Budget Speech 2016Growth and development |
So we are resolved to restore the momentum of growth, to ensure that it is inclusive and sustainable, and to preserve our economy’s investment-grade status.
As Minister Nene put it in his October Medium Term Budget Policy Statement address: “If we do not achieve growth, revenue will not increase. If revenue does not increase, expenditure cannot be expanded.”
This means we must address institutional and regulatory barriers to business investment and growth. It means we must give greater impetus to sectors and industries where we have competitive advantages. And it means being bold where there is need for structural change, innovation and doing things differently. We need agility and urgency in implementation.
International experience has demonstrated that growth is ignited by strong and stable political and economic institutions, sound infrastructure that reduces the cost of doing business and facilitates trade, competition between firms and openness to trade and an environment where firms invest and undertake research and development. We also know that the more inclusive the economy the greater its scope for growth.
These are the challenges we hear in South Africa today.
| • | We are responding to appeals from the business sector for greater certainty in respect of policies that affect investment decisions. |
| • | We are engaging with proposals from organised labour for a minimum wage policy, and for progress on opportunities for young people. |
| • | We are responding to action in communities where services are missing or badly managed. |
| • | We are crafting solutions to the voices of students regarding fees and housing. |
I need to emphasise that violent protest is not an acceptable way of articulating these challenges.
Also, in these and other areas, the choices we make cannot meet every need, and the action we require involves collective action by many stakeholders. Today’s Budget sets out government’s plans for the next three years, building on what we have achieved since 1994. It also signals the actions underway to improve policy coordination and collaboration between social partners and stakeholders.
As outlined by the President, initiatives are in progress to address our policy coordination and implementation challenges.
| • | Over 80 bills and plans have been reviewed since September last year as part of the new socio-economic impact assessment programme, under Minister Radebe’s oversight. The aim is to address possible regulatory constraints pro-actively before they take effect. |
| • | Visa regulations have been revised following consultation between Ministers Gigaba and Hanekom and concerns raised by the tourism industry. |
| • | Talks are in progress under Minister Olifant’s leadership to improve workplace dispute resolution procedures. |
| • | Minister Davies is introducing a new investment promotion agency to streamline administrative procedures and enhance our position as an African financial centre. |
| • | Special economic zones and employment-intensive sectors with export potential have been prioritised for support by the Industrial Development Corporation. |
| • | Initiatives to transform ownership of land and improve productivity in agriculture are under way, and Ministers Zokwana and Nkwinti are addressing drought-related challenges in rural areas. |
| • | Under Minister Molewa’s guidance, South Africa’s response to the global climate change challenge has been prepared, and work with the National Business Initiative on the green economy has been strengthened. |
| • | Our environmental employment programmes continue to earn international recognition. The Community Work Programme is expanding its reach and Jobs Fund partnership projects of R12 billion have been approved. |
| • | Building on the Phakisa oceans economy initiative, a R9 billion investment in rig repair and maintenance facilities at Saldanha Bay is planned, and work has begun on a new gas terminal and oil and ship repair facilities at Durban. |
| • | Minister Joemat-Pettersson is overseeing our renewable energy, coal and gas IPP programme, and preparatory work for investment in nuclear power. |
| • | Minister Pandor’s department is leading work on beneficiation initiatives, including titanium, fuel cells, fluorochemicals and composite materials. |
| • | Minister Motshekga is working with social partners on the National Education Collaboration Trust to identify and implement school improvement initiatives. |
In recent weeks, President Zuma, other Ministers and I have engaged with business leaders to understand their concerns and views. Confidence and shared understanding have been reinforced. These engagements are clearly critical to boosting our economy, and must be extended to include regional forums and other stakeholders.
We particularly welcome the working groups that have been established and several practical proposals for joint action. These include a collaborative initiative to combat corruption and abuse of tender procedures, a new fund to accelerate small and medium enterprise development and measures to build investor confidence and contribute to social cohesion.
By removing constraints, supporting innovation, protecting jobs, diversifying our economy and exploring new opportunities, we can expand growth prospects.
Our economic outlook is not what it should be, global uncertainty and the drought are very real challenges, but our efforts to build a better future continue.
We are resilient, we are committed, we are resourceful.
By working together we can increase growth, broaden participation and inspire confidence in our economy and society.