This year’s budget speech by the Minister of Finance, Trevor Manuel, was made amidst much uncertainty. The global financial crisis and the political tremors in both government and the ruling party did not provide an ideal backdrop for such a major policy announcement.

As an ecumenical organisation working for social and economic justice, we welcome the Minister’s five pillars that formed the basis for his budget speech. These are ideals no one can stand against – protecting the poor; sustaining employment growth and expanding training opportunities; building economic capacity and promoting investment; addressing the barriers to competitiveness; and maintaining a sustainable debt level.

However, we remain sceptical as we are too accustomed to hearing such noble commitments in election years only for the rhetoric and the non-action to disappear to the back burner soon thereafter. Sometimes the promises to protect the interests of the poor seem to be aimed at winning the vote of the poor and nothing more. When there are no elections, it is the marginalised and the vulnerable from the rural parts of our beloved country and our inner cities and our townships that remain last in the queue for sharing the country’s resources.

We note the increase in social spending which includes, among others, social grants; education, health, roads and rural development; and housing, water, sanitation and municipal services. We are, however, alarmed that most of the increases are below the inflation rate. In education, for instance, the minister did not commit to a full-scale implementation of free education for all. These examples tell us that most poor people who depend on these grants, and use the public education and health systems, will at best remain where they are – in the lowest rungs of society and condemned to perpetual poverty from generation to generation.

We are also doubtful as to whether the necessary political will and appropriate mechanisms will be there to see this commitment through. In the past, sensible policy pronouncements and promises made in the budget speeches were not followed through. Maladministration, corruption, fraud, political interference and bureaucratic chaos where often allowed to impede policy implementation and thus delay the rights of the poor to enjoy socio-economic rights enshrined in the constitution of the country. And with a new administration looming, it remains to be seen if these tendencies will continue unabated and the anticipated scramble for positions in government as a reward for political loyalties will become an even bigger albatross around the necks of the poor.

The pronouncements on the public works programmes are not new. What is known is that in the past the programme created minimal low quality jobs that did not move many out of the poverty trap. It is also clear that this programme alone cannot absorb every unskilled worker or skilled unemployed. With the effects of the world economic crisis starting to be felt in our country lower level workers are likely the first to be affected through retrenchments, thus worsening the unemployment rate. The Minister himself pointed out that should this occur, even the street vendors who sell fast-food to miners would as a result suffer loss of income.

Government needs to speed up the development of a comprehensive and integrated industrial strategy that will set South Africa on a higher labour absorbing economic growth path. Underpinning such a plan should be an accelerated skills development and education plan that will help us sustain such an economy.

This process can only be achieved through an inclusive process where all sectors of society are drawn to give input, including the millions who live off the informal sector of our economy, the rural women and the massively unemployed youth, for instance.

Thabo Koole
Communication Officer
Ecumenical Service for Socio-Economic Transformation

This year’s budget speech by the Minister of Finance, Trevor Manuel, was made amidst much uncertainty. The global financial crisis and the political tremors in both government and the ruling party did not provide an ideal backdrop for such a major policy announcement.

As an ecumenical organisation working for social and economic justice, we welcome the Minister’s five pillars that formed the basis for his budget speech. These are ideals no one can stand against – protecting the poor; sustaining employment growth and expanding training opportunities; building economic capacity and promoting investment; addressing the barriers to competitiveness; and maintaining a sustainable debt level.

However, we remain sceptical as we are too accustomed to hearing such noble commitments in election years only for the rhetoric and the non-action to disappear to the back burner soon thereafter. Sometimes the promises to protect the interests of the poor seem to be aimed at winning the vote of the poor and nothing more. When there are no elections, it is the marginalised and the vulnerable from the rural parts of our beloved country and our inner cities and our townships that remain last in the queue for sharing the country’s resources.

We note the increase in social spending which includes, among others, social grants; education, health, roads and rural development; and housing, water, sanitation and municipal services. We are, however, alarmed that most of the increases are below the inflation rate. In education, for instance, the minister did not commit to a full-scale implementation of free education for all. These examples tell us that most poor people who depend on these grants, and use the public education and health systems, will at best remain where they are – in the lowest rungs of society and condemned to perpetual poverty from generation to generation.

We are also doubtful as to whether the necessary political will and appropriate mechanisms will be there to see this commitment through. In the past, sensible policy pronouncements and promises made in the budget speeches were not followed through. Maladministration, corruption, fraud, political interference and bureaucratic chaos where often allowed to impede policy implementation and thus delay the rights of the poor to enjoy socio-economic rights enshrined in the constitution of the country. And with a new administration looming, it remains to be seen if these tendencies will continue unabated and the anticipated scramble for positions in government as a reward for political loyalties will become an even bigger albatross around the necks of the poor.

The pronouncements on the public works programmes are not new. What is known is that in the past the programme created minimal low quality jobs that did not move many out of the poverty trap. It is also clear that this programme alone cannot absorb every unskilled worker or skilled unemployed. With the effects of the world economic crisis starting to be felt in our country lower level workers are likely the first to be affected through retrenchments, thus worsening the unemployment rate. The Minister himself pointed out that should this occur, even the street vendors who sell fast-food to miners would as a result suffer loss of income.

Government needs to speed up the development of a comprehensive and integrated industrial strategy that will set South Africa on a higher labour absorbing economic growth path. Underpinning such a plan should be an accelerated skills development and education plan that will help us sustain such an economy.

This process can only be achieved through an inclusive process where all sectors of society are drawn to give input, including the millions who live off the informal sector of our economy, the rural women and the massively unemployed youth, for instance.

Thabo Koole
Communication Officer
Ecumenical Service for Socio-Economic Transformation