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The Congress of South African Trade Unions hold great expectations from the upcoming budget speech by Minister Tito Mboweni.

The nation and workers are facing their greatest challenges since 1994.  The government faces an uphill battle in restoring confidence in an ailing economy. 

This budget comes at a time when State-Owned Enterprises (SOEs) are under strain as total cost production outstrips actual revenue and almost all remain liquid, requiring billions in bailouts from the government to remain afloat, straining an already overstretched fiscus. 

All of this takes place when the unemployment statistics remain stubborn at 40%(expanded definition, including discouraged work-seekers,) with less and less workers contributing to the fiscus through general taxation due to job insecurity as a result of retrenchments. Workers are facing a fresh wave of uncertainty as thousands face job losses as Telkom, Massmart, the mining and agriculture sectors and SAA issue section 189 notices to begin the process of retrenching workers.

We simply cannot continue on a trajectory of 40% and rising levels of unemployment.  The government needs to tell the nation what more it will do to ensure that it and the private sector implement the progressive commitments of the Presidential Jobs and Investment Summits.

The government needs to shift funding from non-core expenditure to support the Industrial Strategy, in particular the 14 Sectoral Master Plans.  The PIC, DBSA, IDC, SETAs and other public and private financing should be geared towards supporting these industrial sectoral master plans.  A clear stimulus plan is of the highest urgency to get the economy to move from less than 1% to more than 3% GDP growth levels.

On State-owned enterprises, COSATU remains the only organisation to table concrete plans and a turnaround strategy for Eskom. The proposals tabled in the economic intervention proposals provide tangible solutions that are required to turn the fortunes of the utility around and save the South African economy from total collapse.

The Federation has tabled a proposal of a social compact between government, labour and industry to mobilize the requisite resources required to stabilize and save Eskom, as mentioned in the President’s state of the nation address.

Government needs to share with the nation and workers, what interventions are being and will be undertaken to address the existential crises threatening to collapse key SOEs, in particular Eskom, the SAA group, the Transnet group, SABC and DENEL amongst others.

Minister Mboweni needs to enlighten the public as to what exactly the government has done, is doing and will do to arrest the 10% of the fiscus that is lost every year to looting and wasteful expenditure.  The public is tired and needs to see decisive action to recover their hard-earned taxes.

The budget speech of late has been a platform to launch unwarranted attacks upon the public servant’s rights to earn a living wage. Treasury is yet to work with the public sector bargaining chamber to determine where in the public sector there is an oversupply of labour disaggregated ;according to level of the job and its subsequent grading, ie treasury has not indicated whether the wage bill at the lower-level employees or at the level of management. COSATU urges treasury to make use of the appropriate platforms for such discussions through organised labour at the Public Service Coordinating Bargaining Council (PSCBC). Treasury must further undertake to address the bloated executive management posts and packages and take greater steps in drastically reducing the Ministerial handbook.

The Tax regimes remains heavily dependent on wages with workers often carrying the burden of being the main contributor to the fiscus while the rich are left to pay very little to no taxes. Many developmental policies require funding for their sustainability and implementation such as comprehensive social security as well at the national health insurance.

COSATU rejects any attempts to increase the level of VAT and call for greater redistribution effects through the introduction of the Inheritance, land, company, custom duties, dividends, and the VAT on luxury items to be incorporated into the tax stream. 

Minister Mboweni needs to stop the increasing shifting of the tax burden to working- and middle-class families.  The loopholes in the tax regime need to be plugged and the tax structure overhauled to ensure the rich pay their fair share.  Further intervention in SARS is needed to ensure that this happens, e.g. a massive expansion of its customs enforcement capacity.

COSATU expects government to explain what it is doing to halt the collapse of dozens of municipalities.

The budget speech needs to flesh out the progressive commitments of SONA so that their timeframes, budget allocations etc are clear.  This includes, in particular, the increased funding for new train lines, three new universities and academies and 7 new colleges, support for emerging farmers, investments in the water maintenance backlog amongst others.

Whilst appreciating the progressive announcements in SONA with regards to the establishment of a state bank and sovereign wealth fund, the federations expects the budget to clarify their roadmap.

COSATU hopes that the Minister will rise to the occasion and announce a progressive expansion of the Reserve Bank mandate so that it tackles not only inflation but also unemployment and our tepid economic growth rate.

Issued by COSATU