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By Eric Naki

Political Editor


Mini budget is roundly rebuked for cutting on public spending

To avert a catastrophe 'government must cut the public service wage bill, sell state-owned enterprises, split Eskom into three and find equity partners for SAA'.


Political parties, trade unions, farmers and economists united in condemning Finance Minister Tito Mboweni’s medium-term budget policy statement (MTBPS) for relying too much on public spending cuts that could come back to haunt him. South African Federation of Trade Unions (Saftu) general secretary Zwelinzima Vavi said the militant independent union federation correctly predicted that Mboweni’s budget would be an assault on the workers and the poor. Vavi said the government had missed another opportunity to confront the worsening economic crisis. “Ever greater numbers are falling into the poverty trap. Statistics show the catastrophic levels of unemployment and deepening inequalities. But…

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Political parties, trade unions, farmers and economists united in condemning Finance Minister Tito Mboweni’s medium-term budget policy statement (MTBPS) for relying too much on public spending cuts that could come back to haunt him.

South African Federation of Trade Unions (Saftu) general secretary Zwelinzima Vavi said the militant independent union federation correctly predicted that Mboweni’s budget would be an assault on the workers and the poor.

Vavi said the government had missed another opportunity to confront the worsening economic crisis.

“Ever greater numbers are falling into the poverty trap. Statistics show the catastrophic levels of unemployment and deepening inequalities. But Treasury has turned its back on the poor majority, so as to serve the interests of the tiny community of the multi-millionaires and billionaires.

“The working class will see deeper levels of budget cuts which will worsen their living conditions.”

Saftu was concerned that the R150 billion government needed in the next three years to “satisfy its commitment to austerity and neoliberalism” will again be paid by the poor. The government would be tempted to again increase VAT and “sin taxes” in the February 2020 budget speech, he added.

Saftu proposed a “real stimulus package” of at least R500 billion, a wealth tax on multimillionaires and billionaires, reverting corporate tax to 56% and a change in monetary policy, including scrapping the inflation targeting policy.

Inkatha Freedom Party (IFP) Gauteng chairperson Bonginkosi Dhlamini lambasted Mboweni for encouraging Gauteng motorists to pay e-tolls. “The ANC has flip-flopped on the grandest scale by backtracking on their promise to scrap e-tolls and reneged on its manifesto. It is clear for each and every South African to see that the ANC remains unresponsive to the people and the plight they face.”

He said the IFP had ample evidence the ANC had used e-tolls to sustain its election campaign. The IFP provincial chair listed Gauteng Premier David Makhura’s promises to scrap the system, all of which came to nought.

The Transvaal Agriculture Union also entered the fray with its president Louis Meintjes accusing Mboweni of not providing any assistance to farmers despite the drought.

“Farmers continue to rely solely on their own structures to survive. This in contrast to state utility Eskom that once again received more grants totalling billions of rands in taxpayer’ funds, yet continues its rapid slide into an debt abyss.”

He said the limited austerity measures were a great solution, but it would be undermined by union federation Cosatu. “SA urgently needs a policy that clearly details the road ahead and inspires confidence among investors and the business sector.”

SA Institute of Race Relations political analyst Herman Pretorius said the MTBPS showed the depth of SA’s crisis, with debt at unsustainable levels. “And this against a backdrop of new unemployment statistics with nearly 30% of South Africans (by the strict definition) not having a job. This is the highest level of unemployment in over a decade.”

He welcomed pay freezes for Cabinet ministers, premiers, and MECs and other austerity measures, but said this did not go far enough to avert a catastrophe. He said the government must cut the public service wage bill, sell state-owned enterprises, split Eskom into three and find equity partners for SA Airways.

Dr Thanti Mthanti, of Wits School of Business, noted that Mboweni’s MTBPS relied too much on cutting public spending, which would impact on employment and economic growth.

ericn@citizen.co.za

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