South African Communist Party general secretary Solly Mapaila
The ruling ANC’s strongest political ally, the South African Communist Party (SACP), is on a collision course with the treasury over the contentious issue of cost-cutting measures for government departments.
The SACP launched its annual Red October campaign this week with its general secretary Solly Mapaila slamming the treasury’s proposals for reconfiguring state departments and cutting government spending.
Speaking at the launch of the campaign in Phuthaditjhaba in the Free State on Sunday, Mapaila said the country could not afford a government that imposed further burdens on citizens already experiencing financial hardship.
“Neoliberal austerity, which we unequivocally reject, is an utterly inappropriate response to economic development problems, just as it was in analogous scenarios in recent memory,” he said.
“We have steadfastly cautioned against the vicious cycle that austerity, also implemented under the notion of ‘fiscal consolidation’, unleashes, especially in economic stagnation.”
Mapaila said instead of addressing the core issues, austerity could exacerbate problems by prioritising predefined fiscal targets and deep cuts in government expenditure, including that on vital development and redistributive programmes.
“In the past, we called for decisive action to tackle irregular, fruitless and wasteful expenditure of public finances. As we reiterate this stance, we want to emphasise unequivocally: ‘We stand firm against austerity,’” he said.
The ANC’s top leadership, and its alliance partner trade union federation Cosatu, have also butted heads with the treasury over its proposed budget cuts.
The ANC is seeking to garner voter support in next year’s provincial and national elections, while striving to prevent a decline in popularity among its supporters.
A poll by market research firm Ipsos suggests that the ruling party could get less than 50% of the vote in 2024.
Mapaila made the remarks ahead of Finance Minister Enoch Godongwana’s expected announcement of cost-cutting measures during the medium-term budget policy statement in November. The country’s weakening fiscal position has prompted urgent calls for cost-cutting measures by the government.
Last month, the treasury instructed departments to reduce spending to ease pressure on the country’s tight public purse. In a letter to provinces, the treasury warned that it faced “unprecedented” challenges for the current fiscal year and had instructed departments and provinces to put a freeze on the hiring of employees.
In parliament last month, Godongwana said when he tabled his budget in February, the treasury had made growth projections, but had since faced financial challenges. However, he added that the government did not intend to cut spending on infrastructure and social services.
On Sunday, Mapaila said the treasury must find new money to fund the public service wage settlement, as opposed to imposing austerity measures on national departments, provinces and public entities.
He added that any attempt to force departments and provinces to cut budgets, especially in critical areas such as infrastructure development and personnel recruitment, could have severe consequences for economic growth and service delivery.