FEDUSA Disappointed with Unimaginative Supplementary Budget

25 June 2020

The Federation of Unions of South Africa (FEDUSA) is disappointed that the Supplementary Budget tabled by Finance Minister Tito Mboweni on Wednesday has not reprioritized government spending in a way that will revive the economy and avoid further job losses. The economy was already in a technical recession when the COVID-19 pandemic hit the country, now the consequential effects start filtering in as Statistics South Africa (Stas SA) reported that unemployment had increased to 30.1% in the first quarter of this year from 29.1% in the last quarter of 2019. Economists expect the jobless rate to deteriorate further in the second quarter and the economy to edge towards a depression if nothing drastic is done by Government.

Instead of announcing bold steps to avoid a looming depression and prevent further job losses through decent budgetary allocations to boost infrastructural projects and enhance network industries to take advantage of South Africa’s unique geographical location, the Minister chooses to talk in general terms, without decisiveness, about releasing R100 billion over ten years towards the funding of 177 infrastructure projects across public and private sectors in collaboration with the Development Bank of Southern Africa. This disappointing reprioritization is in stark contrast to the Minister’s own remarks that: “the South African economy is now expected to contract by 7.2 % in 2020; this is the largest contraction in nearly 90 years”.

R100 billion was already announced as part of the stimulus package by President Ramaphosa in May 2020 to assist with job creation and prevent any further job losses. When exactly will these funds be unlocked, as entities do not have the luxury of waiting until Christmas for the good news to arrive, when members continue to go hungry due to no salaries being received? SMME’s, who in stark contrast to their huge contribution towards GDP, have once again been left to their own perils without any lifeline due to the hard lockdown, and face a certain death as many small business are simply unable to be resuscitated without sufficient capital injections from Government. FEDUSA members and South African citizens alike have all heeded the calls of the lockdown and have respected the sanctity of the existential threat it posed, but now Government simply fails to equally respond sufficiently, to ensure that both survival and recovery of industry stakeholders are supported.

FEDUSA is equally disturbed and finds it totally ironic that the very Minister of Finance who made a double frontal attack on public servants through the slashing of the wage bill (a disingenuous form of mass retrenchment) and dishonoring the last portion of a legally binding wage agreement signed with organized labour in 2018, now sees it convenient to abdicate all responsibilities to the Department Public Service and Administration. “Minister Senzo Mchunu is negotiating with our partners in the labour movement to find a balanced solution that sets compensation at an appropriate, affordable and fair level; we wish him well,” So once against the true sense of wasteful expenditure is demonstrated through Government’s continued paying more than R17 million in salaries to provincial and national state officials who have been suspended for a series of allegations of  gross misconduct including improper relations with pupils, bribery and theft as confirmed by Minister Mchunu in Parliament earlier this week. Surely these funds could have been allocated to deserving frontline members of FEDUSA who have continued to serve this country and save its citizens, during this historically extraordinary time of the pandemic.

Without sufficient intervention by Government to save jobs to support cyclical economic growth, service delivery, tax collection and debt service measures will simply fall even further short of projected targets.


                 (606 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