Tuesday, November 05, 2019

SACP's Initial Response to the Medium Term Budget Policy Statement
2 November 2019

The SACP will continue to engage within the tripartite Alliance and deepen its public campaign for a policy change towards the implementation of the second radical phase of our democratic transition. The systemic problems of inequality, unemployment, poverty and lack of, or insufficient structural economic transformation, require a different approach if South Africa is to realise its developmental objectives. It is inconceivable that the country will realise different outcomes and advance towards collective prosperity by doing the same things over and over again.

The SACP calls for an urgent 2019 general election manifesto-based common approach on key economic programmes and interventions that must be followed by the ANC-led government to achieve economic turnaround, as well as advance and deepen democratic national transformation and development. The SACP strongly believes that there is a firm basis from the ANC-headed Alliance manifesto around which more agreements can be consolidated and secure the consent of the widest possible sections of our society, the workers, the middle strata, and so on.

The Medium Term Budget Policy Statement (MTBPS) starts from the premise that its baseline projection assumes there will be minimal policy changes. What this implies is that both the institutional thinking and macro-economic policy regime under which inequality, unemployment and poverty not only remained persistent in South Africa but also continued to be entrenched, will largely remain intact. This contradicts the manifesto, which makes it very clear that our macro-economic policy framework will be aligned post-May 2019 general election to support the objectives of the second radical phase of our democratic transition and the other commitments made in the manifesto.

The MTBPS contains the Medium Term Expenditure Framework and thus a summary of government's fiscal goals and objectives, as well as projections for the economy and public finances. This means that it must be taken seriously, thoroughly scrutinised and robustly engaged, as it is not a mere or ineffectual paper but part of our national budgeting process.

The SACP maintains its comprehensive response to the initial National Treasury paper entitled 'Economic transformation, inclusive growth, and competitiveness: Towards an economic Strategy for South Africa, released in August, and will scrutinise and engage with what the Minister of Finance Tito Mboweni referred to as 'Version 2' of the paper.

South Africa requires radical changes in the micro-economic policy sphere. The SACP has identified these critical pillars, among others, as essential to strengthen the second radical phase of the transition:

a high impact, comprehensive and coherent industrial policy, including a robust digital industrial policy;
within the framework of the high impact, comprehensive and coherent industrial policy, sectoral development master plans;
an innovation, research and development master plan;
adequately supported education, training and national skills development plan; and
the ongoing necessity to transform the financial sector including the establishment of not-for-profit developmental banks.
In this regard, the SACP maintains its strong position for adequate financial support to higher, technical and vocational education and training, in line with the ANC-headed Alliance's collective commitments spelt out in the May 2019 general election manifesto.

Nonetheless - despite the importance of the radical changes definitely required in our micro-economic sphere - it would be inappropriate to advocate micro-economic policy reforms as solutions to macro-economic problems and crisis. Hence our collective ANC-headed Alliance May 2019 general election manifesto commitment to align our macro-economic policy framework to support the objectives of the second radical phase of our democratic transition and the other commitments made in the manifesto. This must be implemented, rather than avoided or rolled back directly or indirectly.

Last but not least, it is inconceivable that the austerity campaign pushed in the MTBPS will not negatively impact the
achievement of the positive economic outcomes that South Africa needs.

The SACP agrees that there is a need for decisive action. Let us together move speedily on this front, in the interests of our people as a whole, the majority of whom is the working-class.



Jenny Schreiner
Politburo Member | Acting Spokesperson
Mobile: +27 76 316 9816
Skype: MashiloAM


Hlengiwe Nkonyane
Communications Officer: Media Liaison Services, Digital and Social Media Co-ordinator
Mobile: +27 79 384 6550


Office: +2711 339 3621/2
Twitter: SACP1921
Website: www.sacp.org.za
Facebook Page: South African Communist Party
Ustream TV Channel: http://www.ustream.tv/channel/sacp-tv

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