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NEHAWU congratulates the Finance Minister,Mr Nhlanhla Nene, on his first address in Parliament on the Medium Term Budget Policy Statement (MTBPS). On the one hand, this takes place against the background of a subdued economic performance that is impacted upon by multiple crises of global capitalism, and on the other hand by the dogmatic pursuit of targets and ratios of the current fiscal and monetary policies by the Treasury and the Reserve Bank, who both continue to immobilise economic activity on the back of the 2009 recession.

The posture of the 2014 MTBPS

The Treasury continues to maintain its adherence to its “counter-cyclical” fiscal policy. Yet, whilst it has revised its forecast of economic growth rate downwards to 1.4% this year, in this 2014 MTBPS, the Treasury itself disturbingly acknowledges that its proposed package of measures “may have a dampening effect on economic growth”. This is despite the fact that gross domestic expenditure and household consumption are at their lowest since 2011, real unemployment stands at 35.6% and official unemployment rate which is 25.5% is at its highest level since the first quarter of 2008. We reiterate our call for a review of the macroeconomic framework as it is currently not working, as agreed at the Alliance Summit.

We welcome the continued commitment to post-schooling and training, which together with employment, labour affairs and social security funds secure the fastest growth in spending by function. We note the endeavours to effect some structural shifts in the economy through interventions in transport, energy, communications, finance, agriculture, mining, and to enhance trade with sub-Saharan Africa through the Industrial Policy Action Plan. We believe that more must be done in this regard.

However, we are concerned about the muted and unexplained talk of the capitalisation of state-owned companies through “the sale of non-strategic states assets” and “tax measures to increase revenue”. This underscore the folly of the R9,3 billion tax cuts announced in the budget speech this year. Therefore, we expect that any tax increases to raise the envisaged R27 billion shall be targeted at the richest 10%, as we are prepared to fight against any attempt to extract this from the working class and the poor through VAT or other regressive means. We call for transparency with regard to the muted privatisation. We are also concerned that in the measures announced to centralise and modernise public procurement, including the new national approach to procurement to be driven by the Office of the Chief Procurement Officer, the ANC’s commitment to localise 75% of procurement does not feature, notwithstanding the fact that it is one of the measures that must be implemented in terms of the Medium Term Strategic Framework (MTSF).

The public wage bill
As part of the unions within the public service, NEHAWU has commenced negotiation to improve pay and conditions of service of our members with the employer on a bona fide footing. We believe that the past two rounds of collective bargaining rounds in 2007 and 2010, which necessitated strikes, are instructive for all parties in their approach to the current round. Therefore, we do not wish to conduct negotiations with the employer outside the framework of the established collective bargaining process, a mechanism which is currently increasingly undermined by the bosses in the private sector.

Thus, we note with concern some announcements made in the MTBPS regarding:

• The 6.6% on the compensation of employees
• The freezing of the personnel headcounts
• The review and consideration of “permanent withdrawal” of funded vacancies

Whilst we accept and fully support cost-containment measures directed at non-essential goods and services, we categorically reject an ideologically informed extension of this to public service personnel. As it is, the public service has still not recovered from the mass retrenchments of the GEAR period, and the state’s capacity to effectively deliver services to our people has been undermined, whilst the already long frozen or unfilled public service vacancies generated work overload and generally angry workforce. Treasury should appreciate that the money that is spent on public service personnel is not expenditure but an investment by the state in its capacity to deliver on its core mandate, which is to deliver quality services to the people of South Africa.

We expect all these announcements in the MTBPS pertaining to the public service, i.e. the rate of wage increase, the size and shape of personnel headcounts, vacancies, etc. would not be unilaterally implemented, but would become subject of bona fide collective bargaining process at the Public Service Collective Bargaining Chamber (PSCBC). With its commitment to “workplace conflict reduction” and collective bargaining as contained in the MTSF, we expect the ANC government to approach the current round of collective bargaining in the public service accordingly, indeed informed by lessons from the past.
- See more at: http://www.cosatu.org.za/show.php?ID=9677#sthash.uB7MPgq7.dpuf

Issued by COSATU