Cosatu left disappointed after Ramaphosa budget meeting

If the Congress of South African Trade Unions (Cosatu) believed it would receive answers from President Cyril Ramaphosa at a meeting on Tuesday to what it has called “National Treasury’s shocking proposals to impose ill-considered cuts across the state”, it was left disappointed.

The federation on Monday said it is “shocked” treasury has tabled proposals to close various departments and key government programmes, reduce the public service headcount by 200 000 and raise value-added tax (Vat) by 2%, in addition to freezing vacancies and suspending infrastructure investments.

Read/listen: Budget cuts: Cosatu to meet urgently with government

Cosatu acting national spokesperson Matthew Parks confirmed on Tuesday the meeting with Ramaphosa had taken place, but they did not receive a presentation about National Treasury’s proposals.

“We raised our concerns firmly. They might be draft proposals, but we are concerned about what we see,” he said.

Media reports suggested Ramaphosa had called for an urgent but long overdue meeting with organised labour about the possibility of a further wage freeze, job cuts and more cuts to government services.

However, Parks said it was a pre-arranged meeting, adding that Cosatu meets with the presidency every few months to discuss key economic issues.

“This was actually an outstanding meeting to receive reports and updates on interventions to rebuild Eskom and Transnet.

“We didn’t get a presentation on the Treasury’s proposals.

“I think they are still proposals that I don’t think even government has agreed to,” he said.

“But we did raise our concerns about what we have seen in the media around Treasury’s possible proposals, and we’ve also raised our proposals about what needs to be done to grow the economy – from Eskom to Transnet, to local government, corruption and unemployment and poverty.”

Another meeting

Parks said Cosatu did not receive any feedback from government about the budget proposals, but they have agreed to meet again in the next few weeks to have further discussions about treasury and Cosatu’s proposals.

“We have put the issues on the table, so at that meeting, we must spend much more time [discussing them].

“We just met two hours today [Tuesday], and perhaps we will have a longer full-day meeting to go into much more detail,” he said

Parks said Cosatu hoped the meeting would clarify treasury’s proposals, issues around the economy and the “fiscal crisis”.

Read: SA budget deficit target at risk as wages rise, tax receipts fall

Ahead of Tuesday’s meeting, Cosatu said it is “deeply dismayed” by the shocking treasury proposals to impose ill-considered cuts across government as it prepares the Medium-Term Budget Policy Statement (MTBPS).

Minister of Finance Enoch Godongwana will table the MTBPS in parliament on 1 November.

Plans will weaken ‘already enfeebled government’

Cosatu said it appreciates the real fiscal constraints facing the state and the need to cut fat and reprioritise expenditure, but the suggestions offered by treasury of slashing expenditure and further decapitation of the state when the economy is in desperate need of stimulus and a well-oiled and capacitated public services “will only serve to choke the economy and further weaken an already enfeebled government”.

“If government wants to cut wasteful expenditure, then it needs to reverse the offensive increases it has given to members of parliament and the legislatures earlier this year and just two weeks ago to councillors,” it said.

“Cabinet can abandon the litany of perks it feels entitled to. Government should slash the number of ministers from 28 to 20 and deputy ministers from 34 to five as well as the 10 000 councillors loitering about dysfunctional municipalities.”

Cosatu stressed the need to grow the economy, adding this was “the only sober path to pay down our worrying debt trajectory”.

“Outsourcing the bill to police officers and pickpocketing nurses is not a solution.

“If we are to grow the economy and reduce unemployment, and thus collect the revenue the state needs to reduce debt, then government needs to deal with the actual obstacles suffocating the economy, workers and businesses,” it said.

Cosatu said government needs to:

• Provide additional support to Eskom to reduce and end load shedding and ensure reliable and affordable electricity;
• Urgently intervene at Transnet and Metro Rail to secure and rebuild South Africa’s freight and passenger railway network and modernise the ports;
• Stabilise and overhaul dysfunctional municipalities and restore the basic services communities and businesses depend upon;
• Allocate additional resources to the South African Revenue Service to tackle tax evasion and customs fraud, conduct lifestyle audits on the wealthy, and thus generate badly needed state revenue;
• Fill critical frontline service vacancies in the public services, especially the police, National Prosecuting Authority and courts, enabling them to crack down on crime and corruption;
• Give relief to commuters and the economy by reducing the taxes currently consuming 28% of the fuel price and place the chaotic Road Accident Fund under administration to lessen its need for fuel levy hikes;
• Expand the Presidential Employment Programme to accommodate one million active participants by October’s MTBPS and two million by February’s budget speech to help young people earn a salary, gain invaluable experience and enter the labour market;
• Enhance the invaluable Social Relief of Distress grant to recover value lost to inflationary erosion by raising it to the food poverty line and linking recipients to skills and job opportunities; and
• Expedite and not freeze the badly needed infrastructure investment programme.

Cosatu claimed that if government implemented these “common-sense interventions”, the economy could return to growth and soon meet the 4% growth target.

“This will set the nation on the path to a prosperous job-creating economy, a capacitated developmental state and ensure the fiscus is set back on a secure path,” it said.

Cosatu indicated it would “seek a more pragmatic and sustainable path to rebuilding the economy” at its urgent meeting with the leadership of government.

Read:
SA treasury looks to rein in spending to avert budget blowout
Public sector wages cost R37.4bn more – Godongwana
Less spending not necessarily way to cut deficit, Ramaphosa says