SPEECH BY GAUTENG MEC FOR FINANCE, BARBARA CREECY, ON THE OCCASION OF THE 2016/17 BUDGET PRESENTATION, GAUTENG PROVINCIAL LEGISLATURE, 8 MARCH 2016 Madam Speaker and Deputy Speaker Premier David Makhura and fellow members of the Executive Council Chief Whip Member Brian Hlongwa Leaders of Political Parties Members of the Provincial Legislature MMCs of Finance Councillors Distinguished guests Comrades and Friends I am honoured to present to this esteemed House, the second budget of our Administration, under the leadership of Premier David Makhura. I want to start by wishing all women in this House and in our Province a very Happy International Women’s Day. Today is especially significant for South African women as it falls in the year of our 60th Anniversary of the Woman’s March to the Union Buildings. It is a day on which we can pause to pay tribute to great South African women: Charlotte Maxeke, Lillian Ngoyi, Helen Joseph, Albertina Sisulu, Sophie de Bruyn, Amina Cachalia, Bertha Gxowa, and Francis Baard. 1 These women set a powerful example of personal courage and fortitude in the face of adversity; they led with humility and selfness; they were unwavering in their principled commitment to non racialism, democracy and equality of all South Africans. We salute them! Their greatest victory was achieved 20 years ago, with the signing into law, of our Democratic Constitution. The Bill of Rights explicitly enshrines equality of all our citizens; requires the state to actively promote equality ,and outlaws discrimination by the state or individuals directly or indirectly against anyone on the basis of race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth. However as President Zuma pointed out in his State of the Nation Address, “the journey to a non-racial society has not yet been completed”. It is therefore mandatory that our generation continue the fight against all forms of discrimination, and in particular, in this Human Rights Month, we stand united against racism and xenophobia. Madam Speaker, Honourable Members as we salute the bravery of our foremothers in the face of insurmountable difficulties, we understand that we ourselves face challenging social, economic and political times of our own. As we table this budget today, Gauteng’s citizens face an intensifying attack on their living standards. The cost of food, transport, and electricity are rising and hit the poorest households hardest. While our City Region economy remains the largest in the country, and has, even in this bleak climate, created over 340 000 formal and informal jobs, we know that two million unemployed residents face a daily struggle against poverty and hardship. Two weeks ago, Premier Makhura gave stern advice to those of us charged with governance when he said: “We cannot bemoan the economic and social problems plaguing our province. It is within our power to change our conditions and build a common South African identity based on equality, liberty and fraternity in our lifetime”. 2 The budget I have the honour to present today, is the financial expression of our government’s will to change the lives of our citizens, and build this common, more equitable and just society. Honourable Members I have said before in this House, that Gauteng is in a unique position to address the poverty, inequality and unemployment facing our citizens and assist the country as a whole reach the growth targets in the National Development Plan. It is worth repeating these three reasons today: The first is the size, relative sophistication and potential competitive advantage of the City Region’s R1,1 trillion economy; The second is this government’s vision for equitable growth and development; And the third is the political will we have to implement our vision and plans to overcome obstacles in our path. In his State of the Province Address, Premier Makhura reported extensively on progress in implementing the Transformation, Modernisation and Re-industrialisation agenda and future plans of the Gauteng City Region whose central economic and social objectives remain: To change income distribution, to enhance equity and thereby raise the living standards of all our people; and To change ownership patterns and bring black people into the economic mainstream of our province. To do this, the Premier said, we must: Change the current industrial structure of our economy to privilege manufacturing, services, agro processing, mineral beneficiation and the creative industries; Develop new, modern, innovation-driven industries in areas of high-tech, pharmaceuticals, biotechnology, and the green and blue economy; Invest hugely in skills development to improve the skills profile of the citizenry in line with new strategic sectors; Transform the apartheid spatial economy and human settlement patterns to integrate economic opportunities, transport corridors and human settlements; Grow the SMME sector as a key driver of growth, and revitalize and mainstream of the township economy; 3 Strengthen the capacity of the state to direct economic development and enhance the competitiveness of strategic economic sectors; Ensure significant investment in infrastructure as the key stimulator for inclusive growth and economic development; and lastly, but by no means least, Build transformative partnerships between the private and public sector in addressing the developmental challenges outlined in the National Development Plan Vision 2030. Honourable Members the urgent and vital task of building a social compact with business, labour, civil society and government confronts us all. To overcome structural challenges to growth, and to ensure wider economic and social inclusion, we all have to agree on what we are prepared to contribute and what we can afford to sacrifice to advance inclusive and substantive growth. On this side of the house we are committed to building the relationships and programmes needed to implement the National Development Plan. In this regard we want to applaud Premier Makhura’s announcement that “we will take Ntirhisano into the economy to work with captains of industry, and leaders of organised labour to enhance the productiveness and competitiveness of our economy”. Socio-Economic outlook Madam Speaker; demographics play an essential role in assessing the achievement of both social and economic goals of a region. Youthful urbanisation is now our reality. Seventy percent of Gauteng population is below the age of 40. According to the United Nations, 64.3 percent of the South African population lives in urban areas. Gauteng province is the centre of urbanisation, it remains the province of choice and our cities remain the engine of economic growth. Gauteng province has a distinct advantage in that it is a home to 3 cities. The City of Johannesburg is the hub of financial and ICT industries and has a strong retail and services sector. The City of Ekurhuleni is the manufacturing, logistics and transport hub of the province whereas the City of Tshwane remains the hub of the automotive sector and of research & development. 4 Our combined cities accounts for more than 80 % of the Regional Gross Domestic Product. Cities have the highest rate of in-migration as the result of economic opportunities that they offer. Gauteng is also a youthful province. More of our young people have post school qualification than elsewhere in the country. They are full of energy and hope for the future. They are innovative and willing to work hard to fulfil their desires. According to the Statistics South Africa Mid-Year Estimates of 2015; Gauteng now accounts for 24 percent of population share in the country which translates to 13.2 million residents. Between 2010 and 2015 the province’s population grew by an annual average of 2.8 percent or an increase of 1.8 million. Over this period, the number of households increased by 16 percent or half a million households. There are benefits to having a young population concentrated in urban areas. These include greater access to skills and labour and a ready market for consumer goods of all types. However, the downside to high population growth is the challenge it poses for service provision in an environment of constrained fiscal space. Honourable Members; South Africa’s economic growth outlook remains fragile, reflective of both global and domestic developments. The Honourable Minister of Finance, Pravin Gordhan put it frankly during his interactions with the captains of industries when he said “sentiments towards emerging markets have grown negative and developing countries are grappling with various challenges. South Africa still faces the challenges of lower economic growth, widespread unemployment and inequality.” When delivering his budget address in the National Assembly on 24 February, Finance Minister Mr Pravin Gordhan noted: “Growth rates of below 1 percent fall short of what we need to create employment and reduce poverty and inequality….this reflects both depressed global conditions and the impact of the drought. It also reflects policy uncertainty, the effect of protracted labour disputes on business confidence, electricity supply constraints and regulatory barriers to investment.” 5 On the positive side, Minister Gordhan noted that the institutional foundations of our economy remain resilient and he cited amongst other things the country’s macro economic policy, inflation targeting, well capitalised banks and financial institutions, our strong constitutional and legal framework, excellent universities and research centres as well as a strong private sector. Our provincial economy mirrors that of the country. When the Gauteng economy slows down, the impact is hugely felt on the national economy. We expect the provincial economy to have grown by 1.2 % in 2015, this indeed is disappointing for us. We are however optimistic that with our interventions as shared by the Honourable Premier, we expect an upturn in our provincial economy by 2018 with a moderate growth projection of 2.8%.