MTBPS: Unions set to complain, with business asking for cuts

With South Africa set to run out of money in less than six months Finance Minister Enoch Godongwana is heading for the first real crisis of his 26 months in the department.

The minister will table his medium-term budget policy statement (MTBPS) today and has no choice but to make unpopular decisions and go against his party’s populist wishes.

Experts indicated he was in the middle of this tug-of-war between the interests of capital and the interests of the socialist-oriented trade union movement.

Godongwana has the backing of big business that believes he must chop, chop and chop and then borrow as he had zero options to deal with the crisis.

Nehawu vow to challenge Godongwana’s budget

But the National Education Health and Allied Workers Union, the largest public service union in the country, vowed to challenge Godongwana’s “Neo-Liberal austerity budget”, which the union claimed was “fixated with draconian cuts across the board”.

The union asked the state to ensure that there would be no reduction in personnel and overall budgets of departments such as health, basic education and social development.

Instead, it should cut ministerial advisors by half and reduce the Cabinet size – especially the number of ministers.

But Business Unity South Africa (Busa) CEO Cas Coovadia had asked Godongwana to outline clear measures that would enable him to spend available funds efficiently.

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The minister must make “deep and substantial cuts in spending” on non-essential and non-productive programmes, then shelve the unfunded prestige projects and link future public sector wage increases to inflation, he said.

“These measures must have the support of the rest of the Cabinet, which must speak with one voice to boost public confidence in the government’s commitment to responsible management of the economy,” Coovadia said.

No tax hike should be implemented as that would worsen SA’s tax burden. “Increasing any taxes will burden households and hobble economic growth further,” Coovadia said.

Nehawu’s general secretary, Zola Saphetha, said Nehawu would continue to stand up against public service wage cuts.

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“We are ready to protest and put pressure on government whenever austerity expansions emerges,” Saphetha said.

But business offered to continue cooperating with the government. “SA businesses are working with the government to resolve the crisis in energy, ease the bottlenecks in logistics, and fight crime and corruption. Businesses’ commitment is clear,” Coovadia said.