FEDUSA in Mixed Reaction to Budget 2021 Announcements

24 February 2021

The Federation of Unions of South Africa (FEDUSA) has welcomed certain aspects in the announcements made by Finance Minister Tito Mboweni in his Budget Speech this afternoon.

Obviously to be welcomed are the Minister’s announcement of a 5% increase in personal income brackets that will provide R2.2 billion relief to workers, that have been thrown into and crippled by severe economic hardships resulting from the COVID-19 pandemic. The relief is in line with the union federation’s pre-budget expectations that the Minister should rise personal income taxes in the context of the pandemic. Similarly, FEDUSA welcomes the Minister’s fiscal support to companies by lowering corporate tax from 28% to 27% from the beginning of the new financial year in April as they will help them gradually return to full operations and rehire workers, who were retrenched because of economic hardship triggered by COVID-19.

The R10 billion allocated to the procurement of COVID-19 vaccines is a positive step towards the road to national herd immunity and the resumption of full – scale economic activities. Whilst this announcement is also in line with working class expectations. FEDUSA explicitly cautions that the road to full economic recovery is premised on urgency. We simply do not have the luxury of time and waiting for 2 years to rollout will simply frustrate and insult the process.

FEDUSA also welcomes that the Minister has announced the introduction of autoenrollment for all employed workers currently not covered by pension funds. This is considered as an extremely progressive and brilliant new form of social protection, following agreements concluded by social partners at NEDLAC. Annuitisation of provident funds will also be introduced at the beginning of next month.

While FEDUSA welcomes the publication of Regulation 28 of the Pension Act for public comment this week, it will oppose any attempts to reintroduce Prescription of Assets.

FEDUSA remains outraged once again that reference is made to Public Service and Administration Minister Senzo Mchunu’s engaging labour in preparation for a new collective bargaining season. Considering the extreme levels of mistrust and the outright undermining of collective bargaining processes, multi-term wage agreements is now considered as taboo. The continued misrepresentation and misleading of the public must be halted, as the statement is totally devoid of the truth. In fact, the Minister  of DPSA is doing his best to avoid FEDUSA and Labour overall. How can we start speaking on the next multi term agreement when he is already reneging on the current Resolution 1 of 2018?

The positive reference to the Presidential R100 billion Jobs Stimulus is handy but it is disappointing that it does not go beyond what is already in the kitty as expected and only amounts to repackaging and reinvention of what is already in place.


(455 Words)

For interviews please contact:

Ms Riefdah Ajam

FEDUSA General Secretary

079 696 2625

Mr Ashley Benjamin

FEDUSA Deputy General Secretary

083 258 4433

Issued by:

Frank Nxumalo

FEDUSA Media and Research Officer

072 637 8096