NUMSA statement on Budget Speech
23 February 2017
The National Union of Metalworkers of South Africa (NUMSA) is not surprised at the budget which was delivered by Finance Minister Pravin Gordhan. In fact this budget reflects what we have known all along which is that the governing party is determined to do everything in its power to ensure the dominance of White Capital in the economy. This budget is clearly a compromise designed to please neo-liberalist institutions and ratings agencies. Gordhan and the ANC think that by using the language of the Freedom Charter, the people of South Africa will be bamboozled into believing that this is a ‘progressive budget’.
It seems clear from this budget that the state is intent on creating a Black Capitalist class, whilst enshrining the dominance of white monopoly capital. The government also sees the creation of a Black capitalist class as the key to tackling inequality, but they do not wish to tamper with the wealth of white business and the monopolies which are strangling the economy. The government also wants to create a pool of cheap African labour which business can continue to exploit with low wages.
Gordhan speaks about 95% of the wealth being concentrated in the hands of 10 per cent of the population. He also states that three quarters of the school leavers enter the labour market without a Matric Certificate and are likely to be unemployed. He also acknowledges that for the last 25 years the economy has grown in a real sense at pathetic rate of 1 per cent per capita! You would think that a caring state would realise that a crisis of such magnitude would require drastic, revolutionary action, but instead, what we got was more of the same. A commitment to neo-liberalist policies like GEAR and now the NDP, which are responsible for the economic disaster which we are facing currently.
For the last 30 years NUMSA has been fighting actively for the wholesale implementation of the Freedom Charter as the only path to radical economic transformation. What we heard delivered in the budget speech was not radical economic transformation. We have said it before, and we will say it again, until the state nationalises the commanding heights of the economy for the benefit of the masses, we cannot effectively deal with crisis of poverty, unemployment and inequality in a genuine way.
Broad Based Black Economic Empowerment
The budget focused heavily on BBBEE as the vehicle to empower the masses. An amount of approximately R8 billion will be spent on SME’s; Co-operatives as well as on developing Economic zones in the townships. The problem is that right now as we speak, parts of Attridgeville in Pretoria are burning because of what some in media have described as Xenophobic violence. After 23 years of neo-liberalism, the majority of our people have not experienced the benefits of an improved quality of life. Their frustration about the grinding poverty that they face, and the unemployment crisis is the reason for the rage against ‘foreigners’ in the community. They see their brothers and sisters from the continent being more economically active than they are in their own country, and its this rage that is fuelling the violence. The question is what is there in the budget to urgently address this crisis? There is nothing in these policies which will fast track the radical changes needed to transform the life of an ordinary working class African in the township.
Furthermore since the inception of BBBEE in 2003 the only people who have truly benefitted from it is white monopoly capital. The ownership patterns on the Johannesburg Stock Exchange are testament to this fact. Only 10 per cent of companies listed on the JSE are directly owned by Africans, clearly BBBEE is a failure. The reality of BBBEE is that white wealth must increase, before Black people can be empowered. A policy which was created with the aim of uplifting Black people is actually a vehicle to entrench the dominance of White Capital – you can thank the ANC for that.
This was done to please ratings agencies and other neo-liberalist institutions. The governing party will never implement true radical economic transformation, because it fears the masters of White Monopoly Capital far more, than the electorate which has kept it in power for the last 23 years.
The simple truth is that capital, which in the South African context is owned and controlled by White monopolies, is unwilling to share its illegally acquired wealth with the rest of society. BBBEE is a way of creating the illusion of transformation, without really handing over the levers of power. The last 14 years have already demonstrated this reality.
SOCIAL SPENDING AND TAX
NUMSA notes the increases in spending on the various grants including the Old Age Grant; the Disability and Care Dependency Grants, and others. But we have to balance these amounts against the realities facing our people. What difference can R1600 make when entire families are forced to exist just on the income provided by a pensioner? This reprieve is meaningless when you balance it against the fact that the petrol price is likely to rise because of higher taxes on the fuel levy and the Road Accident Fund. This will have a material impact on the lives of the poor and the working class. An increase in the petrol price, means the cost of living goes up, because those costs are passed onto the consumer.
NUMSA welcomes the tax rate of 45 per cent for those with a taxable income of R1.5 million. However it still reflects a fundamental flaw in governments’ policy. The only way that the state can fund development is through tax. The problem is that the tax base is very low and this system is not sustainable. The money we are spending each year grows faster than the tax revenue which is being collected and the indebtedness of the state will grow. Surely the logical thing to do is to nationalise major industries, especially mining. If government owned a majority stake in all mining houses, that would drastically increase revenue for the state. Norway nationalised decades ago and they have benefitted hugely from it. The money from nationalising would allow us to provide free quality education and healthcare. We could spend the money upgrading our public healthcare facilities which are in a critical state.
ON THE NATIONAL MINIMUM WAGE
The National Minimum Wage doesn’t go far enough to address income inequality in South Africa. In fact, it does the complete opposite. It allows business to exploit workers by legalising slave wages. A rate of R20 per hour is favourable for business because they control the hours and therefore the wages. Workers want a living wage not just a minimum wage. What can R20 per hour achieve in the life of a worker who is supporting extended family?
What can R20 per hour do when public transport is not subsidized, and workers spend at least half their income travelling to work. Workers want to an improved quality of life. They want to be able to educate their children and ensure that they have access to quality healthcare - that is not possible on a wage of just R20 per hour.
Furthermore, the changes which have been proposed in the labour legislation are designed to take away the only power workers have, which is the right to strike. What Pravin calls “production friendly industrial relations and prompt resolution of disputes’ is nothing more than an attack on labour. We want to remind the governing party that it was the workers who were the driving force of the liberation movement during Apartheid. The workers were the ones who were on the frontline, promoting ‘Stay Aways’ and boycotts in the townships. It was workers who marched in their thousands against the Dompas in Sharpeville. Thousands of South African workers died fighting for freedom. And now for their sacrifice, this Black government wants to make it impossible for workers to use their right to strike to fight for a better life. NUMSA is determined to defend this right in the street and in the courts.
The Budget Speech shows just how far removed this government is from the day to day reality of South African existence. Whilst they pontificate in parliament over the additional R5 billion allocation to NFSAS, students are sleeping in libraries and on the streets and our universities and tertiary institutions have become battlegrounds, because NFSAS is an inadequate funding tool.
When Gordhan claims, as he does on page 5 of his speech that, transformation must us unite and not divide South Africans, he continues to peddle the illusion that white monopoly capital will relinquish their economic power without a struggle, without conflict and extortion, and without conquest. Instead, the imperialists have blocked every progressive measure to correct the injustices of the past; they have legally and illegally exported much needed capital out of the country; and they continue to viciously hold on to the control of the economy and finance capital.
But, even he cannot conceal the fact that all the measures he has announced are going to amount to nothing.
Towards the end of his speech Gordhan, plays his hand. When he proposes a “charter of economic rights” it’s his final act of betrayal of the working class: an attempt to water down the Freedom Charter and replace it with the much vaunted “negotiated settlement”.
This settlement was that the black government would use the government fiscus, regulations and procurement to grow a black capitalist class, whilst at the same time ensuring that white property, language and cultural rights would be sacred and protected by the constitution. And to guarantee the permanent domination of white capital and capitalists, South Africa would be a “constitutional state” and not a "parliamentary democracy" (because a parliamentary democracy would be dominated by blacks and they could easily overturn the terms of the negotiated settlement.)
Gordhan’s address is a continuation of the failing and crisis ridden ANC’s policy of looking left while walking right. No amount of revolutionary leftist rhetoric will change the trajectory of the economy which is right-wing and capitalist. The black working class will not be fooled again.
There is only one true solution: the revolutionary organisation of the working class behind a revolutionary programme in a revolutionary socialist party to overthrow the supremacy of capital. As NUMSA we will not rest until we have built a Workers Party capable of representing and defending the interests of the working class and capable of advancing to a Socialist South Africa.
Organise or starve!
Issued by Irvin Jim, General Secretary, NUMSA, 23 February 2017