NEHAWU RESPONSE TO THE MEDIUM TERM BUDGET POLICY STATEMENT 2021/22

November 11, 2021

Thursday November 11, 2021

The National Education, Health and Allied Workers’ Union [NEHAWU] notes the tabling of the Medium Term Budget Policy Statement (MTBPS) before Parliament by the Minister of Finance, Enoch Godongwana, today the 11th November 2021.

NEHAWU is deeply disappointed and dismayed by MTBPS that was tabled today by Minister Godongwana. As NEHAWU, we view this MTBPS as a continuation of successive vicious attacks directed to workers and the poor by Treasury and its surrogates, which have been overwhelmingly rejected in the recent local government elections, in particular by the working class and the rural poor, who are the core electoral base of the African National Congress.

This year’s MTBPS is underwhelming and devoid of progressive macroeconomic policy response to the unfolding socioeconomic crises precipitated by the pandemic and sustained by persistence with austerity. It lacks a proper debt management and restructuring strategy, it is still centred on Neoliberal macroeconomic policy framework that has been rejected by many South Africans as it has plunged the masses of our people to unemployment and poverty.

Over the past 27 years, these reactionary macroeconomic policies have also deepened social inequalities and deindustrialisation, and thus reproduced the semi-colonial structure of the economy. NEHAWU reiterates its rejection of Treasury’s blunt instrument of cutting the public service wage bill as a debt management strategy. We are disappointed that the Minister of Finance has not changed track on this, given its damage on the economy, electoral performance of the ANC. We therefore call on government to reconsider its decision to dishonour the PSCBC Resolution 1 of 2018.

The austerity measures that have been implemented by Treasury have led to deep social schism in our society, as demonstrated by the July lootings in KwaZulu-Natal and Gauteng as well as other ongoing social unrest in our communities and workplaces. This MTBPS has dismally failed to present a national budget to encourage social cohesion, nation building, and an equitable distribution of the national wealth across and in-between social groups in order to heal our societies of deep social divisions. As a public sector union that organises frontline workers who were the backbone of COVID-19 war, we are deeply concerned by the impact of cuts to key public service delivery functions, in particular the cuts over the next 3 years in the allocations to healthcare by 0.6%, social security by 16.9% and policing by 0.5%. These massive cuts are unacceptable in the middle of a pandemic imposed social and economic crisis.

This budget destroys the quest to build a democratic capable developmental state, with its proposals of structural reforms which is nothing else but the radical privatisation of SOE’s, and the entire network industries which is in state hands. It also undermines the local government ANC election manifesto with regard to the insourcing of all social provisioning within the state.

As NEHAWU, we are deeply annoyed and disappointed by the fact that other monetary policy instruments such as monetary financing and monetizing of the South African debt are still not considered given the severity of the crisis that our economy faces. We had hoped that the South African Reserve Bank would have made everything possible to finance development institutions to support economic recovery through a stimulus package to finance social infrastructure such as affordable quality housing, water, health and public transport for workers and the poor.

NEHAWU is also deeply disappointed, by the failure of government to announce a Basic Income Grant to ameliorate the ever deteriorating social conditions of the poor and working class mostly unemployed female headed households. With the massive illicit capital and portfolio out-flows out of our economy it is disturbing that no attempt has been made to impose transactional taxes and other capital out-flows management techniques. On the redistributive side, we are deeply alarmed by the failure to impose wealth taxes to the rich at the time wherein there exist deep social inequalities in our society between the rich and the poor.

As NEHAWU, we are ready to work with all progressive social forces in the trade union movement, civic and social movements to build the Left Popular Front against austerity, privatisation, and attacks on the working class and the poor, by a neoliberal administration that is hell bent and prepared to use the pandemic and the state of emergency situation we are in to sell the nations assets to the highest bidder.    

Issued by NEHAWU Secretariat, 11 November 2021