Pretoria - Cosatu wants Finance Minister Enoch Godongwana to spell out measures to fight poverty and unemployment and to deal with corruption in his Budget speech expected to be delivered in Parliament tomorrow.
Cosatu spokesperson Sizwe Pamla said his trade union federation believed the country was facing at least five critical challenges, against which the Treasury’s tax and spending policies must be measured. These are rising extreme poverty, unprecedented levels of unemployment, rising multi-dimensional and intersecting inequalities, dilapidated economic and social infrastructure, corruption and widespread crime.
“For far too long, the government’s persistence with Neo-liberal macro-economic fiscal and monetary policies has been dismal against this yardstick. Cosatu expects a people’s Budget to take forward redistribution and social delivery outlined in the ANC resolutions and various manifestos,” he said.
Pamla said Cosatu wanted the Budget to be transformed into an effective tool for economic revival, transformation, and improved service delivery – a developmental tool that prioritises pro-poor social expenditure and adopted increased progressivity of taxation.
“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 a substantial real increase in social spending.
“In so far as the government has managed to somewhat maintain spending, this has largely been due to improvements in revenue collection. Over and above the inadequate resource allocation to social services, deficit reduction has severely squeezed spending on infrastructure and economic services.
“Reduced spending in these crucial categories has severely constrained our capacity to restructure the economy and increase our production capacity.”
Pamla said fiscal austerity was 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 job creation.
“This has also undermined the National Development Plan by limiting the ability to execute the government’s mandate on SMME promotions. It is near impossible to build a strong economy with government economic programmes being emasculated by fiscal austerity.
“The federation wants the government to pursue a social investment strategy. In the long term it would reduce government debt as a proportion of GDP: Economic growth would boost tax revenue which can be used to fund increased spending or reduce debt.
“Second, by expanding GDP, the debt: GDP ratio falls automatically or proportionally for any level of debt.”
Cosatu was hoping the government would table a decisive, bold Budget that would spur an economy struggling to emerge from a devastating recession and global pandemic, providing measures to reduce a dangerously high (43%) unemployment rate.
Pamla said it should offer meaningful relief to the poor and unemployed and include a package of measures to reduce and end load-shedding.
“We expect a detailed plan on how to secure our railway network and rebuild embattled State-Owned Enterprises and dysfunctional municipalities.
“The Budget needs to speak to the plan to accelerate the fight against crime and corruption. We cannot afford a Budget that deceives the government into believing our sole crisis is reducing the public deficit, and then miraculously, all other challenges will disappear.”
Cosatu welcomed the State of Disaster to tackle the electricity crisis. It needed to be accompanied by support to enable Eskom to reduce and end load shedding over the next six months.