Revised budget proposals could reshape the future for South Africa's working class

By Zingiswa Losi

Government has now tabled the revised Budget proposals to Parliament. It is now up to Parliament to consider, amend and ultimately adopt a Budget that will allow the State toprovide public services that the poor and the economy depend upon.

We need to avoid an outcome of extremes. Workers cannot afford a return to an austerity Budget that weakens public services and denies badly needed economic stimulus, nor can the working class survive further hardships.

Government is the most important tool to uplift the poor, invest in working class communities’ futures and create the foundations for a thriving and inclusive economy.

It is not merely aset of tables and growths for market analysts to ponder over whilst sipping cappuccino.

The Budget must be guided by the fundamental challenges facing society, in particular theworking class, namely a 41.6% unemployment rate, entrenched levels of poverty andinequality, endemic crime and corruption, stagnant economic growth of 1%, overwhelmedpublic services, struggling municipalities and State-Owned Enterprises, and a general senseof despair.

When the Budget is adopted by Parliament it needs to rebuild frontline public services, investin critical economic infrastructure, stimulate economic growth to the 2% if not 3% required tounlock growth and create jobs, and provide relief to the poor and unemployed.

If collectively we show the necessary political courage, bias towards the working class andstrategic foresight; we can produce a final Budget that capacitates the State, spurs economic growth and protects the poor.

But this requires sobriety and maturity. It needs us to focus on where the Budget needs tobe amended and improved, including various expenditure and revenue options.

We need to avoid the temptation to personalise matters and reduce this to a matter of the Minister for Finance alone, or to delude ourselves into thinking that slogans will translate into Rands and Cents.

What is needed is a package of progressive interventions that can provide tangible results immediately and the medium and long term. In the midst of the Budgetary excitement, an important signal by Minister Godongwana hasbeen missed.

He has asked for help to leave the path of austerity cuts that have severely weakened the State’s ability to provide the essential services the poor depend upon. This is a call Cosatu has been making for years.

Despite our frustrations and opposition to some of the Budget’s revenue proposals, there arealso very important progressive allocations within it that we must defend. This includes welcoming government’s realisation that bleeding public services workingclass communities and businesses depend upon is harmful to the economy. 

The additional allocations to frontline services, in particular Education (R29 billion), Health (R28.9bn), Home Affairs (R3bn), Defence (11.7bn) and Correctional Services (2.6bn) will help repairdamage inflicted by previous austerity cuts.

The commitment to hiring more teachers, doctors, nurses, home affairs, police and border management officers, amongst other frontline personnel will boost public services. The finalisation of the public service wage agreement will help public servants heal financial wounds. 

The additional allocation of R46.7bn to bring total MTEF infrastructure spending to R1.03 trillion, in particular roads (R402bn), water (R156bn) as well as investments in rail, ports,new hospitals and 13 000 university beds will inject badly needed economic stimuluscreating thousands of jobs.

The substantial above inflation increases for social grants will help 19 million recipients copewith the rising costs of living.

An additional R8.8bn for Public Employment Programmes as well as R22bn from theUIF for job creation programmes are a welcome shift from previous disastrous cuts. The R3bn pilot project for the missing model to access tertiary education is positive and must be accompanied by a clean-up of Nsfas and an inflation recovery for its threshold.

Treasury needs to resume engagements with Cosatu to finalise the next phase of the Two-Pot Pension Reforms to help workers who have lost their jobs or are drowning in debt, whilst simultaneously boosting retirement savings. 

These reforms have injected R43bn intomore 2.2 million workers’ pockets and the economy.

Whilst Cosatu deeply opposes VAT hikes, we welcome government’s heeding our call toexpand zero-rated goods to include other meat, vegetables and dairy products and the fuelprice taxes’ freeze for a second year bringing valuable comfort.

Similarly, relief provided tothe sugar sector will help cushion its jobs.

Cosatu is particularly pleased government embraced its call for an additional R4bn to boost SARS’ efforts to tackle tax evasion and ensure monies owed and needed to fundpublic services are collected.

These are progressive shifts by government, in response to Cosatu and others’ demandsfor an end to the brutal austerity Budget cuts that have decimated public services. We must not only defend these hard-won victories but ensure they are implemented.

Whilst welcoming these progressive allocations and conceding that they do not mark an endto neo-liberalism, we remain deeply opposed to tax adjustments that will place highly indebted workers under even greater strain.

The Federation cannot support a VAT hike or not adjusting income tax brackets for inflationbecause of the pain they will impose upon the working class.

Cosatu has tabled several progressive alternatives to raise revenue for the State ranging from boosting SARS’ ability to tackle tax evasion including by the tobacco industry and underdeclared imports, to ensuring high wealth individuals and companies pay their fair share including through reducing tax loopholes and deductions, to releasing additional funds from SARB’s reserves, to asking the developmental financial institutions to take over someeconomic infrastructure projects, and similarly for the DFIs, SETAs and NSF to do so withpublic employment programmes.

There must also be a comprehensive expenditure review to weed out corruption, wasteful, ghost posts and bling expenditure and shift resources to frontline services and investmentsthat protect the poor and stimulate growth.Parliament has two weeks to achieve this.

Cosatu will continue to play its role insupporting progressive interventions and opposing reckless neo-liberal austerity approaches.

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