Bruce Whitfield:
The Finance Minister, Trevor Manual, outlining government’s spending plans in the next three years in Parliament today. Expecting spending to rise by an average of seven percent a year over the next three years.

Cash has been earmarked, infrastructure spending, the 2010 World Cup, it is getting a big chunk of the money. Also, 10 000 more employees in the police service as well. It is a great pleasure to welcome Trevor Manual to the 'World at Six', minister good evening, thanks for joining us.

Trevor Manual:
Good evening Bruce.

Bruce Whitfield:
You were quite upbeat today about the fact that the economy is still strong, the official forecast is downgraded from five to 4.4 percent, but you make the point in your address that really, a lot still needs to be done to drive growth and it is sly to talk about these things, but what programmes has government got in place in order to get that growth back up to that five percent level once again?

Trevor Manual:
All of it is clearly work in progress. We still are quite strong in respect of metals, prices remain quite buoyant, there is no end in sight yet and so clearly that will continue to drive it. In addition, there are changes underway in respect of a series of industrial policy measures that will boost our exports.

Our big challenge is to ensure that we have more tradables available and that will then focus on the export sectors, but that is a programme being driven by the department of trade and industry. There have been discussions in cabinet about that and the DTI is involved in a series of discussions with a range of industry players.

Bruce Whitfield:
You talk in your speech today about the fact that consumer growth has been really strong. We know that the Reserve Bank governor is worried about consumer spending. But you talk about the delay in the supply side of the economy, catching up. From a government perspective, do you see more money being invested in industry, more money being invested in projects, which, over the long term will contribute to that growth?

Trevor Manual:
You always have a lag. I think that the point we were making today is that in terms of the upstream sectors, and we picked out three; cement, steel and refined petroleum products. There sometimes are short delays. Some of those, if you take the issue of the petroleum product, we have had shut downs on the refineries, it will take a while to bring another refinery on stream. You are dealing with global supply and demand issues, and we are going to live through these issues. But there is nothing to suggest that we cannot maintain reasonable growth.

So, we have revised down to 4.4, but we are pretty confident that the infrastructure spending coming through, you mentioned 2010, it is not just the stadiums, we will also, the infrastructure and then a series of other issues in the build environment that will continue to maintain buoyant spending in the economy, infrastructure and investment spending therefore, that will contribute to growth.

Bruce Whitfield:
What about the spectre of inflation though, we saw the consumer price inflation numbers excluding mortgages coming in at 5.1 percent today. We have three interest rate increases so far this year, we could very well have another three 50 basis point increases by April next year. Is there a concern within the Treasury that this could actually hamper growth even further?

Trevor Manual:
We are not too concerned, we restated today the inflation target at three to six percent. We believe that is entirely manageable, but it is exceedingly difficult because of the global imbalances and also I think that most of your listeners would be aware of the fact that we are importing more that we are exporting, the deficit on the current account is worrisome.

The governor has spoken about that from time to time, but we believe that the inflation would be on the high side of the band, but still within the band and that is why we were able to reconfirm.

Bruce Whitfield:
You are planning this year to spend R474-billion that is 14 percent more than last year, another 60 being budgeted for next year. Can we afford this increase in spending, we are seeing big tax collections and those are significantly ahead of budget, but I think it is one of the issues at the moment is we have got big spending plans, but where is all this money going to come from?

Trevor Manual:
The money is there. In the current year, with our expenditure level raised now to 474, it was 472 in February and we have been able to effect bringing in applications, some savings of last year of some rollovers and so we have actually built in an additional 6.5 billion and it only adds to the envelope.

But for next year, we are budgeting for a surplus of 0.5 percent of GDP and that is about R9-billion more than you have in taxes than our spending plans for next year. So it is there, I don’t think we are concerned about that.

Bruce Whitfield:
Crime of course another huge issue which impacts an ever growing number of South Africans. You are earmarking more cash for that, another 10 000 for the SAPS to take the numbers up to about ±190 000 by 2010, more people for the court system or for the justice system as well. One issue that does get under the skin of a lot of our listeners is they pay their taxes, they look around themselves at crumbling roads infrastructure, the lack of basic service delivery in many cases, failing hospitals in some cases and it is all well and good to make the money available, but a lot of people are frustrated about the way in which it is spent. Is there more money going to be spent on the management of the way in which this money is spent?

Trevor Manual:
We are building in that as well. In some of the sectors, there will also be salary increases for particular kind of professionals to ensure that we can improve both on the technical work but also on the quality of management we have across the public service. I think that whilst the negatives always stand out, there is actually a fair amount that is positive and we must celebrate that too.

Bruce Whitfield:
Will you use for example, the Treasury’s model, the Sars model as being very successful ways in which the civil service can operate and maybe implement those sorts of models in other government departments?

Trevor Manual:
Those are being applied, the department of public service and administration have in fact undertaken a detail that is, and pointed out to some departments where the weaknesses are. There are instances also where the skills cant be had for love or money and some of these would be in technical areas in municipal government for instance and we have been able to breach that through a programme called Siena Mange at the DBSA where we are supporting some of the local governments, some of the municipalities that are a bit more stressed ensuring that we can have the technical skills to plan and implement the project and get services to people.

Bruce Whitfield:
If I may digress just for a moment on a completely separate issue Minister, Vuyani Ngalwana, the pension funds adjudicator has been fairly outspoken recently about the fact that the feels quite toothless and that the very good work that he has been doing in the last 18 months or so is almost worthless because of the way in which the life companies have been able to take his challenges to court.

Are you working with Vuyani Ngalwana, are you trying to encourage him to stay in his post as pension funds adjudicator?

Trevor Manual:
Vuyani Ngalwana's contract runs out, and I think that it is quite important that we leave the ball in his court about his own future. But what is more important than the individual is the systems that are laid. And I think that we are dealing in the retirement fund industry with bad practices that have been tolerated for a very long time, for a whole host of reasons part of which are supervision, but more importantly, there is frequently limited trusteeship of pension funds by way of employees acting together.

Those things all have to work, it is part of the system, you cannot place over reliant on a single individual, but I think that the system is much richer, including the statement of intent and the series of other decisions we have been able to reach with the industries.

Bruce Whitfield:
Finance Minister Trevor Manual on the mini-Budget and also on Vuyani Ngalwana. Thanks very much for joining us this evening. The Finance Minister Trevor Manual delivering that mini-Budget. We will get full analysis on the mini-Budget as the programme progresses.