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The National Education, Health and Allied Workers’ Union [NEHAWU] notes the presentation of the 2022 Medium Term Budget Policy Statement (MTBPS) by the Minister of Finance, Enoch Godongwana today, Wednesday 26 October 2022, in Parliament.

In the overall, the 2022 MTBPS is underwhelming as it represents yet another iteration of the austerity framework as set out in the first budget of the six democratic government in 2020 for the entire government term, hence its medium-term economic growth projections are pathetic. Ironically, the Treasury does not mention the devastating effect of austerity in forcing it to make downward revisions in terms of the 2022 and the medium-term growth forecasts; instead the blame is externalised to the Ukraine-Russia war or the slowing global growth.

It is a tragedy that in the midst of crisis levels of unemployment and poverty, the Treasury is narrowly fixated on achieving its target of a primary fiscal surplus over the next financial year and medium-term, when the amount of people who are out of work is still standing higher than the pre-COVID 19 level. About 15 million South Africans currently live below the food poverty-line, and the unemployment rate is sitting at a record 44%. Having prioritised its fiscal targets above all else whilst not having any employment creation target, it is also heart-rending that even in the medium-term, capital investment is still going to remain well below the NDP target of 20%, whilst final government consumption would remain negative.

As acknowledged by the Treasury, investment is about R62 billion below pre-pandemic levels, which was itself a very poor level of investment compared to other peer countries whose economies are managed through sensible macroeconomic policies. This means that there would be no attempt to stimulate the economy in order to actively drive job-creation or at least the recovery of the jobs that were lost in the recent past due to the COVID-19 pandemic, as more than 858 000 of such people were still out of work by the middle of this year. Even the additional allocations over the medium-term for health, education and policing would be well below the forecasted average inflation rate and when considered from the standpoint of the previous cuts on these budgetary items and the effect of a higher rate of population growth, this still remains a draconian austerity fiscal policy stance in the overall.

As NEHAWU we reiterate our rejection of the so-called structural-reforms, which is nothing but the extension of the private sector into the domain of the state and in the delivery of public goods and services. It is an orientation of putting profits before people, as is the case with government’s operations that are prevalently run by the outsourcing companies. This has further weakened the state’s capacity and induced corruption and it is in line with the long-standing dogmatic adherence of the ANC government to Neoliberalism. Therefore, we condemn the move to create private sector partnerships for the Durban Pier 2 and Ngqura container terminals.

This self-congratulatory boasting about achieving the fiscal target and stabilising the public debt at 71.4% in 2022/23, two financial years earlier than planned, has been at the expense of the catastrophic destruction of the capacity of the public service and livelihoods of its employees, despite the fact that in his speech the minister talks about “strengthening state capability”. As cynically and proudly stated in the Budget Review, “between the 2020 Budget and the 2021 Budget, government reduced the medium-term compensation of employees’ baselines by more than R300 billion to stabilise the public finances”.

This is obviously a disguised reference to the disgraceful decision to dishonour Resolution 1 of 2018 of the Public Service Coordinating Bargaining Council (PSCBC) in terms of the wage adjustment applicable in 2020 and its effect on the baseline of the public service wage bill since and the subsequent move to make non-pensionable cash allowances a permanent feature in dealing with wage demands by public service workers.

We condemn the intention of government to push down the throat of public service workers the 3% offer that majority of workers rejected. This is a demonstration of disdain in which public servants are treated and the continuation of the agenda to destroy collective bargaining in the public service. This is the same tendency we saw when the very employer chose to go to court leaving majority of COSATU unions stranded in the arbitration process during the dispute on non-implementation of the last leg of PSCBC resolution 1 of 2018. We call on the employer to respect the institutions of social dialogue and come to the PSCBC conciliation on the 31st October 2022 to resolve the current impasse. It is wrong and unacceptable for the Minister to discuss in parliament details of negotiations that happened in the bargaining council to an extent of misleading the public that there was a tentative agreement. As former trade unionists, he and the Acting Minister of Public Service & Administration they should know better that any offer is subject to mandating process as such it can’t be interpreted as being tentatively agreed to by negotiators.

We note that the Treasury has placed “ higher public-service wage costs” in its Fiscal Risk Statement and as NEHAWU we reject the projected 3.3% average annual growth in the compensation of public service employees between 2022/23 and 2025/26, whilst at the same time government is projecting CPI inflation above 5% over the medium-term. This represents the extension of the wage freeze and therefore having already lost more than R300 billion, we want to assure government that we are resolute and determined to resist this victimisation of the public servants in order to address the budget deficit and public debt that were caused by corruption and incompetent macroeconomic management.  

Similarly, in the face of deepening poverty and hunger, whilst dithering and zigzagging on the introduction of the Basic Income Grant, the Treasury has the audacity to state that “any permanent increase in expenditure, such as a new social grant, need to be matched by permanent revenue increases or spending reductions elsewhere”. At the same time, in the current financial year the Treasury has effected a permanent corporate tax cut, which neither in the 2022 Budget nor in this MTBPS it has been fiscally accounted for or audited in terms of its implications and impact on the fiscus. The Treasury talks about “growing an inclusive economy”, whilst at the same time it plans to cut off the 15 million who before April 2022 were receiving the Social Relieve of Distress Grant (SRD Grant).

Despite the fact that this grant is deplorably small in value against the backdrop of the escalating cost of living and social reproduction, the Treasury makes a declaration that over the medium-term "spending in the social development function will contract by an average of 2.4 percent as the COVID-19 social relief of distress grant will end on 31 March 2024”. In other words, the Treasury is taking a stand to end the SRD Grant and it is also unilaterally rejecting the move towards the introduction of a Basic Income Grant. Once again this underscores our consistent position as NEHAWU that the Neoliberal ANC government is addressing its fiscal targets of achieve a primary budget surplus and the stabilisation of public debt by the butchering of the public service workers and the working class in general. We condemn this class onslaught and undertake to work with our federation to help build a powerful movement of the workers and poor, to resist the austerity and class offensive on the poor.

Lastly, we call for transparency on the US$ 8.5 billion Just Energy Transition Partnership and proper consultation and engagement, especially with workers and communities that are going to be severely impacted by moves to pre-maturely shutdown power stations and coal mines, especially in the high-veld region.

Issued by NEHAWU Secretariat