COSATU response to the Supplementary budget speech

The Congress of South African Trade Unions is extremely disheartened and disillusioned by the uninspiring and timid Supplementary Budget presented by Minister Mboweni and his technocrats. This is not a budget fit for a country that is in deep recession with an expanded unemployment rate of 40%, with more millions of workers facing retrenchments.

We were hoping for an imaginative budget aligned to the needs of the country and our developmental objectives, but we received a budget that will only act to entrench the current economic stagnation.

The Minister rehashed the economic relief measures announced by the President a month ago. Despite the President repeatedly calling for a bold R1 trillion stimulus plan to grow the economy and smash unemployment; there was no such plan tabled today. 

Many economic relief measures presented today, are already happening, and were meant to keep the workers afloat and survive the lockdown.  They are not a stimulus plan that will grow the economy.

The R30 billion consumer relief banks have provided was for the 3 months lockdown.  The banks can do much more, but no one is willing to ensure that they act.

We acknowledge what the SA Reserve Bank has already done but we need a new bold mandate that protects the economy and jobs.

We note the R100 billion for job creation, but we need more details. The R200 billion provided through banks is critical but the fact that only 3.5% of it has been dispersed by the indifferent and callous banks is a scandal.  Government must immediately intervene to unlock these badly needed funds.  However, all relief funding given to employers must be conditional upon them retaining jobs and incentivised for job creation.

The Minister claims that the insurance industry has provided relief, but this is news to millions of workers and businesses.  In fact, the insurance industry is being taken to court for failing to help desperate businesses on the verge of collapse.

COSATU wrote to the Minister requesting workers who have lost income during the lockdown be allowed to withdraw an equivalent amount from the pension funds to survive.  We are disappointed that government has not moved on this proposal.

Government did well to assist social grant recipients with additional funds.  However, SASSA is failing to roll out the R350 grant to millions of unemployed South Africans more than a month later.

The government cannot continue to take credit for the UIF Ters Fund, that money belongs to the workers and government has no business claiming it as part of its efforts to help workers.

In fact, more UIF funds will be needed to help workers who will face a flood of retrenchments or who may still not resume work.  The least government could be doing is to audit the disbursement of these funds and send the SIU and the Asset Forfeiture Unit to investigate allegations of corruption.

The budget offered no meaningful support to key economic departments and sectors battered by Covid-19. We do welcome though the shifting of R21 billion to health, R12. 6 billion to other key departments in the fight against Covid-19 as well as R9 billion to water and sanitation and transport.  Whatever relief given to the taxi industry must be dependent on them registering their workers for the UIF and Compensation of Injury on Duty Fund.

COSATU is extremely worried by the work of the Solidarity Fund.  Whilst its intentions are noble, workers are angry that it is importing more than 90% of the masks, PPEs, medical kits instead of sourcing them locally. 

This is a reminder that government does not have a plan to support manufacturing where there is real value creation. There is not interested in addressing the neo-colonial structure of the economy. A mass buy local campaign is critical to saving the economy.

The federation supports the raising of additional finances from foreign lenders on condition it does not undermine our national sovereignty. We have to assert that the South African debt-GDP ratio is not the highest amongst the peer countries.

Many of these countries rather than choking their economies with austerity measures, they have implemented policies that support economic growth as the most sustainable way of reducing the budget deficit and drawing down the public debt; hence their better economic growth performance compared to South Africa.  South Africa can improve its debt-GDP ratio and budget-deficit through policies that support economic growth.

The silence of government on how to reduce wasteful expenditure and corruption is outrageous and shameful. We lose 10% of our budget to corruption and wasteful expenditure according to the Auditor-General.

Covid-19 has shown that the attacks on public servants were misguided, so we need government to honour the 2018 public sector wage agreement.  Calling public servants’ essential workers while treating them like glorified slaves is disingenuous.

The fat must be cut from the wages of politicians and senior managers and not among struggling workers.

COSATU welcomes the mass infrastructure programme.  This is key to growing the economy.  In particular investments in ports, rail, energy, water, health, and education.  This must include impact investments from the banks and investment funds.  Government alone cannot drive this.

Lastly COSATU is amazed that the Minister did not allude to a road map to save our key economic SOEs. there is nothing in a form of a concrete plan tabled on how it seeks to rationalise and align the SOEs and the generally huge pay and benefits structures within the SOEs.

Even the bailouts given to these SOEs that are now taking place on a regular basis tend to incorporate these huge executive remuneration structures and exorbitant board fees. Once again, the question of performance or productivity is never raised in this regard, despite the fact that these SOEs have been failing at a huge cost to the fiscus. The fact that there seems to be no analysis and proposals on the part of the Treasury to address this is deeply alarming

This supplementary budget did not fully match the needs of workers and the economy.  We are now in danger of entering an economic depression and the scariest thing is that government does not have a plan. This budget only served to remind us that as workers, we are on our own and the policymakers have no idea what they are doing.

Issued by COSATU

Sizwe Pamla (Cosatu National Spokesperson)

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