NEHAWU response to the 2019/2020 Budget

20 February 2019

The National Education, Health and Allied Workers’ Union [NEHAWU] notes the tabling of the 2019/2020 Budget today in parliament by Minister Tito Mboweni. This year’s budget speech was organised around six fundamental prescripts: 

1. Achieving a higher rate of economic growth

2. Increasing tax collection

3. Reasonable, affordable expenditure

4. Stabilising and reducing debt

5. Reconfiguring state-owned enterprises

6. Managing the public sector wage bill

Regrettably, the macroeconomic framework remains neo-liberal, orthodox and anti-growth and pro-markets forces. The austerity measures it proposes, will cripple the capacity of the state and undermine service delivery to the poor and the marginalised in our society. This 2019/2020 budget undermine the spirit and objectives of Jobs Summit; there is no clear coherent plan to create jobs, drive a broad-based industrialisation that targets strategic sectors that are shedding jobs in the economy.

Public Sector Wage bill

As NEHAWU we are dismayed that the Treasury continuous to decry the fact that the compensation of public employees is the largest expenditure item and his undertaking to effect a R27-billion reduction in compensation – as if quality public services could be delivered on the cheap. In the first place, the new Minister of Finance, Tito Mboweni, is narrowly jumping onto this bandwagon seemingly relying on the old surreptitious ratio drawn from GEAR that proclaims a wage bill that is more than a third of the government’s consolidated expenditure to be excessive. NEHAWU rejects this Neoliberal rationality because by its nature the delivery of public services requires adequate personnel, and the minister does not take into account of the fact that the public service establishment has accumulated a lot of vacancies especially at the coal-face of service delivery in provinces since the 2014 MTBPS. Through this stealthy additional reduction of personnel head-count, workloads on existing personnel have been aggravated and the quality of service delivery undermined.

We condemn the fact that there is a fixation in government to single-out the compensation of public employees, whilst when it comes to the budget there is a deafening silence regarding wastage, corruption and fruitless expenditure incurred through the massive outsourcing of public service functions, as illustrated and exposed in the proceedings of Commission Inquiry on State Capture.

Currently, there is an Inter-Ministerial Panel to review the composition of the public service, we view   the utterance by the Minister as an attempt to pre-empt the outcomes of this panel which is an act of provocation. NEHAWU will await for the recommendations of this panel before commenting on this matter.

NEHAWU would like to reiterate its long held position that labour relations matters between the employer and the employee must be canvassed in proper platforms, our labour regime compels parties to deal with these matters in the bargaining council, the Public Service Coordinating Bargaining Council (PSCBC).

As the biggest union in the public service we will oppose any undemocratic, authoritarian practices that seeks to undermine and unilaterally alter the conditions of employment our members.

On State-Owned Enterprises 

NEHAWU supports the efforts to deal with governance challenges in various State Owned Enterprises (SOEs). However, we are opposed to the unbundling of Eskom into three entities. We have noted that in the speech that the Minister is proposing to sell the so called “non-core” state assets. NEHAWU will not allow the national silver to be sold to the highest bidder, nor will we allow IPP’s to use ESKOM as a terrain of private accumulation. NEHAWU demand more transparency on the IPP’S contracts. We welcomes the additional funding allocation of R23 billion per annum over the MTEF to help stabilise Eskom. More needs to be done to save ESKOM, we call upon the President of the Republic to urgently engage the progressive trade union movement that is organising in the sector on the future of ESKOM, security of supply and pricing, present and future sources of electricity for the country.

Post Schooling Education, and Health

NEHAWU welcomes the continued increased allocations over the MTEF to Post-schooling Education and the promises to fill critical vacancies in health sector, this is in line with both the agreements reached both at the Jobs and Health summit. We call for a speedy delivery of these promises because we need urgent measures to fix our health system and implement the National Health Insurance. Primary health care remains the back bone of our health system, NEHAWU welcomes and support the allocations that have been allocated to the Community Health Workers, and this will go a long way in building a healthy society that cares for the vulnerable in our society.

Manufacturing incentives, and infrastructure spending

With the persistent high levels of unemployment and deindustrialisation more needs to be done to stimulate growth and employment creation; NEHAWU welcomes the following announcements by the Minister of Finance:

- R19.8 billion for industrial business incentives, of which R600 million has gone to the clothing and textile competitiveness programme

- An increase in the jobs funds, which lead to an increase over the next three years to R1.1 billion.  

- R481.6 million that allocated to the Small Enterprise Development Agency to expand the small incubation program

- R1.8 billion that is allocated for the implementation of 262 priority land-reform projects over the next three years. R3.7 billion is set aside to assist emerging farmers seeking to acquire land to farm. 

- The South African National Roads Agency is allocated an additional R3.5 billion over the next 3 years to improve non-toll roads.

Carbon Tax

NEHAWU supports moves towards a low-carbon economy. However, reject the imposition of a carbon tax on fuel of 9c/l on petrol and 10c/l on diesel with effect from June 5. We are dismayed by the entrenched ideological commitment to avoid the imposition of taxes on the high-income earners and the wealthy, and instead preferring to broaden it to all tax payers. The application of the carbon petrol and diesel, just like the 2018 VAT increase, shows an ideological commitment to avoidance of targeting the rich and in this case the high carbon emitters in the broader economy. It is as if the Finance Minister Tito Mboweni, is oblivious to the broadly shared criticisms to a similar tax measure as implemented by the French government.

NEHAWU calls upon all South Africans, the working class in particular to reject the unbundling of Eskom, the privatisation of state owned enterprises, the attack on the conditions of employment of public service workers, and the imposition of drastic austerity in the public service.

Issued by Khaya Xaba, Media Liaison, NEHAWU, 21 February 2019