NEHAWU statement on the supplementary budget
25 June 2020
The National Education, Health and Allied Workers’ Union [NEHAWU] notes the Supplementary Budget presented by the Minister of Finance, Tito Mboweni, in terms of the Public Finance Management Act, the Money Bills and Related Matters Act.
The tabling of this Supplementary Budget takes place against the background of the release of the Quarterly Labour Force Survey on the 23rd June 2020 by Statistics South Africa. Accordingly, total unemployment rate [the so-called expanded unemployment] was already almost 40% by the first quarter of 2020. This signifies the already unfolding catastrophic socioeconomic crises facing poor households in our population, 10.8 million of which were already unemployed before the implementation of the lockdown measures according to the declaration of the National State of Disaster in response to the Coronavirus epidemic since the second quarter.
As NEHAWU, whilst taking into account the broader fiscal response to the immediate crisis of COVID-19, we are nonetheless disappointed in the fact that this Supplementary Budget largely comprises reallocations across spheres and programmes, in which only about R38 billion is new and additional money. This is despite the fact that we are facing a disastrous over 7% GDP contraction in the current financial year and the fact that other peer countries are taking far more decisive macroeconomic measures to avert economic collapse.
There have been a range of measures proposed by our federation to stimulate economic growth, which have been ignored in the Supplementary Budget. Amongst others, these include the question of the prescribed assets to secure impact investments from the more than 6 trillion rands in pension savings and the implementation of the Government Employees Housing Scheme to stimulate the labour intensive construction sector and to address our members’ pressing demands.
Contrary to the rhetorical claims about the “binging mouth of the hippopotamus” that is causing the debt predicament, the fact is that since 2015 year after year Treasury has announced additional austerity measures in the budgets, to cut spending, hence between 2014 and 2019 non-interest expenditure only grew by 1, 6%. As a consequence, amidst the unfolding public health emergency caused by COVID-19, we have unprecedented rates of vacancies in the coalface sites of public services, including the frontline public healthcare, education, social development, safety and security.
Frontline workers are still facing the grim prospects of being infected by the Coronavirus due to the inadequate supply of the Personal Protective Equipment [PPEs] and the failure by government as an employer to comply with the Occupational Health and Safety Act. In our view, this Treasury’s austerity programme is largely responsible for undermining the country’s fight against the COVID-19 epidemic as more frontline worker are claimed by this contagion.
These sustained budgetary cuts since the fifth administration were however accompanied by massive haemorrhaging of fiscal resources through outsourcing contracts, corruption, mismanagement of SOEs and other agencies, excessive use of consultants, etc. The Zondo Commission has highlighted some of these channels through which the state’s resources have been looted, whilst the last report of the Auditor General South Africa, Kimi Makwetu, highlighted the deteriorating financial management across government and SOEs.
Once again, none of these drivers of the widening budget-deficit and public-debt have been mentioned in the Treasury’s efforts to stabilise public debt at 87.4% of GDP in 2023/24 and in pursuit of the unrealistic fiscal target of a primary budget surplus within three years. Instead, the Treasury continues to single-out government workers under the Public Service Co-ordinating Bargaining Council [PSCBC] and now NEHAWU and other Congress of South African Unions [COSATU] unions are forced to defend collective bargaining from attacks by the African National Congress [ANC] government, to ensure that the 2018 PSCBC agreement is honoured.
We note that Treasury says that “Cabinet has reiterated support for the proposed public-service wage bill reductions announced in February”. As NEHAWU, we can guarantee Treasury that we shall spare no effort and leave no stone unturned in defence of the interests of our members, including in waging a fight to ensure that the 2020 salary adjustments are implemented with back-pay from April.
Issued by Khaya Xaba, NEHAWU National Spokesperson, 25 June 2020