Budget 2008!

We are all, in this together!

The presentation of this year's annual budget gives all South Africans, and members of the ANC in particular, an opportunity to do two things. The first is to interrogate how government is spending its money. By examining 'where the money goes' we are able to see how our political commitments and programmes are translated into the allocation of resources. Second, the budget give us an opportunity to debate the economic policies that we pursue in the course of realising the objectives of the National Democratic Revolution (NDR).

At our 52nd National Conference in Polokwane we re-affirmed that the basic economic tasks of the NDR are to fight poverty, defeat mass unemployment and create a more equal society. The Polokwane resolution on economic transformation states that:

"Answering the challenges of unemployment, poverty and inequality means that we must simultaneously accelerate economic growth and transform the quality of that growth. Our most effective weapon in the campaign against poverty is the creation of decent work, and creating work requires faster economic growth. Moreover, the challenges of poverty and inequality require that accelerated growth take place in the context of an effective strategy of redistribution that builds a new and more equitable growth path."

The resolution outlines the pillars of our economic programme which constitute our strategic approach to achieving these goals. One of those pillars is expanding the social wage, which is a critical part of 'an effective strategy of redistribution'. Conference called for an expanding social wage, and made education our clear priorities.

The 2008/09 budget takes us forward in achieving these objectives. In particular:

• There are significant real increases in social expenditure, especially for health and education. It is worth noting the additional allocations to early childhood development, higher education (including the National Student Financial Aid Scheme), the school Nutrition Programme, the hospital revitalisation programme and in support of the fight against TB and HIV and AIDS.
• The allocation to social security has increased by R12 billion, which follows on from the significant increases over the last five years. The Child Support Grant is extended from 14 up to 15 years and a programme to equalise the pensionable age for men and women has been outlined.
• There are significant increases in support of free basic services, including though municipal infrastructure grant and equitable share. These will promote further infrastructure roll out and provision of free services respectively.
• The income floor below, where earners pay no income tax, has been further increased to R46 000, which means that anyone earning less than R3,800 a month is exempt from paying income tax.
• Further allocations are made to support public works programmes, including those that contribute to infrastructure development and social development.

Tax and transfer is a critical element of our approach to economic growth and development and will remain so as long as mass unemployment, poverty and inequality remain such huge challenges. But our programme of economic transformation cannot be confined to these policies, because our aim is to change the economy to ensure that the people share more equitably in the country's wealth. The 52nd National Conference also called for action to transform the structures of production and patterns of ownership in the economy.

On this score, the budget also makes a critical contribution:

• The ANC-led government continues to lead a massive public infrastructure investment programme. Taking into account further private sector investment, the programme will transform the nature of the South African economy. Of particular importance to this are investments in our public transport infrastructure, building our electricity generation capacity, and improving municipal infrastructure.
• An additional R2.3 billion is allocated for industrial policy spending, whilst tax incentives amounting to R5 billion are given in support of industrial incentives and employment creation.
• The amount allocated to land redistribution and support agriculture is substantially increased.
• The tax and administrative burden on small business is reduced by raising the threshold below which they must register for VAT from R300 000 to R1 million. In other words, companies that have an annual turnover of less than R1million no longer have to register for VAT.
• The budget continues to invest heavily in our human capabilities, including through education and skills development, tasks which are critical to transform our economy in the long run.

As we mentioned at the outset, the budget is also an opportunity for members of the ANC to critically engage with the economic policies pursued by our government.

Of particular concern in public debate has been the question of a fiscal surplus. This means that the government's income is more than it spends. Put differently a fiscal surplus means that the government is saving money. Some have argued that it is wrong to save money when people are unemployed and poor.

The ANC has no particular principle or position that says whether the government should save or borrow money. Our resolution at Polokwane simply says that macro-economic policies must support and sustain growth, job creation and poverty eradication on a sustainable basis.

As the Minister of Finance, Trevor Manuel correctly pointed out in his speech, there are storm clouds gathering in the international economy which will have an effect on South Africa. He also urged us to confront these storm clouds collective, since 'we are all in this together'.

This means that all of us have the responsibility to understand and engage in discussion on the appropriate macro-economic policies that will enable our country to sustain growth and embark on job creation and poverty eradication programmes on a sustainable basis. Since we are all in this together, we must all take this debate seriously, and improve our understanding of the issues involved.

As we conduct this debate we should all keep in mind the following facts:

• Poverty, unemployment and inequality remain the most serious economic, political and social problems that face South Africa. Growing the economy, and sustaining that growth is the best way to address these challenges.
• Over the last few years public spending has grown by 9% in real terms, whilst the economy has grown at about 5%. This means that, even though we have a fiscal surplus, government has been spending more and more each year. Whilst the economy is now expected to slow down, the budget continues to see real increases in public spending faster than economic growth over the next few years.
• The main reason we have a surplus is not that government is spending less, but that it is receiving more income. This is partly because SARS has performed so well and brought more tax-payers on board. It is also because of the high price of gold, platinum and other commodities that South Africa produces. Were the prices of these commodities to fall on international markets, our income would decline.
• As a whole, South Africans save very little. This means that in order for our economy to grow it must draw on the savings of people from outside South Africa. The more we depend on foreign savings, the more foreigners will determine the kind of policies we have to pursue. It is no accident that those developing countries that are able to pursue an independent growth path are those who save much more than they consume (for example China and Venezeula).

Our Polokwane resolution calls on the ANC to take the lead in mobilising and uniting all South Africans around our common vision of economic transformation. Our national budget continues to be developmental and pro-poor. This does not mean there is no room for improvement. It does not mean that there is no room for debate.

But, as we conduct these critical national discussions we must never forget that we are all in this together. As members of the ANC we must never forget our responsibility to empower our people and unite them around a common vision of economic transformation.

Our Revolution will not be Halted

A few days before A few days before the President of the Republic, comrade Thabo Mbeki, delivered this year's State of the Nation Address, the leader of the Democratic Alliance, Helen Zille, made the astounding statement that, "The ANC's national democratic revolution is not only incompatible with democracy, but it lies at the heart of virtually every crisis we face. The electricity crisis, the arms deal, the manipulation of the criminal justice system, the weakening of Parliament and threats to the media and the judiciary can all be traced back to the national democratic revolution." She went on to demand that Pres. Mbeki, "halt the march of the ANC's national democratic revolution." A week later she challenged the President of the ANC, comrade Jacob Zuma, to: "Pledge your allegiance to the Constitution."

Nothing blinds people to their own power and privilege so much as the powerful and privileged position they occupy in society. Adapting a dictum so loved by some, we can say that absolute power and privilege tend to blind absolutely.

Few are as blind as the coalition that Zille leads - an amalgam of those who have exercised power and enjoyed privilege in one form or another - political, economic, social, military - based on the exclusion, exploitation and oppression of the vast majority. They shaped society in their own image and interest. Regrettably, but not surprisingly, they understand the abnormal to be normal and view attempts at fundamental change to this state of abnormality as unnatural and threatening.

They strive continuously to create social amnesia about where we come from - the better to obscure where we should be going, and what we need to do to get there. By perverse inversion they place the oppressed in the dock of history and charge them to justify their resistance to oppression and the assertion of their human dignity.

For centuries the lives of millions of South Africans were subjected, first to colonialism and later, with the introduction of apartheid, to colonialism of a special type which represented an all-round assault on each and every aspect of the existence and humanity of black people in general and Africans in particular. At the heart of this vicious system was the inter-related and mutually reinforcing oppression and exploitation on the basis of race, class and patriarchal relations of power.

National democratic revolution represents the strategic framework that guided the struggle to overthrow apartheid colonialism and continues to guide the struggle to eradicate its terrible legacy.

It is not, as Zille suggests, the national democratic revolution, but the legacy of apartheid colonialism that lies at the heart of virtually every serious challenge that we face as a nation, including that of nation-building.

The 2007 Strategy & Tactics of the ANC: Building a National Democratic Society describes the main content of the national democratic revolution as, "the liberation of Africans in particular and Blacks in general from political and socio-economic bondage. It means uplifting the quality of life of all South Africans, especially the poor, the majority of whom are African and female. At the same time it has the effect of liberating the white community from the false ideology of racial superiority and the insecurity attached to oppressing others." It goes on to say that, "the NDR seeks to build a society based on the best in human civilisation in terms of political and human freedoms, socio-economic rights, value systems and identity."

The transformation of power relationships in the many centres of power that constitute any society (the economy, the state, civil society, culture etc) has never happened by itself.

Strategy and Tactics recognizes that, "revolutionary democrats shall not find social relations of the new order ripe and ready for harvesting at the point of transfer of power. A national democratic society is a conscious construct, dependent on conscious action by politically advanced sections of society."

Those who oppose such conscious action and advocate a laissez-faire "equal opportunity society" approach must tell us which institutions in our society, which centres of power, must remain untransformed. Who must remain excluded? From what must they remain excluded? To whose advantage must they remain excluded?

Strategy and Tactics describes the kind of progressive national liberation movement needed to carry out the NDR in the current phase, as one that, "understands the interconnection between political and socio-economic challenges in our society; leads the motive forces of the NDR in pursuing their common aspirations and ensuring that their sectoral interests are linked to the strategic objective; masters the terrain of electoral contest, utilises political power to advance the objectives of the NDR and wields instruments of state in line with these ideals as reflected in the National Constitution; organises and mobilises the motive forces and builds broader partnerships to drive the process of reconstruction and development, nation-building and reconciliation; and conducts itself, both in its internal practices and in relation to society at large, in line with the ideals represented by the NDR and acts as a microcosm of the future."

Those opposed to transformation know that some of the most potent weapons in the hands of the oppressed are education, mobilization, organization - unity in action. They know that they must undermine the ability of the oppressed to unite in action to create a better life. They know that the ANC is the organizational expression of the deepest hopes and aspirations of the majority of South Africans. They know that they must attack the moral and political authority of ANC and its leadership to play the role of a unifying political centre.

Recently, Dan Roodt wrote in Rapport: "Let us admit it: our situation is dire. But not everything is lost, because we still have one weapon, and that is to break down the legitimacy of the current system."

Illustrative of this "breaking down" are the lies told about the nature and character of the national democratic revolution and the commitment of the ANC and its leadership to the Constitution and the rule of law.

The ANC has a long and proud history of commitment to constitutionalism and the rule of law dating back to its inception in 1912. This is illustrated by the adoption, amongst others, of the 1943 Africans' Claims in South Africa document and the Freedom Charter.

Strategy and Tactics explains that, "one of the most critical acts of the NDR is the creation of a legitimate state which derives its authority from the people, through regular elections and continuing popular participation in the processes of governance." It goes on to caution that, "in its conduct in relation to the state, the ANC should be guided by its own principles, and act within the framework of the National Constitution and relevant legislation. In this regard, it should manage the state as an organ of the people as a whole rather than a party political instrument."

And further that, "Mobilised around a clear vision of the kind of society we wish to become, the nation should act in partnership - each sector contributing to the realisation of the common good. The means should be put in place for citizens to exercise their human rights, and for the checks and balances necessary in a law-governed society. The democratic state should also have the organisational and technical capacity to realise its objectives."

None of these objectives can in any way be said to go against the letter or the spirit of our Constitution, on the contrary.

Our Constitution is based on the founding values of human dignity, the achievement of equality and the advancement of human rights and freedoms, non-racialism and non-sexism, supremacy of the constitution and the rule of law, universal adult suffrage, a national common voters roll, regular elections and a multi-party system of democratic government, to ensure accountability, responsiveness and openness - many of the very values underlying the national democratic society that we seek to build.

Our Constitution represents a progressive framework within which law governed social transformation aimed at building a national democratic society can take place. Strategy and Tactics states that, "as a broad canvass, the Constitution and the state system provide the requisite wherewithal to implement objectives of the NDR."

We must contest vigorously the attempts by those opposed to transformation to bleed our Constitution dry of its progressive content and to project it as a sterile bulwark against progressive social transformation.

Our tasks are clear: We must advance in unity as we mobilise the masses to build a caring national democratic society. Our national democratic revolution will not be halted.

FORWARD TO A SINGLE PUBLIC SERVICE

Our developmental state requires a capable and effective public service

In 1955 at Kliptown, the African National Congress (ANC) spearheaded the adopted the Freedom Charter, which reflects our commitment to create an equal and just society. Hardly, 50 years later the ANC-led government has built a democratic society in which all South Africans have the right to vote, to live where they wish, to move freely around the country, enjoying a wide range of natural rights and freedoms. As we move towards the realisation of our dream of full liberation of our people we have to ceaselessly confront the twin challenges of poverty and inequality.

Since 1994, the ANC-led government has strived to build a "developmental state". From our perspective a developmental state government leads a strong, concerted drive for economic growth, ensuring the mobilisation of national resources towards development goals. Each developmental state is historically unique, so there is no single path that delineates progress towards the attainment of the 'developmental state'. The emerging South African developmental state is democratic, non-racial, interventionist, redistributive, pro-poor, people-centred and participatory.

The evolution of a developmental state is dependent upon the commitment, strength and competence of those public servants who must convert the stated developmental goals into coherent programmes. The state therefore requires a capable and effective Public Service to implement its national development plan. Notwithstanding the progress made in transforming the state over the past 14 years, this vehicle has not yet fully realised its potential.

Resolutions of the 51st and 52nd Conferences

In this vein the 51st Conference held in Stellenbosch in 2002 expressed the view that: "we seek to build a developmental state, capable of implementing the objectives of our national democratic revolution, including the creation of a better life for all, addressing the legacy of apartheid colonialism and patriarchy, and acting as the driving force for socio-economic transformation; and (that) the state as the key instrument for the delivery of basic services should develop appropriate systems and structures in order to facilitate a more quality and sustainable service delivery machinery." Among the resolutions taken under this heading were:

• To continue strengthening, developing and refining the system of intergovernmental relations between the three spheres of government that has evolved;
• That the pace of transformation be accelerated through the creation of a single development-oriented integrated system of public administration; and
• That the move towards a single public service should not be seen as an administrative process, and should incorporate the move towards integrated service delivery including single access points of services for citizens. This will result in greater access to services for rural communities.

The 2004 Manifesto of the African National Congress promised the people of South Africa that it would, amongst other undertakings:

• Realise Batho Pele principles and improve services in government offices, through electronic means and by working with citizens to monitor those who work in these offices;
• Improve interaction between government and the people through accountable public representatives, one-stop government centres, izimbizo and the use of electronic government services; and
• Ensure better co-operation among national, provincial and local governments with integrated planning and monitoring of implementation, and a common system of public service.

The 52nd ANC Conference, in Polokwane, re-affirmed the decisions regarding the Single Public Service, recognising that "one of the most pervasive challenges facing our country as a developmental state is … best addressed through a concerted effort by government in all spheres to work together and to integrate as far as possible their actions in the provision of services, the alleviation of poverty and the development of the people and the country." The Conference therefore resolved that "The African National Congress should continue to lead and drive the process of the unification of the administration in the three spheres of government in a Single Public Service." Conference created a structure within the Legislature and Governance subcommittee to facilitate and monitor the implementation of the Single Public Service.

Strategic objectives

The ANC-led government has worked towards the establishment of the Single Public Service as a strategic intervention to further enhance and strengthen the capability of the system of government across the three spheres. For enhanced service delivery and better integration of efforts, the Single Public Service proposes to align and harmonise the service delivery institutions of state to ensure that the state can deliver on the government's socio-economic agenda.

The State is constitutionally bound to ensure that high quality services are delivered to the citizens at their convenience. This challenges the ANC-led government to determine and implement the most effective methods and channels of service delivery. It calls for a dynamic, modern delivery model and system that clusters services to the convenience of the citizen, and offers them through a 'single window', whether in person or online.

The objectives of the Single Public Service include the following:

• To create a common ethos of service delivery across the three spheres inspired by the basic values and principles contained in section 195 of the Constitution and principles of Batho Pele;
• To deepen integrated service delivery by creating service delivery points (a "single window") through which citizens can access a basket of public services;
• To strategically align the institutions that comprise the machinery of the developmental state so that their implementation efforts complement one another; and
• To create common norms and standards for human resource management and development across the three spheres to facilitate the mobility of personnel across the spheres.

Current status of the Single Public Service Bill

During the past six months the Single Public Service Bill has been extensively consulted on both within government and the trade union movement. Comments received will inform the version of the Bill that will form the basis for public comment. The Bill will be tabled in Parliament in the second half of the year.

Towards seamless service delivery

The single public service contains a potential for bridging the organisational gaps associated with traditional ways of structuring government. The intention is clearly that citizens should benefit from a seamless interface with the government machinery. What we do not want to see materialising under this legislation is the weakening of the institutions in which local democracy can find expression or where the normal mechanisms to exercise control and democratic checks are undermined!

** The draft Single Public Service Bill can be accessed at
http://www.dpsa.gov.za/documents/acts&regulations/SPSBill.pdf

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