The MTBPS' proposed adjustments are not aggressive enough to grow the economy - Cosatu

THE Minister for Finance, Enoch Godongwana, tabled government's Medium-Term Budget Policy Statement (MTBPS) at Parliament.

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FINANCE Minister Enoch Godongwana tables the Medium-Term Budget Policy Statement. by GCIS

Whilst appreciating the turnaround in key parts of the state under the African National Congress led government, in particular Eskom, Transnet, Metro Rail and the South African Revenue Service (Sars), the Congress of South African Trade Unions (Cosatu) remains deeply worried that the Budget, including the MTBPS’ proposed adjustments are not aggressive enough to take the economy from the 1% growth it has been limping along since 2008 or to tackle the 42.4% unemployment rate.

Cosatu appreciates progress made including exiting from the Financial Action Task Force’ grey listing which is key to attracting investment as well as the creation of 248 000 new jobs over the past three months and the projected increase in growth over the Medium-Term Expenditure Framework (MTEF) to 1.8%.

We are, however, dismayed that Treasury remains excessively focused on reducing expenditure, debt and deficits as well as achieving a narrow surplus at the expense of badly needed economic growth and job creation.

Much has been said about the proposed reduction in the inflation target from 4.5% to 3%.

Inflation robs workers’ wages when they are already battling to survive the rising costs of living.

The risk in this shift is that the Reserve Bank may continue to deny badly needed repo rate relief to millions of highly indebted workingand middle-class families and an economy desperate for stimulus.

We need to tackle the root causes of inflation, namely the ever-volatile international oil price, and its resulting impact upon our fuel price regime as well as Eskom’s unsustainable dependence upon unaffordable above inflation tariff hikes. These are burning matters that government must address not squeezing workers’ meagre wages further.