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The Congress of South African Trade Unions (COSATU) is deeply dismayed by National Treasury's shocking proposals to impose ill-considered cuts across government as it prepares to table the Medium-Term Budget Policy Statement.  The Federation is shocked Treasury has tabled 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.

Whilst 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. 

If government wants to cut wasteful expenditure, then it needs to reverse the offensive increases it has given to Members of Parliament and the Legislatures earlier this year and just 2 weeks ago to Councillors.  Cabinet can abandon the litany of perks it feels entitled to.  Government should slash the number of Ministers from 28 to 20 and Deputy Ministers from 34 to 5 as well as the 10 000 Councillors loitering about dysfunctional municipalities. 

What is needed is to grow the economy.  That is the only sober path to pay down our worrying debt trajectory.  Outsourcing the bill to police officers and pickpocketing nurses is not a solution.  If we are to grow the economy and reduce unemployment, and thus collect the revenue the state needs to reduce debt, then government needs to deal with the actual obstacles suffocating the economy, workers and businesses, namely to:

• Provide additional support to Eskom to reduce and end loadshedding and ensure reliable and affordable electricity.
• Urgently intervene at Transnet and Metro Rail to secure and rebuild our freight and passenger railway network and modernise our ports.
• Stabilise and overhaul dysfunctional municipalities and restore basic services communities and businesses depend upon.
• Allocate additional resources to the South African Revenue Service to tackle tax evasion and customs fraud, and conduct lifestyle audits on the wealthy, and thus generate badly needed state revenue.
• Fill critical frontline service vacancies in the public services, especially the Police, National Prosecuting Authority and Courts, enabling them to crack down on crime and corruption.
• Give relief to commuters and the economy by reducing the taxes currently consuming 28% of the fuel price and place the chaotic Road Accident Fund under administration to lessen its need for fuel levy hikes.
• Expand the Presidential Employment Programme to accommodate 1 million active participants by October’s MTBPS and 2 million by February’s budget speech to help young people earn a salary, gain invaluable experience and enter the labour market.
• Enhance the invaluable Social Relief of Distress Grant to recover value lost to inflationary erosion by raising it to the Food Poverty Line and link it recipients to skills and job opportunities.
• Expedite and not freeze the badly needed infrastructure investment programme.

If government can show the necessary fortitude and vision and implement these common-sense interventions, the economy can return to growth and soon meet the 4% growth target.  This will set the nation on the path to a prosperous job creating economy, a capacitated developmental state and ensure the fiscus is set back on a secure path.  Cutting medication to a patient in the ICU ward at hospital will achieve little besides killing that patient.  Workers can no longer afford to live in hope of miracles, whilst Treasury experiments with economic theories that have been rejected across the world, including in the industrialised west.

COSATU will urgently be meeting with the leadership of government to seek a more pragmatic and sustainable path to rebuilding the economy.

Issued by COSATU