Living on a beggar's budget
While Finance Minister Nhlanhla Nene delivered his budget speech in Parliament on Wednesday afternoon, Chenai Mpereki (33) and her four-year-old boy were at their usual spot in one of Johannesburg’s most affluent suburbs. On the corner of Jan Smuts and Ruth avenues, you will find her at a small intersection opposite the Dunkeld West Shopping Centre, keeping an eye on her boy, who finds it difficult to sit still on the traffic island.
It is a busy intersection, which is why Mpereki is here every day from six to six, begging food, clothes and money from strangers who stop at the traffic light.
Mpereki wears a large white sunhat and her son wears an adult’s red hat, a long-sleeved sweater and tracksuit pants. “We sit here the whole day and it gets very hot. This is how I make sure he doesn’t get burned by the sun,” says Mpereki about the child drowning in the oversized clothes in the scorching Johannesburg mid-afternoon heat.
She has an almost empty water bottle with some ice in it.
Mpereki waves at the shiny cars driving past her intersection and forces a slight smile. Her large hat is folded up in the front to show her face; she does not make eye contact with the motorists when they stop at the light. She sometimes extends her right hand with her left hand clasping her right wrist so that passers-by can easily drop change in her hand.
“I haven’t made any money today but at least I have some fruit for my son. I don’t know how I’m going to get home,” she says.
Mpereki can tell Nene a thing or two about austerity, about stretching a tight budget.
On a very good day she makes R100 from which R22 pays for transport – R11 to and from Yeoville, where she lives. She spends some of the money on maize, sodas, which she and her son need for energy, and chips.
“Some people scream out, ‘Get off your ass and get a job, you lazy bitch!’ Do they think I didn’t try and find a job when I first got to Jo’burg? I did and I got nothing. And no one would give us food or house me and my son. We went hungry,” she says.
No employment-oriented strategy
Mpereki is unlikely to get a job anytime soon. Wits economics professor and national planning commissioner Christopher Malikane believes the reason lies with the fact that the government and the treasury do not have an employment-oriented strategy.
“If we had that, there would be no unemployed lady sitting in the street begging for money,” he told the Mail & Guardian after watching Wednesday’s budget. “Our government owns nothing, no strategic assets other than Eskom and Transnet. And those two are dependent on the state for bailouts and on the private sector for resources.”
He says the biggest problem is the incapacity of government, and that Eskom and Transnet are dependent on coal owned by the private sector. “So the social aspect of the policy and the budget will always be throwing money at the problem because we don’t own the basic means of production. The mines, Sasol and Mittal Steel – without these assets, forget about it,” says Malikane.
According to Statistics South Africa, money allocated to welfare and social security has increased from R72.7-billion in 2005-2006 to R187.1-billion in 2014-2015 – more than double in a decade.
In his 2015 budget speech Nene proposed that child support grants be increased from R310 to R330 a month, something Malikane says is counterintuitive because the increases were below inflation. “Moving the child grant from R310 to R330 a month is a joke, a contraction of the grant. The budget is not solving any poverty issues,” he says.
South Africa’s social policy is divorced from industrial policy, Malikane says. The department of trade and industry’s Industrial Policy Action Plan is a “wish list – a pie in the sky” because, without owning the means of production, the government does not control the economy.
“How do you industrialise without controlling the economy? In fact, the tax system needs to be analysed – it is completely inadequate as it is; most of the money is sitting in the financial sector – else we will always have high poverty and hungry mothers and children,” he says.
But a former researcher at Nepad, Muzi Maziya, disagrees. “That was a major balancing act Nene had to do and I respect him. But also keep in mind that there is an ANC that is mindful of the 2016 local municipality elections and at the same time its approach with the business sector is conservative,” says Maziya.
If the ANC government chose to go the populist route they would lose investor confidence, says Maziya. The ANC is also trying to move away from a dependency government, because “once you get people used to the idea that you give them welfare above inflation, then you are saying ‘don’t be productive’”, he says.
Most of the money in the budget is going towards small business development to create jobs in the formal and informal sectors. “You must introduce incentives for people to work and, at the same time, protect vulnerable workers by implementing a national minimum wage,” Maziya believes.
Malikane thinks the minister should rather have taxed financial market transactions as opposed to increasing the fuel levy tax, income tax and the cost of electricity, which directly affects the poor. “The company tax was left at 28%. The corporates have too much power,” says Malikane, adding what the minister should have done is tax the financial sector.
“We need to tax financial activity and speculation and structure the system so that money moves from the financial markets towards production. Even the International Monetary Fund recommended financial flows be taxed.”
Malikane adds that the government always makes the excuse that the private sector needs jobs and that foreign investments are essential for increasing employment, “but companies only care about profits and not labour and foreign investors take their money and reinvest it elsewhere”.
For Mpereki, who still sits on her street corner, the budget, financial markets, taxes and even social grants are things of academic interest. She’s a Zimbabwean and, although she has lived in South Africa for close to 10 years, she has not been given the status of a citizen. Her safety net is even more precarious than that of South Africans – more of a reason to be back on Jan Smuts Avenue tomorrow and the days after that.