EFF STATEMENT ON THE MEDIUM-TERM BUDGET POLICY STATEMENT
Wednesday. 28 October 2020
The EFF notes the predictable and undermhelming Medium-Term Budget Policy Statement presented by the Finance Minister Tito Mboweni, The policy statement presented by the Finance Minister, inundated with rightwing ideological drivel disguised as sense and reason, is evident that Tito Mboweni is part of the cabal that is serving local and foreign white monopoly capital.
The policy statements unashamedly attack workers and the poor people at the interest of profit, advancement of private interest that serves the few and must be rejected. The continuing onslaught on workers income and basic services that majority of the poor rely on is disgraceful and will not stop unless society mobilises intensely for the removal of Tito Mboweni as finance minister and ultimately the incompetent, corrupt and spinelessness ruling party.
October marks two years since Mboweni was appointed finance Minister. Since his appointment, Mboweni has not tabled any believable and practical economic policy that has the potential to grow the economy, create jobs. reduce poverty and inequality.
Instead, Mboweni's appointment has been disastrous for South Africa. The COVID-19 pandemic that has affected the global economy only made things worse as South Africa had no plan, to begin with. Mboweni has arrogantly and unashamedly paraded his incompetence. undermining civil society, activists and labour that are important stakeholders. Mboweni has even gone as far as undermining the announced R500 billion COVID-19 social and economic stimulus package, which made it imaginary intervention more than anything.
Mboweni's policy statement is nothing but a pamphlet from the Bretton-Woods Institutions used to solve the economic crisis in the most backward and unscientific manner. The insistence on an austerity budget that we have witnessed as a National Treasury traditional go-to avenue to resolve far much fundamental macroeconomic challenges facing South Africa is not without ideological nuances.
There is abundant evidence from all over the world to show that besides rightwing ideological tendencies, there is no scientific evidence that austerities have either the capacity or potential to resolve the fiscal crisis. Instead, it only reduces government contribution to the nation's gross domestic product. South Africa's economy has continued to deteriorate at a faster rate since Mboweni's appointment because he has misguidedly reduced government expenditure.
The proposed budget policy statement clearly shows that non-interest spending remains unchanged, meaning no known money is going to come from the government to revive the economy. Instead, Mboweni's proposal is a misguided three-year fiscal consolidation programme, another way of saying budget cuts. Mboweni has proposed a large reduction of non-interest expenditure of R300 billion over the next three years.
This is money that will come from public servants' salaries, national skills, training and education, agriculture and rural development and reduction of money for employing healthcare workers. To revive the economy, any proposed budget cuts that fail to allocate funding for additional capacity in the state to deliver services, the inclusion of rural economy into mainstream economy and protection of food security as it is with Mboweni's proposal is misguided, shortsighted and is misaligned with the ill-conceived Ramaphosa plan to create 800 000 jobs. This is completely misaligned with the crisis levels of poverty and joblessness.
South Africa's huge debt to GDP, budget deficits and high-interest expenditure is as a result of the governing party's mismanagement of the economy. South Africa spend more to service loans than what we spend as a country in agriculture, land reform, special economic zones, industrial development and economic development. Mboweni's policy statement does not provide a believable plan on how he plans to address the debt that is out of control we are facing as a country. What made matters worse for South Africa is that majority of the money that was borrowed was wasted in infrastructure projects that had their costs inflated, riddled with corruption and add no value to the lives of workers and the poor.
South Africa continues to face an energy crisis. There is no way we can resuscitate the economy with an Eskom that is being dismantled to serve the interests of a group of a handful and powerful individuals who want to control energy supply.
The expansion of independent power producers at the expense of Eskom that has not and will not reduce the cost of energy and access. If independent power producers want to produce energy, they should do so on their own and not involve public assets. The prioritisations of profit-driven by greed that has informed the expansion of IPPs and dismantling of Eskom, which Cyril Ramaphosa, Pravin Gordhan through his daughter's investments and Mboweni's associates continue to milk the state, is self-serving.
Access to affordable energy and energy security is a human right and should be made available to all. SAA must not be sold to anyone, because the bidders will be foreign companies which will not care about the strategic importance of a national airline. Those who assess the importance of SAA just on superficial balance sheets are shortsighted.
Issued by the EFF, 28 October 2020
