The upcoming Medium-Term Budget Policy Statement should respond to the issues raised by South Africans during the Local Government Elections Campaign
08 November 2021
The Congress of South African Trade Unions (COSATU) and South African workers, in general have high expectations from the Medium-Term Budget Policy Statement (MTBPS) due to be tabled at Parliament on 11 November by Minister for Finance, Enoch Godongwana.
The annual economic results are in since the February Budget; and the economy is in its deepest recession in a hundred years, unemployment has pushed past 44%, key State-Owned Enterprises (SOEs) and municipalities are in varying stages of collapse, rampant corruption and load shedding are hobbling any chance of economic recovery. Clearly, a timid and austerity focused Budget Speech that was delivered in February this year has spectacularly failed.
With this kind of feedback, we expect that the policymakers and decisionmakers will admit their mistakes and change the policies that have worsened an already bad situation. They need to table an MTBPS that will ignite the economy, stabilise the state and provide relief to workers and the unemployed.
The July riots in KZN and Gauteng, and the recent local government have made it clear that South Africans are demanding change; it is up to this government to decide whether it is going to be a change in policies and behavior or a change of government.
This MTBPS should be about saving and creating jobs. Government must lead the way when it comes to employment creation. It must compulsorily require all the SOEs, Agencies nationally and provincially and local government to submit internship plans, each must have a quota per year, at minimum wage level and the same can be done by labour and private sector.
The Federation wants government to respect collective bargaining and stop unilateral wage freezes.
If government is serious about stabilising the fiscus, then politicians and their offspring must stop stealing.
The extravagant packages given to underperforming Ministers, Premiers, Mayors and SOEs Executives must be cut.
Budget cuts must be abandoned they only serve to choke the economy when it needs to be stimulated.
We hope to see the following presented in the MTBPS on Thursday:
- A mass stimulus package that will lift the economy out of the recession.
- Tripling of the Presidential Employment Stimulus Programme to R33 billion so that it can create 2 million job opportunities.
- Measures to modernise the Unemployment Insurance Fund so that it is more efficient.
- Extension of the Covid-19 Special Relief Dispensation Grant (R350) beyond March 2022 and increasing it to the food poverty line. We reject the proposal to abandon it or replace social grants with a single grant per household. This will plunge millions into despair and will be an administrative nightmare.
- Tabling an Amendment Bill to allow financially distressed public and private sector workers limited access to their pension funds.
- Relief for sectors of the economy that are badly affected by Covid-19 and the recession
- Additional resources for SARS to tackle tax evasion, enforce customs collections on imports, implement lifestyle audits for politicians and the wealthy.
- Close tax loopholes and increase taxes for those earning about R1.5 million as well as inheritance and estate taxes for the wealthy, and import duties on luxury goods.
- A single, transparent, online public procurement system for the entire state. This will help save costs, ramp up local procurement and ensure suppliers are paid within 30 days. It should also provide for the centralised procurement for certain large-scale items e.g., medicines, textbooks, vehicles. The Public Procurement Bill providing for this must be tabled at Nedlac by the end of 2021.
- Reversal of reckless austerity budget cuts to key economic departments and public services that threaten economic growth and undermine service delivery, especially for the CCMA which has seen a flood of workers seeking protection; and health and education infrastructure that is key to saving lives and ensuring that the youth are equipped with the skills to find jobs.
- Strengthen the ban on politicians doing business with the state to include their spouses and children, as well as the leaders of ruling political parties.
- Provide additional capacity for the National Prosecuting Authority, Hawks, Police and Commercial Crimes Courts to ensure that corruption cases are prioritised and successfully prosecuted.
- Act on the damning findings of the Auditor-General on the dismal situation in local government.
- Additional support for Eskom as the economy will not recover without reliable and affordable electricity.
- Turn around plans to stabilise and save collapsing State-Owned Enterprises that are key to unlocking the economy.
- Additional resources to support industrial financing, support for emerging farmers and export credits that are key to growing the economy.
- The mobilisation of every possible source of stimulus to spur economic growth.
- The release of the draft amendment of Regulation 28 to allow pension funds to invest in infrastructure is welcome and needs to be finalised
- The announcement of R130 billion in just transition financing for Eskom will be a boost to the economy. It must ensure that no coal mining or energy worker or communities are left behind
- A revamped Loan Guarantee Scheme to support emerging businesses is needed.
- The financial sector is not contributing to the government’s development agenda and this needs to change.
- Ramped up local procurement by the state, SOEs, local government and the private sector, the recent instruction for public infrastructure projects to source locally produced cement is welcome. This must be expanded to include clothing, machinery, steel and other easily available locally produced goods.
If these measures are adopted and implemented, we believe that the economy can grow, and jobs can be saved and created.
Issued by COSATU
Sizwe Pamla (Cosatu National Spokesperson)
Tel: 011 339 4911
Cell: 060 975 6794