Publications
Partners
The Congress of South African Trade Unions (Cosatu) and its affiliate union, the National Education, Health and Allied Workers' Union (Nehawu), have rejected National Treasury's proposed cost-cutting measures, saying they are "shocked" and "dismayed" by the proposals.
The measures, which include a freeze on advertising new appointments and procurement contracts for all infrastructure projects, were outlined in a recent letter from Treasury to national departments, provinces and public entities.
Cosatu and Nehawu - the country's largest public sector union - have raised concerns that the radical measures will be a blow to departments that are already reeling from previous austerity measures that saw their budgets being slashed.
READ: ANC's economic policies are out of touch with reality, say experts
In a statement, Cosatu's parliamentary coordinator, Matthew Parks, described Treasury's measures as "reckless attempts" to impose misguided austerity budget cuts across government in the run-up to the Medium-Term Budget Policy Statement (MTBPS) in November.
While the union federation acknowledged the fiscal constraints facing the state and the need to cut unnecessary spending, Parks said Treasury's proposed solutions will only stifle the economy and further weaken government. He argued that the economy needed stimulus and well-functioning public services and that Treasury's measures would do the opposite.
He said:
“If we are to grow the economy and reduce unemployment, and thus increase the revenue the state needs to reduce debt, then government needs to deal with the fundamental obstacles suffocating the economy, workers and businesses,” he added.
Cosatu called on government to provide additional support to Eskom to reduce and end load shedding and ensure reliable and affordable electricity. The federation, among other things, wants Treasury to urgently intervene at Transnet and Prasa to secure and rebuild the country’s freight and passenger railway network and modernise ports.
“Cutting medication to a patient in the ICU ward at a hospital will achieve little besides killing that patient. Workers can no longer afford to live on hope and prayers, while Treasury experiments with economic theories that have been rejected across the world, including in the industrialised west.”
READ: Monetary policy is a blunt tool in the face of erratic political decision making
Meanwhile, Nehawu said it viewed Treasury's cost containment measures as the department's persistence with its intensified austerity programme.
Nehawu's general secretary Zola Saphetha said that the directive to freeze hiring in the public service was a move towards stricter headcount management. He argued that this was not the solution to the high vacancy rate and understaffing in the public service, which were major contributors to the impeding of service delivery.
Saphetha stated:
He added that Nehawu could not understand why Treasury would issue a directive to freeze hiring new employees when the country was facing skyrocketing unemployment, poverty and inequality.
“We reiterate our call for government and National Treasury to end the moratorium on vacancies in order to improve the capacity of the state to deliver quality public services.”
Cosatu said it would urgently meet with the leadership of government to discuss a more pragmatic and sustainable path to rebuilding the economy, while Nehawu said it would continue its campaign against the implementation of austerity measures.
At the same time, President Cyril Ramaphosa reportedly held a secret meeting with National Treasury officials at a wine farm in Stellenbosch on Wednesday, following Treasury's proposal of spending cuts. The meeting, which lasted until Thursday, was attended by Finance Minister Enoch Godongwana, SA Reserve Bank governor Lesetja Kganyago and other Treasury officials.
