Durban - Trade union Cosatu is preparing to take on the National Treasury over proposed expenditure cuts which could see the number of civil servant jobs being slashed.
Finance Minister Enoch Godongwana is expected to announce the spending cuts plan when he tables the medium-term budget policy statement in November. The public sector wage bill is one of the areas expected to be trimmed.
On Tuesday President Cyril Ramaphosa met with Cosatu, the South African Federation of Trade Unions, the Federation of Unions of South Africa and the National Council of Trade Unions, with all parties agreeing to find a solution to the many challenges in the country and grow the economy.
Presidency spokesperson Vincent Magwenya said public-sector expenditure cuts were a complex exercise that needed time and would be prioritised over the next nine months to restore confidence and bolster the growth strategy.
Cosatu said it was shocked by Treasury’s proposals to close various departments and key government programmes, reduce the public service headcount by 200 000 and raise VAT by 2%, in addition to freezing vacancies and suspending infrastructure investments.
Acting national spokesperson Matthew Parks said: “While we appreciate the real fiscal constraints facing the state and the need to cut fat and reprioritise expenditure, the suggestions offered by Treasury of slashing expenditure and further decapacitating the state when the economy is in desperate need of stimulus and a well-oiled and capacitated public services, will only serve to choke the economy and further weaken an already enfeebled government.”
He said if government wanted to cut wasteful expenditure, then it needed to “reverse the offensive increases it has given to MPs and the Legislatures earlier this year and just two weeks ago to councillors”. He added that the number of ministers, deputy ministers and councillors could be reduced as well as all the perks they received.
Parks said for government to collect the revenue it needed to reduce debt, it had to provide additional support to Eskom to reduce and end load shedding; urgently intervene at Transnet and Metro Rail to secure and rebuild the freight and passenger railway network; modernise the ports; and stabilise dysfunctional municipalities.
Economist Dawie Roodt said government did not have the capacity to reduce thousands of jobs before next year’s elections. “There are about 1.2 million civil servants in government and provinces but there are also civil servants at state owned enterprises (SOEs), with Eskom employing 50 000 people, and at municipalities, so the number is close to 2 million.”
Roodt said the government must cut state spending, privatise or close down SOEs and stop corruption.
Another economist, Duma Gqubule, said Treasury had created “mass panic in society, by being dishonest and not credible with regards to the most sweeping cuts in the public sector since 1994”.