NUMSA REACTION TO THE 2015/16 BUDGET SPEECH

26 February 2015

The National Union of Metalworkers of South Africa (Numsa) notes the 2015/16 Budget Speech delivered by the Minister of Finance Nhlanhla Nene, yesterday Wednesday 25 February 2015, in parliament. The Budget Speech does not represent a major or significant shift from the old-conservative and neoliberal outlook to the much-talked about "radical phase".

Two weeks ago President Jacob Zuma addressed the nation and sent out a message to the people of this country that all is well thanks to a caring people's government. Ironically, the Budget speech does little to reinforce the ‘good story to tell' line of the President and with the all too familiar language of "budget constraints", "fiscal consolidation", "slower growth and rising debts" the current budget falls short from addressing the basic needs of local communities and their constitutional rights to Free Basic Services such as water, sanitation and electricity.

Businesses, banks, multinational corporations and a range of international finance institutions want guarantees that South Africa is still a good country to invest in and the Minister, like his predecessors has played the fiddle according to their tune. Fiscal discipline and liberalized markets will remain the bedrock of government economic policy and will not be compromised in favour of a developmental trajectory that seeks to redistribute wealth and restore the resources of our country through common or public ownership.

In the Medium Term Budget Policy Statement the Minister called for the sale of non-strategic government assets - a warning that government is prepared to sell of what's left of the family silver irrespective of the consequences this might have on service delivery and the promise to build a better future for the people of this country. NUMSA vows that it will use all the resources at its disposal to strengthen the forces of the working class and its allies to oppose such capitulation to monopoly capital and the narrow interests of the bourgeoisie that it seeks to protect.

The nine strategic priorities for the year include encouragement of private investment and unlocking the potential of small enterprises. There is hardly any reference to the provision of Free Basic Services (water, sanitation, refuse collection and electricity) for local communities. Neither do they include the provision of quality public service delivery nor increases to curb gender based violence. Since the dawn of our new democracy the interests of big corporations have taken preference over the rights of working people and the poor.

With reference to the energy crisis the Minister has emphasized the importance of having a non-stop flow of electricity for manufacturing and mining. Not once did he mention the effects of load shedding on local communities or the exorbitant price of electricity that has been passed on to the consumers by Eskom through the Multi-Year Price Determination (MYPD) and the Regulatory Clearing Account (RCA) mechanism that permits ESKOM to recover additional costs through increased consumer tariffs.

According to an article by Terrence Creamer (Polity, 05 Feb 2015) the National Energy Regulator of South Africa (NERSA) ‘agreed that Eskom had under recovered R7.82-billion between 2010 and 2013 and announced that 2015/16 power tariffs would increase by 12.7% on April 1, instead of the 8% originally sanctioned in MYPD3.

Moreover, in times where half of working South Africans are earning less than R3033 a month new electricity tariffs, fuel levies and excise duties would be implemented to offset a shortfall in government revenue.

The personal income tax would be increased by 1%, the fuel levy will go up by 30.5 cents, the Road fund levy by 50 cents, and excise taxes will increase from 15 cents to R3.77 on certain goods. In addition Eskom's MYPD3 RCA related application will exacerbate the current situation leading to more disconnections amongst poorer communities.

These increases would be balanced precisely on the backs of the poor. The people of South Africa would be forced to pay more for the inadequate and unpredictable electricity supply and for taking a taxi or using their own vehicle to get to work. At the same time, small businesses would enjoy tax reliefs and large corporations would not contribute even an additional cent to the benefit of the country.

The failure to create an adequate social grant system seems to be a tradition of every Budget. The proposed increases to social grants are falling short from both the inflation-related increases and from the actual needs of the people. With the inflation of over 6%, the R60 rise of the old age grant (only 4.45% increase) seems more like an insult to the entire social grant beneficiaries rather than government assistance. The increase of the child support grant up to R330 a month still does not cover even parts of child-related expenses.

The Budget proposals to shift R1.5 billion from the provincial budgets to the national Department of Health also undermine the provincial capability of delivering quality health services. Such a move will hinder the service delivery capacity of local municipalities and subsequently worsen the life of people, household, and communities.

The Budget Speech of 2015 fails to put people of the South Africa first. Such core demands as food and social security, water, decent sanitation, housing, and waste removal have been neglected or have been allocated insufficient resources.

The Budget, contrary to the Constitution of the South Africa, does not give priority to the basic needs of the local community. Instead, the Budget Speech confirmed the well-known truth: the government is more interested in pleasing big businesses and international organizations rather than being concerned with the well-being and prosperity of its citizens.

The Budget Speech has been a spectacular disappointment to the working masses and the poor of our country. We are making this charge as Numsa, informed by the following realities;

(1) The government is cutting expenditure that will make the situation of the poor and working people even worse. The government should be held responsible for destroying jobs of the public service, namely teacher posts, nurses and other health-care workers have been done away or frozen.

(2) Government alleges that it has no choice to cut spending and present a GEAR budget, because of rising debt levels. The government spending is no more than it collects in taxes.

(3) Despite the growing concerns on rising debts levels, government wants to spend trillions of rands on building a nuclear energy plants. This is nothing more than a massive corruption pool, much greater than the arms deal.

Statement issued by Woody Auron, NUMSA Parliamentary Officer, February 26 2015

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