Johannesburg - The South African Communist Party (SACP) has denounced the National Treasury’s attack on public service bargaining.
According to the SACP, the National Treasury did not budget for salary increases for public servants in order to force national departments, public entities, and provincial governments to cut budgets for other priorities.
"This comes out clearly in a widely circulated leaked National Treasury letter dated August 31, 2023."
"The SACP is gravely concerned at signals spearheaded by the National Treasury, indicating that it intends further tightening austerity. In the letter, the National Treasury is calling for a freeze on new personnel appointments and procurement for new infrastructure development projects, among others," read the SACP statement.
The Communist Party said that while it understand the challenges that a stagnation-induced anticipated under-collection of revenue will create for the funding of public programmes, it did not agree that neoliberal austerity is an appropriate response any more than it was when we were confronted with several other similar challenges in the recent past.
According to the statement, the SACP has consistently warned of the vicious cycle that austerity undertaken in the name of "fiscal consolidation" can create in a context of economic stagnation.
"In a policy document tabled at our 17th National Congress held in July 2022, we argued that:
“In the past, we have had no objections to the targeted cutting of ‘wasteful expenditure’, but we have expressed our concern at the impact generalised austerity has had on economic recovery, as well as the resourcing of potentially important developmental or pro-poor programmes.
“One specific example was the better-designed and enhanced public employment programme, which had its budget cut by 10% in one of the earlier rounds of austerity," read the statement.
The party further said that it had lamented the increasingly serious and evident underfunding of potentially counter-cyclical or transformational programmes such as infrastructure development and industrial policy support, among others.
The party said that instead of acting as the enforcer of cuts, reinforcing stagnation and leading to yet more cuts, the SACP believes that the central task of the National Treasury as administrator of fiscal policy is to mobilise the additional resources required to support key developmental programmes, both on and off budget.
"This means it can no longer afford to reject out of hand (as has been the case up to now) the myriad proposals put forward by many heterodox economists. This includes tax proposals. In a country that is universally recognised as one of the most unequal in the world and which is also grappling with extraordinary levels of poverty and inequality, it is surely not too much to be considering levying or increasing wealth taxes, targeted taxes on luxury goods (rather than a general rise in VAT), or taxes on at least some of the least productive speculative financial transactions, or on dividend payments," proclaimed the party.
The SACP said that it was deeply concerned at the apparent inability of the ANC-led government to chart any course out of the vicious cycle of cuts, reinforcing stagnation and leading to more cuts.
"We will be reaching out to like-minded organisations and individuals as part of building a popular left front in support of a people-centered inclusive alternative to both neoliberal austerity and neoliberalism in general," added the party.
The Star