NEHAWU Response To The Treasury 2023 Budget
Wednesday February 22, 2023
The National Education, Health and Allied Workers’ Union [NEHAWU] notes the tabling of the 2023 Budget and the medium-term expenditure framework by the Minister of Finance, Enoch Godongwana, in Parliament today.
In the overall, measured against the yardstick of the deepening and crisis-levels in the rates of unemployment, inequalities and poverty in this country, the fiscal policy stance is underwhelming and reflects the Treasury’s persistence with its intensified austerity programme which started in 2020. We reiterate our firm opposition to the Neoliberal “structural reforms” in the energy, freight-rail and ports, as we also continue to support COSATU campaign on the scrapping of the eTolls concessioning of public infrastructure to the profiteering private sector. From the point of view of socioeconomic development in the medium-term, this complacent attitude and formulaic Neoliberal fiscal stance is reflected in the absence of any proactive countercyclical spending measures to address some of the key socioeconomic crises facing the country. Gross fixed-capital formation is still woefully below the pre-pandemic levels, despite the grand investment pledges that have been made in the annual Presidential Investment Conferences since 2018. As NEHAWU we believe that the country is facing at least five critical socioeconomic challenges that require urgent measures and against which the Treasury’s fiscal policy must be evaluated, i.e.
• Rising extreme poverty
• Unprecedented level of unemployment
• Rising multi-dimensional and intersecting inequalities
• Dilapidated economic and social infrastructure
• Elite corruption and widespread crime
For far too long, the Treasury’s formulaic persistence with Neoliberal fiscal policy has dismally failed against this yardstick and this 2023 budget and its medium-term expenditure framework represent more of the same. To present a budget with a slowing down economic outlook of 0.9 per cent in 2023 and averaging 1.4% growth rate between 2023 and 2025, whilst admitting the likely stagnation in employment creation is irresponsible and hopeless. It is indeed harrowing that the official employment rate today remains at the level it was in the first half of 2016 and the Treasury doesn’t elevate unemployment as a priority and a risk. To restrict total government spending more or less along the average projected rate of inflation is unacceptable in this crises-ridden socioeconomic fabric.
The Public Service
We note that the Treasury has placed our legitimate demands for improvement in pay and conditions of work in its budget risk register, whilst leaving out the ongoing corruption in spending on goods and services. Accordingly, the Treasury has set the public sector wage bill to grow at an average annual rate of 3.3%, whilst threatening that “a public-service wage agreement that exceeds the rate of growth of the compensation budget, would require steps to contain overall compensation spending through stricter headcount management.” The goods and services, which is a channel of corrupt tenders and consultancies grows higher at 4.7%. For the Treasury to pretend that the collective bargaining dispute of the current financial year of 2022/23 does not exist and to merely state that “this Budget provides for the carry-through costs of the 2022/23 wage increase” is disingenuous and provocative.
We have out-rightly rejected the employer’s 3% increase against the inflation rate of 6.7% -and as a worthy trade union we shall never ever voluntarily accept a wage cut on behalf of the workers. NEHAWU remains resolute and reiterates its position that there shall be no 2023/24 wage negotiation until this current dispute is resolved, let alone for the outer years.
This budget and its medium-term fiscal framework identifies “strengthening the capacity of the state to deliver quality public services” amongst its three main objectives. NEHAWU is currently in the midst of driving its Public Service Delivery Campaign, whose objectives amongst others includes:
• A fight for improvement in pay and working conditions in order to retain skilled and experienced personnel and improve the morale of the public servants, as a necessary prerequisite for effective service delivery.
• To end moratorium on vacancies in order to improve the capacity for service delivery – to shorten the queues and turn-around times and improve the experience of the citizens.
• To eradicate rampant corruption and widespread outsourcing of the state’s responsibilities and functions to the tenderprenuers.
South Africa has an estimated population of about 60.6 million, served by a public service apparatus of about 1 164 000, which is actually lesser than in 1995. According to the World Bank, the growth of the South African population varied between 1.3% and 1.6% between 2006 and 2020, which means that it has grown by more than 22% during this period whilst the headcount in the public service remained virtually stagnant. This means the public service employee per capita has seriously declined. The current plans to increase personnel in policing and public healthcare are extremely marginal and from a low and historically contracting base. What is even more disturbing is the fact that there is no plan to catch up and close this gap over the medium-term in which the current cadre of public servants would be expected to carry out its duties whilst being 12% less and further shrinking in terms of the vacancies. Actually, even this figure of 12% vacant posts is not reliable, as acknowledged by the DPSA. Therefore, we reiterate the demands of our Public Service Delivery Campaign, to strengthen the capacity of the state to deliver services, especially in the areas of the working class and rural poor, by filling vacancies and improving pay, infrastructure and working conditions.
We have consistently opposed the creation of the Border Management Authority (BMA). As a consequence, the Treasury is now taking away R3.3 billion from the National Department of Health (NDOH) to the BMA and it states that “staff will also be seconded from other organs of the state”. We call on the employer to table such plans for engagement with labour – unilateralism in collective bargaining must stop!
Previously the Treasury had placed the National Health Insurance (NHI) as a risk to its fiscal framework. It has now completely erased the NHI as a stand-alone and ring-fenced budgetary item in the consolidated framework, as the overall allocations to healthcare remain woeful despite the impending commitment to establish the NHI Fund in the medium-term. We note that the healthcare budget is increasing by about R7.5 billion in 2023/24, R7.8 billion in 2024/25 and R8.1 billion in 2025/26 to address service backlogs, medical supplies, other key goods and services.
NEHAWU condemns the fact that the Treasury has still not made up its mind on the retention and permanent absorption of the essential healthcare personnel recruited during the pandemic. Even more of these clinicians are required as part of preparations for the NHI. Currently, there are about 39 000 vacant posts in public healthcare in terms of the fixed establishment of about 337 671 according to the 2020 data. In terms of the Human Resources Strategy for the Health Sector: 2030, adopted in 2020, “an additional 97 000-health workers, with CHWs comprising around one third would be required by 2025.” The Treasury’s budget allocations in healthcare over the medium-term mean that the implementation of 2020 Human Resource for Health Strategy is already failing – undermined by austerity in the same way as the previous 2012 strategy was undermined. This is obviously intended to sabotage the NHI project!
We note that the planned allocations to the National Student Financial Aid Scheme (NSFAS) are set to grow more or less in line with inflation at 6%, as would the overall post-school budget at 5%. However, this shall not resolve the brewing contradiction between the growing number of eligible matriculants and the available places at universities in particular, as subsidies to this sector shall increase below inflation at 3.2% over the medium term. Hence, we strongly condemn the contraction of spending on infrastructure for higher education by 2.6% and TVETs by 14%. This would only lead to overcrowded lecturing halls, strained and dilapidating infrastructure, declining quality in the teaching and learning process and the crises of accommodation. Nonetheless, we welcome the fact that the Department of Higher Education and Training (DHET) is reprioritising R1.1 billion over the medium-term to enable the Community Education and Training (CET) sector to build its own infrastructure for learning and teaching in order to reduce its reliance on basic education school infrastructure.
NEHAWU condemns the fact that the Treasury has not made any inflation-linked adjustment to the Social Relief of Distress (SRD) Grant, let alone increment and it remains recalcitrant in its opposition to the immediate and urgent implementation of the Basic Income Grant. It is a disgrace to boast about the attainment of the primary budget surplus whilst depriving and plundering the poor into extreme and desperate levels of poverty. The introduction of the SRD Grant at R350 in May 2020 as part of government’s response to the socioeconomic impact of the COVID-19 was welcomed as a step in a progressive direction. But this grant itself is hardly an adequate means to address and reduce the scourge of extreme poverty that stalks this country. Actually, it is not even a means of survival as it is even less than half of the Food Poverty Line, which is South Africa’s measurement of extreme or absolute poverty, against the backdrop of the unfolding cost of living and poverty crisis in which food and electricity prices are far outpacing headline inflation.
We note that the Treasury is offering individuals that have the means to install rooftop solar panels a rebate of 25% of the cost of the panels, up to a maximum of R15 000, from 1 March 2023. This would obviously exclude the overwhelming majority of the population, especially as this is limited within the window of the 2023/24 tax year. We call on the Treasury to use some of the US$8.5 billion debt-burden to be incurred from the western imperialist countries, the so-called International Partners Group, for the subsidisation of all who seek to install rooftop solar panels. We demand transparency on the terms and conditions for the repayment of the foreign denominated debt involved in this package.
Similarly, we call for transparency on the appointment of an international consortium to review all the plants in ESKOM’s coal-fleet and we are out-rightly opposed to the Treasury’s statement that Eskom is required to automatically implement the operational recommendations emanating from this independent assessment, including that “Eskom must concession all these power stations.” We condemn this agenda of deliberately debilitating ESKOM, as even the debt-relief plan is merely meant for the transmission infrastructure and maintenance whilst excluding the mandate of positioning ESKOM to play a leading role in the roll-out of renewable energy generation in line with the 2019 ANC electoral undertaking.
Issued by NEHAWU Secretariat
Zola Saphetha (General Secretary) at 082 558 5968;
December Mavuso (Deputy General Secretary) at 082 558 5969;
Lwazi Nkolonzi (NEHAWU National Spokesperson) at 081 558 2335 or email: email@example.com