CHARLES MOLELE
COSATU says it is expecting a “People’s Budget” with a comprehensive plan on how to fix SA’s crippling economy as outlined in the ANC’s key conference resolutions and various election manifestos.
The Minister of Finance Mr Enoch Gondwana will deliver his 2023 Budget Speech to members of the National Assembly on Wednesday against the backdrop of rising inflation, high interest rates and the load-shedding crisis.
The Budget Speech, which is preceded by the President Cyril Ramaphosa’s State of the Nation Address (SONA), is expected to provide details of government spending and make proposals about how the priorities outlined in the SONA would be funded.
The federation said Wednesday’s budget by Godongwana needs to move away from the ineffectual and failing budget cuts that have only served to “suffocate and squeeze” an already struggling economy.
It added that the federation believes the country is facing at least five critical socioeconomic challenges against which the Treasury’s tax and spending policies must be measured.
These include rising poverty levels, unemployment, rising multi-dimensional inequalities, dilapidated economic infrastructure, and the fight against crime and corruption.
“COSATU wants the budget to be transformed into an effective tool for economic revival,
transformation, and improved service delivery. It needs to be viewed as a developmental tool that prioritizes pro-poor social expenditure and adopts increased progressivity of taxation,” COSATU spokesperson Sizwe Pamla said on Sunday.
“Workers are tired of the blind pursuit of budget deficit targets within arbitrary parameters which have no logical or scientific basis. Deficit reduction has prevented the substantial real increase in social spending which is required to deal with the apartheid legacy.”
Over and above the inadequate resource allocation on the social services side, deficit
reduction has severely squeezed spending on infrastructure and economic services, said Pamla.
“Fiscal ‘austerity is undermining the government’s own flagship economic initiatives. The cuts in programmes have led to the government lagging in Information Technology, a breach of contractual obligations in terms of investment support, a negative effect on foreign direct investment, and a slowing down of local investment in manufacturing decreasing opportunities for job creation,” he said.
“This has also undermined the NDP by limiting the ability to execute the government’s mandate on SMME promotions. It is near impossible to build a strong economy with the government’s economic programmes being emasculated by fiscal austerity.”
He said the labour federation hoped that government will rise to the occasion and table a decisive and bold budget that will spur an economy struggling to emerge from a devastating recession and global pandemic, providing a variety of measures to reduce a ‘dangerously’ high unemployment rate of 43%.
He said the budget should also offer meaningful relief to the poor and unemployed and include a package of measures to reduce and end load-shedding.
“State-Owned Enterprises and dysfunctional municipalities. The budget needs to speak on the plan to accelerate the fight against crime and corruption,” said Pamla.
“What we cannot afford is a limp-wristed budget that deceives the government into believing that our sole crisis is reducing the public deficit and if that is done, then miraculously all other challenges will simply disappear.”
Pamla said COSATU welcomes the Declaration of a State of Disaster to tackle the nation’s electricity crisis, saying this needs to be accompanied by the necessary support to enable Eskom to reduce and end load shedding over the next six months.
“This includes a debt relief package that relieves Eskom of up to two-thirds of its debt burden. However, we hope this move to relieve Eskom of its debt burden is solely intended to improve its solvency ratio, to enable it to take a lead in investing in renewable electricity generation rather than a stealthy manoeuvre to prepare for the fire sale of its power plants,” said Pamala.
“It needs to support the power utility to improve its procurement systems and reduce wasteful expenditure, halt the rising levels of municipal debt to Eskom which now stands at R57 billion. The lack of reliable and affordable energy is the main threat to the economy.”
The federation has also welcomed the extension of the R350 social relief of distress (SRD) grant which will cost the fiscus an estimated R44bn. This as the government remains under pressure from opposition parties, labour unions and civil society bodies to introduce a basic income grant to cushion the poor and the unemployed.
“We cannot sustain a society where we leave a quarter of the population behind with no source of income. The administrative blockages bedevilling the SRD Grant need to be fixed and all 12 million unemployed persons should access it,” said Pamla.
“It needs to be raised to the food poverty line as it has not been adjusted for inflation since its inception in 2020. Its recipients should be linked to skills development and employment placement programmes where possible.”
INSIDE POLITICS
