NEHAWU’S Response to the 2014 Budget Speech

Thursday, February 27, 2014 – 12:09

NEHAWU embraces the increased budget allocated and focused on various sectors. However, it is disappointed that the budget still lacks flexibility

The National Education Health & Allied Worker’s Union (NEHAWU) notes the 2014 Budget Speech as delivered by the Minister of Finance, Pravin Gordhan, which among other things includes the 2014 Budget Review, Division of Revenue Bill, Appropriation Bill, and the Estimates of National Expenditure. We welcome the fact that the revenue collection for the year 2013/14 exceeds government’s estimates as announced in October 2013 during the Medium Term Budget Policy Statement by R11.4 billion.

We are also satisfied by the National Treasury’s announcement that capital spending would now be the fastest-growing component of non-interest expenditure until 2016/17. With this in mind, we expect that the legitimate demands and aspirations of the public service workers would no longer be played up against the service delivery demands of our communities. The treatment of worker’s demands as an item that needs to be traded-off with the service delivery demands of the people, will create labour instability and poison relations in the public service. This will delay and deny poor people their much needed services.

The Budget Framework

Despite the currently subdued economic growth level, we are disappointed that the budget seems to be lacking flexibility and is still rigidly directed at pursuing the targets that were previously set by the National Treasury. With regard to the budget deficit, the National Treasury has tabled plans that even exceed its targets, as the budget deficit is now standing at four percent of the Gross Domestic Products, which exceeds its previous target of 4.2 percent for 2013/14. Similarly, real non-interest expenditure was aimed to grow at an average of 2.2 percent over the next three years, is now set to grow at an annualised average of 1.8 percent. It is unclear as to whether the National Treasury is indeed pursuing its own counter-cyclical fiscal stance in the light of the fact that the economic growth rate is subdued, yet it is not adequately using the fiscal policy to stimulate growth.

Compensation of public service employees

We reiterate our position that it is wrong for the National Treasury to publicly engage on matters pertaining to wage negotiations outside the Public Service Collective Bargaining Chamber. We are concerned that the National Treasury is already pre-emptively anticipating a ‘slower wage bill growth’ at around 6.4 percent over the next three years. This will harden attitudes and intoxicate relations between parties before the wage negotiations have even begun. We hope that consideration will be taken of the fact that over the past two financial years the compensation of employees as a percentage of consolidated non-interest spending has marginally declined.

The collective bargaining process should be guided by the spirit of open mindedness and with the view to improve the worker’s remuneration and their conditions of service. It is disconcerting that there is silence and no progress report on the work of the Presidential Remuneration Commission which was established to investigate the appropriateness of the remuneration and conditions of service provided by the State to all its employees as announced in the 2013 State of the Nation Address. The upcoming public service negotiations should factor in, the findings of that commission.

Health

We welcome the increased budget allocated for HIV and AIDS Programmes. This, we believe will greatly assist and ensure that the country meets the 2015 Millennium Development Goals. However, we note that an amount of R1.2 billion has been set aside for piloting general practitioners contracts in the health system. For NEHAWU this seems to be an attempt to shift funding away from the public sector, to support private sector initiatives, when we know that our members in the public service are often overstretched and are working under increasing pressure because of staff shortages.

Our members and other health workers are at the forefront of caring for the 2.5 million people, who now have access to anti-retrovirals. We believe that allocations for private sector contracts should be balanced with the filling of posts in the public sector. We reiterate our call for the release of the White Paper on the National Health Insurance, in line with the policy framework expressed in the resolutions of the African National Congress’s Polokwane and Mangaung conferences.

National Health Laboratory Service

We look forward to engaging with the new funding framework for the National Health Laboratory Services (NHLS). NEHAWU has consistently expressed concern over the current structure of the NHLS from its inception.