NEHAWU'S RESPONSE TO THE BUDGET STATEMENT
WEDNESDAY, 25 FEBRUARY, 2015
NEHAWU notes the first Budget Speech by the Minister of Finance, Mr Nhlanhla Nene, and amongst a myriad of its outcomes and proposals, we also note the tabling of the 2015 Budget Review, Division of Revenue Bill, Appropriation Bill, and the Estimates of National Expenditure.
The Budget Framework and fiscal stance
As previously stated in our response to the 2014 Midterm Budget Policy Statement {MTBPS}, we are concerned by the plight of the 8.1 million unemployed people (34.6% of the workforce), in view of government's rigid commitment to driving the budget deficit below 3%. This rigidity continues, despite the prevailing economic climate in which the gross domestic expenditure and household consumption remain at their lowest since the recession.
The Treasury is also stubbornly sticking to the reduction of non-interest spending as a percentage of GDP, with real spending only planned to grow by an annual average of 2.3% over the next three years. The dampening effect of this fiscal policy stance on economic growth does not inspire hope amongst the unemployed and our members; many of whom continue to bear the burden of supporting the unemployed relatives and extended family members.
We welcome the undertaking by the Treasury to release a discussion paper on the financing options for the National Health Insurance and the White Paper; we believe this is long overdue. We also give our support to the announced increases in allocations to basic and post-schooling education. However, we reiterate our position that social security policies such the national health insurance and retirement insurance reforms must be left under the custodianship of their relevant ministries and departments - with no undue interference by the Treasury.
Whilst we welcome the review of the supply chain management in the public sector, we are concerned by the Treasury's silence with regard to the ANC's manifesto commitment to the localisation of 75% of procurement in the proposed measures. NEHAWU believes that the promised measures to fight the bleeding of billions of rands out of the country through profit shifting and other unlawful money outflows are long overdue.
Compensation of public service employees
NEHAWU notes the fact that the Minister has steered clear of making pronouncements on the compensation of public service employees, as he misguidedly did in his presentation of the 2014 Medium Term Budget Policy Statement. Despite the notable absence of the rhetoric on the public service wage bill, we note with concern the fact that according to the 2015 National Budget Review, compensation of public service employees is projected to grow by 6.6% a year over the period; this suggests that the employer is sticking to the position pronounced during the MTBPS.
In view of the setting aside of unallocated "contingency reserve of R5 billion next year, R15 billion in 2016/17 and R45 billion in 2017/18", we hope that this is an indication of the employer's sincerity and flexibility in the ongoing public service negotiations as implied by the minister's recognition of the fact that "public service salary negotiations have still to be concluded".
Statement issued by Bereng Soke, NEHAWU General Secretary, February 25 2015
Click here to sign up to receive our free daily headline email newsletter
