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Budget Speech 2014

Global Crisis and Response

 

 

Your administration started out, Mister President, with an economy that, in rugby terms, might be called a “hospital pass”.

 

We experienced a once-in-70-year economic earthquake, the aftershocks of which are not yet over. Today we can report to the South African people, on what we have done in the past five years to respond to this crisis.

 

We began on a firm footing:

 

• Growth of 5 per cent a year between 2003 and 2008,

 

• A steady expansion in employment, and

 

• A budget surplus for the first time in 50 years.

 

We were set back by the crisis:

 

• A collapse in commodity prices, sharp declines in international trade and a crisis in financial markets,

 

• The South African economy contracted by 1.5 per cent in 2009, nearly a million jobs were lost, and

 

• Government revenue in 2009/10 fell short of the budget target by R61 billion.

 

We stabilised the economy, and ensured a recovery:

 

• Our response was to implement an aggressive countercyclical fiscal adjustment.

 

• When global trade went into reverse, we took steps to improve competitiveness of businesses within the framework of the Industrial Policy Action Plan. We accelerated infrastructure investment and we expanded financial assistance to businesses in distress.

 

• We expanded the Community Work Programme.

 

• Unemployment insurance and our expanding social grants programme provided increased income support to the most vulnerable.

 

Our response to the global crisis was founded on a collectively agreed framework for working together – government, business, labour and communities – facilitated by the National Economic Development and Labour Council.

 

And so although the great waves of financial turbulence and the slow growth in developed economies have constrained our economic recovery, we have recorded positive growth since 2010. We have more than recovered the jobs that were lost. And we have initiated a coordinated infrastructure investment programme. It is organised into seventeen Strategic Integrated Projects to catalyse opportunities in mining, industry, agriculture and services across the country. We have saved this country from the worst impact of the Great Recession!