Mini-budget: ‘Budget cuts won’t save South Africa’
Several organisations are calling on the government to find alternative ways of saving money other than cutting the budget for public goods and services.
The organisations, including the South African Federation of Trade Unions, South African Communist Party, Alternative Information & Development Centre, and Institute for Economic Justice, addressed the media on Tuesday.
They shared their expectations ahead of the Medium-Term Budget Policy Statement.
Finance Minister Enoch Godongwana will table the so-called mini-budget in Parliament on Wednesday afternoon.
The tabling of the budget comes amid growing concern over government expenditure and fears that the country could be heading for a debt crisis.
The organisations believe that the National Treasury will have to borrow more money to evade a debt blowout.
“We are calling on the Minister of Finance to intentionally put the constitutional rights and well-being of communities and workers first over narrow and often unjustifiable budget deficit targets that will do little to alleviate the crisis of unemployment, poverty, and inequality and build a more inclusive economy,” they said in a joint statement.
“In fact, failing to fund social provision can erode the credibility, performance, and quality of the medium-term fiscal framework. Over time, this can weaken effective public administration and negatively impact clear oversight, participation, and control over the budget. Over the longer term, it is not clear how much further and how much longer government spending can be cut without aggravating South Africa’s deep political fissures, leading to social unrest”.
Dr Gilad Isaacs from the IEJ called on the private sector to carry a larger portion of the tax burden.
“There is room for the private sector to pay a larger share of tax because we are in difficult economic circumstances, and the ability to tax corporations is not unlimited in the global capitalist economy even if we would like it to be.”
SAFTU’s Trevor Shaku said South Africans should reject the idea that cutting government spending will resolve the economic crisis.
“We know what’s going to be there tomorrow, and they are going to cut expenditure on public goods and services. What we have to do is rally our people to reject the austerity because that is going to be the stable for this country in the next coming years.”
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