Press Statement dated 25 October 2018
The Federation of Unions of South Africa (FEDUSA) agrees that while the South African economy is at cross-roads because of state capture and corruption, it is totally unfair to blame workers for the burden of the public sector wage bill which constitutes 35% of government expenditure as announced by Finance Minister Tito Mboweni in his maiden Medium Term Budget Policy State or Mini-Budget in Parliament on Wednesday.
While the 3 year public sector wage agreement concluded with unions earlier this year will breach budgeted estimates by more than R30.2 billion through 2020/21, FEDUSA notes Mboweni’s announcement that national and provincial departments should absorb these costs within their R1.8 trillion compensation baselines over the period.
While the Minister went to great lengths in complaining about the public sector wage bill he said absolutely nothing about combating tax fraud perpetrated by big business and illicit financial flows that have seen billions of rands leaving our country annually. FEDUSA would like to challenge him and the President to implement immediate measures to stop illicit financial flows that rob government of billions of rands in tax revenue every year.
The debt-service costs increased to about 15 per cent of main budget revenue in 2021/22, which amounts to R215 billion according to the MTBPS, while the deficit will widen to 4.3% of GDP. Gross loan debt is expected to increase from R2.8 trillion or 55.8 per cent of GDP in 2018/19 to R3.7 trillion or 58.5% of GDP in 2021/22, mainly to finance the budget deficit. This debt will be financed by raising funds in both the domestic and international capital markets. Domestic debt issuances will remain the major source of financing.
FEDUSA welcomes the spending priorities of education through improving the quality of education, building scarce skills and transforming society through inclusive economic growth and employment creation which are key objectives of the NDP. Concerning the expansion of healthcare services, FEDUSA is pleased that a further 2 200 critical medical posts will be created in provinces and medical student internships will expanded in order to grow the sector.
The success of the Clothing and Textile Competitiveness Programme which saw the sector exports grow from R7.1 billion in 2008 to R25.1 billion in 2017, which led to the opening In the opening of 22 new leather factories and the creation of 2 200 jobs is also good news.
Issued by Dennis George, General Secretary, Federation of Unions of SA (Fedusa)