EFF statement on the Medium-term Budget Policy Statement

31 October 2019

The EFF notes the Medium-Term Budget Policy Statement delivered by the Minister of Finance Tito Mboweni yesterday. The policy statement by Minister Mboweni shows yet again that there are no new ideas, creativity or shift towards reviving the economy that has completely collapsed. This is an honest admission by the ruling party to the people of South Africa that it does not know what to do with the economy.

Treasury's policies are at the centre of the South African crisis of unemployment, poverty and a stagnant economy. We are not shocked that there is no departure from the previous trends instead, the thinking that got South Africa to where it is today continues with more enthusiasm and determination.

The EFF notes the reduction of benefits for Public Representatives and reminds South Africa that the EFF Founding Manifesto says "The manner in which the state is currently structured with regards to benefits and perks given to elected representatives is not only costly, but unethical in that it leads to a social distance between the people and representatives. As a matter of principle and decisive intervention, the EFF advocates for public representation that is not defined by unnecessary luxuries and benefits, most of which costs the state unnecessary and very costly sums of money. To decidedly address this question, the EFF will advocate for a policy position that will lead to representatives not being bought cars by the state, and not being bought houses either. The amount of money the state spends on representatives' personal conditions and upliftment is in no way justifiable. As public representatives with salaries, ministers, MECs and councillors should use their own cars and stay in their own houses, paid for by the salaries they are given by the state".

We additionally call for the relocation of Parliament from Cape Town to Pretoria so that we have one Capital City, administrative and legislative. This should be realized as a matter of urgency, and be expedited by decommissioning provision accommodation for MPs in favour of a different model.

Whilst we agree with reduction of perks for public representatives, we caution the ministry of finance that structural austerity measures on social services and infrastructure are not a sustainable economic recovery strategy.

There is no new thinking on how to stabilize state-owned enterprises to repurpose them as key drivers of industrial development and service delivery. Instead, the Minister has only revealed the government's intention to move with speed towards privatisation of strategic state-owned enterprises, and amputate the little capacity that is remaining to revitalise industrialisation.

The policy statement was presented as if Stats SA did not release quarterly labour force figures which showed that unemployment has increased to 29.1% in the 3rd quarter. There is no youth employment initiative that President Cyril Ramaphosa is driving. Since his appointment as a President, the unemployment rate has increased from 26.7% to now almost 30%, with no concrete plan on how to grow the economy and create jobs.

We note the intention to continue with e-tolls, and we reiterate our call for our people to reject the e-tolls. Government must find other means to refinance the debt of e-tolls and future construction. Public infrastructure must be enjoyed by all and should contribute to play a role in redress.

We are concemed that additional resources were made available to SARS and the National Prosecution Authority, but there was no immediate intervention to give the Public Protector additional resources despite sound request to capacitate her office.

South Africans from all parts of society should be extremely concerned about the current debt levels that have reached more than 60.4% of the GDP. Government owe private lenders a lot of money without a clear and believable plan of how to deal with the borrowings that are clearly crippling the fiscal plan. It is now evident that South Africa is in a financial crisis.

We proposed the following urgent measures as medium intervention towards the budget speech in February to stabilise the economy and stop the bleeding in the job:

Measures to deal decisively with illicit financial flows to ensure SARS meets revenue targets.

Leverage state procurement budget to stimulate local industrialisation through state buying of locally manufactured goods and services, to move away from exports of basic goods and services.

Move towards insourcing of workers in all spheres of government to stimulate demand and widen tax base to lessen dependence on safety net.

Repurpose the public sector to reduce dependency on private sector to deliver services and build state capacity to ensure that we improve the effectiveness of the state.

Leverage the R500 billion of possible infrastructure projects to build state capacity build roads, water, sanitation, houses, schools and other infrastructure without too much dependence on the private sector.

Ensure implementation of national minimum wage with a revised rate.

Stabilise electricity supply through normalisation of coal crisis.

Issued by Mbuyiseni Ndlozi, National Spokesperson, EFF, 31 October 2019