The Budget did not reflect RDP priorities, according to the country’s biggest organised force, Cosatu. This is an edited version of the ANC-alliance partner’s
Compared to apartheid Budgets, the 1995/6 Budget does have a number of positive features. Judged in terms of the fundamental shift required by the Reconstruction and Development Programme, however, the Budget fails to deliver. At best, the Budget can be described as a transitional Budget. We have yet to see our first RDP
One of the major thrusts of the RDP is the need for the radical reorganisation of state departments, and reallocation of public resources, to reflect the priorities of the RDP.
The Congress of South African Trade Unios had expected that the 1995/6 Budget would reflect this approach. We are therefore disappointed by its failure to do so. Despite a number of broad references to the reprioritisation process in the Budget speech, there is no evidence that the Budget has been fundamentally driven by this perspective.
We would have expected an outline of the multi-year reprioritisation plans, with clear timeframes and targets. We would also have wanted to see a concrete demonstration of the way in which RDP priorities are reflected in Budget allocations.
The Budget needs to reflect a strategic vision and plan for the entire state, as well as indicate the setting or “RDP targets” by each department, a process of consultation with various sectors of society, and a process for auditing and public monitoring of these
This year’s Budget conveys the impression of “ad- hocism”. To the extent that reprioritisation exercises are taking place, it is behind closed doors. They do not appear to have impacted on this Budget in any systematic way.
Much has been made in the press of a claimed “large increase in social spendin” in this year’s Budget. While there are large percentage increases in certain Budget votes, such as housing, this is still from a very low base.
Taken as a whole, relative social expenditure hardly increases, bearing in mind the factors of population growth, inflation, and the growth in GDP. This must also be measured in the context of the huge backlogs facing the majority of our people, as well as the continued skewed distribution of resources.
Cosatu accepts that this is a process which will have to be addressed over a number of years, that the problems won’t be resolved simply by throwing money at them, and that it is intricately linked to the process of reorganisation and the development of new delivery systems. At the same time it is simplistic to use previous social expenditure under apartheid as our main
While it may be true that in certain areas, such as education, reorganisation of resources rather than massive expansion of the Budget is needed; it is also true that in certain areas, such as health, a large increase in allocation of resources may be necessary, and viable in the short term.
The Budget continues to pursue the mechanical approach, contained in the RDP White Paper, of containing government expenditure by cutting down on public sector employment. Cosatu believes that the way in which this issue is being tackled is likely to have the effect of frustrating delivery of the RDP. The reorganization process should determine where staff should be increased and where it should be decreased, on the basis of need, not on the basis of abstract, mathematical formulae.
Cosatu rejects the allocation given to Defense in the 1995/6 Budget. No amount of rhetoric can avoid the reality that every tax rand given to defense is a tax rand denied to serving the needs of our people. Nor can it be denied that South Africa has no actual or potential enemy posing a threat to us, and that no country remotely close to our borders has the capacity to do so.
Much has been made of the so-called “large cut” in defense spending. We reiterate our rejection of apartheid spending as a yard-stick. Our country’s priorities have totally changed. Furthermore, once the “supplementary budget” is brought into play, the cut in defense in minimal, even by old standards.
We also reject the “supplementary budget” of R200- million to the intelligence services. If these allocations are maintained, it will raise serious concern that the military and security establishment continue to wield inordinate influence.
The failure of government to extend VAT zero-rating to basic necessities including water, medicines and foodstuffs will continue to put an unfair burden on poor and working people.
We welcome the elimination of tax discrimination between men and women. Revised tax tables however will only benefit low income earners with two breadwinners in a family, and with less than five children.
The 1995 Budget process was not transparent. Nor was the Budget the product of consultation. The previous culture of secrecy needs to change.
Various mechanisms should be used to ensure transparency and public participation in the preparation of the 1996/7 Budget. These include the fiscal and monetary chamber of Nedlac and the parliamentary finance committee.
Cosatu is concerned about the current situation where parliament is used to rubber stamp the Budget. Parliament needs to be given the power to amend the Budget. Further, standing committees should be empowered to intervene in the internal allocations of departmental budget votes, to ensure that they reflect RDP priorities.