South Africa: Cosatu's Budget Expectations Statement - 2019

Photo: GCIS
President Cyril Ramaphosa with Finance Minister Tito Mboweni ahead of the Budget 2019 Speech.
press release

The Congress of South African Trade Unions looks forward to the upcoming Budget Speech. We expect the upcoming budget to set the tone and speak of ways to address the challenges facing the country and change the lives of the poor majority. We have very high expectations for the 2019 Budget Speech given the extent of the economic and governance crises the nation faces.

The Minister of Finance Tito Mboweni needs to prove that he has a plan to fix our broken economy and also eliminating wasteful expenditure and corruption. Workers are losing jobs every day and the cost of living is going through the roof. They need to see coherent action and rapid results.

Workers are tired of seeing their hard earned taxes treated as petty cash by an unaccountable political and business elite.

We need to hear from the Minister what is being done to stop the bleeding of resources that have been identified by the Auditor-General. To date despite the AG estimating that we are losing 10% of national, provincial and local budgets to looting, we have not seen any solid plan to stop this.

We hope that the Minister will rise to the moment and announce his support for Parliament's progressive anti-corruption PIC Amendment Bill. The National Treasury and its Ministry have been a stumbling block to this badly needed bill. It is time Treasury and the Minister come to the party because the looting at PIC is not acceptable.

We also acknowledge the President's efforts to attract foreign investment. But we want the government to do much more to encourage and coerce the local investors to play their role. They cannot keep asking for concessions while they are not delivering. The Investment Strike from local businesses is not yet over and the economy continues to bleed jobs at an alarming rate.

We need to hear from the Minister, how the government will ensure that the Jobs and Investment Summits' commitments are implemented. Already there are deeply worrying betrayals/ abandonments with both government and business backtracking on their commitments to protect and create jobs. The wave of retrenchments that are decimating workers in the private sector and now potentially the public sector are a huge betrayal of the working class. Our rising unemployment can't be resolved by retrenching more thousands of workers.

We need to hear how the government is going to move the economy from 1% growth to 3%. The government needs to present a plan to rescue the mining, agriculture, tourism, energy, auto-manufacturing sectors. We also want to hear about a plan to grow the new and emerging sectors such as water conservation, recycling, ocean and aquaculture, electric vehicles, land rehabilitation and climate change. These sectors hold great potential to create hundreds of thousands of jobs but need decisive leadership and a solid policy intervention from the government.

We need to hear about the government's interventions that place the creation of decent jobs at the centre of economic policy. The Budget Speech should talk to ways of creating conducive conditions for the growth of the SME sector, which targets local markets, absorbs local labour and circulate its income into the local economy.

COSATU recognises the fiscal crises facing the state. We believe that government if it simply manages budgets better, reduces wasteful expenditure and corruption, recovers stolen funds and prosecutes the looters.

The government needs to increase targeted expenditure to protect and uplift the poor and stimulate badly needed economic growth and at the same time begin to contain and reduce the unsustainable levels of public debt. This is a matter of urgency and one that can be done if there is the political will.

Too many departments and municipalities regularly fail to spend more than 10% of their budgets. Billions are wasted on glamour or vanity projects. It is unacceptable that R12.5 billion has been allocated to build five departmental head offices and our consulate in New York. It is time the government learns to spend worker's taxes in a smart way.

The government has not sought to reduce wasteful expenditure in a sustainable manner. Cancelling public servants' performance bonuses without consulting them will only serve to demotivate these workers. Freezing posts in hospitals, schools and home affairs only serve to weaken service delivery. How does the state expect doctors and nurses to save lives when working 48 hours shifts or teachers to educate classes of 60 learners? This is happening while there is still a bloated management structure and a cabinet of more than 70 Ministers and Deputy Ministers; 90 MECs and more than 9000 local government councillors.

COSATU hopes that this year will see a shift away from increasing the tax burden upon working and middle-class families. Workers have been made to foot the bill for state capture for far too long. The Minister needs to announce that there will be no further anti-worker tax hikes.

Whilst recognizing the increased limit to how high taxes can be raised, COSATU believes that the rich do not pay their fair share. There is space to raise corporate income tax, personal income tax for those earning above R1.5 million per annum, inheritance and estate taxes and most critically import duties to protect local industries and jobs.

We need the Minister to explain what measures are being put in place to fix SARS, in particular, to deal with the scourge of illicit tobacco and clothing imports.

The government needs to announce serious measures to help the poor cope with the flurry of tax hikes, in particular, the VAT hike. Whilst COSATU welcomes exempting sanitary pads from VAT, this is nowhere near enough to help the poor.COSATU urges the government to increase the amount of free water and electricity allocated to indigent households.

We want clear turnaround plans for SOE's that will not involve rendering thousands of workers unemployed at SABC, SAA, SA Express, Denel, Prasa, Transnet.

COSATU expects the Minister to provide an update on rolling out of the improved public transport system and plan on how to enhance safety on public roads. There is an urgent need to find an alternative model for funding expansion and improvement of road infrastructure. COSATU remains opposed to e-tolling and hopes that the Minister will have to respond to the outcry against e-tolls by scrapping this expensive system.

South Africa is one of the most water-scarce nations. Half the country is in a water crisis due to over consumption, a growing population and infrastructure neglect and collapse. We need to hear the government's plan to fix the Dept of Water and Sanitation, including dealing with those who allowed the Giyani project to balloon from R40 million to R4 billion.

The Driehoek School tragedy was a wakeup call for the nation. Our schools, departments, roads, bridges, police stations, hospitals, prisons, military bases, dams have been badly neglected by the custodian departments and the Department of Public Works. We need to hear about a funding model that will help avoid another Bank of Lisbon tragedy.

There is a lot riding on the 2019 budget. COSATU will not support a budget that is detached from the Manifesto to guide the government's programme. The Minister must not deliver a budget that is divorced from the ANC Elections Manifesto.

Issued by COSATU

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