parliament, appropriation bill, budget, borrowing
4 minute read
25 Jul 2014
7:24 pm

Parliament passes Appropriation Bill amid opposition protest

parliament, appropriation bill, budget, borrowing

Parliament on Friday passed the Appropriation Bill and the budgets for 38 government departments amid protest from opposition parties that accumulated borrowing, set to reach R2 trillion in three years, would saddle future generations with an unfair debt burden.

Image courtesy of Wiki Media Commons.

Economic Freedom Fighters’ MP Godrick Gardee said his ultra-left party could not support the bill because borrowed money was being wasted on projects that held no benefit for generations to come — notably the upgrades at President Jacob Zuma’s Nkandla home.

Though the EFF did not object in principle to borrowing to finance public spending, it could not support the way the African National Congress did it, he added.

“It is problematic where one of the basic principles of the fiscal policy, which is that of inter-generational fairness, is being over-looked,” Gardee said.

“Borrowing should not be used to buy goods and services from which future generations would not accrue benefit but be burdened with obligations to pay back a debt used in futility by a preceding generation.

“Such goods and benefits like the Nkandla residence, that asset of R230 million, is financed by a state debt and that debt is going to be paid by future generations.”

A similar point was made by Steve Swart of the African Christian Democratic Party, who asked whether government fully grasped the implications of its actions.

“We need to understand the enormity of what we are busy doing, and I share the concern of other members about our debt service costs.”

Swart added that given the rate of borrowing, it was unconscionable that up to R30 billion from the state’s coffers was lost to corruption annually.

The Democratic Alliance said the bill attested to “dismal economic and financial management” on the part of the ANC and showed the ruling party had no plan to solve the jobs crisis.

In his response, Finance Minister Nhlanhla Nene denied that borrowing exceeded responsible limits.

Though debt servicing costs had risen and the fiscal space had shrunk, Treasury was keeping to the principles of sustainability and inter-generational equity, and remained committed to stabilising the growth of public debt over the next three years.

In a jab at the EFF’s lack of experience in Parliament, Nene said that being new they had perhaps not had time to study the state’s consolidated operating accounts. Government was building schools and clinics “that will benefit our children and not burden them with debt”.

Swart questioned whether government would be able to achieve debt stabilisation in the face of shrinking growth.

“Whether you are able to achieve this of course, that is the challenge… given the various political pressures from various quarters,” he said.

“And it is also premised on economic growth reaching targeted levels, initially 2.7 percent, but now revised downwards significantly.”

The EFF objected to every single budget tabled by Cabinet ministers in the past fortnight, each time spelling out ideological cause for doing so.

The party refused to support the justice budget because it said it failed to address unequal access to justice, and the mineral resources bill because it believed the state should get directly involved in mining minerals such as platinum to make beneficiation and job creation a reality.

“Those are the basic logical things that must be considered,” EFF Chief Whip Floyd Shivambu said.

On land reform, the EFF repeated its offer to the ANC to support a constitutional amendment to allow the state to seize farmland without compensation.

“We won’t support the budget because it is about buying back our stolen land, which is wasteful expenditure and promotes illegality” the party’s Andile Mngxitama said.

“So far only eight percent of the land has been bought back, for a lot of money. The only solution is we get our land back without paying money. We extend to you, the majority party, the offer to amend section 25 (of the Constitution), to make sure it goes, and to expropriate land with compensation, but that requires revolutionary courage.”

The DA also objected to the land reform budget, saying it was woefully inadequate to deal with fresh claims that would be lodged in the new five-year period that began last month.

The day’s debates often degenerated into insult-trading, with the EFF again protesting that there was no rule obliging it to refer to MPs from other parties as “honourable”.

Mngxitama suggested the ANC’s Mandla Mandela was failing to live up to the legacy of his grandfather, former president Nelson Mandela.

“We have members who so poorly represent the names of their great families.”

He was swiftly told to withdraw, but only did so reluctantly after telling House chairman Cedric Frolick: “You are abusing your chair.”

The bill will now be sent to the National Council of Provinces for concurrence.

– Sapa