RAMAPHOSA’S MIXED ECONOMY RHETORIC IS A TACTICAL RETREAT FROM URGENTLY-NEEDED STATE INTERVENTION
February 16, 2022
SAFTU DEMANDS IN THE CONTEXT OF AUSTERITY BUDGET TABLED ON THE 23RD OF FEBRUARY 2022
February 24, 2022

REJECT BUDGET CUTS ON PUBLIC SERVICES TO THE POOR YES TO PEOPLE’S BUDGET.

The South African Federation of Trade Unions (SAFTU) opposes neoliberal solutions to the socio-economic crisis of capitalism. From the time African National Congress (ANC) took power in the 1990s, it has demonstrated its commitment to capitalism and market-oriented solutions by accepting macro-economic and fiscal policy models dictated by the financial institutions of neoliberalism — the World Bank (WB) and the
International Monetary Fund (IMF).
Last year, the World Bank published a Country Partnership Framework for South Africa, in which it outlines a set of models that should be followed to steer the economy on growth path. These models are premised on pushing the country to accelerated privatisation program through structural reforms and “consolidating fiscal balances.”
Giving a policy manifestation of the process of “consolidating fiscal balances”, a fiscal consolidation program has been forged to be implemented in a span of 5 years including the two previous years (2020 and 2021). Fiscal consolidation is a program committing government to budget cuts on provision of social services and goods.
On 23 February 2022, the Minister of Finance, Enoch Godongwana, will be reading a budget speech that gives effect to this fiscal consolidation. The budget cuts contained
in the fiscal consolidation are meant to please the real bosses of the ANC, who are big business represented by the World Bank, International Monetary Fund and Rating Agencies.
For the 70% of the population that depends on public goods and services — that is, the poor, the unemployed, ordinary workers, youth and women; the budget will be distressing and disadvantaging.
These are some of the budget cuts proposed from 2022 to 2024 by the ANC government, as stipulated in the Medium Term Budget. Policy Statement (MTBPS):
• Basic Education: from R281,8-billion in 2021/22 to R279-billion in 2023/24 (using Treasury inflation accounts in this sector, this represents an 12.6% real decline);
• Health: from R259-billion in 2021/22 to R243-billion in 2023/24 (which with inflation of 4.9% and 4.0% the next two years, will be a real decline of 15.1%);
• SAPS: from R109,2-billion in 2021/22 to R106,2-billion in 2023/24 (a 11.7% real decline);
• Social Development: from R399,6-billion in 2021/22 to R320,4- billion in 2023/24 (a 23.8% real decline, even though increases in population and poverty are anticipated, which will require much higher commitments)
• Public Sector Wage Bill: R303 billion cut from the public sector wage bill between 2021/2022 and 2024/2025.
The consequences of these cuts are substantial reductions in jobs of various government departments, lack of infrastructure, less maintenance and repair, and shortages of working equipment. In so far as jobs are concerned, the practical effects of these cuts will be:
The KwaZulu Natal Department of Basic Education has already reduced its jobs by
6 000.
• In the Eastern Cape, 1,142 schools have been gazetted for closure. This means teaching posts will also be reduced.
• In March 2021, there were 24 000 unfilled vacant posts in the Education Department.
• The Western Cape has the worst Teacher-to-Learner ratio of 1:37 instead of an
preferable 1:20.
• Home Affairs staff will be reduced by 834 jobs.
• The South African Police Service jobs will be reduced by 10% between 2020/21 and 2023/24. This means by the end of the financial year 2023/24, there will be 18,399 fewer police officers,
• Statistics South Africa’s jobs will be reduced by 146;
• The judiciary (judges, prosecutors, etc) will shed 815 posts;
• Correctional Services will shed 1,027 posts; and
• The health sector is said to be sitting with 22 000 unfilled posts. Given the huge knock it took in the Budget, it is more likely to reduce its headcount in great numbers in the next three years.
• Government did not pay workers any increase in 2020. It paid them 1,5% increase of what they were in any case entitled to through the pay progression policy and gave them a lousy bribe of few hundreds
To resist this onslaught, SAFTU has declared 2022 as a year of mass rolling action against budget cuts, wage cuts, job losses and unemployment. As part of the rolling mass action, SAFTU and its working class allies have organised a protest on the national budget day, 23 February 2022, in Cape Town to fight back.
Our demands amongst others are:
• reverse the budget cuts, and increase spending in critical areas of service delivery;
• ensure public sector wages are budgeted sufficiently so that more teachers, nurses, police, correctional officers, social workers and traffic officers are hired.
• invest in infrastructure and equipment for public institutions targeting in particular hospitals, schools, police stations and local government;
• introduce a monthly universal basic income grant of R1,500 for the unemployed and lowest paid;
• Build houses and provide sanitation to millions of people living in informal settlements
• Build infrastructure in rural areas so that school kids will not have to cross dangerously flowing streams and rivers on their way to school
• overhaul the economy and create one based on the need to address unemployment, poverty, and inequality,
• introduce a job guarantee scheme so the 12.5 million workers can get the jobs;
• Reverse privatization, and nationalise the big corporates, big farms, mines, and banks
• Reinvest in the transport system in which the railway system is refurbished and trains brought back to fare people between towns, and from workplaces to residential areas
• a public works programme on decent wage
• end corruption in government and in the private sector
• introduce a wealth or solidarity tax so that the rich pay more tax. Increase the corporate taxes, stop business from looting up to 40% of the procurement budget, stop illicit cash outflows and tax dodging schemes
• do not increase the VAT as it will hit the poor more than the rich.