Organised labour on Tuesday read the riot act to the government over cost-cutting measures proposed by the Treasury due to unprecedented revenue and spending pressures.
Labour urged the government to strengthen state institutions and provide support to Eskom to create economic growth and reduce joblessness.
President Cyril Ramaphosa met with leaders of Cosatu, Saftu, Fedusa and Nactu virtually under the auspices of the National Economic Development and Labour Council (Nedlac) to discuss the administration’s challenges in meeting its priorities and how to “fast-track economic recovery”.
The president briefed them about progress the government is making in tackling the country’s socioeconomic crises.
Federation of Unions of SA (Fedusa) general secretary Riefdah Ajam said unblocking the country’s economic growth is critical “as the jobs bloodbath worsened by the electricity crisis must be addressed with greater conviction”.
Ajam said austerity measures contained in a Treasury note have spread “much panic within the membership ranks, and at a macro level, create the risk of anarchy”.
“This latest move by government will most certainly hamper all forms of service delivery and the freezing of critical posts will have a lasting impact on crime and security, policing, the ability to move forward on the [National Health Insurance] and so on,” she said.
Poor rail, road and ports infrastructure remains a “stumbling block” and privatisation would intensify the jobs bloodbath. “Urgent intervention at Transnet and Metro Rail to secure and rebuild our freight and passenger railway network and modernise our ports remains an immediate priority.”
The SA Federation of Trade Unions (Saftu) also rejected cost-cutting measures proposed by the Treasury “as they have dire impact on the quality of public service”.
“For instance, the temporary freezing of vacant posts that is proposed as a cost-cutting measure worsens the low levels of the headcount in the public sector,” union spokesperson Trevor Shaku said.
“The public servant to population ratios have thus worsened, with educator-to-learner ratio of 1:31 in basic education; police-to-population ratio of 1:413; nurse-to-patient ratio of 1:224; doctor-to-patient ratio of 1:3,198 and a social worker-to-patient ratio of 1:5,000. This is compromising the future, health, and safety of our people, as 80% of the country’s population depends on public services,” Shaku said.
The Congress of SA Trade Unions (Cosatu) said it is deeply dismayed by the Treasury’s shocking proposals to “impose ill-considered cuts across government” as it prepares to table the medium-term budget policy statement.
“The federation is shocked the Treasury has tabled proposals to close various departments and key government programmes, reduce the public service headcount by 200,000 and raise VAT by 2%, in addition to freezing vacancies and suspending infrastructure investments,” Cosatu said.
“If government wants to cut wasteful expenditure, it needs to reverse the offensive increases it has given to MPs and the legislatures earlier this year, and just two weeks ago to councillors. Cabinet can abandon the litany of perks it feels entitled to. Government should slash the number of ministers from 28 to 20 and deputy ministers from 34 to 5 as well as the 10,000 councillors loitering about dysfunctional municipalities.”
Cosatu said if the government wants to grow the economy and reduce unemployment, it should — among other things — provide additional support to Eskom to reduce and end load-shedding; intervene at Transnet and Metrorail to secure and rebuild the rail network; and stabilise and overhaul dysfunctional municipalities.
SA Revenue Service
It should also allocate additional resources to the SA Revenue Service (Sars) to tackle “tax evasion and customs fraud, and conduct lifestyle audits on the wealthy, and thus generate badly needed state revenue”.
In a statement, the presidency said it was agreed at the Nedlac meeting that tackling unemployment and poverty would improve social and political stability and lead to economic growth.
Ramaphosa said: “Given the scale of the challenge, we require support from all social partners to urgently accelerate implementation of the government’s plans and drive additional interventions.
“While there is encouraging progress, the energy shortfall remains the single biggest constraint on economic growth. We need to accelerate and expand our efforts even further, not only to overcome the immediate crisis, but to fundamentally reform our energy sector and ensure that we never face such a shortfall again.”
National Council of Trade Unions (Nactu) general secretary Narius Moloto said the unions requested a follow-up physical meeting with the government to further reflect on its presentation. “We also feel that the issues [Ramaphosa spoke about] need to be broadened to include the high levels of unemployment and poverty ravaging the country,” Moloto said.
Organised labour overall convener Gerald Twala said labour welcomes the engagement and hopes it will be the beginning of further discussions on various measures to “grow the economy, create jobs, rebuild the state and tackle crime and corruption”.
“Labour is deeply concerned about the variety of crises affecting our state-owned enterprises, municipalities, government, the economy and workers. They require decisive action to resolve them,” Twala said.
“Measures must capacitate the state to deliver quality public services, unlock economic growth and set the nation on a sustainable path.”
The meeting comes after the Sunday Times reported that Ramaphosa and his ministers had been briefed that the government would have to raise VAT or close dozens of state programmes to lower spending sufficiently to allow it to continue with the R350 social relief of distress (SRD) grant beyond March next year. By one Treasury projection, the SRD grant could cost the country R129bn a year by 2030/31.
The meeting, according to the paper, followed the release of a Treasury memo last week warning that the government faces unprecedented revenue and spending pressures as the economy falters amid load-shedding, inflation and stagnant growth.
Data released by the Treasury last week showed the budget deficit had hit R143.8bn, the largest since 2004 and greater than economists’ forecasts of R115.5bn.
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