FEDUSA in Bitter- Sweet Reaction to the Medium Term Budget Policy Statement

29 October 2020  

The Federation of Unions of South Africa (FEDUSA) had a mixed reaction to the cocktail of progressive and controversial policy interventions announced by Finance Minister Tito Mboweni when he tabled his Medium-Term Budget Policy Statement (MTBPS) in Parliament on Wednesday.

Key among the progressive interventions was government’s adoption as new progressive social policy an historic agreement signed by the social partners at NEDLAC constituencies for the annuitisation of retirement savings beginning in March 2021 to enhance social protection; and the move to comprehensive social security in South Africa.

National Treasury has also endorsed another vital social protection agreement by NEDLAC constituencies – a first for South Africa – that will result in the fast tracking of the introduction of auto-enrolment for all employed workers, and the establishment of a fund to cater for workers currently excluded from formal retirement provision, as an urgent further intervention towards a comprehensive social security system.

In addition, National Treasury will table a Bill in Parliament next year that will make it possible for workers to access a portion of their retirement savings as an income replacement under certain still to be determined guidelines such as during the recent hard lock down regulations. As part of a NEDLAC agreement for a R100 billion stimulus package to create 800 000 jobs, the Minister announced an immediate allocation of R12.6 billion.

The Minister also announced the start of a highly contested process of reviewing Regulation 28 of the Pension Funds Act that will make it possible for retirement funds to increase their exposure to investment in public infrastructure should this be supported by their Boards of Trustees. A notice in this regarded will soon be gazetted for public comment.

However, the reversal of the Treasury Note is simply illogical  and insulting as it erodes all gains on localization and support intended to expand manufacturing and particularly our export manufacturing capabilities.  At a time when the economy is set to shrink by some 7.5%, investment in local manufacturing could not be more vital.

In addition, while the Minister’s announcement of plans of salary cuts for management-level positions, across national, provincial and municipal governments, state-owned entities and all other senior public representatives is a step in the right direction, the fact that this will be across the board for the next three years and also affect ordinary civil servants who were not paid the last portion of their 2018 wage settlement is an insult to their hard work which he acknowledged during his address.

FEDUSA therefore calls on government to reduce exorbitant salaries and packages of Executives of SOE’s, parliamentarians, Executive mayors, Municipal Managers, Heads of Chapter 9 institutions and cut down on the bloated Cabinet with immediate effect instead of punishing public sector employees.

Furthermore, cutting essential departments such as Police and Higher Education to fund a non-performing corruption cash cow like SAA to tune of R10.5 billion is unconscionable fails on a any level of common sense.  Our institutions of Higher Learning are the primary research and development centres for the country.  Who in their right mind would cut research capacity during the middle of a global pandemic?  Similarly, cutting back on police services at a time when crime, in particular Gender based crimes is at an all-time high simply demonstrates a total lack of moral conscience at any level.

The only way a R10.5 billion to SAA can be justified is if the first flight the airline does is straight to Dubai to bring back the Guptas and their briefcases of cash so they can be held accountable and pay back the stolen money.


(597 Words)

For interviews please contact:

Ms Riefdah Ajam

FEDUSA General Secretary

079 696 2625

Issued by:

Frank Nxumalo

FEDUSA Media and Research Officer

072 637 8096