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The Federation of Unions of South Africa (FEDUSA) has called on new Finance Minister Enoch Godongwana to inspire and catalyse economic recovery, job creation through guaranteed stability and security that is desperately needed to support and advance reconstruction and recovery beyond COVID 19.   

The slow uptake of the vaccination process must be reviewed to ensure that the full opening of the economy is prioritised, allowing for the much – needed return to work for the tourism and hospitality sector. Failure to fully move beyond the current vaccination rate will only risk weaker economic growth and exacerbate the impact of the anticipated fourth wave of the pandemic. Moreover, the expansion of COVID 19 support measures as part of structural reforms in healthcare and NHI must be prioritised, as frontline workers remain subjected to continued exposure to the pandemic.

FEDUSA equally implores on the Minister to publicly announce the lifting of the three-year public sector wage freeze announced by his predecessors when he tables his maiden Medium Term Budget Policy Statement (MTBPS) on Thursday. This selective austerity targeted only at ordinary public servants and not at high-earning government officials has only served to deepen the hardship faced by workers in the middle of the COVID-19 pandemic. Frontline workers and public servants have only demonstrated their tenacity and commitment to the principles of Batho Pele and should not be devalued when their services have helped with both saving lives and livelihood. Highly improved tax revenue collection in the current fiscal year of 2021/2022 driven by a strong commodities boom should also allow Minister Godongwana to announce a decent allocation for public sector wage increases over this period and avoid unnecessary conflicts of the recent past. This measure should be accompanied by filling up the massive vacancy rate in the public service. 

However, FEDUSA expects the Minister to announce strong strategies to curb the high levels of illicit outflows to tax havens estimated at R100 billion a year, which threatens any tax revenue windfall or bonanza. 

Instability and insecurity of supply of electricity continues to plunge the country into ongoing electricity blackouts, crippling economic reconstruction, further un-employment and threatening any form of recovery. Imposing extra burdens on companies and inspiring a renewed wave of retrenchments. Urgent fiscal interventions from Government is need now to secure a stable energy grid.

The federation also believes that the MTBPS is an opportune moment for Minister Godongwana to focus on and expand the tax relief measures to bring the necessary relief to desperate households. The policy and legislative process of accessing portions of pension funds must be fast tracked. FEDUSA insists that political intervention must be applied, considering that the legislative process on average takes two years to finalise. Hunger and desperation remain the damaging consequences of this pandemic and cannot wait for another two years – the urgency is now. However, FEDUSA cautions Government not to further insult workers by focussing on the tax opportunities and double dipping at the interim access point and then again at retirement.       

Record unemployment of 43.2% of the working-age population, ongoing retrenchments driven by COVID-19, very high youth un-employment ,growing hunger, and inequality makes it a viable option to upgrade the current social relief grant of R350 a month to a permanent monthly Basic Income Grant (BIG). A BIG funded by the fiscus not only provides welcome relief in a society with one of the highest Gini coefficients in the world, but will also stimulate demand for the goods and services that consumers need. This will ultimately feed into the much-needed economic recovery following the COVID-19 devastation.

Issued by FEDUSA