COSATU statement on the upcoming Medium Term Budget Policy Statement

COSATU keenly awaits Finance Minister, Tito Mboweni’s tabling of the Medium Term Budget Policy Statement at Parliament on Wednesday.  Our economy and our country in general is in a real crisis far bigger than our current economic recession. This calls for urgent attention and decisive leadership from government.  Whilst we appreciate that this is Minister Mboweni’s second week on the job, there will be no honeymoon for him.  We don’t have the luxury of time because workers are tired and battered from 36% unemployment and the ongoing retrenchments across most sectors of the economy.

Unemployment remains far higher than in any comparable country in the world, and as a consequence poverty is widespread, and we now have world-record levels of inequality. It is essential that we urgently adopt a completely new growth path to transform our economy into one based on labour-intensive industry and one that meets the basic needs of our people.

Our economy needs to be transformed to meet the needs of all of our people. Growth on its own is insufficient to solve our unemployment problem. We need to expand the capacity of the economy to grow sustainably and we need growth that is more labour absorbing.

We must reverse the dominant neo-liberal and anti-state thinking that seeks to reduce the role of the state to that of a regulator and which argues for the provision of services to be left to the market.

The federation expects Minister Mboweni to unveil how government will pull the economy from the doldrums and how we will grow the economy and ensure that the nine (9) million unemployed workers find jobs urgently.  South Africa is at risk of experiencing a collapse in the social order and we are not immune from the uprisings we saw not so long ago in countries like Egypt and Tunisia, where unemployment triggered the revolt by young people.

We expect the MTBPS to spell out government’s stimulus and infrastructure programme.  This needs to include how government will prevent the types of looting we saw in previous infrastructure investments.

The federation expects the MTBPS to flesh out how government will deliver on the commitments it signed at the recent Presidential Jobs Summit.  Central to the Jobs Summit signed by the President, was the commitment by government to fill critical public service vacancies, in particular nurses, doctors, teachers, police officers, prison wardens etc.

We note and dismiss Minister Mboweni’s weekend comments that he wants to fire 30,000 Eskom workers.  This is nothing but a blatant act of provocation and COSATU will not allow that to happen.  It is not workers who looted Eskom and we are not going to allow them to be forced to pay for the sins of others.

Minister Mboweni further complained about the public service wage bill and that 80% of government’s budget goes to it.  This is bizarre claim is simply devoid of truth.  The public service wage bill is about 40% of the state budget and has been stable for some years now.  In fact over the last two years the public service head count has been reduced by 3%.  Currently 148,000 or more than 10% of the public service posts are vacant.  This is what is contributing to the collapse of badly needed public services, not nurses wanting to earn a living wage.

The Minister needs to first propose that cabinet members reduce their perks and stop outsourcing most of government work to private consultants. The vulgar looting that we have seen over the last couple of years was not committed by the workers.

We need to hear from the Minister how government will stop the flood of billions of Rands that has been looted from the state. What is government doing to recover those stolen monies and send those criminals to prison, including those occupying high positions in government and business?

We need to hear how government will sort out its management crises and end the culture of wasteful expenditure that costs the fiscus hundreds of billions of Rands.

COSATU wants to hear solid and coherent proposals from government about how to arrest the alarming and unsustainable rise in public debt.  Blaming workers is not a policy.

We need to hear what the Minister will be doing to sort out the mess at SARS.  The capture of SARS has allowed criminals to avoid paying billions in taxes.  It has allowed the flood of illegal imports at our ports and border posts and this has decimated fragile local industries.

We need to hear detailed plans to turn around Eskom, PRASA, SAA, SABC and Denel and the other collapsing SOEs that threaten the jobs and pensions of thousands of workers, and pose a massive financial risk to the state and the economy.  We don’t need to hear about bail outs.  We need to be told when will the comprehensive forensic audits happen and what are government’s plans to put these SOEs on a sound financial footing and business model.

We expect to hear from the Minister his plans to address the varying allegations about mismanagement and corruption at the PIC.

We want to hear from the Minister that there will be no more tax increases upon the working and middle classes, who are battling to survive and struggling to cope with the barrage of recent tax hikes upon them.  We expect the Minister to have the courage to announce an overhaul of the tax regime that will shift the burden to the rich and ensure that they pay their fair share and are not allowed to take advantage of tax loopholes. The Company Income Tax that was reduced from 34% to 28% did not deliver the desired results as previously promised and its about time something is done to address this. We cannot afford to continue giving tax breaks and incentives to big corporations, when there are no results.

Lastly we want to hear the Minister agree to the VAT Panel’s recommendations to extend VAT exemptions to key food items e.g. locally produced poultry, a key nutritional and food item for the poor.  We expect him to announce that government will purchase locally produced sanitary pads and distribute them for free at government educational and health institutions and social grant points.

We want government to announce that it will distribute vouchers for locally produced school uniforms to no fee schools and learners qualifying for fee exemptions.  Government equally needs to introduce a progressive sliding scale overhaul of water and electricity tariffs that protects the poor, shifts the burden to the rich, rewards low consumption and penalises excessive consumption.

Issued by COSATU

Sizwe Pamla (Cosatu National Spokesperson)

Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794