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COSATU's expectations statement for 2017/18 budget speech
The Congress of South African Trade Unions has enormous expectations from the upcoming 2017/18 budget to be delivered by the Minister of Finance, Pravin Gordhan next week. We do not expect a business as usual budget but one, which will be in synch with the resolve of the ANC, that this year must be dedicated to radical economic transformation.
As the federation, we expect the Minister to allocate more resources towards government programmes that are meant to create jobs and adopt policy positions that will kick start economic growth. The main priorities and the overall focus of the budget should be about addressing the triple challenges of the high levels of unemployment, deepening poverty and growing inequality.
The Quarterly Labour Force Survey (QLFS) for the fourth quarter of 2016 shows a slight decrease of 0,6 percent in employment.
The official rate of unemployment declined marginally from 27.1 percent in the third quarter to 26.5 percent of the labour force in the fourth quarter of 2016.
The budget should help start to unpack the President's "Radical Economic Transformation theme", as announced in the State of the Nation Address last week. Most of the economic transformation raised issues in the SONA focused on BEE and the already empowered but presented no coherent job creation plan and targets by government.
The January 08th Statement of the ANC NEC, delivered by the president called for every cent that will be spent by government to be directed towards employment creation. We need to see this happen across all government departments, provinces and municipalities. The budget needs to clearly outline the plan and the programme to implement this directive.
COSATU expects to hear about tax increases only for those, who can afford them; the rich and not the working and middle classes.
The current socio-economic situation in the country means that we should not have any increase on VAT or income tax for the lower and middle income earners.
We want an introduction of a progressive tax system, with an introduction of a tax category for the super rich, including an introduction of solidarity tax, whose aim is to cap the growth of earnings of the top 10% and to accelerate the earnings of the bottom 10%. We want to see an introduction of investment tax credits to encourage local procurement of machinery and equipment and an increase in tax on financial transactions, including capital gains tax above a certain minimum threshold to limit short-term capital flows and to encourage productive investment.
We reiterate our call for the abandonment of inflation targeting and for a new macroeconomic framework that will target economic growth and employment targets. We call for the reinstatement of capital controls to prevent the asset stripping of South African industry.
Government should deal with tax evasion through conducting lifestyle audits for public representatives and those private individuals' in the wealthy bracket ;and also consider tax incentives for the SMMEs.
On Land Reform and Agriculture, we expect to see additional resources provided to meet land reform targets, and also give support for the sector to enable it to compete with subsidized US, EU and Brazilian agriculture products. We also want to see more support for emerging black farmers in particular.
The federation wants to hear about timeframes around comprehensive social security reform ,and the extension of a 2018 deadline for compulsory annuitisation of workers provident funds ,because government delayed the presentation of the Comprehensive Social Security paper at Nedlac.
Treasury should shift the social grant payment function to the Post Bank, as a way of building state financial institution. COSATU wants to hear about government's plan to rollout an affordable, safe, accessible and reliable public transport system, including how they plan to address the metro rail crisis.
On energy, we expect to get clarity on the unpopular and unaffordable nuclear energy procurement plan and about the expansion and acceleration of the renewable energy sector. We need a funding model that will help reduce excessive electricity increases by Eskom and municipalities and a proper plan to address the municipal electricity payment crisis.
The budget needs to address the Department of Water and Sanitation's budget crisis and must put the department under administration if necessary. Government needs to address the water crisis through conservation, desalination etc. Municipalities should be helped with a plan to stop excessive water price increases that are victimizing the poor citizens and killing small businesses.
More resources should be allocated to the police in order for them to meet their policing targets and to the correctional services to ensure that they do not become colleges, where criminals graduate in crime but become facilities that rehabilitate them.
The crisis in our education system persists and the quality of education is declining, despite improved matric results last year because poor children remain trapped in inferior education with wholly inadequate infrastructure. Many schools depend on boreholes, rainwater or have no access to water on or near site, have no arrangement for disposal of sewage and many still depend on pit latrines. They have no source of electricity, and no libraries or laboratories.
We expect the education budget to be increased substantially to ensure that the education infrastructure is improved; the mud schools are eradicated and that there should be no teaching under the trees.
The budget statement should outline how government plans to provide free and affordable higher education for working and middle class students, and what do they plan to do to fund and address the governance crises in the TVET colleges.
We expect the Minister to allocate more resources to ensure the realisation of the expansion of the FET sector to accept 1 million learners per year. This will in turn reduce the youth labour force, by extending their stay in the education and training system, so that they acquire basic and high-level cognitive skills.
The health budget must be increased substantially to enable the speedy implementation of NHI. We want to hear about practical steps and figures given to achieving the NHI and addressing the infrastructure and staffing crisis in our public hospitals and clinics.
Issued by COSATU
Sizwe Pamla (National Spokesperson)
Tel: +27 11 339-4911 Direct 010 219-1339
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