom and to accept the responsibility of using their opportunities to underscore, to expand and to entrench real human dignity for all South Africans. [Applause.]

Mr N M NENE: Madam Speaker, hon members, let me start by congratulating our hon Minister of Finance on his commendable and well-deserved achievement. A simple explanation of expansionary fiscal policy is an increase in expenditure both in Government and consumer spending, increased investment spending and a reduction in taxes. This is precisely what this Budget achieves. One commentator made the observation of how difficult it is for opposition parties to find fault with the Budget because they have to look outside of it to find ammunition to fight back. When the Minister of Finance, the hon Dr Trevor Manuel, tabled the Budget last month and later the Division of Revenue Bill, our communities realised that we do what we preach in the ANC. The Minister put it quite eloquently when he said: ``Indlala igwetshiwe’’ [Poverty has been eradicated.] Indeed, the frontiers of poverty are threatened by this expansionary Budget. An increase in local government allocation to strengthen basic municipal services provision to poor households is clear evidence of this and, therefore, the example that Mr Ken Andrew made no longer exists.

This is also meant to help the municipalities to manage the demarcation processes, the institutional restructuring of service delivery systems and to provide free basic services to address precisely what Mr Ken Andrew was complaining about. And, I was very surprised to hear the hon member condoning theft, all in the name of trying to push for the basic income grant.

The provincial sphere of government also benefits tremendously from this expansion in spending, all directed at reinforcing the accelerated pro-poor programmes. We acknowledge that, due to the magnitude of the problem of poverty, it is not easy to meet the expectations of our people. Hence the President’s call for Vukuzenzele and Letsema becomes very relevant as it affords all of us an opportunity to appreciate the size of the problem and to collectively declare war on it.

The challenge facing us as elected representatives of our people is that of mobilising all motive forces to take full charge of the struggle against poverty. In the Minister’s words, the most important contribution Government made to long-term growth and development is investing in its people. The Learnership Programme and the Skills Development Programme, through the Umsobomvu Fund, are among the key development strategies for human development.

In order to enhance small business development, some tax relief measures are proposed and some of them have been mentioned by the previous speakers: an increase in the threshold from R100 000 to R150 000 for the 15% tax rate, an increase in the threshold from R1 million to R3 million turnover for small business relief and also that the tax administration burden has been simplified and reduced in order to reduce compliance costs.

Our advances in pursuit of a better life for all are meant to enhance the dignity of all our people and to liberate them from poverty and human deprivation. The Freedom Charter says: ``The people shall share in the country’s wealth.’’ In order to realise this dream, we need to wage a sustained struggle on many fronts. We must ensure that our economy grows and develops. It must provide the material base that will enable us to defeat the challenges of poverty and underdevelopment. It must create the jobs without which it will be impossible to defeat the scourge of poverty. Thus, we have to focus on the twin tasks of growth and equity.

Our society continues to be plagued by racial, gender and geographic disparities that still exist in the distribution of wealth, income and opportunity. These disparities are themselves a fetter on the growth and expansion of the economy and the wealth in our society.

We should encourage the emerging black businesspeople to communicate with their established counterparts to extend their contracts and interaction with the rest of the region and our continent as a whole. In terms of job creation, it is critical that we use the opportunities created by, among other things, the transformation that is taking place in the Department of Trade and Industry, the rural-urban renewal programmes, and the recently adopted strategy on agriculture. This strategy needs to be pursued with vigour in order to address the issues of land, food security and job creation. This will include support to the new black farmers to ensure that they have the means to carry out their productive activities successfully.

Thina-ke njenge-ANC indlala nobuphofu akusilo nje ibhola lepolitiki, kepha thina uqobo lwethu siphuma kuyo le miphakathi edla imbuya ngothi kube kukhona abadla izambane likapondo ngoba babevunwa ubandlululo esikhathini esingaphambili.

UHulumeni we-ANC ujube ikhomishini ukuthi icubungule ngesimo sonke sezenhlalakahle ukuze kutholakale isixazululo esiphelele kulesi simo sobumpofu. (Translation of Zulu paragraphs follows.)

[We, as the ANC, do not regard poverty as a political football, because we ourselves come from these communities, which were poor, while others were living well because they were supported by apartheid in the past. The ANC Government has appointed a commission to investigate the whole of social welfare in order to find solutions to poverty.]

This means that we must ensure that these masses have access to houses, clean water, sanitation, electricity, health facilities telecommunications, roads, affordable and efficient public transport and other social infrastructure to end the situation of underdevelopment and to improve the social and economic wellbeing of our people.

National Treasury has recently released its strategic plan for 2002-05, where its mission and objectives are amplified, the first of these being the advancement of economic growth and income redistribution. In the Minister’s statement of policy and commitment, he reaffirms his commitment to setting and enforcing high standards and making Government more accountable and transparent.

It is our belief in the ANC that our achievements in the past were based on solid and tested principles and policies with which, together with the masses of this country, we will continue to chart the way forward with the rest following us to victory. [Applause.] Mr B H HOLOMISA: Madam Speaker and hon members, the UDM remains convinced that job creation is the single biggest challenge facing this country. If we can succeed in rising above this challenge, then South Africa can truly become a winning nation which provides a decent and fulfilling life to its citizens. In the final analysis, the needs of every South African flow from the need for a decent job.

The UDM is dismayed that the Appropriation Bill reflects no co-ordinated national strategy on the part of the Government to create jobs. We have said this before: Government must intervene responsibly in the economy to create jobs and encourage domestic-led business growth. It is, despite claims to the contrary, a realistic and viable option practised by governments across the world.

The very same countries that this Government is too eager to please, with its self-imposed structural adjustment package, are not blindly pursuing such policies. When American factory workers or European farmers face large- scale unemployment, those countries intervene. They do not tell their workers, ``The market has spoken; you are now redundant.’’ No, they invest billions in subsidies, skills training and business development. Underspending at national Government level continues, while it accuses provincial governments of this transgression. In fact, it appears that the kettle and the pot are equally black. Again, we have to question the commitment of Government; R3,48 billion of the national Government Budget went unspent in the 2000-01 financial year - about R1,7 billion on both the recurrent and the capital side of the Budget.

It is truly disturbing that the national departments that can contribute significantly to job creation and infrastructure development are the biggest offenders. The Department of Public Works contributed almost 21% to the total underspend due to large underspending on its capital budget, and the Department of Labour contributed 14% due to underspending on the recurrent side.

Corruption continues to blight all efforts at addressing the needs of South Africans and undermines Government spending, as envisaged in this Bill.

In his state of the nation address, as in all previous addresses at the opening of Parliament, the President declared his commitment to rolling back the frontiers of poverty. Poverty alleviation among the poor has been his refrain in his opening addresses.

One would not believe this is the same President who previously chaired a Cabinet committee which awarded arms procurement tenders, in clandestine circumstances, to offshore companies which, to date, will cost taxpayers between R52 billion and R66 billion. Notwithstanding the findings of the investigating agencies, which exonerated the executive from any wrongdoing, a dark shadow of doubt hovers over the handling of the arms procurement deal.

During 2000, I tabled in Scopa a report revealing unauthorised expenditure amounting to R8 million that was paid to two consultants by the Department of Public Enterprises. My report ruffled some feathers in the corridors of power. However, to date those revelations have not been disproved. Yet no action has been taken to redress the situation, which impoverishes the taxpayer and abuses the public trust. This kind of conduct at the highest level undermines investor confidence and accounts for the hesitancy of potential investors to do business in this country.

In his Budget Speech the Minister of Finance said he would balance his 2000- 01 Budget by privatising state assets. However, the conduct of some of these state enterprises leaves much to be desired. If the corruption manifested in some of them is anything to go by, I doubt if the Minister will achieve his objective.

For instance, I have in my possession here documents which bring into the open shady deals involving Transnet and a company in Cameroon. According to these documents, Transnet was offered a tender by Advanced Technics Trust, a Cameroon company, for the maintenance of Boeing 737 and 747 aircraft belonging to Cameroon Air, a state-owned corporation. Transnet admit in these documents that they paid R26,9 million in bribes to employees of Camair and influential government officials in Cameroon to induce Cameroon Air into awarding the contract to SAA.

Today the Cameroon authorities are suing SAA for approximately R1 billion in the international court for bribery and failure to honour the contract they concluded with ATT Ltd. I am reliably informed that SAA equipment in Cameroon could be impounded as a result of the litigation. The value of the equipment in question is about R1,5 billion.[Interjections.]

Mrs Z A KOTA: Madam Speaker, on a point of order: The hon member referred to the President, at the time he was Deputy President, chairing a clandestine committee on the procurement. I would appeal to the Speaker to study the Hansard and see whether we can make a ruling on that.

The SPEAKER: But what is the point of order?

Mrs Z A KOTA: The point of order is the integrity of the President in terms of chairing a clandestine committee on the procurement.

Mr B H HOLOMISA: I …

Mrs Z A KOTA: You said that. [Interjections.]

The SPEAKER: Order, hon members. I will certainly look at it. I did not hear that. It may have happened before I came.

Mr B H HOLOMISA: I did not say so. I am answering you now. Sit down. [Interjections]

The SPEAKER: I will certainly look at at the Hansard. Just one moment, hon member. Order! Hon members, I would ask you to listen carefully yourselves and make a clear point of order. You cannot just say, ``Please read Hansard and see if there is a point of order’’. I must ask that you point out what is the point of order. Please proceed.

Mr B H HOLOMISA: This rhymes well with the comrades’ battle cry at the weekend rallies, when they say, ``Aluta continua!’’ and on Mondays the looting continues in the executive boardrooms. [Interjections.]

Hundreds of thousands of rands will be spent investigating the reasons for the fall of the rand when, in reality, the cause is here at home. If the Minister wishes to learn more about the Cameroon indaba, I am more than willing to share notes with him over a cup of tea.

However, during his response in this debate he will be expected to brief the House as to whether the information I give is authentic or not and what impact it has on the image of the country.

The UDM is concerned about the millions of rands that the Department of Foreign Affairs doles out to countries like the Comoros islands and other offshore causes. One wonders whether these amounts are approved by the relevant portfolio committees of this House or whether they indeed reach the intended destination when one recalls the ill-fated Sarafina 2 debacle.

It will be difficult for the residents of Khayelitsha, Malamlela and Elliotdale to understand the rationale for giving away such amounts to outside causes when they are told that there are no jobs, no food and no medical care for them. If this is the price of the African Renaissance and Nepad, then it is too expensive.

The third issue the UDM wishes to raise relates to poverty alleviation. The current child support grant supports children only to the age of seven. Yet at this age children must go to school, and parents find it difficult to afford this additional expense whilst simultaneously being deprived of the child support grant. The UDM appeals to Government to extend the child support grant to cover children at least until the age of 15. Failure to do this makes a mockery of the right to education and the ANC election promises of free education.

Government has demonstrated a tendency to punish those who disagree with it by withholding poverty alleviation programmes. For example, the people of Malamlela in the Northern Province claim that they have been suffering punishment ever since they questioned the decision to place them within the jurisdiction of a certain municipality. As a result they did not vote in the 2000 elections out of protest. And now we are receiving reports that road-building and other projects in their area have been halted. This type of practice is morally wrong and reminds us of the way the apartheid government punished through deprivation those who disagreed with it. This is a shocking example of Government contributing to poverty instead of alleviating it. [Time expired.]

The MINISTER OF EDUCATION: Madam Speaker, hon members, there is a famous poem by John Keats which refers to ``stout Cortez, when with eagle eyes he star’d at the Pacific.’’ Well, Keats actually got it wrong, for it was Magellan, rather than Cortez.

But what he was expressing was a state of wonderment and surprise - a kind of elixir of life. Well, last Sunday I felt like that. At my age, I need to get elixirs of life. An extraordinary thing happened at the cricket test match between ourselves and Australia, when five young men recently inducted into the team, particularly Hall and Prince, clapped their hands, urged on their colleagues and pushed them on. Even though we were not winning, there was an extraordinary exhilaration they were showing.

I say this because it reflected so badly on their colleagues at the Wanderers, where they were listless. They lost from the first ball onwards, and they lost by an innings and 360 runs. These young people were therefore responding to a call. They were proud to play for South Africa, although they were professionals. They were genuinely proud, Prince and Hall in particular. They were motivated and grew up a little more in that process.

I felt like stout Cortez when I saw this happening, a most illuminating thing which our newspapers, with their deadlines and their interviews only with players, never remarked on. And I felt like this also a few days ago when the Budget came. Let me tell hon members why. When we came into office in 1994, we came with a different approach. I was a Keynesian all my life. I worked on the basis that it was important to have growth and job creation, that one borrowed money for that, and that the future generation would pay for that. Of course, what we encountered was not zero growth, but minus growth. We encountered a situation - and even an ordinary economist like me was frightened - of a deficit before borrowing of over 9%. Of course our whole borrowing reputation - we were responsible for this, through our anti-apartheid movement - was in tatters. So in eight years there has been this remarkable change.

Of course, there are mean-spirited people. I like Bantu Holomisa because he is a genuinely friendly person and has a good physical presence, but he is mean-spirited, and this mean-spiritedness is destructive in the end, because he equates our intervention in Comoros with Virodene, when the hon the Minister of Foreign Affairs is not here to defend herself. What an extraordinary jump! It is an extraordinary jump because she is performing her official functions, which that hon member is, mercifully, no longer performing anywhere. She is not here. The Comoros issue was at the request of the Organisation of African Unity. It was vital that we go there and not allow foreign intervention and mercenaries once again to destabilise another African country. But it is only the mean-spirited who would say, ``For that R8 million or R10 million I could have gone into some kind of settler here.’’ The world does not work that way, and the budget of the department is clearly worked out.

I was intrigued by this, therefore, and by Mr Andrew and Mr Bekker. With the extraordinary luxury of being in opposition, they were trying to work out the need for research facilities or to work out a kind of instant solution to our poverty. It is interesting how one can do all those things in opposition without the luxury of having to apply them in any way.

So I say, specifically in relation to the Budget - and this is the first time - that I felt like stout Cortez and stared in wonderment. But we could, in fact, increase it, since central to poverty eradication is the old age pension. We could increase it over and above the level of … what is it called? HON MEMBERS: Inflation!

The MINISTER: That is right.

An HON MEMBER: Whatever.

The MINISTER: Not ``whatever’’, that is important, that is real growth and that is what I am trying to show.

Of course, we could also do that with the children’s grants. We could do so across the board and, in particular, in relation to human resource development, which I want to speak about. In his opening address the President referred to it in the following way:

Decision-makers across the globe have accepted the reality that the global struggle to eradicate poverty and underdevelopment is fundamental to the wellbeing of our human society.

Numerous references he made reaffirmed the Government’s commitment to human resource development, largely because we all now know that the best way to tackle and, we optimistically hope, in the end to eradicate poverty is through education.

One generation should, through education, enable the next generation to be better off and to be better qualified. That is what apartheid stultified from 1924 onwards and, of course, the Land Act. It rejected the idea that one generation of the Africans would improve the next, and we have to do that now. Why? As George Orwell said, the most important people are the great unwashed in our country. But the development of our greatest resource is, like Orwell’s, that of our people, and fundamental in the Government’s strategy is to deal with this thing.

That is why the Minister of Labour and I presented the human resource development strategy to the Cabinet last April as a people-driven process of transformation and social development. Now we are moving, after a year, to involving the people more directly through nongovernmental organisations, business and the unions to ensure that there is proper shape and growth in our policies. Furthermore, it is a key priority for us this year. As the President said, it is the surest guarantee of sustainable job employment and economic development. The overarching goals are extremely ambitious. They include improving the human index of development for the country, a reduction of inequality and an improved position in the international competitive scale. The human resource is computed by using indicators such as life expectancy at birth, levels of adult literacy and the level of attainment of general schooling in the population.

The reduction of inequality takes place within the broad development strategy that focuses on the poor in this country. The fact that South Africa is second only to Brazil as the most unequal society in the world serves to confirm the importance of these goals. So we are finding this out. Through our skills levy, the Ministers of Education, Labour, Trade and Industry and the Public Service and Administration have been working together to identify the skills required in the labour market.

We can no longer depend on supply side. That is sangomas throwing bones, and I have more respect for sangomas than the economists who used to say, ``We need more engineers,’’ and when we produced some more engineers, they would be unemployed. The same thing happens with the National Research Foundation, where we are identifying scholarships and paying for these scholarships so that candidates acquire skills in science and technology.

Most importantly, I want to inform the House, as a statement of fact, that Government’s contribution to the National Students’ Financial Aid Scheme has gone up from R450 million to R500 million. In addition - I think the green book is not entirely correct - the National Students’ Financial Aid Scheme has found R200 million more in the repayment of loans and this year we are distributing R700 million. The imagination cannot encompass that, because 232 000 young people have gone through by means of financial aid and over R3,5 billion has been spent on them. I should inform the House also that those who are financially assisted do better at higher education than those children who are paid for by their fond parents.

We are reforming the technical college sector, reducing the 150 racially organised technical colleges to 50. There has been no problem at all because it is now being implemented this year. Higher education is a different matter altogether. Teacher training was at a very poor level up to two years ago. The teacher training college has been incorporated into higher education. There are vacant places, it is true, elsewhere. These vacant places have to be filled by provinces themselves.

We are reforming the structures with a view to greater equity and restructuring for the purposes of a greater return for our society. I cannot leave this, of course, without looking at the question of higher education, because the system is poised for change this year. We are grateful to the Minister that we are one of the few countries in the world that have maintained our investment in higher education. For the next three years, in real terms, expenditure in higher education will go up.

Nearly every other country, unfortunately, through the baneful influence of a loss-cost approach by the World Bank, has seen its universities deteriorating to the extent that there are no facilities left for the young people. We have maintained our investment. We provided real redress against apartheid by getting these 232 000 children into higher education. This year in our national plan for higher education we have said that we want 100 000 more young people in higher education so that we can, in fact, get the kind of graduates to meet our human resource development needs. It takes 10 years to get 100 000 more. It means we have to totally restructure our higher education.

We cannot have an ICT university without restructuring the university on a regional basis. Can I, therefore, say that there would be a fundamental change this year, but it is still going to the Cabinet. Restructuring is not for its own purpose. The purpose is to reorganise the sector in such a way that we develop a vibrant and quality higher education system responsive to the country’s needs in human resource development. There is research capacity. We saw the report.

There is very little research capacity, most important of all, to fuel our economic, social and intellectual developments. I will go back again to stout Cortez, when … He star'd at the Pacific'' for the first time. He saw, of course, he was there, the battle was to go back again. Our battle was a battle for freedom, our battle was a battle for emancipation from apartheid, and I go back to one of the greatest poets of old time, Bertolt Brecht, who wrote in the Songs of the soldiers of revolution, When the difficulty of the mountain is once behind, that’s when, you will see, the difficulty of the plains will start.’’ Though our experience of the 20th century in South Africa has been one of negotiating a higher mountain, fraught with enormous difficulties and sacrifices, from that plain we have come to the triumph of a battle and now we need the real liberation - to enjoy a social contract between workers and Government and business and Government so that we can enter the 21st century away from the deceptive calm of the mountains and in the real battle of the plains, and that is to tackle poverty and alienation, to have growth and make a fit place for all our children to be cherished equally in South Africa. I thank the Minister of Finance for his Budget. [Applause.]

Mr L M GREEN: Madam Speaker, let me begin my input by extending the ACDP’s congratulations to Minister Manuel for receiving an honorary doctoral degree. I believe that this award to Minister Manuel is well deserved.

The Budget of 2002 certainly has given much confidence to, especially, every South African about the state of our economy. The tight fiscal control over the last few years is paying off in real terms, especially if Government could concentrate on its responsibility to social infrastructure needs. Growth in real terms of almost 4% is predicted over the next few years, and this should provide sufficient boost to our economy, which is gaining strength against other stronger economies.

Our country is steadily improving its objective of economic stability within the Southern African region. Based on its macroeconomic policies, Government was able to provide increased spending on infrastructure, police, HIV/Aids and social security grants.

Many South Africans will already know by now that they will benefit from the R15 billion in tax relief this year. There is great anticipation that we will witness some growth in our economy, especially within the small business sector and the export market. Our steel industry will also benefit from the recent decision by America to import our steel at reasonable entry levels.

With its emphasis on poverty alleviation, provinces will receive an extra R20,5 billion over the next three years to improve the social conditions of those most in need. The increase in child support grants and pensions should provide some reasonable relief for the poor. Whether this increase will sustain against the Reserve Bank’s uncertainty to confidently predict its control over inflation targeting, is a matter that will impact negatively on the poor if we fail to keep inflation at reasonable levels.

Already the daily battering of the rand is taking its toll on food prices. For all households, basic needs like shelter, food and security are top priority items. A shift in the stability of any of these items must be avoided at all costs. If we allow the downward slide in basic needs to continue, a society loses hope in itself and in its political and socioeconomic infrastructures. What happens, as a consequence, is that because of a weakened society, the ruthless make themselves leaders over the people to lay claim to whatever resources they can obtain.

We are in the fortunate position that ours is a nation that wants to get things right, especially in terms of our past legacy. Ours is a nation which fought injustices and crimes against humanity. Year after year, we remember those who have died so that we can enjoy a country with a future that will render better education, better health, and better security, and a country that strives for equal opportunities without fear of intimidation and harassment of its people. These were the moral imperatives of the struggle, and these same imperatives should provide moral leadership and aid to our neighbouring states whose democratic and human rights values are under severe attack.

Our previous government committed the immoral act of purposefully destabilising our neighbours. Our political leaders must work towards stabilising this region, which sometimes demands that our present Government take a stronger stand against political leaders who violate the human rights of their own people.

If South Africa wants to enjoy economic growth beyond the 2% to 3% margin, then it must send out the signal to the world that we are serious about democracy and economic freedom, not only in our own country, but also in our neighbouring states. Although we may have put in place the right economic policy, this can be easily undone by improper foreign policies. We will risk serious structural damage to our economy if we do not take urgent policy stands against the undemocratic activities of our neighbouring countries.

The way South Africa deals with foreign policy issues will have a bearing on whether we will face the risk of being excluded from future prospective capital flows. Will the outcome of the Zimbabwean elections affect direct foreign investment to this country? We must not fool ourselves that because we have a stronger economy than Zimbabwe the investing nations will overlook the political factors displayed when we do not make a strong stand.

In conclusion, the ACDP believes that this Budget is the best one since Minister Manuel’s appointment, and we wish to commend him for this Budget. We also want to commend the Director-General of Finance and the Department of Finance for their sterling work. We support this Budget, because we believe that it does more for the development of the poorest of the poor. [Applause.]

Mr M S BOOI: Madam Speaker, my colleagues, I want to congratulate the Minister of Finance, whom I happen to have known for many years, on the sterling work he is doing with the finances of our country.

I know the hon the Minister’s commitment to the poor. I know that all the efforts and the struggle are to make sure that the poor are able to put bread on the table.

I would like to tell the hon the Minister that as we reflected on and looked his Budget, as the committee we then concluded that it was quite clear that the Budget is meant to address the issues of the poor. The way the Minister has been able to formulate it, it is quite clear that it is able to handle some of the social issues that were left out by the apartheid regime.

As far as I am concerned, the issue that I have to reflect on is safety and security, because the issues that the Minister has highlighted have enabled us to fight for peace.

I want to tell hon members that I am dedicating my contribution today to baby Tshepang. Baby Tshepang, from the Northern Cape, was sodomised and raped. We must say that the sterling work that has been done by the police, who have been able to arrest the criminal involved in the rape of the baby, is quite important. More importantly, the arrest was carried out by a policewoman. She was able to put together the case and succeeded in tracing the criminal. With all the information they had and in spite of all the criticism, she showed her obligation and was able to solve the case.

So I want to make my own contribution by dedicating my contribution to the police and the work that they are doing within the service for that baby. We must say to the hon the Minister that his contribution to the Police Service has helped us improve our detective service. Since we came to power, our detective work has been gradually improving each year, and that to us is very important. That is why they were able to solve the case involving baby Tshepang.

Although the communities are able to bring some information to the detectives, our detectives are able to make sure that the cases are solved, and that is one of the reasons we say that the Budget will help us.

The second issue that the hon the Minister of Finance knows, has been one of the critical problems that we have been confronted with within the Western Cape, is the issue of gangsterism. I must say to the hon the Minister that as a result of the vision outlined by the Minister of Safety and Security and the National Commissioner of Police, and of looking into criminal intelligence, there is a hell of an improvement in how they are able to gather information against gangsters.

From the last report they were able to put in front of us, it was quite clear that they are fairly informed about the activities of the gangsters. They are able to follow the syndicates wherever they are. They are able to wreck and break some of these crime syndicates. They have penetrated the gangs right into prison. We congratulate the police on this achievement. What we are saying is that the Minister’s improved avocation to the Police Service will contribute a lot towards assisting our policemen.

That is not the only point I would like to make. One of the most important things that I am here for is to look into the work, because this is the month of safety and security according to the programme of volunteerism of the ANC. We wanted to look and see how much progress has been made over this period.

We were able to present a report here, through the hon the Minister for Intelligence. She was able to report as to how many people have volunteered for service in the country. Now she has come up with 500 people. That figure has improved quite tremendously. The figure that we could be looking at has gone way beyond 30 000. Gauteng has given us a total of 20 723 volunteers; the Western Cape has only given us 2 450; the Eastern Cape 10 158; the Northern Cape, 962; the Free State, 23 676; the North West, 6 228; Mpumalanga, 6 728; Limpopo, 4 568; and Kwazulu-Natal, 3 361.

Overall our figures are standing at 78 854. That is the number of volunteers that we have received over this period. It quite clearly says to us that the communities out there are willing to co-operate and work with the police. They also state to us that the growing confidence in the work of the Police Service itself is one of the things that we have put on the table for the police to improve their budget. That would be quite helpful for us.

What we want to say to the Minister is that that contribution itself will go a very long way in trying to stabilise the crime that we are confronted with. As we go beyond the issue that I tried to raise yesterday, I am raising it again because I am concerned. I want to raise it again and express it quite resolutely as a member of Parliament.

The issue we are raising in relation to section 49 of the Criminal Procedure Act of 1977 is a problem. We do not think that the way the Deputy Minister dealt with it yesterday was quite enough. It is not good for the record of the Government and the processes of South Africa’s democracy that we have been able to go through.

What we are saying is that this section 49 allows and gives the police powers to shoot and kill any criminal that they come across. Our problem with that is that if ever a kid of 14 years picks up a loaf of bread and runs and the police come across that kid, they have the right to shoot him if ever we allow them to practise according to this legislation. We have been trying to stop that. It has been more than seven years now.

It has been since 1977 that this law has been lying there and that the Department has not been able to implement it. I wanted to say to the Deputy Minister yesterday that, given the record of the Government and of human rights in our country, it does not augur well at all for them to allow that process and not to take the decision in relation to section 49.

I want the House to understand that, because it is the responsibility of Parliament to defend and uphold the Constitution and the Bill of Human Rights. If that is not being implemented, it is an indictment on our own democracy. I want to say to this House, as a representative of the public, that the fact that the legislation is not moving forward is an indictment on our human rights record that we have been able to set.

We know as the members of the ANC that we have been confronted with this type of problem on many occasions where we have been asked to lay down arms, and asked by the movement to suspend the armed struggle. We have been able to do those things without question or reluctance. That is where our strength lies. Our strength lies in the fact that we have a tradition of being able to say that if ever one wants to use one’s gun, one does not have to use it to shoot at people and kill them. One must have a reason to do that.

What the Deputy Minister tried to do yesterday was to shift around and not to give us that particular answer. I am saying, because we are launching Human Rights Day, let them apply their minds and take a political decision. Let them see to it that that particular legislation gets implemented. There is no way we could continue postponing it, because if we continue to postpone it, with the 700 deaths that the police have been responsible for so far, it is a bad record for our democracy. We would never be able to rest for those who are loyal within the ANC to make sure that this legislation gets implemented. That is one of the things that I wanted to say.

Lastly, the other most important thing that we wanted to reflect on, following from what hon van Schalkwyk has been able to raise here, is talking about the issues of unity, and of how we should be able to work together. Under Mr Mluleki George’s leadership within our committee we have been able to put together a consensus and a way of relating to one another. We have been able to tell ourselves that crime is one of the issues that we get confronted with as South Africans. It is not in the interests of the country that we should be able to politicise this issue. It is not in the interests of the country that we should be able to play our party politics. It is quite important that we all should be united around this particular issue.

The President has shown it by action and by calling upon every South African to take the responsibility of volunteering and going to police stations and communities to mobilise them to participate in this programme.

We want to continue encouraging members, as we go on leave or recess, by saying that they should take this responsibility with them as we continue wanting to strengthen democracy and as we continue making sure that the fundamental principles of democracy are upheld. This is just one of the responsibilities which we, as South Africans, should be able to take upon ourselves as we make sure that we get ourselves quite actively involved in assisting in the fight against crime.

When one finds a community policing forum which is divided according to racial lines one should, as a member of Parliament, be quite concerned about what is happening and about what that community policing forum is confronted with; one should take it as being one’s responsibility to get involved in assisting those communities to improve the community policing forum so that all of us can be seen to be playing a particular role in that situation.

As we are aware, baby Tshepang was confronted with being a victim of rape and sodomy perpetrated by human beings, people who are irresponsible, never mind the colour line or party line and wherever they come from. The issue that one gets confronted with is that our kids and babies are being raped. The responsibility rests with our own consciences, as members of Parliament. How much do we want to come together to be able to fight the crime situation? Within the community and with every member of Parliament that serves in the safety and security committee, that responsibility goes a long way.

We have been able to adopt the view that we would be fighting against crime as a team of youngsters. I am saying: Let us do it together. [Applause.]

Dr P W A MULDER: Mevrou die Speaker, as ek maar soveel tyd soos die vorige spreker gehad het. Ek het oor al die jare na meer as 12 begrotings in hierdie Raad geluister en dit sou onbillik vir my wees om die Minister vandag slegs te kritiseer, wetende dat dit een van die beter begrotings is wat ooit van hierdie podium af gelewer is. Dit is min dat ‘n Minister so kan geld uitdeel en aan die ander kant aan departemente ekstra sosiale toelaes kan gee, sonder om aangrypend belastings te verhoog. Tog het die Minister dit in hierdie begroting in ‘n groot mate reg gekry. Ek dink tog dat as die Minister alleen in die aand met sy gewete is, dan prewel hy saggies: Dankie, Pravin Gordhan; dankie, Pravin Gordhan.

As daar na die begroting en die makro-ekonomiese faktore gekyk word, dan gaan dit goed met Suid-Afrika en behoort ons van krag tot krag te gaan. Tog is dit nie die geval nie. Die inflasiekoers het gestyg. Vanmiddag het die rentekoers met een persent gestyg, en die groeikoers daal nog deurlopend. Ons beweeg eintlik in die verkeerde rigting, nieteenstaande ‘n goeie begroting. Die vraag is: Waarom? Omdat ons nie daarin slaag om meer werksgeleenthede te skep nie - en ek wil dit eenvoudig soos dit maak. Die Minister het toegewings aan die kleinsakesektor in hierdie begroting gemaak. Ek is egter bevrees dit is nie genoeg nie.

Gister het die Adjunkminister van Veiligheid en Sekuriteit aangedui dat meer as 600 000 aansoeke gekry is vir die 16 000 nuwe polisieposte. Die 600 000 werkloses wat aansoek doen, almal persone met matriek en meer, illustreer die probleem. Ek is bevrees dat hierdie Minister met behulp van die begroting nie hierdie probleem van werkloosheid sal kan oplos nie. Die antwoord is myns insiens eenvoudig en moet by sy kollega wat verantwoordelik is vir arbeid gesoek word. Slegs meer buigsame arbeidswetgewing gaan hierdie probleem oplos; iets waaroor Mnr Manuel, wat my betref, nie beheer het nie.

In die lig van die begroting het die VF gedink die Minister kon dalk meer konkrete hulp aan Saambou gegee het, soos nou met BOE gedoen word. Dan was dit dalk nie nodig om op hierdie wyse nou vertroue in die Suid-Afrikaanse ekonomie en veral in die banksektor te moet herstel nie.

Een van die probleme wat ons hierdie jaar steeds gaan hê, is die geleidelike verdere verswakking van die waarde van die rand. Dit het ‘n regstreekse invloed op inflasie en op ons groeikoers. Die afgelope week se gebeure in Zimbabwe help geensins om die rand se waarde te stabiliseer nie. As die Zimbabwiese uitslae ontleed word, is dit duidelik hoe daar ‘n baie hoë stempersentasie was in die pro-Mugabegebiede en ‘n baie lae stempersentasie in die Tsvangiraigebiede. Dit dui tog duidelik aan tot watter mate Zanu-PF dan geslaag het deur middel van administratiewe vertragings, intimidasie, manipulasie en MDC-kiesers van die stembusse af weg te hou. So was daar ‘n oorweldigende toename in die hoeveelheid mobiele en ander stemburo’s in die platteland, wat Mugabegebied is, en tot ‘n 50% vermindering van stemburo’s in stedelike gebiede, wat MDC-gebied is. Vir tienduisende kiesers in die Hararegebied was dit onmoontlik om te stem; selfs na die verlenging van die stemtydperk. Met tye was daar in die Hararegebied tot 6 000 mense in een tou wat geduldig staan en wag om te stem, terwyl die stemtempo op daardie stadium tussen vyf na tien persone per uur was. Wat my betref, is dit berekende administratiewe vertraging.

Die ware toets vir demokrasie is nie om van hierdie podium van demokrasie en menseregte te praat nie. Dit is vir my maklik. Dit is vir ons almal maklik. Dit is veral maklik as mens in die ANC is wat met sy 66% meerderheid die regerende party is. Die ware toets vir demokrasie kom wanneer ‘n regerende politieke party die risiko loop om die politieke mag te verloor. Dit is die toets wat President Mugabe die afgelope jaar in Zimbabwe geskryf het en na my mening nie geslaag het nie. Die bereidheid om alle partye ‘n gelyke geleentheid in die media en tydens die verkiesing te gee, is ware demokrasie. Dit is wat Pres Mbeki se Nepad inisiatief voorstel soos ek dit verstaan.

As die Suid-Afrikaanse regering verkeerd op die Zimbabwiese verkiesing reageer, moet ons aanvaar dat dit ‘n groot effek op die rand se waarde gaan hê. Ons moet ook aanvaar dat die mooi ideale van Nepad skade aangedoen sal word. Ons het groot wysheid om uit hierdie dilemma te kom, sonder om die ekonomie enige skade te doen. (Translation of Afrikaans speech follows.)

[Dr P W A MULDER: Madam Speaker, if only I had as much time as the previous speaker. Throughout the years in this House I have listened to 12 Budgets, and it would be unfair of me to only criticise the Minister today, knowing that this is one of the better Budgets that have ever been delivered from this podium. It is rare that a Minister can allocate money in such a way and then also give extra social grants to departments without drastically increasing taxes. Yet, to a large extent, the Minister managed to achieve this with this Budget. However, I do think that when the Minister is alone at night with only his conscience, he softly mumbles: Thank you, Pravin Gordhan; thank you, Pravin Gordhan.

If one looks at the budget and the macroeconomic factors, it is going well with South Africa and we should go from strength to strength. Still, this is not the case. The inflation rate has increased. This afternoon the interest rate increased by l%, and the growth rate is still decreasing consistently. In fact, we are moving in the wrong direction, notwithstanding a sound Budget. The question is: Why? Because we are not succeeding in creating more job opportunities - and I would like to make this simple. The Minister has made concessions to the small business sector in this Budget. However, I am afraid that this is not enough.

Yesterday the Deputy Minister of Safety and Security pointed out that more than 600 000 applications were received for the 16 000 new police posts. The 600 000 unemployed who applied, all persons with matric and more, illustrate this problem. I am afraid that this Minister with the assistance of the Budget will not be able to solve this problem of unemployment. In my opinion, the answer is simple and should be sought from his colleague who is responsible for labour. Only more flexible labour legislation will solve this problem; something that Mr Manuel, in my opinion, does not control.

In the light of the Budget, the FF thought that the Minister could perhaps have given more concrete assistance to Saambou, as is now the case with BOE. Then, perhaps, it would not be necessary to have to restore faith in this manner in the South African economy and especially banking.

One of the problems that we will still face this year is the gradual further devaluation of the rand. This has a direct impact on inflation and our growth rate. The events of the past week in Zimbabwe do not help at all to stabilise the value of the rand. When the Zimbabwean results are analysed, it is apparent that there has been a very high voting percentage in the pro-Mugabe areas, and a very low voting percentage in the Tsvangirai areas. This clearly indicates to what extent Zanu-PF has succeeded by means of administrative delays, intimidation, manipulation and keeping MDC voters from the voting booths. In this way there was an overwhelming increase in the number of mobile and other polling stations in the rural areas, which is Mugabe territory, and an almost 50% decrease in polling stations in urban areas, which is MDC territory. For tens of thousands of voters in the Harare area it was impossible to vote; even after the extension of the voting period. At times, in the Harare area, there were up to 6 000 people in one queue who patiently stood and waited to vote while the voting rate at that stage was between five and ten persons per hour. In my opinion, this is a calculated administrative delay.

The true test of democracy is not to speak of democracy and human rights from this podium. That is easy for me. That is easy for all of us. It is especially easy if one is in the ANC that is, with its 66% majority, the governing party. The true test of democracy is when a governing political party runs the risk of losing political power. This is the test that President Mugabe took the past year in Zimbabwe and, in my opinion, did not pass. The willingness to give all parties an equal opportunity in the media and during the election, is true democracy. This is what President Mbeki’s Nepad initiative proposes, as I understand it.

If the South African Government does not react properly to the Zimbabwean elections, we must accept that it will have a great impact on the value of the rand. One should also accept that the fine ideals of Nepad will be damaged. We have great wisdom to survive this dilemma, without damaging the economy.]

Mrs R R JOEMAT: Madam Speaker, hon members, the Budget of 2001 was dubbed ``Manuel’s Sweet Fruit Budget’’ and we all received apples as we entered the House. This year we received grapes, which must be an indication that the fruits of labour can now be enjoyed by millions in the country.

A budget is not only about figures that are arranged and balanced in respect of income and expenditure. This Budget is driven by three objectives that are fundamental to the strategic goals of the ANC-led Government. These goals are the eradication of poverty and vulnerability; the growth and development of our economy; and the construction of a people- centred society based on the principle of human dignity.

The majority of South Africans suffered in the past for more than 40 years under a regime that retarded economic growth whilst forcefully implementing its racist ideology, leaving a legacy of inequality. Mrs Daniels of Manenberg in my constituency in the Western Cape said, ``Poverty is not wanting your children to come home because you have no bread to give them; fearing the council truck because it might stop at your door to put your furniture in the street; and praying that the madam will understand that there was no money for taxi fare.’’

Mrs Daniels also wants to thank the Minister. She is extremely grateful for the two increases in pension in their household income. We must now continue to invest in the most valuable asset in our country, that is its people.

To be able to implement the macroeconomic policy of Government, the revenue base must be strong and sound. Since 1994 tax policy, supported by deep structural changes to tax administration, compliance, culture and collection, has consistently delivered revenue growth that enabled the fiscus to reduce the deficit, whilst expanding public services to the people of our country.

The programme of fiscal discipline, sound management, focused spending programmes and continual tax relief remains the hallmark of our ANC-led Government. The rise in company tax was the main driver of the extra R15 billion in revenue collected that allowed the Minister to cut taxes for individuals and provide for poverty alleviation. Closing the gap is what makes tax relief and rising social spending possible.

We, therefore, must congratulate the Receiver of Revenue under the leadership of Mr Pravin Gordhan, his approximately 12 000 employees and the millions of patriotic and compliant taxpayers on earnestly contributing to the building of the new South Africa.

The tax relief package for individuals contributes towards reducing the cost of employment, and rewards work and savings. It also narrows the gap between the lower and higher earning brackets, making more money available to the individuals in the lower and middle salary brackets, therefore stimulating the economy.

The Minister, or the doctor Minister Trevor Manuel, said there are various taxpayers: those who pay their taxes in the patriotic manner, like members in this House; those who are unaware of their obligations; those who avoid full compliance through aggressive tax planning while adhering to the letter of the law, and those who simply ignore the obligations. I want to say to those who simply ignore the obligations to come forward and pay. A strong economy will benefit all, especially those who need it most.

Everyone once again applauded the Minister for his Budget, and ordinary people gave the Budget a vote of confidence. But the most important part of a successful budget is the spending and the delivery. A bigger budget does not necessarily mean a better budget. It is the delivery and the quality of service that is the most important outcome of a budget.

Civil servants are employed persons who serve the people of our country and who affect the delivery of service. To make spending and delivery effective, there must be a culture of work, a work ethos.

I would like to take an example from nature to illustrate this. At one stage the fish population along the Japanese coast became depleted. The Japanese discovered later that this was because of the otters they had killed for their fur. So what role does the otter play in this food chain? Sea urchins thrive on the roots of big brown seaweed, called kelp, and destroy the kelp forests. No kelp means no food and no breeding place for the fish, so they disappear. The otters’ favourite food, again, is sea urchins. The whole day the otter goes about laboriously with its task of eating these sea urchins. No otters means plenty of sea urchins, and thus no kelp. The end result is the fish colony’s destruction.

But what biologists found very strange is why the otter works so hard. It does not have to work so hard. The otter could lie leisurely on its back the whole day and eat the sea urchin now and then. It can still survive on the least amount of effort. Why work harder than you have to?

Hon members must understand that it is in the otter to work so hard. It has a built-in genetic code, an ethos of work for the sake of the good of the whole system. A culture of working for the good of all South Africans is what we must work towards.

My constituency office has dealings with a Miss Elizabeth Stall of the Bellville welfare office. She goes that extra mile to assist us to help our people. She gave us her cellphone number, and offers to help any time of the day. It is civil servants like her and many others who go the extra mile like the otter - no favours asked, no ulterior motives. Working for change for the good of the whole is what makes the Budget, at the delivery point, a success.

Let us do what our President is doing. Let all of us continue this year to mobilise for reconstruction and development, not just for the good of the whole country, but also for the good of the whole of the African continent, because the whole is only as good as its parts. And, if we embrace this culture, we will all enjoy the fruits of our labour. Let us go forward in the spirit of Batho Pele - people first. [Applause.]

Mrs M A SEECO: Madam Speaker, since Budget day almost a month ago, there has been talk about the balance and consideration given to put it together.

We, in the UCDP, give the nod to the allocation to the Department of Safety and Security. This department has the highest allocation of 16,90% of the entire Budget. It is expected that citizens of this country will be kept safe in their homes. We hope that police stations will be properly resourced and members of the SAPS’s salaries will be improved. Education has the fourth highest allocation, at 7,75%, of the entire Budget. This is the department that has to prepare the nation for greater things in life. The department has to provide tuition and educational facilities from preprimary school level until university. The Department of Education has to give grants in respect of financial management, HIV/Aids and childhood development.

The amount of R6 billion allocated to the Department of Provincial and Local Government is a sure sign of recognition that the department has to cater for the needs of municipalities, some of which are tottering on the brink of bankruptcy while others are wallowing in the deep end of debt. There is no doubt that the huge financial injection will get this level of government out of the financial doldrums.

It still boggles the mind to find that the Department of Defence is allocated the second highest amount after Safety and Security. In our opinion, there is no need to allocate so much money to this department. The country is not at war, and seems to be facing no war in the foreseeable future. [Interjections.] The Department of Social Development has to fight poverty. It has to aim for the eradication of poverty and not be modest by referring to poverty alleviation. It is noted that there is an increase in the allocation to welfare service transformation to aid and protect the rights of children, youth, women and older persons. To us, Social Development should have been among the first 10 departments to be allocated high amounts and not be relegated to the middle of the table while it has to cater for the most vulnerable members of our society.

We note that, following the President’s state of the nation address, crime prevention is a national priority and that is why Safety and Security has been allocated the biggest slice of the loaf. We appreciate that Education, Health and Housing are amongst the top 10 Votes, which is an indication that Government means well in addressing the plight of the nation.

The UCDP supports the Appropriation Bill.

Dr S E M PHEKO: Madam Speaker, a nation’s budget is a reflection of what it values and where its priorities are.

South Africa’s Gini coefficient shows that we live in the most unequal society in the world. This has created extreme poverty for the African majority and extreme wealth for the minority population.

The Gear policy is perpetuating this state of affairs. It is distressing that this Parliament continues to receive national budgets which do very little to bridge the economic gap in inequality. Solidarity with the poor is more important than the rhetoric of ``sweet fruits of liberty’’, when those fruits are enjoyed by a tiny minority.

Our country needs a budget which fundamentally reconstructs the lives of the poor to enable them to live in dignity. This means accepting the failure of Gear, which has caused massive loss of jobs and has kept millions homeless, landless and unable to acquire education. Education is becoming more and more unaffordable for the poor. Poverty alleviation will be a pipe dream as long as equitable redistribution of land is ignored and the myth remains that land claims from 1913 will satisfy land hunger in this country.

The majority of this country are poor. They do not have money to spend. African businesses are failing because they do not have decent markets and are not protected. Business concerns are collapsing throughout the country. Our youth and women are wasted because they are not working. They are uneducated, sick, alienated and helpless. Many lack basic services such as water, good roads and health care, especially in the rural areas.

The PAC agrees that our country must be in a state of military preparedness against external aggression, but it is ridiculous that over R50 billion should be spent on arms when millions of citizens in our country suffer so much. The Government has refused to cancel the arms deal. This is despite the fact that it is internationally accepted that contracts which are tainted with corruption are null and void and can be cancelled.

During the Budget process for the year 2000-01, the PAC advocated that the old age pension be raised to R700. It is a shame that the 2002-03 Budget has increased this pension by a mere R50, making it R620. There is talk about ``people first’’, but when citizens of this country everywhere demand basic services and HIV/Aids drugs, including nevirapine for HIV-positive pregnant mothers, Government Ministers respond by fast-tracking the privatisation of state assets and resisting the legitimate demands of the people.

It is important that the principle of poverty eradication not be contradicted by economic policies such as Gear and the privatisation of state assets, which enrich the rich and aggravate the poverty of the poor.

Child mortality is already high amongst Africans. They have the shortest life expectancy. It is forecast that by 2020 the average life span of the African people in this country will drop from 57 to 50 years. The country needs a budget that is based on an economic policy which serves the interests of the poor, while not reducing the wealth of those who have overcome poverty. Despite our disagreement with the policy on which this Budget is based, the PAC will vote for it.

Prof S M MAYATULA: Madam Speaker, let me just make a comment on the Budget allocation for arms. I want us to remember that war does not come, it arrives, and we have to be prepared for it. Education remains Government’s first priority, and the current Budget bears testimony to that. In the financial year 1998-99 the Education budget was R45,348 billion, which in four years rose by R10 billion to R55,395 billion in 2001-02. In one year it has again risen by R4 billion to R59,799 billion this year, which is 24% of nonexpenditure interest.

Furthermore, the Education budget is expected to reach R68,360 billion by the year 2004-05. Of the R59,799 billion, which relates to the total amount budgeted for education as a whole, only R8,804 billion is allocated to the national Department of Education, and part of that is channelled to the provinces in the form of conditional grants.

I would like to highlight some of these programmes and their possible income impact on the lives of our people. I will start off with Higher Education, which has been allocated the lion’s share of R7,992 billion, of which R500 million is set aside for the National Students’ Financial Aid Scheme. This amount, which is R50 million more than last year’s, if one includes the paybacks which will go up to about R700 million, is targeting the poorest of the poor and continues to open the doors of learning to those who would otherwise never even dream of setting foot in the institutions of higher learning.

I now turn to Financial Management and Quality Enhancement, which is allocated a sum of R224,320 million, which will rise to R248,479 million by the year 2004-05. It is intended to improve financial management in the education system and also to improve the quality of education in schools. To me, those seem to be very important items. This programme will bring about improved school effectiveness by prioritising district and school management, governance development and teacher development, and by targeting the identified areas for rural development and urban renewal.

This project is going to lead to improved school safety, targeting crimes like drugs, vandalism and racism and also introducing youth development programmes like music, sport, culture and indigenous games in our communities. It will also lead to improved learner participation in the effective teaching of mathematics, science and technology, also targeting disadvantaged female learners to enter gateway subjects and critical professions.

All these good programmes will come to nothing if our people do not respond positively to the President’s call of Vukuzenzele. Those schools that are affected by vandalism and drugs, the districts that want to improve their school management systems, and the youths who want to be involved in sports, arts and cultural activities must start putting their heads together and make plans to access these funds. Olungakhaliyo lufela embelekweni. [A newborn baby that does not cry dies on its mother’s back.]

Allow me to move to Early Childhood Development, which has been allocated a sum of R52 million, which is expected to rise to R88 million next year to provide children eligible for the reception year with access to a quality education and care programme, particularly in poor communities. This programme will lead to 3 000 licensed Grade R participants, 3 000 registered community-based early child development sites, 90 000 learners who are able to continue with their learning in the foundation phase, and 3 000 basic education kits of learning materials for each learning site.

We must remember that this is going to be a new move to our rural areas and it is going to change the current set-up whereby preschools are a privilege of the rich. The ANC Government is delivering.

With regard to HIV/Aids, as in education, I want to start off by saying that there is an unfortunate linking of prevention of Aids purely with nevirapine. There is more to the prevention of Aids than nevirapine.

These are some of the projects that the Department of Education will engage in in that fight. Education has been allocated a sum of R142 million - and last year this figure was only R63,5 million - to show how the Government is taking this HIV/Aids pandemic seriously in order to ensure access to an appropriate and effective integrated system of prevention, care and support for children infected and affected by HIV/Aids, and to deliver life-skills and HIV/Aids education in primary and secondary schools. This project will lead to an additional 200 trained master trainers; an additional 15 000 trained primary and secondary school teachers; and an implementation of the life-skills programmes in an additional 35% of primary and secondary schools.

Allow me to move to the Thuba Makote schools as centres for community development, which have been allocated a sum of R34 million in this Budget, which is expected to rise to R64 million next year. This is meant to develop and pilot a cost-effective approach to the design, construction and management of school facilities which will also meet the development needs of rural communities. This project is directed to the rural communities in order to change their lives. This programme will go a long way in implementing the President’s announcement when he said (Hansard (Joint sitting) 2002, col 15): ``Government will … allocate the necessary resources to ensure that no child studies under a tree.’’

This programme is going to develop 27 schools in rural areas in each province, identified as being in the greatest need. One can imagine 27 schools in each province! It will also lead to proposals for 18 more schools and to the construction of 18 multifunctional schools. What we are called upon to do as MPs and communities out there is to try and track whether these things are happening and whether the budget is landing on the ground.

The last programme that I want to touch on is the national Ikhwelo project, which received a sum of R25 million last year and will now get R40 million, which will rise to R50 million next year, to provide access to skills development and generally educating and training for adult learners. When we say adult basic education is important, we mean it and we are putting funds towards that to enhance their social and economic capacity. In concrete terms these projects will lead to 450 educators or trainers employed to train adults in agriculture and SMME learning programmes in addition to literacy. That means there is an employment that is going to come out of this. Nine thousand adults will be engaged in lifelong learning.

Through this Budget, the ANC-led Government has put forward a plan of action for us all. In the name of Vukuzenzele, let us all roll up our sleeves and put our shoulders to the wheel.

The success of these programmes depends on the commitment of all our people to do their best. Wadsworth Longfellow put it beautifully, when he said: ``The talent of success is nothing more than doing what you can do well, and doing well whatever you do.’’ I think our Minister of Finance is a typical example of that.

The success of these programmes again depends on our spirit of volunteerism. As we give ourselves and our time to these tasks, let us remember, according to Henry Ward Beecher: ``There was never a person who did anything worth doing that did not receive more than he gave.’’

Let us go out and do something for our communities, not to be paid for doing that, but for the good of doing those things. It is better to do something for nothing than to do nothing for nothing. [Applause.]

Miss S RAJBALLY: Madam Speaker, the MF notes the perception of progress in this country. We need to ensure more visibility on all the positive things happening within South Africa, and doing that will instil a sense of pride in the nation. This is by no means an easy task taking into account the escalating levels of poverty, unemployment and crime. People need to be informed that this is not a gross mismanagement of the country, but a creation of the past system by the apartheid regime.

When we look at the Budget, we can see that it is an empowering Budget, a people’s Budget. Looking at the deficit now, compared to 20 years ago when it was in double figures, it is an indication of the country being well managed. The people need to realise that they have been part of this process due to greater public participation since the democratic elections. The MF finds it to be the duty of all parties, the House and the many organs of government to be part of this whole initiative to instil confidence in our country.

The MF feels that the budget for the smaller parties should be increased to ensure that the parties become more effective, and finds that the budget allocated to the parties represented at Parliament is inadequate.

Due to time restraints, the MF is unable to fully address the Appropriation Bill. Crime is the biggest threat to our new democracy. Thus, the MF agrees that the budget for Safety and Security is a priority. To address crime effectively, it is imperative that the money be allotted in a fair and equitable manner, depending on the needs of the community.

Education and training are of major importance to ensure we address literacy and poverty in rural and urban areas. Taking account of the vast needs of the majority of the population, the budget allocated to Education is approved, though the MF feels that to address the situation effectively, larger funding is needed.

The conditions of public hospitals and the issue of Aids need serious attention and much more resources to achieve the ends. The MF, however, applauds the efforts in primary health care. The Department of Transport’s new approach of interacting is welcomed by the MF. The Housing department’s achievements fall far short of expectations. It must be congratulated for its effort to meet the challenges, and visibility is necessary so that the thousands on the waiting list realise that efforts to address the problem are being made, and that houses cannot fall from the sky.

The MF supports the Appropriation Bill and congratulates the department, headed by the hon the Finance Minister, Dr Trevor Manuel, on the fiscal discipline and plan. From the Minority Front, congratulations! [Applause.]

Mr C AUCAMP: Madam Speaker, two tertiary institutions were so impressed with the hon the Minister’s Budget that both of them awarded an honorary doctorate to the now Dr Manuel. Who am I then to criticise … [Interjections.] He has three? Well, then let us upgrade him to an automatic! [Laughter.]

On the income side of this Budget, R15 billion in tax reductions will be spread over the whole spectrum which, in turn, will stimulate saving and investment, with growth and job creation as a probable result. A reduction in tax for companies was also on the shopping list of the AEB. That did not materialise, but would have led to more investment from abroad. With regard to the expenditure, the increased spending on capital projects and infrastructure will stimulate growth and job creation. The increase in social pensions, although less than expected, is also applauded, as well as the fact that the Minister did not give in to popular pressure for a basic social grant. The AEB is definitely not singing together with the PAC and the DP in this socialistic choir.

Behind the generally well accepted Budget lies an economic philosophy. In this regard President Mbeki, an economist himself, recently wrote in ANC Today that, unlike other liberated countries in Africa, South Africa has embarked on the long and disciplined road to delivery and development with own capital, and not the easy way of unsustainable quick-start development and delivery with money borrowed from overseas. This is not always popular, but it is sustainable. Thus, with regard to economic discipline and macroeconomic policies, South Africa has distanced itself from irresponsible behaviour in Africa.

My vraag vandag is: Waarom kan hierdie volwasse, nugtere en volhoubare benadering nie deurgetrek word na alle aspekte van regering nie? Waarom so bang, as dit kom by beleidsaspekte soos die handhawing van die regstaat, van demokratiese beginsels, van die vertrapping van menseregte, om dan ook duidelik aan die wêreld te sê: In Suid-Afrika doen ons dit anders? In Suid- Afrika distansieer ons onsself ondubbelsinnig van vergrype van tiranne soos die huidig onwettig verkose president van Zimbabwe.

Kom ons plaas Suid-Afrika in alle opsigte in ‘n liga van sy eie, in ‘n liga wat die mooiste van Afrika sy eie maak en nie die averse nie. In Suid- Afrika gaan ons eie unieke oplossings uitdink sodat korrupsie nek omgedraai word, sodat elke bevolkingsgroep sy eie kan handhaaf, sy kinders kan onderrig volgens sy eie waarde en etos, sy gemeenskapsinstellings kan handhaaf, volkshelde se name nie net op monumente nie maar ook by die ingange van ons dorpe kan aanskou. (Translation of Afrikaans paragraphs follows.)

[My question today is: Why can this mature, sober and sustainable approach not be applied to all aspects of government? Why are we so afraid, when it comes to policy aspects like upholding the rule of law, democratic principles, trampling of human rights, to tell the world loudly and clearly: In South Africa we do things differently? In South Africa we distance ourselves unequivocally from the transgressions of tyrants like the current illegally chosen president of Zimbabwe.

Let us place South Africa in a league of its own in every aspect, one that makes the most beautiful of Africa its own and not the opposite. In South Africa, we are going to come up with our own unique solutions to stop corruption in its tracks, so that each population group can hold its own, teach its children according to its own values and ethos, uphold its community institutions, observe its folk heroes’ names not only on monuments, but also at the entrances to our towns.]

The AEB, politically incorrect as it may be, will support this Budget and does so with this urgent appeal: Let us apply the same discipline, uniqueness and our very own type of excellence in every sphere of public and private life. Let the hallmark of a winning country not be limited to a once-a-year budget, but let it extend to every sphere of life, province, state department, office and teacher.

The CHAIRPERSON OF COMMITTEES: Order!

Mr C AUCAMP: Chairperson, let me just finish. [Laughter.] Let the whole world then take notice. South Africa may never be the victim of collective punishment, because, as Frank Sinatra said, we do it our way. [Applause.]

Ms S B NQODI: Chairperson and hon members, the annual Budget is a political instrument, which members of this House use to hold Government accountable for the way in which it manages the taxpayers’ money. Through our ongoing constitutional obligation of the review and scrutiny of the Budget, we are able to take informed political decisions that can assist Government to make wise, progressive and responsible political choices.

I can say without any hesitation that the Budget for the fiscal year under consideration in this debate satisfies this assertion. It is indeed a well- organised, well-planned and target-focused policy document which empowers us with sufficient information that illustrates this Government’s commitment to improving the quality of life of the people of this country.

Furthermore, it enables us to monitor progress in policy implementation by all spheres of government through the detailed illustration and tabulation of the vertical and horizontal division of revenue. With such a powerful instrument at our disposal we are confident of delivering as expected the political mandate that we carry from the people that we represent in this House.

Before I make any input in this debate, I wish to highlight the following facts. The latest report by Statistics SA estimates that our population has grown to approximately 45 million. The demographic realities indicate that almost 87% of these people are Africans, the majority of whom live below the poverty datum line, because they are unemployed, illiterate, unskilled and homeless. Because of these facts they are the most vulnerable group exposed to all forms of social ills and problems.

Whereas, under the past regime, the majority of these people were not counted in the country’s census records, since 1996 the ANC-led Government has made sure that they are counted in also. The same happened in last year’s national census. Given this truth it is important, therefore, for us in this House to know that the Budget of this Government is informed by these new statistical records. The big slices of the Budget cake which used to be cut for the benefit and enjoyment of life of a handful of our population, due to the racial and discriminatory policies, now have to be shared by all of us in this country, irrespective of who we are.

The unfortunate consequence is that this Government has to allocate the national Budget in such a way that it takes into consideration the political, socioeconomic and historical background of the masses of people. Definitely, if we understand democracy, this Budget and the next one to follow after this have to be pro-poor. The analysis of this Budget indicates a great shift of resource allocation from the national Government to the two delivery arms of government, the provincial and the local spheres, through the equitable share allocations and the unconditional and conditional grants. The bigger transfer, as noted, goes to the provincial sphere of government. This is welcome because, as we all know, according to the constitutional dictates and obligation, this is the sphere of government responsible for most social spending.

The increase in nonconditional and conditional grants will definitely enable provinces to deliver expediently in areas of infrastructure development, education and skills development, health, housing and job creation and increase the amount for the old age pension, child support grants and care-dependency grants.

The biggest increase in the Budget goes to the local government sphere. This is also highly commendable, since this is the sphere charged with delivery of basic services and provision of infrastructure, especially to the poorest areas of our communities.

Residents are dependent on these newly demarcated municipalities to roll out essential services and infrastructure. Government is once more commended for an extra boost of funds, which seeks to help those municipalities which fall within the nodes identified in the rural development and urban renewal programmes. The growth in the housing subsidy allocations for this sphere is also noted in the Budget. It is expected that the new Local Government: Municipal Finance Management Act will further relieve those municipalities which have a small tax base and which remain poor because of the deliberate underdevelopment strategies of the past governments.

Again, the increase in the amount of conditional grants to municipalities for infrastructure and institutional restructuring and capacity is welcomed. Hopefully, this will improve skills in financial management and accountability through the training that both the officials and the councillors who serve in these structures definitely need.

Details of the national departments’ spending plans for the next three years, as said in the estimates of national expenditure, clearly underline this Government’s commitment to accelerated transformation and change, economic growth enhancement, job creation, deepening equity and social development, especially of our previously marginalised and underdeveloped communities, and the strengthening of the safety and justice sector.

In conclusion, I wish to reassure the House that the ANC-led Government remains as truthful and committed to our popular and consistent election campaign slogan that says, ``A better life for all.’’ We said this in 1994 and in the 1999 elections. This is what actually made us win the elections by a landslide.

The political mandate that we carry in this House is enormous and challenging, and the stakes are high. The achievements of the ANC in this House need to be perceived and judged in relation to the endless list of backlogs that we inherited from the apartheid regime, especially the servicing of a huge national debt which we found ourselves confronted with in 1995.

We should realise that up to today the very same debt constitutes more or less the second largest experience of this Government, absorbing almost a fifth of our Budget as indicated in the past budgets. Because of this Government’s prudent fiscal management policy, outstanding revenue performance and the outstanding improvement of tax collection by Sars, we have reduced Government dissaving, interest expenditure and debt.

Our people are beginning to benefit from the spin-offs of this sound fiscal policy. The message conveyed to our electorate through this Budget is that with their support and the loyalty they displayed in the last election, we are determined to accelerate change as we promised in our election manifesto for this second term of our democratic Government. We are beginning to level the playing field, to discover the keys to treasure boxes that were hidden from us by those who resisted change in the Government of National Unity.

The time has come - I would like to say to Comrade Trevor - to give to Caesar what belongs to him. I want to say to the majority of our people out there to seize the opportunity that will be granted to them through our black economic empowerment and SMME programmes, so that they, too, can begin to enjoy the benefits of the riches that were created by our fathers and mothers. They must be warned, however, that they do not have to be hired because of the colour of their skin. [Applause.]

Mr P J NEFOLOVHODWE: Chairperson, because of the constraints of time I will be not be able to congratulate my dear friend on having been awarded a doctorate. This year’s Budget is inspiring in some respects. Indeed, those who are employed have benefited from the tax cuts. Azapo understands that the aim of a country’s budget proposal is to stimulate economic growth and to enable the citizens of a country to enjoy the benefits of economic growth and expansion.

Tax cuts, which will benefit close to about 11,8 million employed people, are indeed a step in the right direction. However, there are limitations, which we want to point out, to the Budget.

The CHAIRPERSON OF COMMITTEES: Order! Hon members, could you please lower your voices. I cannot hear what this member is saying from the podium here. Continue, hon member.

Mr P J NEFOLOVHODWE: The encouraging steps in the right direction are, however, negated by the rising interest rates that were effected at the beginning of the year. Let us hope that interest rates will not rise again. Coupled with the rising food prices, we have a situation which might lead to one step forward, two steps backward.

This year’s Budget has not, in fact, offered much to the unemployed of our country. Given the South African situation in which the majority of unemployed people are black, we can therefore predict that the increase in child and old age grants will simply disappear in the midst of the unemployed fathers and mothers or, in some instances, be shared with the extended family members.

Solidarity with the poor, which the Minister has indicated, will mean recognising, therefore, the poor’s financial institutions and encouraging these institutions to grow. Solidarity, in these circumstances, lies in recognising and formalising these institutions so that the money the poor have gained can be saved in institutions of their own, without their having to depend on the institutions of the rich which do not grant them credit.

The allocation of R1,5 billion for poverty alleviation is an encouraging sign indeed, but judged against the 30% unemployment rate, it is, however, not enough. Job creation is fundamental if we hope to alleviate poverty. [Time expired.]

Ms R TALJAARD: Chairperson, Minister, hon members, the welcome tax relief in this Budget and the repeated near-Gregorian chants that our microeconomic fundamentals are sound, must not obscure the fact that underlying questions of credibility and confidence need to be interrogated.

If we wish to find the missing ingredient holding our economy back, we cannot shy away from these questions. Clearly, they have political undertones and it is therefore not surprising to find them excluded from the Myburgh commission’s brief. Instead of being in second gear, in more than one sense we appear to be stuck in neutral at best. [Interjections.] Yes, Minister Manuel, neutral. Despite 11 September, which has become an ill-advisedly abused alibi for many ills, including domestic ones, the US economy is showing flickers of a strong recovery, according to Federal Reserve Chair Alan Greenspan. One hopes the global economy will follow suit. We require some bold steps of our own, primarily greater confidence- building, to place this country on an accelerated growth path.

We are simply not reaching the levels of growth that we require. We have squandered some of our key opportunities to capitalise on good market conditions in telecommunications and aviation. We have spent money far in excess of what we can afford in the Strategic Defence Procurement.

As I indicated, we have lost out because our privatisation process has been slow and inappropriate in many respects. We have seen this in the telecommunications sector, and with pre-September 11 cracks in the aviation sector also showing in this sector. As a consequence of the Telkom and SAA IPO delays, we have found seemingly reasonable sounding alibis. These alibis cannot obscure the missed opportunities. To compound the SAA case we had to pay a turnaround specialist an exorbitant severance package before the conclusion of his contract, only to have to reacquire SAA from Swissair and overturn key acquisition decisions at further substantive cost to the taxpayer.

While we have seen recent announcements on Turbomeca Africa Safcol, Spoornet and Eskom, these post-Budget Speech developments must not obscure the nondelivery by the Minister of Public Enterprises. The hon the Minister set a target of R18 billion in last year’s budget. The hon the Minister of Public Enterprises met it with R4,3 billion out of the deals that do not amount to privatisation: the special Sasria dividend and the M-Cell shares that are literally parked on ice.

These post-Budget steps cannot obscure the fact that our privatisation process has been slow and inappropriate, raising the issue of whether the choice of strategic equity partnerships is, indeed, a sound choice, because it walks the middle ground between eking out foreign direct investment and attempting to retain control in Government hands over state-owned enterprises at all costs.

The estimates of expenditure confirmed that the arms deal costs now stand at R52,7 billion. This, the Minister knows as well as I do, is an underestimate and does not fully reflect the additional burden of financing and interest payments. This is well above original estimates of R30,3 billion, with annual payments peaking in 2005-06. In a supreme exercise of the art of euphemism, the Minister stated that increases of the Defence vote will provide for the higher costs of the arms deal to revised exchange rate projections. This is indeed a euphemism.

We have an acquisition cost with no ceiling, with exchange rate volatility in the driver’s seat and not the National Treasury. This is clear from two contrasting Business Day headlines of 17 and 19 November, and I would like to highlight them. The headline of 17 November 1998 reads: Threat to arms package.'' In this article the Minister of Finance's reservations are well recorded:Manuel is understood to be opposed to new borrowing of about R7,5 billion over 15 years, which acceptance of the package would require.’’

Two days later, the Minister was overruled by his Cabinet colleagues. The headline of 19 November 1998 reads: ``Arms deal approved despite Manuel’s reservations. [Interjections.] Yes, the hon the Minister was indeed overruled by his colleagues. He was in the one corner fighting on affordability, and Mr Erwin, Mr Modise and, indeed, the then Deputy President were in the other corner. The Minister of Finance lost that battle and that is why exchange rate volatility is in this seat. [Interjections.]

This is the March deadline for the second tranche on the arms deal. [Interjections.] I ask the Minister of Finance today: Is he yet again going to be overruled and make a trade-off with the Ministers who favour the arms deal, or is he going to act in the public interest and cut back on the second tranche? That is the only answer we want in March. [Applause.]

Adv S P HOLOMISA: Mhlalingaphambili namalungu abekekileyo, ndivumeleni nam ndongeze kula mazwi okuvuyisana nomzukulwana kaManuel ngeembasa athe waziphiwa zizikolo zemfundo ephakamileyo kweli leNtshona Koloni. Njengogqirha omtsha siqinisekile yinto yokuba, uCihoshe, njengoko ndisiva kusitshiwo, uza kuthi ayinyange iphile le randi isigulelayo.

Kungovuyo kum ukuba ndime phambi kwenu ngale mvakwemini khon’ ukuze nam ndibeke mabini mathathu kule ngxoxo yoMthetho oYilwayo woLwabiwo-mali walo nyaka uphezulu.

Kulo nyaka kaVukuzenzele, unyaka weLima, kuthi boonolali kuxhelw’eXhukwana xa kuthethwa ngokuba masizisebenzele. Kudala kakade sisebenzela abelungu singade sibone nto. Eli phulo lisikhumbuza ixesha langaphambili apho besizilimela sizifuyela impahla sitsho sikwazi ukondla iintsapho zethu singayanga mlungwini. Ngelo xesha iinkabi zeenkomo besinazo, izitiya namasimi emakhulu, enemveliso, siwachumisa ngomgquba, abantwana bencel’izapholo, besidla umthubi namasi.

Umlungu, njengoko nisazi, wasiphathela indlala, satsho safa saphela zizifo. Uqale wasohluthela umhlaba, wanciphisa iinkomo zethu, wasinyanzela ngeerhafu, satsho sanyanzeleka ukuba sisebenzele yena. Singamahlwempu xa kungoku. Izicwangciso zenkqubo yeSebe lezoLimo nemiCimbi yoMhlaba zisekelwe ukubuyisa umva le meko yobuhlwempu nendlala.

ISebe lezoLimo nemiCimbi yoMhlaba limaxhaphetshu libuyisela kubaniniwo umhlaba abawuhluthelwayo, neyookhokho babo, ukusukela ngonyaka ka-1913. Lixakekile likhusela abo bahleli kwiifama zabelungu ukuze bangagxothwa ngesinyolokotho kwimizana yamagxamesi abahlala kuyo. Kwa eli sebe aliphumlanga, lilungiselela ukwaba ngokutsha umhlaba osezandleni zombuso, lisabela abo badinga umhlaba owarhwaphilizwa ngabelungu. Zonke ezi zicwangciso ke, umhlekazi omhle, ugqirha Manuel, uCihoshe makayazi into yokuba zifuna imali. … Ingathi uQhudeni uyamphazamisa phaya … Kuthiwa khupha imali ukuze wenze imali.

Uhlenga-hlengiso lomhlaba yinkqubo efanelwe kukuba yenziwe igqitywe ngexesha elithile. Kungoko ke bekunga ingagalelwa kangangoko imali kweli Sebe, ukuze likwazi ukuthi emva kweminyaka emithathu liwubuyisele umhlaba kubaniniwo, libafumanele umhlaba bonke abahleli ngempundw’enye kwiifama zabelungu. Xa kunokuthi kube njalo, abantu bakuthi baya kuvuka bazenzele ngenene, babe ``ngoophila kukuzenzela’’.

Le nkqubo yokwabiwa komhlaba ngokutsha ihambisana ncakasana naleyo yeSebe lezoLimo nemiCimbi yoMhlaba yokulwa indlala nokuvelisa ukutya. Njengoko sikhokelwe ngamakhosikazi kweli Sebe, eli Sebe liyayilwa into yokuba ikati ilale eziko. Izicwangciso zalo ezininzi zikhuthaza ukungenelela kwamakhosikazi kumsebenzi wolimo nemfuyo.

Ngomhlaba ngamnye okhutshwayo kuqinisekiswa into yokuba amakhosikazi ayaxhamla kuwo. La makhosikazi ayaqeqeshwa ukuze abe nezakhono zokuwulima nokunonelela imfuyo leyo abangaba banayo. Bafundiswa ukuba bayile amaqumrhu okuba bahlanganise izinto abanazo khon’ ukuze bazuze imveliso ethe xhaxhe. Lilima ke elo. [Uwele-wele]

Umhlaba uwodwa awukwazi kuvelisa ndyebo. Umhlaba ufuna izixhobo zokulima ezinjengeeteletele, imatshini zokunkcenkceshela, izichumiso nocingo lokubiya. Isabelo seSebe lezoLimo nemiCimbi yoMhlaba masithabathele ingqalelo ezo zidingo ukuze bakwazi abantu bakuthi ukuziphilisa.

Amafama arhweba ngolimo ayakhala ngedizili. Athi noko ebulela ngomnyinyiva aphiwa wona, le irhafu iseleyo kwidizili isawenza umthwalo ube nzima kakhulu. Kubeka phi ke kwizikhwabazi zamahlwempu endlu emnyama. Sithi ke ngoko, okaManuel makenze icebo. Sithe kaloku kuthiwa kuphuma imali ukuze kungene imali.

Ekuqaleni phaya, sithe umhlaba wethu esiwulimayo mncinci kakhulu ngenxa yorhwaphilizo lwamandulo. Noko kunjalo, usenayo intwana yamafutha okuwenza ube nemveliso. Iphulo leli Sebe lezoLimo nemiCimbi yoMhlaba kukukhuthaza amawethu ukuba aziqhelise ukulima iintlobo ngeentlobo zezityalo ngamaxesha onke onyaka, bafuye iintlobo ngeentlobo zemfuyo, ende nemfutshane. Lingena apha ke igalelo lamaqumrhu ophando nophuhliso, anjenge-Agricultural Research Council, iOnderstepoort Biological Products neOnderstepoort Veterinary Institute. Ngobuchule bala maqumrhu amawethu aya kukwazi ukukhetha izityalo ezifanele imihlaba yawo, bawazi amayeza okuseza imfuyo yabo.

Ngexesha besityelele komkhulu, ePitoli ekuqaleni kwalo uphezulu, siyiKomiti yezoLimo nemiCimbi yoMhlaba, bakhale kakhulu abaphathi bala maqumrhu besithi, noko inkxaso abayifumanayo inganeno kakhulu kuneemfuno neemfanelo zabo. Iingcaphephe ziyemka zisiya kufuna amathafa aluhlaza. Siyaphinda kwakho, siyacela ukuba isabelo sawo lamaqumrhu sithi nyi noko.

Sidume kakhulu kulo lonke eli leAfrika nangaphandle ngokuba phambili kumanyathelo ophando nophuhliso kangangokuba abathengi abaninzi, bemveliso yawo, baphuma kwelasemzini. Masingayivumeli yeyele nto zakuthi.

Zonke ezi zicwangciso ziya kuba lilize phofu ukuba la masebe mabini kaNkosikazi Didiza ayayekelwa ngalawo oogxa bakhe. Intsebenziswano phakathi kwamasebe ngamasebe ingundoqo ukuze liphumelele iphulo lokuliwa kwendlala.

Sicela amanzi okunkcenkceshela kwiSebe lemiCimbi yaManzi namaHlathi, iindlela ezihambekayo kweleMisebenzi yoLuntu, amathuba angawo orhwebo kwiSebe loRhwebo neMveliso, ukuze imveliso yethu ixhamle kwiimalike zasemzini, amalungelo afanelekileyo kubasebenzi ezifama kweli Sebe lezaBasebenzi nakuwo onke amanye ukuze uphuhliso lube loluza kwendela lungapheleli esithubeni. Ewe ke kwelemali isebe, sicela imali.

Sizimisele ke ngoko, singamalungu e-ANC ukuba sisebenze bade bangqine abantu bakuthi kulo uzayo unyaka bathi `wagwetywa ndlala’. Njengoko nisazi siyi-ANC siyaluxhasa olu lwabiwo-mali. [Kwaqhwatywa] (Translation of isiXhosa speech follows.)

[Adv S P HOLOMISA: Chairperson and hon members, please allow me to add a few words and congratulate the grandchild of the Manuel family for the awards that he received from institutions of higher learning in the Western Cape. As a newly honoured doctor we are certain that, Cihoshe, as I hear them call him, will help lift the standard of the rand that is falling right now.

It is with pleasure that I am standing before you this afternoon so that I could also contribute a few words towards this discussion about this year’s Appropriation Bill.

During this year of Vukuzenzele, the year of united social action and volunteerism, to us villagers this brings joy when there is talk about working for ourselves. We have always worked for the white man without witnessing any positive results. This campaign reminds us of the previous time when we used to grow crops on our fields and look after our livestock so that we could feed our families without going to look for work from the white man. During that time we had oxen, gardens and large fields which produced substantially and on which we used manure, whilst young children sucked milk of newly calved cows and sourmilk.

The white man, as you know, brought us hunger and that led to us dying in large numbers because of diseases. First, he dispossessed us of our land, reduced the number of our cattle, forced us to pay taxes, and because of that we were forced to work for him. We are poor as it is now. The programmes of the Department of Agriculture and Land Affairs are a mechanism of alleviating hunger and poverty.

The Department of Agriculture and Land Affairs is busy with the process of giving back land that was forcefully taken away from its rightful owners, even that of their forefathers, dating back to the year 1913. On the other hand it is protecting those that reside on white-owned farms against forced evictions from the outfarms they live in. The same department is preparing to distribute state-owned land that was previously taken by white people, amongst those that are in need of it. The hon Dr Manuel, Cihoshe, must know, therefore, that all these things need money. It seems Qhudeni is disturbing over there. It is said, give out money in order to make more.

Land reform has to be finished within a certain timeframe. That is why there is the wish that there should be a substantial amount of money that is allocated to this Department, so that at the end of three years land restitution would be complete, and that those that are not really welcome in white-owned farms would be given land of their own. If things could work out like that, our people would wake up, stand up and do things for themselves, and be called “those who live by doing for themselves”.

This process of land redistribution goes hand in hand with the objective of the Department of Agriculture and Land Affairs of fighting hunger and that of producing food. As we have women leaders in this Department, this Department’s aim is to fight against hunger. Most of its programmes encourage women to participate in farming.

With each piece of land that is given out it is ensured that women enjoy the benefits. These women are trained so that they could gain skills of growing crops and rear livestock that they might have. They are taught to form joint teams or agricultural corporations in which they would combine their resources so that they could have more production. That is a joint team.

The land by itself cannot produce. The land needs farming equipment such as tractors, irrigation machinery, fertilizers and wire for fencing. The budget allocated to the Department of Agriculture and Land Affairs must take into consideration those needs so that our people can fend for themselves. Agricultural farmers are complaining about diesel. They say that they appreciate the slight reduction, but tax on diesel still makes it difficult for them. How much more difficult can that be with the poorest of the poor in the black nation. We say, therefore, that the son of the Manuels must devise a plan. By the way, we say money must go out in order for more to come in.

In the beginning, we said our agricultural land is very little because of corruption in the past. In spite of that, it still has a little bit of richness to enable it to produce. The campaign of this Department of Agriculture and Land Affairs is to encourage our people to get used to ploughing different kinds of crops at all seasons and farm with different types of livestock. This is where the contribution of the research and development teams such as the Agricultural Research Council, the Onderstepoort Biological Products and Onderstepoort Veterinary Institute come in. Through the expertise of the teams, our people will be able to choose crops that are suitable for their type of soil and know which medicines are suitable for their livestock.

When we, as the Portfolio Committee on Agriculture and Land Affairs, were visiting to the Union Buildings in Pretoria at the beginning of this year, the directors of these teams complained very much saying that the support they are getting was not enough for their needs and wants. Experts leave to seek greener pastures. We repeat our request that the budget allocated to these teams be increased a little.

We are popular in the whole of the African continent because we lead in the research and development initiatives in so much that a number of consumers of their production are from outside South Africa. Let us not let it sink my people.

All these programmes will be pointless if the hon Minister Didiza’s two departments are just left to be by themselves by those of his colleagues. Co-operation between different departments is essential in order for the campaign against hunger and poverty to be successful.

We ask for water for irrigation from the Department of Water Affairs and Forestry; roads that are in good condition from the Department of Public Works; favourable trading opportunities from the Department of Trade and Industry, so that our production can benefit from international markets; granting of rights or farmworkers from the Department of Labour and to all the others, so that development could deep-rooted and not just end anywhere. And yes, from the Department of Finance we ask for money.

We are committed, therefore, as ANC members to work very hard to such an extent that our people would agree in the following year and say, `away with hunger’. As you know, we as the ANC support this budget vote. [Applause.]]

Mr N J GOGOTYA: Mr Chairperson, on a point of order: We notice that, with regard to certain political parties, there is a 100% absence in the House. Azapo is literally 100% absent. [Interjections.] We seek clarity, Mr Chairperson, as to whether they have permission to be 100% absent.

The CHAIRPERSON OF COMMITTEES: Order! That is not a point of order. Just take your seat, please.

Mr J H VAN DER MERWE: Mr Chairperson, there are only a few opportunities every year for members to discuss general political issues. Today is such a day.

In view of the serious state of affairs in the country, we should try to find common ground from where we, as a Parliament, could tackle the real and dangerous issues confronting our land and its peoples. Serious issues such as unemployment, poverty, HIV/Aids and crime take no notice of political affiliation. Supporters of all political parties are hit by these monsters. The same is the case with race, gender and wealth. Rich and poor people are all targeted.

We are therefore obliged to sit here, all of us, to devise a strategy in which we all participate, a strategy which will lead to the eradication of poverty and crime, a strategy which will ensure employment for our people and a strategy which will defend us against HIV/Aids. We should therefore apply our minds and devise creative strategies, and all of us should join hands to execute those strategies. There is no other way forward if we are serious about destroying these dangers facing our land and its peoples. We need to offer opinions and also criticise. We should tolerate criticism. We should encourage open-hearted discussion. We should also demonstrate the capacity to absorb criticism.

However, to be successful we also need to budget carefully.

Looking at the Budget, therefore, I noticed that the hon the Minister of Finance indicated that his Budget provided for almost every need and aspiration of our people, our country and our economy. However, he admitted to two shortfalls that his Budget does not effectively address.

The first shortfall is that he does not have enough measures to stimulate economic growth. Secondly, he does not have enough measures to generate employment. The core words therefore are growth'' and employment’’. As for the rest, the Budget distributes the economic resources of our state across the board of all line functions, maintaining an even keel on our Government ship.

I really wonder whether in the waters we are now traversing we should keep an even keel, or whether the time has not come to put our sailboat in full speed, accepting that every now and then it might keel to one or the other side. If we want to catch the winds, we must have the courage to tilt the boat in the right direction and fill our souls with the strength we need to move ahead in our journey towards overcoming the hurdles in our way, moving onwards to prosperity and stability. If we continue to operate in this way, trying to avoid catching the winds, our boat will remain in the middle of the ocean, far away from any port of safety.

There is little wrong with what is in the Budget. There is little wrong with many things the Government is doing, but there is, however, criticism of what is not in the Budget and there is criticism of what our Government is not doing.

The two things our country needs most are effective, courageous - yes, and why not - drastic measures to promote employment and more employment to stimulate growth, growth, growth. Therefore, one cannot please everyone at the same time. We must choose growth and employment over conflicting interests. One cannot promote growth and please the trade unions at the same time. One cannot promote employment and maintain the type of legislation which effectively prevents people from acquiring jobs and takes away all the incentives that any employer may have about hiring people.

We must also face a hard and shocking fact, which we, unfortunately cannot deny. That is that in the past 10 years, our employment rate has decreased dramatically, so much so that today we are one of the countries with the largest unemployment rate anywhere in the world. We only need to look at the recently released Global Competitiveness Report of Harvard University and the World Economic Forum, to see that our macroeconomic profile ranks at the very bottom of the 75 countries that are reviewed in the report. We must do something constructive about this.

The same report outlines how our country excels, but not in aspects such as our enormous rate of corruption by public officials, incompetence by public officials and difficulty in doing business in South Africa. I say this with no pleasure, but actually with a degree of pain. The point is that all we want is for our country to work, to be effective and to be productive.

I wish to return to the dangerous issues confronting us. The first is unemployment. The official unemployment rate is around 27% of employable South Africans, but the unofficial rate is between 30% and 35%. A third of our people do not have work. What can we do? The IFP says, firstly, that we have to create the conditions in which private business will flourish by investing in new and existing industries and enterprises. This environment is created by making our labour laws more flexible and conducive to job creation, especially for the small business sector.

Secondly, the IFP says that we have to launch special job creation projects in certain sectors of the economy, such as agriculture and small-scale mining.

Thirdly, we have to provide incentives for companies to employ more people, such as tax incentives or additional tax rebates.

Talking about Aids, the national rate of infection is around 20%. This is a monster confronting this country. What can we do? The IFP says we should provide antiretroviral drugs to all pregnant mothers. This will save about 30% of the babies born with the HI virus. Secondly, the IFP says we should provide intensive counselling services to people living with Aids.

Thirdly, we should launch a national awareness programme that unprotected sex leads to HIV/Aids. Uganda and Malawi were spectacularly successful in their awareness campaigns. Fifthly, we should convince the ANC Government to change its stance, because its position is detrimental to the fight against HIV/Aids.

Dealing briefly with crime, violent crime such as murder, rape and armed robbery have decreased in the past few years, but the levels of crime are still far too high. What can we do? The IFP says, firstly, that we should implement an approach of zero tolerance to all crime. Regardless of the severity of the crime, the system must be seen to punish the offender. The city of New York was very successful with the zero-tolerance approach in which small, petty crimes were dealt with first, and later on the larger crimes.

Secondly, the IFP says police investigators should be better trained so that more cases can be successfully prosecuted in the court system. Thirdly, the IFP says the court system should also be strengthened. Too many criminals are walking free because the system is overloaded, underresourced and unable to obtain successful prosecutions. Fourthly, the IFP says the system of incarceration should be improved so that criminals pay their debt to society, but still have the opportunity to be rehabilitated.

Regarding poverty, the IFP believes that poverty can only be attacked through a combination of strategies. Among these strategies are job creation, clean living conditions, affordable housing, electricity provision, social insurance, medical intervention in diseases such as TB, cholera and HIV/Aids, and food programmes. The most important point is that dealing with poverty cannot be limited to one programme or specific intervention only, but rather that there should be a comprehensive attack. It should be composed of a comprehensive strategy that covers all of the above aspects in general.

In conclusion, the bottom line for all of us is to restore confidence in South Africa. We have lost the confidence of the world because of our inability to deal effectively with the major and dangerous issues confronting and threatening us. If a person has money overseas and wants to invest it, he will invest it in a hundred other countries before he brings it to South Africa with all the problems we have.

Mortally dangerous issues such as poverty, Aids, unemployment, crime, strikes, the absence of work ethics, and others, prevent people from investing in this country. An investor will not invest his or her money in a country which cannot deal effectively with these dangers. The central message therefore, not only for myself but for all of us, is that we have to restore confidence in our country.

Ms L MABE: Chairperson, some people’s lives are incomplete if they do not talk about the strategic defence procurement packages. [Interjections.]

It is an honour to be part of today’s debate. A South African who never experienced life in a township or in a rural area will not appreciate what this Budget provides for the poor people of this country. Economic development and growth will never be complete without infrastructure development in formerly disadvantaged areas. It is a great challenge for Government to develop infrastructure for a large section of this country which for ages and ages has been denied access to basic services.

Government’s fiscal policy aims to promote growth and development. During the past few years, the Budget focused on reducing the heavy debt which this Government inherited from the apartheid system. As a result, there was slow growth and infrastructure development which was not prioritised in the Budget. Commencing with the previous year’s Budget, the fiscal policy is now focused on promoting growth and development which can be realised through spending on infrastructure.

This year’s Budget advances further in addressing the backlogs of infrastructure development which will make a major impact on the sustainable development of the economy. I note that capital expenditure has declined in the past few years and now accounts for 9,3% of the total expenditure by provinces. It is of great necessity for one to focus on this section. Sustainable growth requires investment in infrastructure capacity in order to include the ordinary South Africans who were never empowered by the merciless system of apartheid and could not effectively participate in the economy at that particular time. Participation in the economy and infrastructure development are unachievable without developing the skills of the ordinary citizens of this country. Therefore, investing in infrastructure and human resources will come to fruition in the long term, and not now.

Spending on public infrastructure gives the poor people an opportunity to develop their skills which are vital for growth. Therefore, investment in capital expenditure in the rural areas includes the rollout of electricity to those areas. In the past, people in those areas never had any hope of having electricity. None of us ever expected rural areas to have access to electricity at this particular time. A thing of value is a joy forever. Having electricity in a rural area is a dream realised against all odds. To those who grew up in electrified houses and streets, access to electricity is a minor issue which needs no appreciation.

The vulnerable groups, which are women and children, will now move with safety in the streets in the evenings and in the early hours of the morning when they have to get up to go to work or to school. Therefore, electrification in those areas will lead to a decline in crime. Women will easily prepare food for their families in a short space of time without having to travel long distances to collect heavy firewood.

The Budget makes provision for investment in water supply infrastructure. We call upon all our people to avail themselves of and participate in these programmes when they are rolled out to their areas. Therefore, active participation will let them have access to water and job opportunities.

To many of our people, water is a rare and valuable commodity. Women and children in the rural areas travel long distances in the scorching sun to get a mere bucket of water. In some areas, the only available water is in the dam or in the river, which is used for washing clothes and drinking by animals as well as for human consumption.

As a result, in some of these areas the people find themselves prone to diseases such as cholera. So through the development of infrastructure these people will, for the first time in their lives, have access to six kilolitres of free water in their homes. The development of water infrastructure will also be of great value to developing farmers. Most people in the rural areas have given up crop farming because of the scarcity of water, as they depend on rain water for irrigation. So modern irrigation systems were a far-fetched idea to these people, and now we hope such people will return to crop farming so that they can create their own jobs. The availability of clean water would help to provide sanitation infrastructure, with the majority of South Africans having access to it.

The Budget allocation for land reform in rural areas has increased. These areas have a bitter history of neglect by the apartheid system. They were never thought of when allocation for infrastructure was made in the previous Parliament. It must also be noted that most people worked on farms and they have acquired high skills without any certification. So, they are the ones who will derive benefits from the development of infrastructure. Most of these people engaged in farming for commercial purposes, owing to lack of infrastructure in their areas.

A large part of Government infrastructure development is undertaken by entities that operate outside the main Budget framework. These include rail, air and harbour services. It must be borne in mind that Government infrastructure expenditure is derived from capital expenditure at all three levels of Government and public-private partnership.

The Budget makes provision for the rehabilitation of roads that were damaged by floods and for the construction of new roads; for instance, the N4 platinum highway which connects us with the rest of the continent. Therefore, investment in capital expenditure has both immediate and long- term socioeconomic spin-offs.

It also creates favourable conditions for economic diversification and gives poor people access to services and opportunities. I want to remind those who are given this mammoth task by Government to construct infrastructure, and that they must ensure that they deliver a quality service.

We are aware that some view Government tenders as an opportunity to make a lot of money by constructing low-quality infrastructure, different from the model presented during the tendering process.

We are aware that in some areas the quality of electrical infrastructure is not of the expected standard. This means that those contractors do not care about the safety of our people. To them greed, rather than sustainability and safety, is of high priority.

We also believe that the Public Finance Management Act provides a sound framework for implementation of Government spending decisions. We expect that various Government departments will monitor, evaluate and report regularly on their expenditure. It is also vital that Parliament prioritise this oversight function over these departments.

Departments and provinces must be held accountable for revenue not spent in a particular Budget year or spent only at the end of the year. The underlying intention of Government with the Budget is to improve the quality of the lives of our people [Time expired.] [Applause.]

Dr P J RABIE: Chairperson, hon Ministers and hon members, the 2002-03 Budget is a positive one, balancing the needs of all competing interest groups with tax relief for all income groups. Revenue rose to R2,65 billion, R15 billion more than was expected. Revenue success regarding revenue collection is closing the tax gap, and this has made tax relief possible with stronger social spending.

The deficit will amount to R22,7 billion - that is, 2,1% of the GDP - and personal tax cuts will put R15 billion back into the taxpayers’ pockets.

Taxpayers earning less than R27 000 will pay no tax. The increase in the interest income exemption from R4 000 to R 6000 for taxpayers under the age of 65 is a positive step.

A number of macroeconomic factors must be taken into account when this particular budget is evaluated. Inflation is on the increase. We are increasing a relatively low growth rate and the rand has declined against the dollar. Our present official unemployment rate of 37,5% is unacceptable. The SA economy has shed 13% of its formal jobs in the nonagricultural sector since 1995. Personal savings have also declined from a disappointing 1,5% three years ago to the present below zero.

The announcement in this regard that tax relief on interest received and the accelerated depreciation allowances for the manufacturing of assets is welcomed. The announcement by the Minister that a task team will be appointed regarding taxes that relate to the retirement industry is significant. Time is of the essence. Tax on interest and rental income of retirement funds is damaging and is another way of taxing savings. To some this constitutes a double tax.

The balance of this budget accentuates the demand side of the economy. It is an attempt to address poverty alleviation and some variables necessary for future sustained economic growth. Positive budgets do not necessarily guarantee delivery. The lack of capacity to actually spend money allocated to national, local and provincial levels is reason for concern.

The implementation of the Public Finance Management Act with heavy penalties for nondelivery will have to address this quite untenable situation.

One of the many achievements of the Department of Finance is that the surprise factor was taken out of the Budget and it was replaced by the introduction of three-year budgets and the Annual Medium Term Budget Policy statement, which gives a lot of clarity to taxpayers and to all the relevant officials concerned.

To conclude: The 2002 Budget tax cuts will benefit all categories of wage earners. The question we will have to ask ourselves is: Will this stem the present alarming exodus of capital and skills from this country?

The South African economy still lacks the economic growth to provide adequate employment. The low savings rate at present is failing to attract more foreign capital, which is another prerequisite for sustained development.

It is not enough to drive economic growth through public spending. The support given to small, medium and microeconomic enterprises is noteworthy. An urgent request is made that in future a substantial reduction in corporate tax be implemented. The relaxation of exchange controls will also foster foreign investor confidence.

The 2002 Budget can be summarised as a budget on growth and a budget that lessens taxes. [Applause.]

Mr B A MNGUNI: Chairperson, hon Ministers and hon colleagues, the level of employment has been decreasing for the past 20 years. This is more prominent in the primary sector, especially in mining and agriculture. It was Anglo American’s long-term strategy objective four years ago that by 2008 it should have reduced its gold production in South Africa to 40% and relocated in Western Africa, where labour and technology was still cheap.

Increasing levels of unemployment are further exacerbated by the quest of the corporate sector to maximise their efficiencies, production and consequently profits. Small and big financially sound companies are in joint ventures. Acquisition measures are nowadays the norm in order to take advantage of the benefits offered by economies of scale, but unfortunately they lead to the sacrifice of a lot of jobs in the process of gaining a sustainable competitive advantage in global economies, of which we are part today.

This is of great concern in that the present democratic Government has not been able to create enough jobs since its inception. It is not by default that we find ourselves in this situation. We vigilantly and deliberately chose this route, armed with a mixed open economic policy, because it is the only means of survival in this phase of our liberation struggle.

When we look at the picture of over two decades ago which I have just painted above, we will realise that this Government has done a great deal so far to address the socioeconomic ills that have been prevalent over the 40 years of capitalistic apartheid rule. Per se, it may mean jobless economic growth. On the contrary, I would argue that we do create jobs but they are not enough to absorb the ever-increasing number of new job-seekers and retrenched or laid-off workers because the economy grew from 2,5% to more than 3% from 1993 to 2000 respectively, before dropping to 2,5% in the first quarter of 2001. Over the same period, the financial sector managed to create about 2% of jobs while wholesale trading industry increased job creation by 0,4%.

The question is: What is Government doing to address the situation? Some of the answers to this question lie in the Appropriation Bill we are now debating. It has already been successfully argued that there has been a major shift towards social spending to push back the frontiers of poverty. This has been a deliberate effort by Government to intervene in the economy by injecting funds in the system to stimulate growth to combat the increasing unemployment. This expansionary fiscal policy we have embarked upon should be viewed against the global economic downturn that has been exacerbated by the 11 September events in America last year.

This Budget is a one part of the cornerstones of the policies that will build the type of economy which will be able to absorb and address this issue by way of developing skills amongst youth and the unemployed, and absorb exogenous factors that have inevitable effects on our economy.

The fundamental question that arises centres on what could be done, and how quickly, to rectify the situation. I think there are four main strategic objectives we have to look at in order to address the situation: firstly, improving the foundations for human development; secondly, improving the supply of high- quality skills which are more responsive to the societal and economic needs of our country; and thirdly, increasing employer participation in lifelong learning and support employment growth through industrial policies, innovation and research and development. In more ways than one this Bill is directly addressing issues over the Medium Term Expenditure Framework period.

Attempts to counter the rising unemployment are taking place against the background of skilled labour leaving the country. As a strategic job creation project and the means of introducing the majority of our African population which has been sidelined from the mainstrean economy over the years, to that economy, the microfinance agencies such as Khula and Ntsika need to strategically engage this valuable asset in a more proactive and vigorous manner, and simultaneously harness the spirit of Letsema and Vukuzenzele for the maximum benefit of our communities and the country at large.

This Budget has further shown Government’s commitment to dealing with unemployment by allocating more resources in developing small, medium and micro enterprises. Together with the informal sector SMMEs have been proved to be most successful in absorbing many of the unemployed population, and actually it has been found that they form the basis of the economy in most developed countries.

It has been long established that a major source of inflation, particularly in developing countries, is excessive government expenditure to finance government budget deficits.

According to the latest economic reports, South Africa has managed to bring Government’s expenditure and the deficit under control, thus eliminating significant potential sources of inflationary pressure. Because of the prudent fiscal policy pursued by the Government under the visionary leadership of the ANC, the steady decline in fiscal deficit has translated into a decline in the public-sector borrowing requirements. The importance of this is that lower public debt and deficits will contribute to lower interest rates.

Without a sound monetary policy, we will not be able to combat many consequential ripple effects associated with inflation and interest rates. With the introduction of inflation targeting in February of 2002, the monetary policy was given a clear and unambiguous target. Though it appears as if we might miss our inflation target this year, I am optimistic that the Reserve Bank will work hard in order to meet the target over the METF period, that is, by the 2003-04 financial year.

However, monetary policy does not contribute directly to economic growth and employment creation in the long run, but rather to creating a stable financial environment. It fulfils an important precondition for the attainment of economic development.

Despite criticism by those who argued against the welfare consequences of Government’s macroeconomic policy and despite the failure of growth to meet the target set for the number of jobs to be created, the Government can claim considerable credit for having created and maintaining an environment of enviable stability at both political and microeconomic level.

Allow me to address a few issues that have been raised at this podium. Economists have calculated that the tax cut of R15 billion translates into interest rate cuts of about 4%. I have said that the ANC has a visionary leadership, and this is evidenced by the 1% rise in interest rates when one looks at 4% interest cuts. As the committee says, we are still living above the interest rate, which means that the poor still have another 3% to spend besides the interest rate increase.

The objective of an interest rates increase is for us to be able attain the inflation target in the 2003-04 financial year, because we need high stability in order for investors to come into the country to invest and for our local investors to be able to reap the economic benefits of our economy.

As this is the year of volunteers, we have set ourselves the goal of pushing back the frontiers of poverty. We dare not fail. [Applause.]

Mr C W EGLIN: Chairperson, South Africa has not gone unaffected by the traumatic events in Zimbabwe over the past two years. Apart from having to deal with the vast problem of human migration, South Africa’s economy has been negatively affected by a decline in trade, a plunge in the value of the rand and a fall in investor confidence.

Events in Zimbabwe have had an impact on the modest GDP growth targets set by the Minister of Finance, and, if they persist, they could put paid to any prospect of achieving the growth target of 7% per annum set by Nepad. Now that the elections in Zimbabwe have been held, the current debate is over the issue of whether the elections were free or fair or not.

Let me say there may be differences of opinion on the extent to which the elections were not free and fair. However, any African leader who may be tempted to whitewash this flawed election or gloss over the glaring violations of democracy, human rights and the rule of law that occurred during the protracted period of the electoral process will be doing a disservice to Africa and will be undermining the credibility of Nepad. Such action will convey the impression that these leaders are not serious in their commitment to democracy.

With Zimbabwe now, what next? Zimbabwe is facing a socioeconomic crisis of massive proportions. The economy is in a state of collapse, unemployment is soaring, millions of Zimbabweans have already crossed their borders into neighbouring countries and millions more who remain face starvation. Added to this there is the risk of instability.

Zimbabwe faces a mammoth task of socioeconomic and political reconstruction.

Zimbabwe will not be able to manage this task on its own. It will need the assistance of the international community and the support of its neighbours.

Where should South Africa stand in this crisis facing the people of Zimbabwe? Firstly, in respect of the humanitarian crisis, South Africa cannot stand back and watch our fellow Africans die of hunger and starvation. At the very least South Africa will have to mount a humanitarian food aid campaign on a massive scale.

Secondly, the people of Zimbabwe need stability: not stability based on arrest, detention and security action, but stability based on reconciliation rather than on revenge. South Africa must encourage Zimbabwe to repair the damage that has been done to the fabric of society while it is adopting the policy of inclusiveness, and not exclusiveness. At the political level this means some form of government of national unity.

Thirdly, South Africa could help the people of Zimbabwe to restore their battered economy. Indeed, it is in South Africa’s interest to do so. However, South Africa must make it clear that it is not prepared to throw good money after bad. South Africa’s involvement must be conditional upon Zimbabwe introducing credible economic management and sound economic policies.

Fourthly, South Africa must play a leading part in ensuring that as a matter of urgency, Zimbabwe returns to good governance based on the principles of democracy, human rights and the rule of law. Zimbabwe must be made fully aware of the consequences of its continuing to violate the founding principles of the SADC or the OAU or of Nepad. Good governance based on democracy, human rights or the rule of law is a precondition for economic growth and human development in Africa. It is the bedrock on which Nepad has been built and without which Nepad will be bound to fail.

The Democratic Alliance wants to see the South African Government at the forefront, and not trailing behind, in a campaign to promote democracy, human rights and law in Africa. Government must be prepared to give support and encouragement to democratic forces where they are in Africa. Government must show solidarity with people whose rights have been trampled underfoot, and to do this Government will have to follow a policy that is much more proactive, more results-oriented and more transparent than it has been in the past.

This will demand of the Government a willingness to take tough decisions, and it will require courageous leadership. This is a tall order, but then for Africa the stakes are high. [Applause.]

Mr B J NOBUNGA: Chairperson, hon Ministers and hon members, maybe one should start by requesting the Portfolio Committee on Justice and Constitutional Development, when they deal with the Bill on crossing the floor, to effect amendments that will allow crossing the borders, because it is clear from the manner in which the DP is interested in Zimbabwe that they might consider crossing to Zimbabwe itself. [Applause.]

Year after year, when the Minister of Finance presents the Budget, it always fills one with hope about the future of this country, and it also confirms the right direction that we are taking in restructuring our economy, thanks to the visionary leadership of the ANC, which has managed to do all these wonders without the experience of running a government before.

South Africa has to pride itself on having such an organisation. We have made significant strides and we continue to put South Africa on the global economic map despite those who are opposed to progress and prosperity.

I must say with pride that we are getting there and we are on the right track. There are many challenges facing us as a nation, but the greatest is to fight to make the lives of our people better. As the Government of the people, under the leadership of the ANC, we remain firmly committed, and we have put high on the agenda the people’s needs and aspirations.

The ANC, as an organisation of the people, strives to create a people- centred society. This is our long-held ideal. In 1955 at the Congress of the People in Kliptown, we said in the Freedom Charter that the people shall govern, and also that no government shall claim authority unless it is based on the will of the people.

There is therefore a great need to make ward committees at various municipalities functional in order to enable the people to determine their destiny by participating in these ward committees. The concept of a people- centred society at local government level hinges around the successful functioning of ward committees.

Having strong local government cements our democracy, and further enables the people to really determine their destiny. The increase of 18,3% a year over the MTEF period for local government funding is a clear indication of our Government’s commitment to strengthening local government and to improving the conditions of our people.

The Freedom Charter further states that the people shall share in the country’s wealth. The increases in local government allocations are essentially intended at addressing the imbalances of the past and are an effort to push back the frontiers of poverty. This cannot be questioned by those responsible for creating these conditions, who today pretend to be champions of the struggle against those very conditions which they created.

The Government, through the adjustments estimate, allocated R200 million for the provision of free basic services to our people. In the Budget before us, the equitable share for local government increased by 4% between 2002-03 and 2004-05. The increase is intended to facilitate the provision of free basic services. We also hope that the expected Municipal Finance Management Bill, which is supposed to come into operation towards the end of June, will go a long way in ensuring that there is prudent utilisation of the resources at local government level, which will help free resources to better the lives of our people.

In order to be able to fight poverty, hunger, disease and unemployment, we need to ensure that we improve the conditions under which our people find themselves. These are conditions of homelessness, illiteracy and being vulnerable to abuse by those controlling the economy in this country.

Let me congratulate the Department of Water Affairs on having won the Globe Water Award. This is in recognition of the standard and quality of our water resource in this country, and is recognition of a nation at work. I hope this will inspire us to work even harder in ensuring that every household in this country benefits from the great efforts - and achievements - that our Government is making.

The past imbalances created poor conditions at local government level through a legislative set-up that shifted the tax bases of areas, where the majority of the people of this country lived, to white areas. This led to the systematic degradation of areas where the majority population of this country lived, blacks in particular, which today are characterised by underdevelopment and poorly planned or absent infrastructure.

The new local government legislative framework, especially the Local Government: Municipal Systems Act, recognises communities as integral parts of municipalities who play an active role in local governance.

We have restored the dignity of these communities by recognising the need for them to have services and improved conditions in these areas by promoting local economic development. We are calling on the business communities to join us in the struggle to establish a strong and sound tax base in these areas by investing in the previously disadvantaged areas in particular. We, however, thank the few private sector stakeholders who have already started investing in such needy areas.

The agenda for promoting local economic development at local level is the responsibility of both the public and the private sector. So let us make it a success. It is by our concerted effort in showing confidence in our own economy by investing in it that the confidence of foreign potential investment can be enhanced.

Government has made available an even greater Budget for infrastructural development, which can serve as an incentive to the private sector to invest in these areas, thereby broadening the tax base and eliminating poverty. Stronger municipalities that are not fiscally dependent on central Government can go a long way in making South Africa free from poverty, deprivation and underdevelopment, which can improve our competitiveness in the global economy.

We need to create jobs, fight crime and reinvigorate the pride of the people in themselves, particularly the youth, who currently bear the brunt of unemployment and deprivation. This will also go a long way in helping even those communities who still feel left behind to start enjoying the fruits of liberty. These initiatives undoubtedly pose a serious challenge to the private sector to show their commitment and patriotism. Government has come to the party by doing all that I have referred to above. Let the private sector join in the fight against poverty, homelessness and unemployment.

The Government’s unwavering commitment to improving the conditions of our people is best illustrated in this budget by means of the provision of funds for the Urban Renewal Programme and the Integrated Sustainable Rural Development Programme. These are the programmes which further demonstrate Government’s determination to level the playing field by creating conditions for meaningful economic growth, rehabilitating towns and making rural community areas conducive to economic investment, with reduced crime, poverty and deprivation.

We fought hard for this democracy, and many gallant freedom fighters laid down their lives for it. It is too early for the people of this country to forget the sacrifices that were made by people who loved their country and its people. The challenge to all of us, therefore, is to respect and honour these gallant freedom fighters, as well as what they stood and died for. This can only happen if we all commit ourselves to defending, advancing, and deepening this hard-earned democracy by ensuring that we contribute to bettering the lives of the people and the country.

When we came to power in 1994 inflation was at about 8%, and the Budget deficit was at about 6% of GDP. But today inflation is at about 6,6% and we have been consistently experiencing a decrease in the Budget deficit up to 2,1% in the year 2000-01, rising slightly in the year 2002-03 and projected to fall to 1,7% of GDP in 2004-05.

These are some of the serious strides that we have made as a country, which also dispel the myth that a black Government cannot run an economy efficiently. There are still those who prefer to abuse the freedoms provided for in the Bill of Rights to distort these great achievements that we have as a country.

Let me conclude by urging every citizen of South Africa, particularly those in the opposition, to join us in the march to make our country, whose democracy is admired by friends and foes alike in the world, a better country. This country has enough problems that were created by the ills of apartheid that we are trying to address. Let it be known that we will not waste our energies by engaging in accusations and counteraccusations, but rather engage in strengthening our democracy and making the lives of our people better. [Applause.]

Mr F BEUKMAN: Chairperson, I quote:

Our policy is directed not against any country or doctrine, but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist. Such assistance, I am convinced, must not be on a piecemeal basis as various crises develop.

This quotation was from the speech at Harvard’s Memorial Church on 5 June 1947, where Secretary George Marshall launched the Marshall Plan for the economic revival of postwar Europe.

Daar is ook lesse vir Suid- en Suider-Afrika in wat in hierdie begroting vervat is. Mnr Manuel se begrotingsrede bevat ook die raamwerk wat gefokus is op die bekamping van armoede, maar ook die skep van werk en ontwikkelingsgeleenthede en toegang van geleenthede vir diegene wat in die verlede ontmagtig is. Een van die debatspunte wat hierdie begroting voorafgegaan het, was die gedagte van ‘n sogenaamde ``basic income grant’’ van R100 aan alle burgers. Hierdie plan is veral deur kerkgroepe en die politieke partye aan die linkerkant van die Raad, soos die DP en Cosatu ondersteun.

Ons stem saam met die Minister van Finansies dat die voorstel van ‘n algemene basiese toelaag van R100 nie lewensvatbaar is nie. Deur ‘n bedrag van R46 miljard te vind om hierdie voorstel te finansier, moet daar drastiese styging in bepaalde belastings kom. Deur 8% van staatsinkomste onbepaald aan sodanige projekte te verbind, kan die vermoë van die regering om geld los te maak vir infrastruktuur en werkskepping ernstig kniehalter. Dalk moet die partye aan die linkerkant van die Raad weer hul somme maak en wys hoe hulle hierdie basiese inkomstetoelaag gaan finansier.

Die welsynstaat of die konsep waar die staat die alfa en omega van onderhoud en inkomste is, is in terme van ontwikkelende ekonomieë nie ‘n langtermyn lewensvatbare opsie nie. Soos die bekende kommentator J P Landman in Die Burger van Dinsdag tereg opmerk:

‘n Mens wonder of die kerkvaders besef waarvoor hulle hul inlaat en of lidmate besef wat in hul naam gedoen word en of middelstandwerkers besef hoe dit hul kans op aflegging verhoog.

Mens kan seker byvoeg: Wat sal die kiesers hiervan sê, indien 54,5 miljoen burgers sal kwalifiseer vir R100? Dit sal omtrent die totale inkomste uit BTW van omtrent R53 miljard insluk. Die BTW-koers sal minstens moet verdubbel om vir hierdie basiese inkomstetoelaag te betaal. Soos Landman tereg aandui, dat om ‘n bedrag gelykstaande aan Suid-Afrika se BTW- invorderings deur inkomstebelasting op salaristrekkers af te laai, sal ‘n nekslag wees aan besparings. Dit sal investering ondermyn en regstreeks lei tot meer werkloosheid en armoede.

Die vertrekpunt van werkskepping en die verbreding van die korps van burgers wat ekonomies aktief is en vir hul gesinne kan sorg, lê daarin om vir die privaatsektor en vir die entrepreneurs maklik te maak om werkgeleenthede te skep. Sakemanne sê reguit: Ons sal meer mense aanstel, maar gee ons minder reëls en regulasies. Maak dit vir ons moontlik om diensvoorwaardes by ekonomiese omstandighede aan te pas. Baie firmas gebruik konsultante eerder as permanente werkers. Industrieë in die primêre sektor vul nie vaste vakatures wat ontstaan nie. Kontrakwerkers en seisoenwerkers is nou die in-ding.

Die gedagte van ‘n ``basic income grant’’ is dalk ‘n populistiese idee wat banieropskrifte en sakeblaaie maak, of tydens tv-tyd vir ‘n paar DStv- kykers opgewonde maak, maar gedagtig aan die groot ekonomiese en maatskaplike vraagstukke waarmee Suid-Afrika te doen het, is ad hoc stappe soos ‘n basiese toelaag nie ‘n langtermynoplossing nie. Ons kan nie kortpaaie gebruik om dit te bereik nie. [Tussenwerpsels.] Die grondslag wat die Minister in hierdie begroting lê, is die regte roete. (Translation of Afrikaans paragraphs follows.)

[There are also lessons for South and Southern Africa in what is contained in this Budget. Mr Manuel’s Budget Speech also contains the framework which is focused on the combating of poverty, but also the creation of job and development opportunities and access to opportunities for those who were disempowered in the past. One of the points of debate which preceded this Budget was the idea of a so-called basic income grant of R100 for all citizens. This plan was supported particularly by church groups and the political parties on the left-hand side of the House, such as the DP and Cosatu.

We agree with the Minister of Finance that the proposal of a general basic grant of R100 is not viable. In order to find an amount of R46 billion to finance this proposal, there would have to be a drastic increase in specific taxes. By linking 8% of public revenue indefinitely to such projects, the Government’s ability to release money for infrastructure and job creation could be seriously hampered. Perhaps the parties on the left side of the House should redo their sums and show how they are going to finance this basic income grant.

The welfare state or the concept in which the state is the alpha and omega of maintenance and income, is not a viable long-term option in terms of developing economies. As the well-known commentator J P Landman correctly remarked in Die Burger on Tuesday:

‘n Mens wonder of die kerkvaders besef waarvoor hulle hul inlaat en of lidmate besef wat in hul naam gedoen word en of middelstandwerkers besef hoe dit hul kans op aflegging verhoog.

One could probably add: What will the voters say about this, if R54,5 million citizens were to qualify for R100? This will virtually consume the total revenue from VAT of approximately R53 billion. The VAT rate would at least have to double to pay for this basic income grant. As Landman correctly indicates, passing an amount equal to South Africa’s VAT collections to salaried persons by way of income tax would be a blow to savings. It will undermine investment and lead directly to more unemployment and poverty.

The point of departure for job creation and the expansion of the corps of citizens who are economically active and can take care of their families, lies in making it easy for the private sector and the entrepreneurs to create jobs. Businessmen say clearly: ``We will appoint more people, but give us fewer rules and regulations. Make it possible for us to adapt conditions of service to economic conditions’’. Many firms use consultants rather than permanent employees. Industries in the primary sector do not fill vacancies which arise. Contract workers and seasonal workers are now the in thing.

The idea of a basic income grant is perhaps a populist idea which makes it onto banners and business pages, or makes a few DStv watchers excited during TV time, but bearing in mind the big economic and social issues which South Africa has to deal with, ad hoc steps such as a basic grant are not long-term solutions. We cannot use short cuts to achieve this. [Interjections.] The foundation which the Minister lays in this Budget is the right route.]]

Mr C M LOWE: Mr Chairperson, the hon Mr Beukman and his party leader might recall that, not too many years ago, a previous Minister of Finance, never once elected to public office, claimed before this House that he had covered his eyes when signing treasury cheques, chose to mislead Parliament on where and how public funds were spent and presided over a morally and financially bankrupt apartheid fiscus. That era is now happily merely part of what some euphemistically term ``our colourful history’’, and while there may be times when the current Minister of Finance might wish that he too enjoyed the luxury of being a nominated MP, I suspect that he, like the rest of us, far prefers being a true democrat, freely and honourably elected by the people of South Africa and subject to their collective judgment at the ballot box - tragically, a right still denied to the people of Zimbabwe.

The Minister claims that this year’s Budget focuses on sustainable economic growth and alleviating poverty. Where he succeeds, we acknowledge and pay tribute to a Treasury and a Minister that, as the hon the Minister Kader Asmal has already pointed out, has changed since those days of eye patches and invisible ink. But when he fails, we, in this opposition anyway, free and unfettered by offers of Cabinet seats and diplomatic postings, have a duty, not a luxury as Mr Asmal has said, to hold him and his colleagues in Government to account to the people they claim to represent.

Their attempts to marginalise and even ignore our input are regrettable and shortsighted but will not deter us even one iota on this side of the House, Africans and patriots all, from our mission to help make our country a better place for all who live in her. For increasing numbers of those who live in her these are dark and desperate times of gnawing poverty, unemployment and hunger. Such circumstances call for brave and bold leadership, for clarity of vision and for men and women willing and able to break out of the mould of business as usual, of more of the same.

As my DA colleagues have noted, the Budget takes little account of the desperation of millions of unemployed South Africans who live in abject poverty and often hopelessness. It may offer R15 billion in taxation relief to those lucky enough to have jobs that pay enough to make them taxpayers, but it fails those who need it most, our children and the poor and the vulnerable.

As the Mail & Guardian so aptly noted:

The Minister’s profligate protest that he was a man seized with the business of addressing poverty had, when it came to the figures, all the weight of a ball of fluff. Why is the child support grant not being extended to children over the age of seven? Where is the basic income grant that both Idasa and the hon Ken Andrew have ably showed can both be provided and sustained? Does the Government even have the capacity and the ability to spend the money it has allocated elsewhere?

Despite the rhetoric and the ringing endorsements of a string of Government praise-singers this afternoon, the reality is very different. In writing about his international investment council, President Mbeki endorses the view that we could change negative perceptions about South Africa just by telling the truth. To some extent he is right, for far too many people do downplay the positive and ignore the radical improvements that have taken place under this Government.

But the truth is also a harsh and a hostile one that this Government too often ignores or palms off by questioning our patriotism or charging us as racists, or being antitransformation. The truth is that nearly 27 million South Africans live below the poverty line and over 5 million children go to bed hungry each night, while millions of rand allocated to feed hungry schoolchildren each day is either stolen or unspent.

Against this background the truth is that the price of maize has increased by more than 66% since May and interest rates have been increased again this afternoon, the second time this year. That is a truth that also needs telling and one that demands more than just a curt or dismissive response from the Minister of Finance.

The Minister ended his Budget Speech by referring to the words of Chief Albert Luthuli. I should like to conclude by quoting the words of an equally illustrious man of the 20th century, Martin Luther King Jr, who said:

The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.

[Interjections.]

The MINISTER OF FINANCE: Where were you when we were in jail? Where were you when we were on Robben Island?

Mr C M LOWE: These indeed are days of challenge and controversy. Far too many of our people spend every single day battling to simply survive. Where does the Minister stand? [Applause.]

Prof B TUROK: Chairperson, earlier this afternoon when the Deputy Speaker was at the podium, there was an incident in the House in connection with the display of a poster by the DA which is being investigated by the Deputy Speaker. I want to help the DP by doing the same thing, but for a different purpose. I have in front of me a document by the DP which is called ``Economic liberation’’. We ask: Liberation for whom?

We heard a speech of the bleeding hearts for the poor South Africans, and earlier we heard the hon Andrew surprisingly calling for a basic income grant. So, therefore, I have to refer to the policy document to try to reconcile the call for a basic income grant for the poor with seeing what the DP really stands for. [Interjections.] This document tells us that the DP wants lower income tax, lower company tax and the abolition of secondary tax on companies. But, as we heard this afternoon, they want a raise of 1% on VAT. [Interjections.] VAT hits the poor; company tax helps the rich. [Interjections.] So for whom do they want liberation? [Interjections.]

What the document tells us is that the individual is the engine of economic and social development. They want minimum government interference. ``Government must be lean; government expenditure should be reduced immediately by 2%’’. They want deregulation; do they want welfare for the poor, or welfare for the privileged? So those are the principles that govern the DP, and I think when DP members come next time they must please show that document, and not the one they had earlier. [Interjections.] [Applause.]

I want to suggest that the DP has the mindset of hypocrisy, because they do not have the interests of the poor at heart but the interests of the privileged. [Applause.]

Let me turn to the Budget. One of the most important features of this Budget is that it is expansionary, despite global uncertainty. I think the Minister put forward a very important issue there for us to examine: expansionary despite global uncertainty. The Minister of Finance said that the Budget has been crafted against the background of considerable uncertainty about the gross prospects of the global economy. I want to examine that. What is the nature of global uncertainty? I do not want to discuss the nitty-gritty of this or that Vote. We will have an opportunity in a month’s time to discuss the Budget in detail. I want to discuss the general background around which this Budget is contextualised. What is the nature of global uncertainty?

Firstly, on the question of polarisation and poverty, Minister Manuel has been privileged to be invited together with Michel Camdessus, the former head of the IMF, to go to the Monterrey conference and to discuss financing for development. I want to quote from what Monsieur Camdessus said in the year 2000, because he provides a context for our Budget. In the IMF survey, an official document of the IMF, he said:

 If we are not able to reverse the trends  toward  greater  inequalities
 between the poorest countries and the affluent countries,  there  is  a
 potential for a surge in extremism and  violenceÿ.ÿ.ÿ.  People  in  the
 poorest countries are the ultimate systemic threat.

I find that quote really prophetic. It precedes September 11th, it precedes the instability that we find in many Third World countries today, and what Camdessus was saying, as a former head of the IMF - a very rigid finance controlling institution - was that one must beware, because the future of the world faces a systemic threat from the poor, if poverty and polarisation increase.

To the people on this side who constantly criticise instability, violence and extremism in Africa, we know that when poverty comes in the door, love goes out the window. [Interjections.] This is what my mother used to tell me: When poverty comes in the door, love goes out the window. And this is what happened in Africa.

Poverty has come through the door, and instability, violence and extremism have come to the continent of Africa. Let us be aware that if there is increasing poverty and increasing polarisation in the world - Monsieur Camdessus has warned us of this, and that was two years ago - that we will face the ultimate systemic threat to the international global system as a whole. President Ciampi this morning said exactly the same thing. He warned us that the polarisation of the world is a formula for instability. I think that we must take care of that and we must understand that whatever limitations there are in South African economic policy, they are located in the instability and problems of the global system as a whole.

The second element of global uncertainty comes from the question of a recession. We all know that the US is in a period of recession, Japan seems to be in an incurable period of recession, Europe too, and, of course, there is Argentina. I do not want to say much more about that. But what I do want to say quite a lot about is the global uncertainty that comes from poor corporate governance, which is now rocking the international financial sector, because those of us who read the international press will be overwhelmed by the crisis of self-confidence and systemic doubts which has arisen as a result of certain problems in the US.

Enron, the biggest bankruptcy ever in the world’s history, has hit the United States, and people are concerned, not just with the question of the loss of investments by a million people who invested in Enron, but also with the basic moral issues and principles of business which underlie the collapse of Enron. The biggest bankruptcy ever'', Business Week said on 25 February.Enron’s unrelenting stress on growth and its absence of control helped push executives in to unethical behaviour.’’ The American Press, Business Week, The Economist , London’s Financial Times - a whole lot of them - are now talking about the crisis of self-confidence in the international capitalist system, in the system of profit taking and in the conditions which govern business in the US and many other countries. I shall come to South Africa in a moment.

An HON MEMBER: We do not understand you.

Prof B TUROK: You do not understand a thing. [Laughter.]

Business Week has said: ``Americans have come to see their free-market economy as largely immune to the cronyism that plagues so many foreign countries, but they were shocked to see how Enron’s cosy ties with its own accounting firm inoculated it from scrutiny.’’ Accounting firms which were consultants to the same firm and doing the auditing, doing the whole thing so that they were able to conceal all kinds of debts and problems which arose with Enron. So while there was an initial bubble of enthusiasm, a bubble of wealth, seemingly, when the collapse came people saw what was really going on.

There were weak governance structures. There were fiduciary responsibilities of directors who ignored them. There was reckless management. Do hon members know that the chiefs of Enron took out R105 million just before the collapse of Enron, but then refused to give severance pay to thousands and thousands of employees? [Interjections.] There was ineffective auditing, conflicting roles between auditors and consultants, the concealing of massive debt. What the business press is telling us is that greed in certain American corporations has replaced sound business practices.

I am returning now to the relevance of all this to our Budget and to South Africa. We all know that, by and large, the South African banking system and the corporate system is sound. But, nevertheless, elements of uncertainty are creeping in because of certain similar practices in South African corporations. The Minister referred to this in his speech. He talked about the corporate failures of Macmed, of Leisurenet, of Regal Treasury and above all, of Unifer. Unifer with its link to Saambou and the link to Absa. The collapse of Unifer is an example of the kind of thing I am talking about and the kind of things that were raised in America and which are a matter of great concern. Unifer created a bubble of loans of R5,5 billion, and R1,8 billion of that was bad debts.

In other words, they went out into the market, just like Enron, pretending to be a sound corporation and then had to write off 50% of their loans. As a result of that, management broke down, there was a failure of due diligence, their auditing collapsed and we have to ask ourselves - and this is what the ABSA director-general said - if the roots of the problem were in mismanagement, deception and fraud.

I want to come back to the DP policy document. Because of problems in corporate governance and weaknesses which are manifesting themselves in the bubble of investment that we have seen internationally, hi-tech stock and the collapse of the Nasdaq for example, because of that, now governments are saying - not just the South African Government or communist governments

• can we afford to have a weak government, can we afford to deregulate, can we afford to have minimum government interference? Let me quote Business Week. This is what they say:

  Even conservatives have learnt a lesson. The clamour for accountability in the financial system means more rules and regulations in a sector that they have spent decades trying to deregulate.

I go back to the document. These people want a minimal state. [Interjections.] They want to deregulate everything. They want to leave everything to the individual entrepreneur. They want to leave everything to private enterprise. We say: No. [Applause.] Let us hear it again: No! [Applause.]

HON MEMBERS: No!

Prof B TUROK: There we are. There we are.

Mr K M ANDREW: Madam Speaker … [Interjections.]

Prof B TUROK: Please, say no to this gentleman.

HON MEMBERS: No!

Mr K M ANDREW: Madam Speaker, may I ask the hon member a question? [Interjections.] Prof B TUROK: Madam Speaker, I will, if you give me extra time. The Speaker’s answer is no, so the answer is no.

Mr K M ANDREW: Madam Speaker, on a point of order: Is the hon member allowed to make selective distorted quotations without giving the reference? [Interjections.]

The DEPUTY SPEAKER: Order! Hon member, please let the member finish his speech.

Prof B TUROK: Madam Speaker, I can give you the page references for everything I have said.

The DEPUTY SPEAKER: Order! Hon member, please just finish your speech.

Prof B TUROK: Madam Speaker, I have one minute left. If you give me time … I will see hon Andrew afterwards and I will read him his own documents. [Interjections.]

The MINISTER OF EDUCATION: Poor Andrew, poor Andrew, poor Andrew!

Prof B TUROK: Let me tie all this up. South Africa needs a strong and a steady government. [Interjections.] We live in an unstable international environment with a high degree of financial uncertainty, and the pressure on our rand is symptomatic of that. We have problems in the financial sector. There is massive international speculation. The dollar is flying around without any control. The IMF itself says it is unable to track the movement of finances around the world. In that environment, we need a strong and steady government. If the DP thinks that its policies of individualism, free market, nonregulation, etc, are going to help South Africa, please tell them what we think: No! [Applause.]

HON MEMBERS: No!

The MINISTER OF FINANCE: Madam Speaker, let me start by expressing appreciation to the committee for the diligence of their hearings, for the reports and also for the debate and to all members who prepared to participate here this afternoon.

It is worth emphasising that this Budget is a progrowth Budget. We find the evidence in the infrastructure spending, in the tax relief to reinforce household spending, in the further relief for small business, in the accelerated depreciation for investment, in the real increases in social transfers to households and in the continuing enlargement on spending on education and skills development. But it is important to recognise that South Africa is not an island.

We make our policies in a global environment, in a world where we have seen economic slowdown in so many countries that are like South Africa. Malaysia, which in 2000 grew at 8,3%, grew at 0,3% last year. The Philippines, which grew at 4% in 2000, grew at 2,9% last year. Brazil grew from 4,5% to 1,7% and Mexico from 6,9% to 0,7%. That is the world that one makes policy in.

So, in looking at growth and at sustainable growth, one has to understand what the trends in the world are. So when people ask that one abstract oneself from that world and pretend that one can put on shutters and be myopic about opportunities in the world, one will fail time and again.

Similarly, the issue of interest rates which has been raised here is a complex issue, because in all of the countries that I have mentioned - and I can extend the list - one will find this distortion and in all developing countries interest rates are substantially higher than in the highly industrialised countries.

For poor countries, because we are dependent on capital, we have not had the luxury of the 10 or 11 interest rate cuts that one has been able to effect in the United States to stimulate development. These are trends which, if one is in the world, one has got to understand and take one’s decisions in that world.

In respect of the points raised by the hon Bekker about interest rates, the Reserve Bank has a mandate given to it by the Constitution. It is a mandate to maintain price stability and it has to act within that environment. It is not pleasant.

I think these last two decisions by the governor clearly have been his baptism of fire. I know that he was exceedingly tormented by what he had to consider in the monetary policy committee, which concluded its work this afternoon. These things are not easy, but I think that in the world that we live in, we need to understand that those trends are there, rather than to use interest rates repeatedly or to use the forward book, as has been done in the past, because that creates a contingent liability and the chickens come home to roost later.

But before people think that we should dress in sackcloth and ashes about how bad South Africa is, the hon Ben Turok referred to some extracts from the Business Week, which is an American publication. Now, this week’s edition talks about certain risks in the US economy. I want the hon Taljaard to hear this, because God lives in the US, of course [Laughter.] They talk about the fact that the net debt of the US will reach nearly 5,8 trillion dollars by the end of 2006, which would be about 46% of that year’s GDP. In 1997 that debt was just 13%.

They go on to talk about the fact that, to off-set this statistic and given the risk of capital flows, the US would require a 30% increase in exports to halve the deficits in the US current accounts - the broad measure of trade in goods services and investment income. The 30% increase in exports would be a stretch - quite impossible for the United States.

The same report goes on to calculate that the US would probably need a depreciation in the dollar of some 43%. There is an imbalance and a distortion here. So, before we beat our chests about the depreciation of the rand, we must understand that these imbalances that exist now in the dollar and the pound that are too strong, will cost exports and cost jobs in those economies going forward.

In the same kind of way, I am sorry that the hon Van der Merwe is not in the House, because the same edition deals with crime in Europe. For instance, it says in respect of France: ``Crime: hold on to that cellphone in Paris! Violent street robberies led by phone snatchings are up 23% in the past year.’’ In Britain, it says, robbery had surged nearly 40% in London since April 2001 and moved into rich neighbourhoods such as Twickenham.

In Spain, crime rose to 10,5% in 2001, leading to increased concern about immigration. It is a problem. It is a problem there, as it is a problem here. So let us stop beating our chests and let us start telling the truth about South Africa. [Interjections.] That is what the international investor council tells us to do. Let us not pretend that these problems are uniquely South African. In the same way, when we look at the issue of jobs, the hon Holomisa says that Government must create jobs. Where is he? Where does he wake up? What is he asking Government to do? I do not think he smelled the coffee, he smelled something else. There is clearly a problem and, again, not a uniquely South African problem. There is a change in the composition of the labour market. That change is a change that is reflected, certainly, in the demand for those with tertiary skills, and there is negative demand across the world for those with no skills. That is our legacy. That is what we have to deal with. That is going to take more than a generation to change, but to get there, certainly, labour market policies need to take account of that reality.

We need to focus increasingly on skilling our people in this economy, and that takes time and resources and the money is there. It is not about flexible labour markets. It is about skilling people, because cheap labour was apartheid labour. It is gone, it is gone for all time, it is gone out of South Africa and it is gone out of the world. [Applause.]

We need to reskill. We need to share jobs. We need look at issues of time. I think there are a series of issues that we need to reconsider as we go forward, but there are no pat populist solutions. So let us get that out of our heads and focus on the real world, because hunger, poverty and the degradation of joblessness is not something that any of us should be willing to countenance.

The changes in the global economy in the last while and the changes in production are bigger, in fact, than the changes that came about in the Industrial Revolution. That is what we need to understand. That is a challenge. It is not an ANC challenge. It is a South African challenge.

We said in the Budget as well that …

… tlala e mo kotsing. [… hunger is in trouble.]

We must remain committed to that fight. We must ensure that we put hunger in danger every single day. It is a struggle we are fighting. [Applause.] When people in this House ignore the fact that poverty strategies are dealt with in this Budget across the board and they focus on one little thing, it is like going into the restaurant and ignoring the menu. There is one exotic meal that they want; there is an exotic meal that nobody has eaten, but nobody has eaten it, probably for a good reason and, because of that, they say there is no food in the restaurant.

I think that the hon Turok has dealt with that kind of confusion. The hon Andrew is leaving the Portfolio Committee on Finance to head up the DP’s policy development. I wish him well. I want to thank him for his service on the Portfolio Committee on Finance, but I want to say that, clearly, our majority is going to grow because of that kind of confusion.

He tries to be Red Ken. He comes with populist issues, but the blue is so deep, that it is just a purple blob that comes out of the policies. [Laughter.] It is indistinguishable. It is a hodgepodge of nothing and the same kinds of views are articulated, if one listens to the hon Andrew. The hon Raenette Taljaard’s song this afternoon was: Privatise the poor, it is somebody else’s problem. We can ignore it. Just privatise them. [Interjections.]

I want to say to the hon Louw that before he asks anybody like me … [Interjections.] There will be a second and third tranche, if that is the answer that hon member wants.

I want to say this to the hon Louw, the Rhodesian. I want to ask him where he was when we were being tortured and in jail. If he was enjoying privilege, he must never ask again where I stand, because he does not know poverty, hunger, torture, oppression or repression. He has lived off the fat of the land. [Interjections.] He represents the same cynical rich. [Interjections.] [Applause.]

Debate concluded.

Bill read a first time (Democratic Party dissenting).

The House adjourned at 19:40. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 (1)    The Joint Tagging Mechanism (JTM) on 14 March 2002 in  terms  of
     Joint Rule 160(6), classified the following Bill as  a  section  75
     Bill:


     (i)     Electronic Communications and  Transactions  Bill  [B  8  -
          2002] (National Assembly - sec 75).


 (2)    The Joint Tagging Mechanism (JTM) on 14 March 2002 in  terms  of
     Joint Rule 160(6), classified the following Bills  as  money  Bills
     (section 77):


     (i)     Social Grants Appropriation Bill [B  9  -  2002]  (National
             Assembly - sec 77).


     (ii)    Burundi Protection  Support  Appropriation  Bill  [B  10  -
             2002] (National Assembly - sec 77).

National Assembly:

1. The Speaker:

 (1)    Report by the Deputy  Speaker  on  her  Visit  to  the  People's
     Republic of China (National People's Congress) 17  to  26  November
     2001.


    The Report is available from the Parliamentary Library.

TABLINGS:

National Assembly and National Council of Provinces:

Papers:

1. The Minister of Arts, Culture, Science and Technology:

 (a)    Annual Report of the South African  Geographical  Names  Council
     for 2000-2001 [RP 28-2002].


 (b)    Annual Report of the National Museum for 2000-2002.


 (c)    Strategic Plan for Arts, Culture,  Science  and  Technology  for
     2002-2005.

1. The Minister for Justice and Constitutional Development: (a) The report regarding the suspension from office of Magistrate R M Nongema, tabled in terms of section 13(3)(c) of the Magistrates Act, 1993 (Act No 90 of 1993).

 (b)    European Convention on Extradition, tabled in terms  of  section
     231(2) of the Constitution, 1996.


 (c)    Additional Protocol to the European Convention  on  Extradition,
     tabled in terms of section 231(2) of the Constitution, 1996.


 (d)    Second Additional Protocol to the European Convention, tabled in
     terms of section 231(2) of the Constitution, 1996.


 (e)    Explanatory  Memorandum  to  the  European  Convention  and  the
     Protocols.


 (f)    SADC Protocol Against Corruption, tabled  in  terms  of  section
     231(2) of the Constitution, 1996.


 (g)    Explanatory Memorandum to the Protocol.

1. The Minister for the Public Service and Administration:

 Strategic Plan for South African Management Development  Institute  for
 2001-2002 to 2003-2004.

COMMITTEE REPORTS:

National Assembly:

1. Report of the Portfolio Committee on Finance on the Social Grants Appropriation Bill [B 9 - 2002] (National Assembly - sec 77), dated 13 March 2002:

   The Portfolio Committee on Finance, having considered the subject of the Social Grants Appropriation Bill [B 9 - 2002] (National Assembly - sec 77), referred to it and classified by the Joint Tagging Mechanism as a money Bill, reports that it has agreed to the Bill.

2. Report of the Portfolio Committee on Finance on the Burundi Protection Support Appropriation Bill [B 10 - 2002] (National Assembly - sec 77), dated 13 March 2002: The Portfolio Committee on Finance, having considered the subject of the Burundi Protection Support Appropriation Bill [B 10 - 2002] (National Assembly - sec 77), referred to it and classified by the Joint Tagging Mechanism as a money Bill, reports that it has agreed to the Bill.

3. Report of the Portfolio Committee on Provincial and Local Government on the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities Bill [B 62 - 2001] (National Assembly - sec 75), dated 13 March 2002:

   The Portfolio Committee on Provincial and Local Government, having considered the subject of the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities Bill [B 62 - 2001] (National Assembly - sec 75), referred to it and classified by the Joint Tagging Mechanism as a section 75 Bill, reports the Bill with amendments [B 62A - 2001].

   The Committee further reports as follows:

   The Committee believes that the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities can serve a vital role in providing for the expression of cultural, religious and linguistic rights in a way that fosters nation-building. If the Commission is effective, it will represent a significant further step in the consolidation of the process of our transition from a divided past to a common future that acknowledges both our diversity and unity.

   The Committee notes that the Ministry and the Department of Provincial and Local Government undertook an extensive three-year process of consultation with a wide range of stakeholders before finalising the Bill for introduction into Parliament. The process included consultative conferences, workshops, provincial public hearings and the establishment of a technical committee, representative of key stakeholders, to process earlier drafts of the Bill. In fact, the process was so consultative that several key stakeholders decided not to participate in the parliamentary public hearings because they felt that they had been given adequate opportunity to express their concerns.

   The Committee congratulates the Ministry and the Department for the sensitive way in which it has processed this Bill.

   The Commission is the only institution “supporting constitutional democracy”, provided for in Chapter 9 of the Constitution, that has not yet been established. With the passing of this Bill, the Commission can now be established, and the Committee proposes that the Commission be launched as soon as possible. It seems to the Committee that 24 September - Heritage Day - might be a suitable day.

   The Committee recognises that there could be an overlap between the powers and functions of the Commission and those of other institutions, including the South African Human Rights Commission, the Pan South African Language Board, the National House of Traditional Leaders and the Commission for Gender Equality. The Committee is also aware that questions are being raised about how productive and effective some of these institutions are, and whether the country, with its limited resources and many challenges, can afford to have so many constitutional institutions. The Committee believes that these issues should be carefully considered at some appropriate stage.

   Within the prescripts of the Constitution, the Committee sought to both define a specific role for the Commission and to encourage the Commission to co-operate effectively with other institutions. Section 6 in particular focuses on the need for this co-operation. It is in the practical implementation of the Bill, however, that certain issues around the specific role of the Commission, its co- operation with other institutions and its productivity and effectiveness will be addressed. We urge the Department and to-be- established Commission to ensure that these issues are appropriately dealt with. We will certainly be monitoring the process.

   In many senses, the proposed Commission is unique. There are few, if any, parallels for it anywhere in the world. The Commission has a major responsibility to provide for the expression of diversity and unity in a mutually reinforcing way as part of our nation- building process. We wish it well.