SAMWU reaction to the Budget Speech: workers have once again subsidised the state

The South African Municipal Workers’ Union (SAMWU) notes the budget speech as presented by Finance Minister Enoch Godongwana on the 22 February 2023. Just as the previous years, the budget has yet again failed to address the many financial challenges faced by the country’s municipalities, many of which have literally collapsed and unable to deliver services to residents as per their constitutional mandate. The financial collapse of the country’s municipalities can largely be attributed to the failure by the National Treasury to prioritise municipalities based on their financial needs. 

Many of the country’s municipalities have for a long time been unable to pay workers their salaries on time and in full, while many municipalities have made it a norm to deduct from workers’ salaries payments for statutory deductions and others such as pension funds and medical aids and never paying them to the intended recipients. Our view has always been that municipalities are in the coalface of service delivery, yet they are not prioritised when developing budgets. 

As an example, this year’s budget has only allocated an additional R8.1 billion and R6.2 billion in equitable share and conditional grants respectively. In total, the country’s 257 municipalities will collectively receive R522 billion which translates to just under 10% of the total government expenditure. These allocations to municipalities will not in anyway address the severity of the challenges faced by municipalities, in particular rural municipalities who are expected to raise the necessary revenue to continue delivering services to South Africans. 

We specifically welcome announced relief to municipalities who collectively owe Eskom over R56 billion. We have seen over the last few months, municipalities having their accounts attached for non-payment by Eskom. As SAMWU, we have always argued that the attachment of municipal accounts by Eskom prejudices both residents who cannot receive service delivery and workers whose salaries are withheld. 

In as much as we welcome this relief, we need to stress that municipal financial problems are not only with Eskom, many government departments owe municipalities billions of Rands for electricity and services which they have consumed but failed to pay. This was seen when several municipalities across the country undertook debt collection campaigns which revealed that not only are residents and businesses not paying, but government department have also too been complacent in dilapidating municipal finances. 

We expected the Minister to announce ways in which government departments will be compelled to pay debt which they owe to municipalities. Importantly, we expected the Minster to allocate more resources to municipalities to allow them to efficiently deliver services to South African. It has always been SAMWU’s view that the current municipal funding model as is, is the single largest enabler of the collapse of the country’s municipalities. 

We are particularly disappointed by the fact that government has yet again delayed allowing workers to cash out their pensions. Delaying the proposed two pot system prejudices workers who, as a result of government’s austerity measures are already failing to keep up with the rise off the cost of living. Municipal workers have been eagerly awaiting the announcement on when they would be able to cash out their pensions to cover the shortfalls that have been as a result of salary increases that are not in line with inflation. This delay can also be construed as a summation by government that workers are irresponsible with their money. Workers’ pensions are deferred earnings of workers and as such, workers should have immediate access to their money. 

We welcome the announcement by the Minister that R132 billion will be allocated towards the country’s Water Boards for infrastructure projects. South Africa remains a country that is water scares and as such there is a greater need to ensure that water boards embark on infrastructure projects that will ensure water security for the country and its residents. Failure to ensure this security will result in the country experiencing the same problems such as the ones with Eskom. We would however have liked to hear from the Minister how the National Treasury will assist the Department of Water and Sanitation on the reconfiguration of the country’s water boards and importantly what steps would be taken to ensure the sustainability and longevity of the current water boards. 

The Minister highlighted that this year, the country will have a fiscal surplus as a result of increased corporate and personal income tax. What the Minister fails to mention is the fact that this surplus will essentially be achieved as a result of the decision taken by the National Treasury to undermine and interfere in Collective Bargaining in the public sector, a decision which has seen public sector employees being denied salary increases that are in line with the real cost of living. Essentially, public servants have subsidised their employer being the state.

In solidarity with workers at the South African Post Office (SAPO) and our sister union, the Communications Workers’ Union, we are concerned that the Minister failed to address the painful issue of over 6000 workers which are due to be retrenched. The Minister should have assured workers that the over R2 billion allocated to SAPO will be used to ensure the future sustainability of the institution and more importantly, to secure the livelihoods of the affected 6000 workers. 

As workers and residents, we are concerned by the rolling power blackouts in the country which have affected every aspect of society. We therefore welcome the decision by National Treasury to take over Eskom debt. We however do not believe that Eskom challenges are financial in nature, Eskom needs capable leaders who will steer the country out of darkness. We therefore hope that the excess funds that will now be available to Eskom will be used to ensure that additional power is added to the grid and relief workers, residents and businesses of the hardship which they face daily. 

Issued by SAMWU Secretariat 

Dumisane Magagula

General Secretary

076 580 4029


Papikie Mohale 

National Media Officer 

073 710 0356