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Fight Inequality Alliance SA Medium Term Budget Policy Speech Reaction

16 November, 2021

Last Thursday, Finance Minister Enoch Godongwana enacted his political commercial, under the guise of the Medium Term Budget Policy Statement (MTBPS) in parliament. On the same day, hundreds of HUNGRY & ANGRY citizens, including affiliates of the Fight Inequality Alliance SA, took to the streets in different parts of the country. They banged on Empty Pots and Pans to protest against austerity.

The MTBPS was tabled against the backdrop of enormous economic and social turbulence, which are mostly experienced by poor and marginalised communities.Yet the Minister’s speech lacked any sense of urgency and failed to set out meaningfully redistributive economic plans, that the majority of South Africans can benefit from. In short, it proved to be yet another missed opportunity for the Government to take the pulse of the street and hone in on people's grievances and demands. It remains “Pro-Poor” in rhetoric only.

The statement prioritizes achieving a surplus in the 2023-24 budget—just 18 months from now. To do that, it anticipates steep spending cuts over the next three years in real terms (i.e. taking into account inflation). Health care is cut by more than 13%. Basic education is cut by 8.9%. Social grants are cut by more than 15%. It gives no indication that the Social Relief of Distress grant—as inadequate as it is at R350 per month—will continue beyond March 2022. All this when both the health and socioeconomic impacts of the COVID-19 pandemic continue to devastate. Refusing to use public money to protect the public in a context like this is a fundamental failure by the Treasury.

In presenting the statement to parliament, Minister Godongwana stressed that “critical to the fiscal path we have chosen is the need to be clear and unambiguous on the trade-offs we are willing to make as a nation”. Make no mistake, what’s being traded off is the lives and livelihoods of tens of millions of South Africans. For what? To prop up an unjust economic model that means scarcity for the many and wealth for the few. This was the key message from protesters around the country.

In the words of Chulumanco Nkasela, “We need a budget that works for the people, the unemployed, the poor and the destitute in this country. Not a budget that further enriches those who are already rich.” These are the voices of young people who are the most vulnerable in the South African labour market; they sit with an unemployment rate of 74.8% There is a growing understanding that austerity is the political struggle of our lifetime and communities are standing up and saying: No! There Are Alternatives.

But, instead of listening to—and meaningfully engaging with—these proposals, Treasury remains dogmatic in its commitment to austerity. According to Minister Godongwana, the MTBPS “charts a course that demonstrates the government's unflinching commitment to fiscal sustainability, enabling long-term growth by narrowing the budget deficit and stabilizing debt” (emphasis added). But, as past crises have taught us, this outdated “trickle down economics” thinking is fundamentally flawed. Austerity has failed to deliver promised growth. Instead, it has only served to widen inequality and deepen violations of socioeconomic rights—rights the government is constitutionally bound to guarantee.

It has now become more important that society unite and build a new center of power through mass mobilisation. We need to be organised to fight the austerity measures that are put out by government that will leave the vast majority of us poorer. It is also equally important that we take up the issues of austerity globally because it is fueled by a global economic system that has huge implications on our lives.

The Time to Tax The Rich is NOW!

 

For more details contact: mahayle.khonziwe@fightinequality.org or wafaa.abdurahman@fightinequality.org

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