COSATU Medium Term Budget Policy Statement’s Expectations

25 October 2016

COSATU appreciates the enormous challenges facing government to create jobs, stimulate economic growth, reduce the debt, increase revenues, stabilize public finances and attract investment. 

COSATU wants our ANC-led government to succeed.

COSATU must state that the economic crisis facing workers did not start in December 2015. 

It’s been there for more than 40 years. 

Workers have been decimated by long term 36% unemployment and amongst the highest levels of poverty and inequality in the world. 

Workers are looking to and need the help of government and the private sector to uplift them for this untenable situation.

As COSATU, we are proud of the many massive achievements that our government has made on a wide variety of issues since 1994, from social grants to housing to education to infrastructure development. 

However, we must be honest and admit that we have failed miserably as a nation to defeat unemployment.  We will not be able to move forward until all South Africans have permanent decent work.

Whilst appreciating government’s constraints, we do not get a sense of how it plans to decisively reduce unemployment. 

We need to be creating 100 000 jobs per month to reduce unemployment and to absorb new labour market entrants. 

We are far from achieving that.  Government needs to tell us how it will slash unemployment. 

This must be its top priority.  The Youth Wage Subsidy won’t resolve it.

COSATU applauds government for resisting the temptation to increase Value Added Tax [VAT].  Such a move would be a painful blow to struggling lower and middle income families in particular the working class

However, government must not dream of increasing VAT in the future. 

We expect the Minister to resist such temptations.  VAT is a regressive tax that hurts the poor and stifles demand and economic growth. 

COSATU will fight any VAT increase.

COSATU expects the Minister to equally commit to not increasing income taxes on working and middle class families. 

We hope that he will equally not repeat government’s subtle tax increase through the back door on lower and middle income families through the lower than usual inflationary based adjustment of the tax brackets in next year’s budget. 

COSATU believes that government should rather increase taxes on the wealthy and on luxury goods and imports.

COSATU appreciates government’s avoidance of a full austerity budget and its efforts to protect service delivery and social expenditure. 

However, we must raise concerns on the reduction in funds allocated to the Department of Trade and Industry which has played a key role in protecting jobs as well as the reduced allocation to the Department of Labour. 

This has decreased its capacity to enforce our labour laws.

COSATU rejects with contempt the continuous attacks upon public servants’ right to earn a decent living wage. 

Nurses, doctors, teachers, police officers and municipal cleaners play an important role and deserve to be able to provide for their families.  COSATU will fight any attempt to undermine their right to a living wage. 

COSATU appreciates government’s pledge not to freeze critical vacancies as nurses, doctors, teachers and police officers. 

However, we have already seen the negative delivery impact this has had on key departments such as health, labour, police etc.  This issue must be engaged with unions at the Public Service Bargaining Council and not simply be left to management to pick and choose.

COSATU supports government’s efforts to reduce wasteful expenditure.  All departments, municipalities and parastatals must fall in and be dealt with if they don’t. 

However, much more can be done in this regard, particularly at a management level across government.  It seems there is a lack of political will in certain Ministries and Departments in this regard.

COSATU supports efforts to consolidate and place on a sound footing our struggling parastatals.  Government must deal decisively with these out of control CEO’s who have brought the SOE’s to the verge of collapse. 

Corruption, labour broking and outsourcing must come to an end in SOEs and across government as a whole.  Treasury must provide adequate funding to SOEs so that they can fulfill their developmental mandate. 

Privatisation cannot be the route to solve their challenges.

Government must be commended for ending black outs.  However, Eskom cannot be privatized.  That will result in electricity becoming un-affordable for workers.  Eskom must not be allowed to continue with its hyper-inflation increases. 

We expect to see more investments pumped into the rapidly growing renewable energy sector which has boosted the economies of many rural towns. 

We hope that the Minister will announce that government has abandoned the unnecessary and un-affordable nuclear plans.

Government must accept that E-Tolls have been rejected, are dead and end them once and for all.

We expect the Minister to announce government’s plans to rapidly ensure free tertiary education for working and middle class families.  Government can no longer afford to allow this crisis to continue and our campuses to burn.

We expect government to announce plans to introduce the National Health Insurance [NHI] and to treat it with the urgency it deserves. 

Our workers are dying from easily treatable diseases.  We cannot continue to be the TB and HIV/ AIDS capital of the world. 

Government must be commended for the massive roll out of ARV’s. 

Government must act with speed to deal with the water crisis. 

Municipalities cannot be allowed to continue to neglect water infrastructure nor must they be allowed to price water out of the reach of the poor.

COSATU appreciates that social grants have not been cut and have been expanded. 

However, we must express our disappointment that their increases have below inflation.  We equally demand to know when government will release its long promised Discussion Paper on Social Security. 

The Minister made this commitment in February’s Budget Speech to release it by July. 

Till date nothing has happened. 

Government must not break its promises to workers.

Lastly, COSATU calls upon government to end the youth wage subsidy.  It was been proven to be nothing less than a subsidy for labour brokers.

Issued by Matthew Parks, Parliamentary Coordinator, COSATU, 25 October 2016