But there are signs of uncertainty: since the beginning of the year for example, R24 billion in foreign holdings of rand-denominated bonds and equities has been sold. Inflation and our own lack of savings increase our vulnerability to financial turbulence. Our economy’s longer term outlook, however, remains favourable. Key policy anchors are in place to provide a solid mooring while enabling the economy to adapt to the cross-currents. The prudent fiscal stance, international reserves of US$33.6 billion, the inflation targeting regime and a floating exchange rate cushion us against shocks and reduce pressure on interest rates. We took these decisions early and we implemented them when times were good. We took them in the face of some severe criticism, even in this House. It is precisely because of the macroeconomic policies put in place since 1996 and the fiscal stance in operation that we can be confident that we will weather this storm. We have seen investment as a share of GDP rise from about 15 per cent to 21 per cent. Our sound footing will enable us to grow at a faster pace, and generate the resources to broaden participation and improve the lives of all South Africans progressively and sustainably.
Madam Speaker, the South African economy has expanded continuously since September 1999. Its pace of growth slowed slightly in 2001 and 2002, and since 2003 we have grown by an average of 5 per cent a year. This is the longest continuous
2008 Budget speech 3 period of growth on record. GDP per person has increased by over 20 per cent since 2000. During the past five years, employment has increased at a faster pace than at any point in the past twenty years, adding over 1.5 million jobs. As we present a picture of where we are now, we must also tell South Africans and the world that our ship is stronger and we are better prepared than during previous episodes of global turmoil. It is time for neither gloom nor panic. But the course ahead will be somewhat tougher. We are all in this together – business and community organisations, labour and government; the employed, the self-employed and the unemployed; the urban and rural; men and women. We may not all be affected in the same way, but we face the same headwinds and uncertainties. None of us has the privilege of perfect foresight; none of us is isolated from the tides and turbulence of the global markets. During periods of uncertainty, it is important that we keep focused on the things required to raise long term growth. The circumstances call to each one of us to do more, to act with greater determination and to act together. This Budget and many of government’s programmes and plans contribute to raising our growth potential in the future. Our investments in physical infrastructure, education and skills, research and development, fighting crime and contributing to regional peace are aimed at improving our growth prospects and broadening opportunity, so that when the storm abates, we will grow even faster, with more equitable outcomes.
Investment in fixed capital expanded rapidly in 2007 and will remain a key support to GDP growth over the medium term, driven by widespread public sector infrastructure development and its effect on private investment and capacity. Spending on energy intensive projects may be deferred over the medium term. Growth in fixed capital formation is expected nonetheless to average near 10 per cent over the next three years.
2008 Budget speech 4 During the course of 2007, food prices increased by over 10 per cent. Mainly driven by global factors and poor weather at home in 2006, the price of a 12.5 kg bag of mealie meal, the staple diet for most South Africans, went from about R37 to R49. This is also a global problem. The prices of basic foodstuffs – maize, wheat, soyabeans and rice – have increased as a result of changing climatic conditions and rising demand. Supply constraints for goods such as cement and refined petrol and diesel added to inflationary pressures, pushing up inflation to 8.6 per cent in December last year and an average of 6.5 per cent in 2007. As is always the case when inflation rises, the poor have been hardest hit.
Madam Speaker, we recognise the hardships that all South Africans are experiencing as a result of higher food and petrol prices. We also commend the work of the Competition Commission and the Competition Tribunal for their diligence in investigating companies that collude to keep prices higher than they should be. This government is vigilant and will act in instances where companies collude to profit from the impoverishment of ordinary people. While we may debate the best method of fighting inflation, there can be no doubt in the minds of caring South Africans that rising prices must be countered and that this must remain the key objective of monetary policy. The steps taken by the Reserve Bank to bring down inflation are working. Inflation is projected to fall within the target range by the end of this year and to average 4.9 per cent in 2009. A policy stance that accommodates higher inflation cannot be consistent with a government that is intent on reducing poverty. One of the points of vulnerability in our economy is that we import far more than we export – this gap, called the current account deficit, has widened to an estimated R143 billion a year. Part of this is because we are investing heavily in infrastructure expansion, we are importing machinery and capital goods, in addition to the imports of fuel and other goods. The value of our exports, although boosted by high commodity prices, is insufficient to pay for our imports. The South African economy evidently has a
2008 Budget speech 5 savings ratio that is too low to support our levels of growth. This gap, of almost R3 billion a week now, has to be financed by savings from abroad. The current account deficit makes the economy more vulnerable, especially during times of stress in global financial markets. Our ability to continue boosting investment to drive long term growth therefore depends on increasing savings and expanding exports. Further progress is required on the microeconomic policy front if we are to address this macroeconomic imbalance. Barriers to faster export growth include skills shortages, transport capacity constraints, high telecommunications costs and tariffs that raise the price of imported intermediate and capital goods.
These are challenges we need to address jointly with all stakeholders – business, labour, government and regulators: for the process of discovery of microeconomic solutions is at least as important as the decision itself. Democratic values and public policy Madam Speaker, our integration into the world economy is a circumstance of modern times and we would not wish to retreat into a disengaged zone of false hopes and selfdefeating loneliness. But we have no sympathy with the view that globalisation is there on a ‘take it or leave it’ basis, and all we can do is to have more or less of it on its own terms. No! We seek to engage with the world economy on terms that are fair and that will benefit all of our people. In his recent book on social democratic policy challenges, Harvard academic Roberto Unger, currently a minister in the Brazilian cabinet, speaks of the need to energise democracy by confronting the interplay of global and local forces, by building the capacity to negotiate from a position of strength, by mobilising the resources of local knowledge and national capabilities. Unger points out for example that higher national savings is about expanding the scope to benefit from globalisation, and fiscal and monetary policies must be focused both on adapting to new circumstances and strengthening local institutions.
It was in this spirit, Madam Speaker, that we embarked on our Reconstruction and Development Programme in 1994, and we constructed a 2008 Budget speech 6 macroeconomic framework in 1996 that was of our own making and not dictated by external multilateral institutions. In revisiting our strategic priorities for the decade ahead, we therefore seek to engage proactively with the global environment, its threats and opportunities, while remaining firmly rooted in the principles on which our democracy is founded.
The mandate that we draw from the Preamble to our Constitution compels us to Heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights; Lay the foundations for a democratic and open society in which government is based on the will of the people and every citizen is protected by law; Improve on the quality of life of all citizens and free the potential of each person; and Build a united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations.
The Tips for Trevor we receive from so many citizens and taxpayers is a sign of democracy at work and tangible evidence of the creativity and diversity of our people. Advice on tax matters understandably features prominently. I was particularly struck by this tip from Mrs Lebo Monyatsi, who writes “ I am a faithful tither in my church (I am paying 10% of my gross salary to the church) – which is in compliance to God’s instructions as outlined in the book of Malachi 3, 8-11. In verse 11 God advises us that when we pay our tithes, He shall rebuke the devourer. And surely the taxman is a devourer. I am therefore of the opinion that the tithe constitutes a donation for a good cause (expanding the kingdom of God, winning lost souls, converting criminals from their bad lifestyles) and therefore tithers should qualify for a tax rebate.” Mrs Monyatsi, I asked my advisors to review the revenue laws to enable me to respond appropriately, but this was unhelpful. I have therefore taken advice from another quarter. I found in St Paul’s letter to the Romans 13 confirmation that “rulers are not a 2008 Budget speech 19 terror to good works,” and a corresponding injunction to “Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear; honour to whom honour.”- I thought this was funny I hope, Mrs Monyatsi, that you will agree that Romans has the advantage, and on that authority allow me to indicate the tax proposals for the 2008 Budget. The estimate of main budget revenue before tax proposals for 2008/09 is R636 billion, taking into account projected economic growth of 4 per cent this year, inflation of 7 per cent, the buoyant trend in wages and salaries and continued growth in imports. The tax proposals for this year provide net relief of R10.5 billion, bringing the projected main budget revenue to R625 billion, which is 12.1 per cent more that the 2007/08 revised estimate. Personal income tax Adjustments to the personal income tax schedules will provide direct relief of R7.2 billion, fully compensating for the effects of inflation. About one-third of the benefit goes to those whose taxable income is below R150 000 a year, and 28 per cent benefits those in the R150 000 to R250 000 income bracket. No income tax will be payable by those who earn less than R46 000 a year, and the tax threshold for people over the age of 65 rises to R74 000 a year. The monthly monetary caps for tax-free contributions to medical schemes will rise from R530 to R570 for the first two family members, and from R320 to R345 for each additional beneficiary. Increases in the tax-free thresholds for interest and dividend income are proposed, from R18 000 to R19 000 for individuals under the age of 65 and from R26 000 to R27 000 for those over 65. The annual exclusion threshold for capital gains or losses will rise from R15 000 to R16 000.
2008 Budget speech 20 As part of the broader review that is underway of social security and retirement savings arrangements, a simplified approach to taxing lump-sum payments on retirement was tabled last year. Similar proposals will be made for the taxation of other withdrawals from retirement funds, together with revisions to the various monetary thresholds and percentage contribution limitations. Measures to boost growth and job creation Madam Speaker, I have drawn attention to the widening gap between demand and supply that has accompanied our expansion since 2002 – the gap between what we spend and what we produce – and to the need to focus economic policy on supply-side measures that will boost output and job creation. The higher growth of the past few years, the broader tax base and improved corporate compliance create the scope for a further reduction in the corporate tax rate, from 29 per cent to 28 per cent. This will contribute to lowering the cost of capital for new investment. Further details are also set out in today’s budget papers of the reform of the secondary tax on companies announced last year. In effect, this converts the STC to a tax on shareholders, consistent with international practice. The rate will remain 10 per cent, the tax will not apply to tax-exempt entities such as retirement funds and public benefit organisations and all STC credits will expire when this change is implemented in 2009. Other tax measures focused on the supply side of the economy include an extension of learnership allowances for the full duration of apprenticeships. Employers and public benefit organisations (PBOs) are also encouraged to contribute to financing education opportunities. The tax-free fringe benefit threshold for bursaries granted to an employee’s dependants increases from R3 000 to R10 000 a year, for employees earning up to R100 000 a year.
Financial support for Eskom 2008 Budget speech 24 At this point, Madam Speaker, let me now clarify the role of the fiscus in relation to Eskom’s financing requirements. Eskom was initially structured as a non-profit utility to be financed entirely by debt. For the first seven years after it was formed in 1923, it was capitalised by government advances totalling £8 million, subsequently converted into treasury loans with terms of up to 40 years. The framework has changed since 2001 – Eskom is now a corporation owned by the state, and its tariffs are subject to oversight by an independent regulator. But the underlying principle throughout Eskom’s history has been that electricity users should bear the costs of its supply, with capital financed through retained earnings and debt on market-related terms. Our public expenditure on electrification has been explicitly targeted at subsidising the extension of supply to low-income consumers, and not at providing finance for the utility itself.
Now that Eskom once again has a major investment programme to finance, its capital should again mainly be raised through debt, and paid for by users over the course of time through appropriately structured tariffs. However, Eskom’s tariffs were steadily reduced in real terms during the 1980s and 1990s, so that electricity prices in South Africa are now far lower than in any other comparable country, and well below full economic cost. The tariff structure is now too low to support the required borrowing. Over the next few years, while new power stations are being built and tariffs are steadily increased and revised to encourage efficient electricity use, Eskom’s balance sheet will be under some stress. It is therefore proposed that up to R60 billion should be provided to support the financing of Eskom’s investment programme, on terms structured to assist in meeting cashflow requirements. Madam Speaker, the House should record and the nation needs to know that this is not a grant. The return on an investment in power generation is very long term, and the repayment of debt must be similarly deferred. But we would not be supporting these investments if we were not confident that they are economically and financially viable.
2008 Budget speech 25 The amount of R60 billion will be required over the next five years, and we anticipate that about R20 billion will be drawn over the MTEF period ahead. This is provided for in the contingency reserve.
We are also setting aside R2 billion over the next three years to support programmes aimed at encouraging more efficient use of electricity, generation from renewable sources, installation of electricity-saving devices and co-generation projects. Intensive work over the next few months is needed to give content to these proposals, so that allocations for this year can be included in an Adjustments Appropriation. Exchange control reform Madam Speaker, in keeping with our focus on structural improvements required for long-run growth, there will be further steps in exchange control reform this year. The importance of a sound framework for financial stability has been underscored by the present turbulence in financial markets, and the direction of our reform is focused on replacing unnecessary administrative controls with improved surveillance and prudential limits on foreign exposure risks, as commonly applied internationally.
2008 Budget speech 26 Madam Speaker, the goals and challenges we have discussed, and the constraints of our present circumstances, confront all of us who share a stake in the South African economy, as government, as businesses, as workers, as local communities, as families, as citizens and taxpayers. We are in this together, as President Mbeki put it: “all hands on deck”, through the financial storm if it visits our shores, through the construction of better schools and skills programmes, through building clinics and social security reforms, through our infrastructure investments and adjusting to an environmentally responsible future, through our fight against crime, through our war on poverty.
Madam Speaker, the South African economy has expanded continuously since September 1999. Its pace of growth slowed slightly in 2001 and 2002, and since 2003 we have grown by an average of 5 per cent a year. This is the longest continuous
2008 Budget speech 3 period of growth on record. GDP per person has increased by over 20 per cent since 2000. During the past five years, employment has increased at a faster pace than at any point in the past twenty years, adding over 1.5 million jobs. As we present a picture of where we are now, we must also tell South Africans and the world that our ship is stronger and we are better prepared than during previous episodes of global turmoil. It is time for neither gloom nor panic. But the course ahead will be somewhat tougher. We are all in this together – business and community organisations, labour and government; the employed, the self-employed and the unemployed; the urban and rural; men and women. We may not all be affected in the same way, but we face the same headwinds and uncertainties. None of us has the privilege of perfect foresight; none of us is isolated from the tides and turbulence of the global markets. During periods of uncertainty, it is important that we keep focused on the things required to raise long term growth. The circumstances call to each one of us to do more, to act with greater determination and to act together. This Budget and many of government’s programmes and plans contribute to raising our growth potential in the future. Our investments in physical infrastructure, education and skills, research and development, fighting crime and contributing to regional peace are aimed at improving our growth prospects and broadening opportunity, so that when the storm abates, we will grow even faster, with more equitable outcomes.
Investment in fixed capital expanded rapidly in 2007 and will remain a key support to GDP growth over the medium term, driven by widespread public sector infrastructure development and its effect on private investment and capacity. Spending on energy intensive projects may be deferred over the medium term. Growth in fixed capital formation is expected nonetheless to average near 10 per cent over the next three years.
2008 Budget speech 4 During the course of 2007, food prices increased by over 10 per cent. Mainly driven by global factors and poor weather at home in 2006, the price of a 12.5 kg bag of mealie meal, the staple diet for most South Africans, went from about R37 to R49. This is also a global problem. The prices of basic foodstuffs – maize, wheat, soyabeans and rice – have increased as a result of changing climatic conditions and rising demand. Supply constraints for goods such as cement and refined petrol and diesel added to inflationary pressures, pushing up inflation to 8.6 per cent in December last year and an average of 6.5 per cent in 2007. As is always the case when inflation rises, the poor have been hardest hit.
Madam Speaker, we recognise the hardships that all South Africans are experiencing as a result of higher food and petrol prices. We also commend the work of the Competition Commission and the Competition Tribunal for their diligence in investigating companies that collude to keep prices higher than they should be. This government is vigilant and will act in instances where companies collude to profit from the impoverishment of ordinary people. While we may debate the best method of fighting inflation, there can be no doubt in the minds of caring South Africans that rising prices must be countered and that this must remain the key objective of monetary policy. The steps taken by the Reserve Bank to bring down inflation are working. Inflation is projected to fall within the target range by the end of this year and to average 4.9 per cent in 2009. A policy stance that accommodates higher inflation cannot be consistent with a government that is intent on reducing poverty. One of the points of vulnerability in our economy is that we import far more than we export – this gap, called the current account deficit, has widened to an estimated R143 billion a year. Part of this is because we are investing heavily in infrastructure expansion, we are importing machinery and capital goods, in addition to the imports of fuel and other goods. The value of our exports, although boosted by high commodity prices, is insufficient to pay for our imports. The South African economy evidently has a
2008 Budget speech 5 savings ratio that is too low to support our levels of growth. This gap, of almost R3 billion a week now, has to be financed by savings from abroad. The current account deficit makes the economy more vulnerable, especially during times of stress in global financial markets. Our ability to continue boosting investment to drive long term growth therefore depends on increasing savings and expanding exports. Further progress is required on the microeconomic policy front if we are to address this macroeconomic imbalance. Barriers to faster export growth include skills shortages, transport capacity constraints, high telecommunications costs and tariffs that raise the price of imported intermediate and capital goods.
These are challenges we need to address jointly with all stakeholders – business, labour, government and regulators: for the process of discovery of microeconomic solutions is at least as important as the decision itself. Democratic values and public policy Madam Speaker, our integration into the world economy is a circumstance of modern times and we would not wish to retreat into a disengaged zone of false hopes and selfdefeating loneliness. But we have no sympathy with the view that globalisation is there on a ‘take it or leave it’ basis, and all we can do is to have more or less of it on its own terms. No! We seek to engage with the world economy on terms that are fair and that will benefit all of our people. In his recent book on social democratic policy challenges, Harvard academic Roberto Unger, currently a minister in the Brazilian cabinet, speaks of the need to energise democracy by confronting the interplay of global and local forces, by building the capacity to negotiate from a position of strength, by mobilising the resources of local knowledge and national capabilities. Unger points out for example that higher national savings is about expanding the scope to benefit from globalisation, and fiscal and monetary policies must be focused both on adapting to new circumstances and strengthening local institutions.
It was in this spirit, Madam Speaker, that we embarked on our Reconstruction and Development Programme in 1994, and we constructed a 2008 Budget speech 6 macroeconomic framework in 1996 that was of our own making and not dictated by external multilateral institutions. In revisiting our strategic priorities for the decade ahead, we therefore seek to engage proactively with the global environment, its threats and opportunities, while remaining firmly rooted in the principles on which our democracy is founded.
The mandate that we draw from the Preamble to our Constitution compels us to Heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights; Lay the foundations for a democratic and open society in which government is based on the will of the people and every citizen is protected by law; Improve on the quality of life of all citizens and free the potential of each person; and Build a united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations.
The Tips for Trevor we receive from so many citizens and taxpayers is a sign of democracy at work and tangible evidence of the creativity and diversity of our people. Advice on tax matters understandably features prominently. I was particularly struck by this tip from Mrs Lebo Monyatsi, who writes “ I am a faithful tither in my church (I am paying 10% of my gross salary to the church) – which is in compliance to God’s instructions as outlined in the book of Malachi 3, 8-11. In verse 11 God advises us that when we pay our tithes, He shall rebuke the devourer. And surely the taxman is a devourer. I am therefore of the opinion that the tithe constitutes a donation for a good cause (expanding the kingdom of God, winning lost souls, converting criminals from their bad lifestyles) and therefore tithers should qualify for a tax rebate.” Mrs Monyatsi, I asked my advisors to review the revenue laws to enable me to respond appropriately, but this was unhelpful. I have therefore taken advice from another quarter. I found in St Paul’s letter to the Romans 13 confirmation that “rulers are not a 2008 Budget speech 19 terror to good works,” and a corresponding injunction to “Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear; honour to whom honour.”- I thought this was funny I hope, Mrs Monyatsi, that you will agree that Romans has the advantage, and on that authority allow me to indicate the tax proposals for the 2008 Budget. The estimate of main budget revenue before tax proposals for 2008/09 is R636 billion, taking into account projected economic growth of 4 per cent this year, inflation of 7 per cent, the buoyant trend in wages and salaries and continued growth in imports. The tax proposals for this year provide net relief of R10.5 billion, bringing the projected main budget revenue to R625 billion, which is 12.1 per cent more that the 2007/08 revised estimate. Personal income tax Adjustments to the personal income tax schedules will provide direct relief of R7.2 billion, fully compensating for the effects of inflation. About one-third of the benefit goes to those whose taxable income is below R150 000 a year, and 28 per cent benefits those in the R150 000 to R250 000 income bracket. No income tax will be payable by those who earn less than R46 000 a year, and the tax threshold for people over the age of 65 rises to R74 000 a year. The monthly monetary caps for tax-free contributions to medical schemes will rise from R530 to R570 for the first two family members, and from R320 to R345 for each additional beneficiary. Increases in the tax-free thresholds for interest and dividend income are proposed, from R18 000 to R19 000 for individuals under the age of 65 and from R26 000 to R27 000 for those over 65. The annual exclusion threshold for capital gains or losses will rise from R15 000 to R16 000.
2008 Budget speech 20 As part of the broader review that is underway of social security and retirement savings arrangements, a simplified approach to taxing lump-sum payments on retirement was tabled last year. Similar proposals will be made for the taxation of other withdrawals from retirement funds, together with revisions to the various monetary thresholds and percentage contribution limitations. Measures to boost growth and job creation Madam Speaker, I have drawn attention to the widening gap between demand and supply that has accompanied our expansion since 2002 – the gap between what we spend and what we produce – and to the need to focus economic policy on supply-side measures that will boost output and job creation. The higher growth of the past few years, the broader tax base and improved corporate compliance create the scope for a further reduction in the corporate tax rate, from 29 per cent to 28 per cent. This will contribute to lowering the cost of capital for new investment. Further details are also set out in today’s budget papers of the reform of the secondary tax on companies announced last year. In effect, this converts the STC to a tax on shareholders, consistent with international practice. The rate will remain 10 per cent, the tax will not apply to tax-exempt entities such as retirement funds and public benefit organisations and all STC credits will expire when this change is implemented in 2009. Other tax measures focused on the supply side of the economy include an extension of learnership allowances for the full duration of apprenticeships. Employers and public benefit organisations (PBOs) are also encouraged to contribute to financing education opportunities. The tax-free fringe benefit threshold for bursaries granted to an employee’s dependants increases from R3 000 to R10 000 a year, for employees earning up to R100 000 a year.
Financial support for Eskom 2008 Budget speech 24 At this point, Madam Speaker, let me now clarify the role of the fiscus in relation to Eskom’s financing requirements. Eskom was initially structured as a non-profit utility to be financed entirely by debt. For the first seven years after it was formed in 1923, it was capitalised by government advances totalling £8 million, subsequently converted into treasury loans with terms of up to 40 years. The framework has changed since 2001 – Eskom is now a corporation owned by the state, and its tariffs are subject to oversight by an independent regulator. But the underlying principle throughout Eskom’s history has been that electricity users should bear the costs of its supply, with capital financed through retained earnings and debt on market-related terms. Our public expenditure on electrification has been explicitly targeted at subsidising the extension of supply to low-income consumers, and not at providing finance for the utility itself.
Now that Eskom once again has a major investment programme to finance, its capital should again mainly be raised through debt, and paid for by users over the course of time through appropriately structured tariffs. However, Eskom’s tariffs were steadily reduced in real terms during the 1980s and 1990s, so that electricity prices in South Africa are now far lower than in any other comparable country, and well below full economic cost. The tariff structure is now too low to support the required borrowing. Over the next few years, while new power stations are being built and tariffs are steadily increased and revised to encourage efficient electricity use, Eskom’s balance sheet will be under some stress. It is therefore proposed that up to R60 billion should be provided to support the financing of Eskom’s investment programme, on terms structured to assist in meeting cashflow requirements. Madam Speaker, the House should record and the nation needs to know that this is not a grant. The return on an investment in power generation is very long term, and the repayment of debt must be similarly deferred. But we would not be supporting these investments if we were not confident that they are economically and financially viable.
2008 Budget speech 25 The amount of R60 billion will be required over the next five years, and we anticipate that about R20 billion will be drawn over the MTEF period ahead. This is provided for in the contingency reserve.
We are also setting aside R2 billion over the next three years to support programmes aimed at encouraging more efficient use of electricity, generation from renewable sources, installation of electricity-saving devices and co-generation projects. Intensive work over the next few months is needed to give content to these proposals, so that allocations for this year can be included in an Adjustments Appropriation. Exchange control reform Madam Speaker, in keeping with our focus on structural improvements required for long-run growth, there will be further steps in exchange control reform this year. The importance of a sound framework for financial stability has been underscored by the present turbulence in financial markets, and the direction of our reform is focused on replacing unnecessary administrative controls with improved surveillance and prudential limits on foreign exposure risks, as commonly applied internationally.
2008 Budget speech 26 Madam Speaker, the goals and challenges we have discussed, and the constraints of our present circumstances, confront all of us who share a stake in the South African economy, as government, as businesses, as workers, as local communities, as families, as citizens and taxpayers. We are in this together, as President Mbeki put it: “all hands on deck”, through the financial storm if it visits our shores, through the construction of better schools and skills programmes, through building clinics and social security reforms, through our infrastructure investments and adjusting to an environmentally responsible future, through our fight against crime, through our war on poverty.
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