COSATU MTBPS Expectations Statement

October 25, 2024

The Congress of South African Trade Unions (COSATU) urges government to table a decisive and progressive Medium-Term Budget Policy Statement at Parliament on 30 October.  An economy stumbling along with a sluggish 1% growth rate, witnessing a rising unemployment rate of 42.6% and higher for youth, entrenched levels of poverty and inequality, embattled public and municipal services, ailing State-Owned Enterprises, and endemic crime and corruption; cannot afford a tepid business as usual approach. 

The Federation agrees that the public debt must be managed, and its trajectory curbed, but the most sustainable and sober path to achieve that is to stimulate economic growth, spur job creation, ensure the state can provide the quality services and support that society and the economy depend upon.  A growing economy and workers in jobs will generate the tax revenue the state requires to fund its constitutional developmental mandate and reduce its debt levels.

Slashing budgets does not address the causes of a stagnant economy, in fact it worsens the crises as it starves the economy of badly needed stimulus and further cripples essential public services with brutal cuts.  The tried and failed neo-liberal approach of putting the cart in front of the horse and flogging it into exhaustion, has been doggedly pursued by Treasury for years and trapped us in our economic rut. 

We hope Treasury and others, will abandon the offensive myth that the public sector is bloated when in fact due to austerity cuts the ratio of teachers, police officers and health workers to society has risen at alarming rates.  None should be surprised when Home Affairs is overwhelmed when it is battling a 60% vacancy rate.  The false propaganda that the public service wage bill is out of control needs to be abandoned, as it was in line with international norms and stable at 35% of the budget since 2008.  Over the past two years with below inflation salary increments and the freezing of posts, it has plummeted to 31% and is now sparking a brain drain of badly needed skilled workers from the state.

Whilst appreciating the many demands facing the state, government needs to be bold, protect key frontline services and inject resources into key programmes that will help unlock growth, fix the state, provide relief to the poor and create jobs.  If we are to achieve these, then government needs to prioritise the following key high impact interventions:

• Ramped up stimulus for the economy by ensuring the R943 billion infrastructure programme is spent well, substantially increased funding for industrial and export programmes as well as SMMEs.
• Additional support to end Eskom’s dependency on unaffordable double-digit hikes, as well as help Transnet and Metro Rail return to full productivity thus unlocking the mining, manufacturing and agricultural sectors, as well as shielding food and commuters from inflation.
• Comprehensive turnaround plans for struggling State-Owned Enterprises, e.g. Denel, the SABC, Post Office and Postbank, this must include not only repositioning them but saving their workers’ jobs.
• An urgent set of interventions to stablise and rebuild struggling municipalities to ensure staff are paid, basic services are delivered, corruption tackled, and infrastructure maintained.
• Investing in frontline public services by filling critical vacancies, appointing competent management and upgrading infrastructure, in particular schools, Home Affairs, hospitals and clinics.
• Ensuring the police, National Prosecuting Authority, Courts and other law enforcement organs have the resources they need to win the war against crime and corruption.
• Providing relief to the poor and working class, including protecting social grant recipients and workers from the rising costs of living.
• Increasing pathways for the unemployed, in particular the youth, to enter the labour market and acquire the skills and experience to find decent permanent jobs, including through drastically expanding the Presidential Employment Stimulus.
• Allocating the South African Revenue Service the funds it requires to boost tax compliance and ensure all, in particular the wealthy, pay the taxes needed to enable the state to provide the quality public services the working class depend upon. 

Albert Einstein once stated that “the definition of insanity is doing the same thing over and over and expecting different results.”  Workers, the economy and the state have been struggling for far too long.  Government needs to use the MTBPS and the pending 2025/26 Budget as a turning point to marshal every possible resource, including overcoming the private sector investment strike, to ensure we fix the state, grow the economy and slash unemployment.  We do not have limitless time and should not simply pray for better times. 

Statement issued by COSATU, 25 October 2024