Workers have a vested stake in the Medium-Term Budget Policy Statement to be tabled at Parliament on 12 November by the Minister for Finance, Enoch Godongwana. 

COSATU urges government to table a bold MTBPS signaling a progressive shift away from the devastating austerity budget cuts that have badly weakened public and municipal services, to rebuilding State-Owned Enterprises key to enabling economic growth, to stimulating an economy stuck at 1% growth, to providing a path to employment for 12 million unemployed and relief for the poor.  Critically it must provide the South African Revenue Service (SARS) the resources needed to collect the taxes the state requires to fulfill its constitutional mandates.

All too often the naïve champions of neo-liberalism miss the point of the Budget, treating it as a number crunching exercise, forgetting that the Budget is the state’s most important tool to addressing society’s deeply entrenched socio-economic challenges, spurring economic growth and creating a better life for all. 

The Budget must respond to society’s dire faultlines of weak economic growth, a rising 42.9% unemployment rate, and entrenched levels of poverty, inequality, crime and corruption.  The MTBPS must give society confidence that we are turning the corner on the decade of state capture and corruption, that the obstacles to economic growth are being removed and the calamity of unemployment will recede.

The MTBPS must provide a comprehensive report on how far government has moved towards delivering upon the Budget’s commitments to rebuilding frontline public and municipal services, in particular filling critical vacancies, e.g. doctors, nurses, teachers, police and other essential personnel. The state cannot deliver quality services society depends upon unless it has the skilled personnel required to provide them.

The MTBPS needs to provide clear interventions to rebuild our increasingly dysfunctional municipalities.This needs to include a much more decisive approach by government towards errant municipalities who fail to pay workers and pension funds, maintain infrastructure or provide basic services. 

We must commend the green shoots we are witnessing under President Cyril Ramaphosa and African National Congress led government to stabilise and rebuild our SOEs. Eskom has turned the page on loadshedding but requires more support to tackle corruption, non-payments, cable theft and vandalism. These are key to ending Eskom’s unsustainable dependence on unaffordable tariff hikes. 

Progress is being made to return Transnet and Metro Rail to full capacity, easing pressure on the mining, manufacturing and agricultural sectors as well as providing commuters more affordable transport to work. Support must be given to other embattled SOEs, in particular DENEL, the Post Office and Postbank.

Government needs to provide law enforcement the tools needed to win the war against crime and corruption. The South African Police Service requires more personnel, working vehicles and massive investments in its IT, forensics and communications capabilities. Our courts must be modernised. Drastic intervention is needed to turn the National Prosecuting Authority around to ensure those who break the law, face justice.

Positive signs are being seen with government’s bold R1 trillion infrastructure investments.  More must be done to ensure funds are spent correctly, timeously and supporting local businesses, workers and goods.  A new mass industrial and SMME financing package of at least R200 billion per annum is needed mobilising every possible resource from the state, the developmental finance institutions and private banks and investment funds. The economy cannot reach the 3% growth needed to tackle unemployment unless we allocate substantial resources to drive industrialisation, exports and jobs rich sectors and SMMEs.

Equally critical is a relief package for struggling businesses in the form of tax rebates, lower electricity prices and fixing the mess at the Unemployment Insurance Fund’s Temporary Employee Relief Scheme. Struggling workers and businesses get cold comfort from promises. They need cash in their pockets.

As the state is rebuilt and obstacles to growing the economy removed, a path to employment is needed for the millions of unemployed. The Presidential Employment Stimulus has done well paying the Minimum Wage and providing thousands of young people with the practical skills and experience needed to find permanent jobs. This must be ramped up to accommodate at least 2 million people each year.

Social grants and in particular the SRD Grant must be protected from inflationary erosion.  It is beyond shameful that in its five years of existence, the SRD Grant has only once been adjusted for inflation.

Commissioner Edward Kieswetter and SARS’ staff have done sterling work undoing the damage inflicted under state capture.Tax compliance has improved from 61% to 67%. SARS needs to be given further resources and a clear target of reaching 75% tax compliance by 2029. This will enable government to plug financial holes, improve public services, inject liquidity into the economy and provide relief to workers and the unemployed.

Government needs to exploit the MTBPS and the pending 2026 Budget to give hope to struggling workers and a weary society, and to lift the economy to the 3% economic growth needed to set South Africa firmly on the path to inclusive growth and renewal.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za