The Congress of South African Trade Unions (COSATU) notes the Medium-Term Budget Policy Statement (MTBPS) tabled by government at Parliament. Whilst appreciating various progressive allocations and interventions contained in the MTBPS, we remain underwhelmed and disappointed by Treasury's continued approach to tackling our deep-seated economic and governance crises. A projected GDP growth rate of 1.8% over the next three years will not generate the jobs we badly need.
The fundamental challenges facing the nation are a stagnant economy and a rising unemployment rate of 42.6%. If we are to set public debt on a sustainable path, then we need to stimulate growth, slash unemployment and rebuild the state. Simply repeating the tried and failed approach of painful austerity budget cuts and freezing vacancies will not resolve these. If anything, they further undermine the capacity of the state to provide the quality public and municipal services the economy needs to grow.
The MTBPS has confirmed that the public service wage bill has shrunk and not grown as a portion of the Budget from 35.7% to a projected 31.4%. Frontline services from hospitals to schools, Home Affairs and the SAPS, are paying the price for the dangerous reductions in filling essential posts. We are witnessing the loss of critical skills. SARS has shown that by appointing competent management, removing corrupt elements, filling key vacancies and investing in the capacity of the state; society reaps the rewards of quality public services that spur economic growth. This is the model that needs to be followed, not suffocating the nurse or teacher.
The Federation is deeply alarmed that no solution has been provided to halt the pending retrenchment of 2 400 teachers in the Western Cape.
COSATU salutes the workers of Eskom and municipalities, and government led by the African National Congress, who have done outstanding work in defeating the devastating period of loadshedding. Whilst commending this excellent work, more must be done to give support to Eskom to plug the financial holes, in particular the alarming levels of municipal debt owed to it.
Similar support needs to be given to Transnet to unlock the jobs and revenue rich mining, manufacturing and agricultural sectors, as well as Metro Rail which is key to transporting 10 million urban commuters in particular to work. We are deeply pained that no additional interventions have been put in place for other embattled State-Owned Enterprises (SOEs), in particular Denel, the Post Office and Postbank. Abandoning workers to unemployment and pickpocketing their pension funds is a recipe for the collapse of once thriving SOEs. The Department of Transport needs to expedite legislative amendments to the Road Accident Fund to ensure its funds reach the poor and its rising liabilities are tackled.
The situation in local government is deeply worrying with the number of municipalities in financial distress, not paying workers or providing basic services, rising at alarming rates. The failure of the Department of Cooperative Governance to meet many of its targets is unacceptable. Whilst welcoming the progress in assisting struggling municipalities to pay their debts to Eskom, much more needs to be done to stablise and rebuild local government. A discussion on a sustainable municipal funding model is urgently needed.
We commend the additional allocations to local government and the Departments of Human Settlements, Health, Transport and Basic Education to repair damage caused by natural disasters. Additional allocations to reinforce frontline public services in particular Home Affairs, Water and Sanitation, Human Settlements, Justice, Correctional Services as well as the adjustment to the invaluable SRD Grant are welcome, as is the R5 billion to settle E-Toll debt. Whilst appreciating the additional R2 billion for SARS to boost tax compliance, it needs to be allocated far more to ensure the state is able to collect taxes needed to fund essential services.
COSATU is deeply concerned that the Departments of Water and Sanitation, Basic Education as well as Agriculture, Land Reform and Rural Development are shockingly far behind in meeting their water and school infrastructure, as well as land reform and emerging farmers targets.
It is extremely disappointing with youth unemployment having reached 70%, that no additional funds have been allocated to the Presidential Employment Stimulus to help millions of youth earn the minimum wage and acquire the skills and experience needed to find permanent jobs.
The Federation welcomes government's commitment to table regulations to implement the critical Public Procurement Act in 2025 which will provide a massive boost to locally produced goods and jobs.
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COSATU has tabled several urgent proposals providing further relief for struggling workers under the next stage of the Two-Pot Pension Reforms to Treasury and Parliament. These engagements need to be expedited to enable the Minister for Finance to make further announcements in the February Budget speech and for these to take place in 2025.
Whilst appreciating the work done by government and Parliament to address the grey listing findings that have been a hindrance to attracting investment, these will only bear fruit if the Police, National Prosecuting Authority and the Courts have the resources, personnel and leadership to ensure that those who loot public and pension funds are tried, imprisoned and their assets attached.
As government prepares the 2025/26 Budget, it is crucial they abandon the tepid business as usual approach, in particular reckless budget cuts to essential public services. Treasury needs to engage with Labour and social partners at Nedlac on a bold set of interventions that will stimulate growth, create jobs and rebuild the state. These need to include ramped up industrial financing for key export industries.
