MEDIA RELEASE

AMCU REJECTS 2024/5 BUDGET

23 February 2024

The Association of Mineworkers and Construction Union (AMCU) has rejected the national Budget for the 2024/2025 financial year as presented by Finance Minister Enoch Godongwana on 21 February 2024. The Union identifies the neoliberal policy direction of government for the lacking commitment to solving the socioeconomic problems of our country.

“AMCU rejects the 2024/5 Budget as presented by the Minister of Finance and we call on all Members of Parliament to vote against it when it is tabled” said AMCU President Joseph Mathunjwa.

“However, we also know this won’t happen because most political parties support the anti-poor neoliberal measures proposed by the bosses’ minister of finance. This is why we as AMCU not only bemoan this budget but are taking measures to establish a political party for workers and the poor. We are convinced we need an alternative budget which means we need an alternative government”, he said.

This budget continues with austerity. This, in spite of the injection of R150 billion from the Gold and Foreign Exchange Contingency Reserve Account. But rather than using that money to invest in the needs of the mass of impoverished people, government through the Treasury has decided to invest in the creditors by sinking this windfall in debt repayments.

This budget slashes spending in real terms by R21 billion. For example, the budget for learning and culture is cut by R9,8 billion. This happens when our education system needs a complete overhaul and the transformation of the curriculum to develop the skills an industrialising economy needs. Health is cut by R8 billion at a time when huge additional resources or needed for the introduction of the National Health Insurance (NHI).

The result will be the teacher learner ratio will get even worse and the queues at clinics and hospitals will get longer. The already ailing infrastructure and equipment will just get worse. Through its austerity measures government is systematically reducing not just the size of public sector workers’ wages but reducing the capacity of the public sector as a whole through job freezes and retrenchments.

“As AMCU we are surprised at the lack of response by public sector unions in the face of this assault. The rebellion of the poor over the crisis of the provision of essential services will just become more widespread and anarchic”, said Mathunjwa.

“The tokenistic increase in some grants must be seen as an election ploy and is not big enough to cover the increase in the size of the population. What is worse, there is no commitment or strategy towards creating jobs, which would lessen the terrible dependency on grants the ANC government has created over time”, he said.

This austerity Budget represents an attack on poor and working-class people. The Budget is underpinned by a deep economic crisis.

“Once again, thousands of jobs are being lost in mining and downstream industries. This crisis results from a failure to diversify our economy underpinned by the stubborn implementation of a set of inappropriate economic policies which include austerity, inflation targeting, liberalisation and privatisation of key sectors of our economy done with the failed idea of attracting foreign investors” Mathunjwa said.

“But it is these foreign investors (many of whom made huge fortunes in SA) who are taking their money either out of our country or parking their capital in the job-destroying financial sector. Our Minister plays to their rule book, simultaneously enabling and enriching them. There are no measures in the Budget to strengthen the capacity of SARS to stop the tax avoidance measures undertaken by big mining corporations, as we have shown in the case of Lonmin, Total Coal and Samancor, which bleeds the fiscus of hundreds of billions of Rands, each year. In fact the 2024/5 Budget fails to consider alternative tax measures, such as a wealth tax, increased corporate tax rates to lessen the country’s indebtedness” he added.

The Budget fails to put in place a strategy to deal with the crisis of vital state-owned enterprises, such as Eskom, Transnet and Prasa – vital for the economy and for transforming the lives of the poor. Instead, this budget accelerates their death spiral by promoting privatisation, especially through Public Private Partnerships and concessioning.

Just as electricity generation is being privatised through the promotion and subsidising of Independent Power Producers, so rail transport and our harbours are being privatised through private sector concessioning and financing.

Another fundamental neoliberal feature of the Budget is the proposal for implementing a fiscal anchor, i.e. a mechanism to legislatively control spending. The “fiscal anchor” currently being used by government is the IMF sponsored idea that governments must run primary budget surpluses.

This is tantamount to legislating a permanent state of austerity, especially when one considers the permanent state of economic stagnation. In this scenario no government would be able to use the Budget as a redistribution tool nor would it be able to stimulate the economy through deficit financing without first having to change the law.

The jobs crisis, which is overwhelming our society in a vortex of violence and crime, is an outcome of these policies. 8 million children go to bed hungry in a rich country blessed with trillion of dollars of natural resources, developed infrastructure and millions of young people willing and able to work.

“We need an investment plan to meet the needs of our people. We need to direct state resource in a massive housing programme, expansion of public transport, renew collapsing infrastructure, not least water, which could create millions of jobs. This in turn would lead to increased revenue for government and overcome the narrow tax base. Instead, the government cuts infrastructure spending”, said Mathunjwa.

“This is why we as AMCU are convinced we need an alternative. We need a new government with an economic plan to emancipate the nation from economic enslavement and collapse, and ensure the integrity of our country”, Mathunjwa concluded.

ENDS

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For more information or media interviews, contact AMCU President Joseph Mathunjwa