Johannesburg - The South African Federation of Trade Unions (Saftu) says it is pessimistic and hopeless about the medium-term Budget policy statement (MTBPS) that will be tabled by Finance Minister Enoch Godongwana.
Godongwana will deliver the MTBPS in Parliament tomorrow.
"Our pessimism is borne out of ANC’s disastrous economic policy, an economic policy regime that has embraced the private sector and strive to establish a conducive environment for profiteering and private ownership against public ownership," said Saftu general secretary Zwelinzima Vavi.
He added: "The political economy of President Cyril Ramaphosa’s administration, consistent with the commitments of the ANC to the capitalist class, is that of neo-liberalism. It is characterised by budget cuts, defunding of public institutions and corporations, and centering the private sector."
Vavi said concretely, this programme was encapsulated in the government’s fiscal consolidation programme, through which it aimed to cut government expenditure across the public sector, from general spending on service provision to state corporations.
"In drawing and implementing fiscal consolidation, the government is listening to the prophets of doom and con artists cum economists at the International Monetary Fund (IMF) and World Bank (WB)," he said.
Vavi said in 2018 that the World Bank advised the government to contain "public wage growth and contingent liabilities in SOEs".
"In an IMF Country Report for 2021, the IMF recommended a fiscal consolidation to significantly reduce the public investments and general government expenditure. The attacks on the public sector, which we strongly feel are going to be reaffirmed and continued in the MTBPS, are premised on these wishes by the financial institutions of capitalism and to create a conducive condition for profiteering."
Vavi said in a presentation to the public service wage negotiations in the Public Service Co-ordinating Bargaining Council (PSCBC), treasury categorised above inflation wage settlements as one of the "significant risks" for fiscal sustainability.
"Because wage settlements are seen as a significant risk deterring government from fighting fiscal deficits and achieving their fiscal policy ambitions as recommended by the IMF and WB, the government refused to give public servants wage increases that were due to them in 2020, and only gave them a 1.5% pensionable adjustment in 2021.
He said in this financial year 2022/23, the government only offered a miniscule 3%.
"Saftu lauds the public service unions for uniting in rejecting the 3% wage offer. Teachers must defy their unions which, clearly acting in the interests of treasury, WB, and IMF, have accepted the wage offer. We encourage the nurturing of this unity for a protracted struggle for an 8% wage increase on the baseline," Vavi said.
He said since the liberal democratic dispensation, characterised by the economics of neo-liberalism, government investment in the SOEs has declined significantly.
"Research indicates that government investment in its corporations declined by 41.9% between 1998 and 2001. Even though government expenditure on its corporations picked up in other periods, it always contracted at a particular point when government pursued neo-liberal fiscal sustainability," he said.
Vavi said in the period before COVID-19 (the most part of former president Jacob Zuma’s second term in 2014 to 2019), investments in state corporations declined by 54%.
He said in the post-COVID period, government corporations were not getting significant government investment because of the austerity fiscal policy commitments they had with the World Bank.
"In fact, such defunding of SOEs today coincides with an acceleration to privatise them. The MTBPS is likely not to change this trajectory. Saftu urges the working class to fight against the defunding of the SOEs and unite to save and reclaim Eskom and Transnet from being privatised."
Vavi said they were demanding that the government give public servants an 8% wage increase; reverse the budget cuts and increase spending in critical areas of service delivery; ensure public sector wages are budgeted sufficiently for so that more teachers, nurses, police, correctional officers, social workers, and traffic officers are hired; and invest in infrastructure and equipment for public institutions targeting hospitals, schools, police stations, and local government.
Other demands:
● Introduce a monthly universal basic income grant of R1 500 for the unemployed and lowest paid workers.
● Build houses and provide sanitation to millions of people living in informal settlements
● Build infrastructure in rural areas so that schoolkids will not have to cross dangerously flowing streams and rivers on their way to school.
● Introduce a job guarantee scheme so the 12.5 million workers can get the jobs
● Reverse privatisation and nationalise the big corporates, big farms, mines, and banks
● Reinvest in the transport system in which the railway system is refurbished and commuter trains are brought back to ferry people between towns and from workplaces to residential areas
● A public works programme on a decent wage
● Introduce a wealth or solidarity tax so that the rich pay more tax. Increase corporate taxes and introduce a tax on idling money that is hoarded instead of being invested in the productive sector
● Stop businesses and cronies from looting up to 40% of the procurement budget
● Stop illicit financial outflows and tax-dodging schemes
The Star