Finance Minister Enoch Godongwana to deliver medium-term budget amid spending pressures.
Civil society and trade union federations have urged the minister of finance, Enoch Godongwana, to put the constitutional rights of workers ahead of unjustifiable budget deficits that will not alleviate the crisis of unemployment and poverty.
The coalition of organisations, including the SA Communist Party, SA Federation of Trade Unions, Institute for Economic Justice (IEJ), the Budget Justice Coalition and others, issued a statement on Tuesday, saying that the slashing of budget allocation would have a negative impact on the poor.
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The budget speech will take place against the backdrop of reports that the World Bank has approved a $1 billion loan to support the reform of South Africa’s energy sector. Additionally, Godongwana has also reportedly foreshadowed that the country might run on a deficit next year if nothing is done to improve government finances.
The statement reads:
As hunger and unemployment soar, the existing absence in public discourse surrounding the MTBPS of prioritising these crises will amount to the government dis-investing from the majority and a negation of the constitutional obligations to the state. Those living in South Africa need a government that actively and effectively addresses the economic and social crisis as and when required.
The coalition of organisations added that the most pressing crises confronting the country include the increased cost of living, joblessness and low income, and increased hunger.
It pointed out that the structural problems that feed into the larger issues are structurally fundamental, including monopolisation, capital intensity, deindustrialisation, the dominance of finance and services and the reluctance of the state to play a more proactive role in driving economic development.
“The urgent challenges we face can only be addressed through a clear job creation strategy, including public employment programmes, expanding social protection through permanent basic income support, tabling supportive economic and industrial policies that stimulate job creation, and the provision of quality basic services,” it further said.
The organisations attributed the fiscal challenges occurring because of the mass exclusion of an enormous segment of society from participating meaningfully in the economy.
It concedes that this exclusion is an outrage from both a humanitarian and economic perspective, as it also puts a drag on growth, erodes the tax base and dampens government revenue.
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“Our fiscal challenges are a reflection of the fact that successive budgets have failed to prioritise solving the issue of economic exclusion. Fiscal consolidation without public consultation is simply putting the cart before the horse—addressing the symptoms, but making the underlying disease worse,” read the statement.
Furthermore, the organisations suggest that government adopts a developmental and rights-based approach to budgeting, immediately closing the mismatched budget and protecting public services and employment.
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