Peoples Budget Coalition Statement on the Medium Term Budget Policy Statement, 27 October 2009

The People's Budget Campaign (PBC) is a civil society coalition comprising of the Congress of South African Trade Unions (COSATU), the South African Council of Churches (SACC) and the South African Non-Governmental Organisation Coalition (SANGOCO). This coalition has for the past ten years tabled proposals on the spending of revenue by the national Treasury and argued for a participatory budget process.

The PBC welcomes the MTBPS's emphasis on the priorities identified in the ANC elections manifesto: creation of decent work, health, education, rural development and the fight against crime. The manifesto programme is the basis for fundamental transformation and we welcome the Minister of Finance's bold commitment that its priorities will not be compromised even in the context in the context of the economic crisis.

Reducing unemployment; poverty and massive inequalities - ANC Manifesto

One of the more significant features of the MTBPS 2009 is its bold steps to support an expansionary fiscal policy and the PBC welcomes the minister's acknowledgement that in the context of declining revenue due to economic crisis, the overall public-sector borrowing requirement will be increased to 11.8% of the GDP to meet the manifesto commitments. This is a welcomed step that challenges the conservative macroeconomic policy framework the country has been following.

The PBC continues to raise concerns however at the continued failure of medium-term resource allocation to significantly reduce inequality in income, service delivery and overall resource allocation. Growing inequality will continue to hamper equitable growth and development, given that South Africa is one of the most unequal societies.

Macro-economic framework and inflation targeting

The PBC welcomes the Minister's statement that we must ensure that monetary policy takes into consideration employment and growth as targets and not simply inflation. However we continue to be critical of the inflation targeting policy that impacts negatively on poorer households and small business, but we welcome the Minister's invitation to a public debate on this important policy area. 

On public procurement, wastage and corruption

The PBC welcomes the Minister strong stance against the corruption in both the public and private sector that is associated with procurement. We will do our part in exposing such corrupt practices wherever they manifest themselves. We further support the Minister's commitment to deal decisively with wastage of resources in the public sector.

Decent jobs and public employment programmes as a critical intervention for of economic turn around

The PBC agrees with the minister's emphasis on decent jobs and public employment programmes, which are a critical part of the drive to achieve an economic turnaround, and endorses his view that "employment brings the best prospects for permanent reductions in poverty". But the MTBPS required greater emphasis on targeting youth employment in the medium term, given high youth unemployment in the country.

On public investment and bailouts

The PBC continues to express reservations on the continued waste of public funds through the bailouts of public entities that have been mismanaged, such as SABC. We call on those who have been responsible for running these entities into the ground to be held to account. The resources wasted in supporting mismanaged public entities could be used in supporting Eskom's recapitalisation programme and save poor consumers from high electricity tariffs.

Social Security

The PBC fully supports the commitment to extend child support grants to 18-year-olds, but the minister's proposals fall short of extending social grants to all unemployed South Africans. The National Framework on the Economic Crisis talked about a significant shift in improving Unemployment Insurance Fund (UIF) benefits to those who have lost their jobs. There needs to be urgent action to implement this policy.

Government Planning and Coordination

We welcome the initiative on ensuring better coordination and planning amongst ministries in the delivery of government programmes. Planning and implementation must remain the task of line ministries within a more coordinated manner.

The PBC will continue to play its role of monitoring and being vigilant, to ensure that real expenditure does not decline or shift away from assisting those who need better social security support, more decent work opportunities, improved education outcomes, better access to basic health care through a National Health Insurance scheme and rural development, in favour of projects that do not provide any benefit to ordinary South Africans.

Statement issued by Congress of South African Trade Unions, October 27 2009

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