ZINGISWA LOSI | Budget must be exploited to reverse SA’s woes

Finance minister Enoch Godongwana will table the government’s medium-term budget policy statement (MTBPS) in parliament on Wednesday.

Workers have a vested stake in a bold MTBPS that signals a progressive shift towards healing public and municipal services reeling from austerity cuts; rebuilding state-owned enterprises that are key to unlocking economic growth; stimulating an economy stuck at 1% growth for too long; providing a path to employment for 12-million jobless; relief for the poor; and critically, providing the South African Revenue Service (Sars) the resources needed to collect the taxes the state requires to fulfil its constitutional mandates.

All too often the self-appointed champions of neoliberalism miss the point of the budget, treating it as a bean-counting exercise, forgetting that the budget is the state’s most important tool for addressing society’s deeply entrenched socioeconomic challenges, spurring economic growth and building a better life for all.

The government needs to anchor the budget upon society’s dire faultlines of lethargic economic growth, a dangerously high 42.9% unemployment rate, and entrenched levels of poverty, inequality, crime and corruption.

The MTBPS must give society confidence that we are turning the corner on the decade of state capture and corruption, that obstacles to economic growth are being removed, and the calamity of unemployment will recede.

The MTBPS must provide a comprehensive report on how far the government has moved towards implementing the budget’s commitments to rebuilding frontline public and municipal services, in particular filling critical vacancies such as doctors, nurses, teachers, police and other essential personnel. The state cannot deliver quality services the public depends upon unless it has the skilled personnel required to provide them.

The MTBPS needs to include concrete actions to cleanse and rebuild our increasingly dysfunctional municipalities. This needs to include a much more aggressive and intolerant approach by the government to errant municipalities who fail to pay their staff and pension funds, maintain infrastructure or provide basic services.

The MTBPS needs to include concrete actions to cleanse and rebuild our increasingly dysfunctional municipalities. This needs to include a much more aggressive and intolerant approach by the government to errant municipalities who fail to pay their staff and pension funds, maintain infrastructure or provide basic services.

We must acknowledge the green shoots we are witnessing under President Cyril Ramaphosa and the ANC-led government to stabilise and rebuild our SOEs. Eskom has turned the page on load-shedding but requires more support to tackle corruption, nonpayment, cable theft and vandalism. These are key to ending Eskom’s unsustainable dependence on unaffordable tariff hikes.

Progress is being made to return Transnet and Metro Rail to full capacity, easing pressure on the mining, manufacturing and agricultural sectors as well as providing commuters with more affordable transport.

Support must be given to other embattled SOEs, in particular Denel, the South African Post Office and Postbank.

The government needs to provide law enforcement with the tools needed to win the war against crime and corruption. The South African Police Service needs more personnel, working vehicles and massive investments in its IT, forensics, communications and other functions. Our courts must be modernised. A drastic intervention is needed to turn the National Prosecuting Authority around and for those who thrived off state capture to face justice.

Positive signals are being seen with the government’s bold R1-trillion infrastructure investments. More must be done to ensure funds are spent correctly, timeously and in support of local businesses, workers and goods.

A new mass industrial and SMME financing package of at least R200bn per annum is needed to mobilise every possible resource from the state, the developmental finance institutions, private banks and pension funds. The economy cannot reach the 3% growth needed to tackle unemployment if we continue to allocate a relative pittance to supporting industrialisation, exports and job-rich sectors and SMMEs.

Equally critical is a relief package for struggling businesses in the form of tax rebates, lower electricity prices and fixing the mess at the Unemployment Insurance Fund’s Temporary Employee Relief Scheme. Struggling workers and businesses get cold comfort from PowerPoint presentations. They need cash in their pockets.

As the state is rebuilt and economic growth blockages are removed, a path to employment is needed for the millions of unemployed. The presidential employment stimulus programme has done well to pay the minimum wage and provide thousands of young people with the practical skills and experience needed to find permanent jobs. This must be ramped up to accommodate at least 2-million people annually.

Social grants, and in particular the social relief of distress grant (SRD), must be protected from inflationary erosion. It is beyond shameful that in its five years of existence the SRD grant has only once been adjusted for inflation.

Commissioner Edward Kieswetter and his team have done sterling work undoing the damage inflicted under state capture at Sars. Tax compliance has improved from 61% to 67%. Sars needs to be given further resources and a clear target of reaching 75% tax compliance within three years. This will enable the government to plug gaping financial holes, improve public services, inject liquidity into the economy and provide relief to workers and the unemployed.

The government needs to exploit the MTBPS and the pending 2026 budget to give hope to struggling workers and a weary society, and to lift the economy to the 3% economic growth needed to set South Africa firmly on the path to inclusive growth and renewal.

• Losi is president of Cosatu