Alliance partners not impressed with budget as job creation ‘falls short’

Finance Minister Enoch Godongwana’s generosity in his budget on Wednesday was not enough to impress the ANC’s alliance partners.

The Congress of SA Trade Unions (Cosatu) shot it down as an “extremely disappointing budget and a repeat of the old promises”.

Cosatu national spokesperson Sizwe Pamla said: “An anticipated 1.8% GDP growth trajectory over the [medium-term expenditure framework] will not see any reduction in unemployment.

“Overall, this was an extremely disappointing budget that repeated old promises, continued its austerity trajectory and was devoid of any new policy interventions to solve the problem of economic stagnation.”

He said Cosatu felt that the central ideas in the budget were not focused on enhancing the labour-absorbing capacity of the economy.

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There was no plan to fix the economy or create jobs, no plan to fight corruption and no plan to stop the leakages that have led to 10% of the budget being lost to corruption.

The state-owned enterprises did not have a funding model, municipalities were still teetering on the brink and budget cuts have continued to be imposed on rural development – sabotaging land reform – the Commission for Conciliation, Mediation and Arbitration and the department of home affairs.

Cosatu’s sentiments were echoed by the Democratic Alliance (DA). DA shadow finance minister Dion George said Godongwana’s projected average GDP growth of 1.8% over the next three years was insufficient to address SA’s high unemployment rate, which reached 34.9% in the third quarter of last year.

George said although the party supported temporary public employment initiatives to provide relief, that was not a sustainable approach to create permanent jobs in the economy.

While acknowledging that the budget offered a welcome but cautious narrative on the state of SA’s fiscal trajectory, George condemned the burgeoning public sector wage bill, escalating national debt and scant detail on the SOEs.

“As long as the government keeps kicking the wage bill can down the road, the threat of a budget blowout will remain high.

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“It is clear that ballooning state expenditure has been driven by wage demands in the public sector and unions, as well as the radical economic transformation faction in the ANC, clearly will not allow the government space to contain this spiralling cost,” George said.

Despite painting a rosy picture of government’s debt consolidation, it continued to track upwards and will reach R4.35 trillion in 2021-22.

“This is enough to set alarm bells ringing.

“But government continues to exhibit lack of urgency, instead choosing to kick the debt can down the road.”

The sugar industry was disappointed by Godongwana’s announcement that the health promotion levy will increase from 2.21 to 2.31 cents per gram of sugar.

Andrew Russell, chair of SA Canegrowers, said: “This hike will threaten thousands more rural jobs.” He said they would request a meeting with the minister to ask him to change his mind.

– ericn@citizen.co.za