Cosatu said it was deeply dismayed by the National Treasury's proposals to impose "ill considered" cuts across government as it prepared to table the medium-term budget policy statement (MTBPS).
“The federation is shocked Treasury has tabled proposals to close various departments and key government programmes, reduce the public service headcount by 200 000 and raise VAT by 2%, in addition to freezing vacancies and suspending infrastructure investments,” acting spokesperson Matthew Parks said.
On August 31, acting director-general Ismail Momoniat wrote to state organs informing them that the fiscal outlook was negatively affected by the higher-than anticipated public service wage settlement.
Momoniat said heads of departments should freeze hiring of new employees, freezing non-essential travel and advertising new infrastructure procurement as well as spending on catering, conferences, workshops and other services and goods not contracted.
Weekend reports suggested that the government planned to increase VAT or close a number of programmes in order to continue with the R350 social relief of distress (SRD) grant in April 2024.
Parks said while Cosatu appreciated the real fiscal constraints facing the state and the need to cut fat and reprioritise expenditure, the suggestions offered by the National Treasury of slashing expenditure would only serve to choke the economy and further weaken an already enfeebled government.
“If government wants to cut wasteful expenditure, then it needs to reverse the offensive increases it has given to Members of Parliament and the Legislatures earlier this year and just two weeks ago to councillors,” he said.
Parks also said the Cabinet could abandon the litany of perks it felt entitled to.
“Government should slash the number of Ministers from 28 to 20 and Deputy Ministers from 34 to 5 as well as the 10 000 councillors loitering about dysfunctional municipalities.
“If we are to grow the economy and reduce unemployment, and thus collect the revenue the state needs to reduce debt, then the government needs to deal with the actual obstacles suffocating the economy, workers and businesses,” he said.
Parks listed a number of possible interventions, including providing additional support to Eskom to reduce and end loadshedding, among others.
He also said Cosatu would urgently be meeting with the leadership of the government to seek a more pragmatic and sustainable path to rebuilding the economy.
Cape Times