FEDUSA Expects Announcements of Concrete Measures in Budget 2022

22 February 2022

The Federation of Unions of South Africa (FEDUSA) expects Finance Minister Enoch Godongwana to announce detailed measures to revive the economy on Wednesday during his maiden Budget Speech. This is after broad Economic Reconstruction and Recovery Plan commitments made by President Cyril Ramaphosa during SONA 2022 two weeks ago.

The union federation expects Minister Godongwana to announce concrete measures to take forward general intentions made by Ramaphosa on Job Creation , the Basic Income Grant (BIG), localisation, infrastructure investment, redesigned loan scheme for SMEs, revival of SOEs, the public sector wage bill, third party access to Transnet frail infrastructure and partial access to retirement savings among others.

Energy security is vital to economic recovery and by extension, the protection of existing jobs and creation of new ones on a massive scale. Yet rolling electricity blackouts continue to hobble economic operations because for the past 12 years. All that has been certain has been the imposition of ever increasing electricity tariffs on consumers for an erratic supply. The latest being the 20.5% increase application to NERSA. The time for National Treasury to announce concrete plans for Eskom is long overdue.

In general, Godongwana needs to announce concrete measures in the form of decent budgetary allocations to reverse the destructive decline of many State Owned Enterprises (SOEs) such as SAA, Denel, Transnet, Metrorail, the National Ports Authority and others. These SOEs have not only been a heavy drain on constrained public resources but are also struggling to pay salaries to workers, many of whom belong to trade unions that are affiliated to FEDUSA.

FEDUSA also urges Minister Godongwana to retain VAT at current levels and award workers more tax rebates to ameliorate runaway food and fuel inflation, interests rates and economic hardships brought by the COVID-19 pandemic.

The economic hardships caused by the pandemic include the closures of many SMMEs which were also worsened by the July riots. FEDUSA expects the Minister to announce a tax relief package to assist these entities in addition to the revamped loan guarantee scheme announced by Ramaphosa in the SONA.

Ramaphosa talked about the repositioning of Durban as a hub port for the southern hemisphere and the development of Ngqura as the container terminal of choice during SONA, however Godongwana needs to spell out how the government is going to entice private sector and other third party agencies to a national railway infrastructure that has been destroyed and lays dilapidated by years of vandalism and state neglect.

The R350 Social Relief of Distress Grant was thrown a 12 month lifeline in the SONA,  however, as this cannot be sustained in the long term, FEDUSA expects Minister Godongwana to announce concrete measures for the gradual phasing in of a Basic Income Grant as a viable alternative to the R350 SDR.

The Master Plans and the Localization Agenda are great levers for economic recovery. However, the Localization narrative is very fluid and lacks concrete plans, including incentives for the private sector to buy in and participate fully. It would be very helpful if Minister Godongwana can provide a clear road map.

In his maiden Medium Term Budget Policy Statement in November last year, the Minister missed the opportunity offered by the commodities boom and the increased tax collections of nearly R150 billion and R99,6 billion respectively, to close the gap in public service remunerations. Instead, the Minister saw it fit to argue unconvincingly that short-term income cannot be used for long-term expenditure. Public servants are still sitting in limbo waiting for the Constitutional Court to make a ruling on their appeal against the Labour Appeal Court’s upholding of the government’s refusal to honour the 2018 Public Sector Wage Agreement. FEDUSA hopes the Minister will provide clarity on this critical matter.

Illicit flows out of the country are estimated at R100 billion a year and could also be rerouted towards assisting with much needed service delivery and remuneration of public servants. The government’s silence on this matter is also disappointing.

(686 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

073 637 8096