Thursday, February 22, 2018

NEHAWU Response to the 2018 Budget Speech
21 February 2018

The National Education, Health and Allied Workers' Union [NEHAWU] note the tabling of the 2018 Budget Speech today by Minister of Finance Mr. Gigaba. The 2018 Budget speech as presented by Minister Gigaba today was uninspiring, disappointing, lacked vision and courage and has dampened the jovial mood of all progressive forces in the country that we are entering a new growth path, whose task is to address the triple crisis of unemployment, poverty and deepening social inequalities and put our country on a radical path of economic transformation, diversification of the economy and manufacturing led growth path.

This budget speech presented by the Minister who presided of the looting, plundering of our State Owned Enterprises, has today missed an opportunity, to reassure working class and poor South Africans that, the African National Congress led government has solutions to the problems confronting society at large. On the contrary, this budget constitute a frontal attack on the gains of the workers, this is demonstrated by the grand standing orthodox, conservative austerity measures presented in form of budget cuts, regressive tax regime, lowering of head counts in the public service, and an affront on workers' wages and conditions of employment.

Macroeconomic framework:

As NEHAWU, we expected that the Minister will shift the macroeconomic policy away from neo-liberal conservative approach that privileges dependency on foreign savings, fiscal discipline, a flexible exchange rate and inflation-targeting to a one whose orientation is growth through redistribution, a macroeconomic policy framework that privileges manufacturing as a driver of growth, and supports comprehensive progressive active social policy. A Macroeconomic framework that favors productive sectors, employment creation, poverty reduction whose orientation is to crush social and income inequality.

Regressive tax regime:

Today the Minister proposed to raise Value Added Tax by one percentage point from 14 percent to 15 percent; he has also proposed to increase the fuel levy by 22c/litre and the road accident fund levy by 30c/litre, effective 4th April 2018. NEHAWU, rejects this tax measures because they are a frontal attack to workers and the poor and are an attempt to shift the burden of adjustment to the already poverty stricken workers and their families.

Public Sector Wage Bill and Austerity measures in the public sector:

As the progressive public sector union, we have noted with dismay and disappointment the grand standing tactics of the Minister of Finance and his disregard of the wage negotiations processes that are underway in the bargaining council. Treasury continues to abuse parliament to mobilize the public opinion against the hard worn gains of workers through consistent attack on the wage bill by using scare-mongering tactics, to cajole workers to forgo of their hard warned gains.

NEHAWU rejects with contempt and will campaign against the proposed austerity measures that government is proposing, because the base line budget cuts and allocations to departments and provinces with increase the burden and impact negatively on the condition of employment of our members. Further, these austerity measures will undermine state-building, and the capacity of the Developmental State. We note that the 2018 budget projects the growth in the compensation of public service employees by about R7.3% over the next three financial years. Taking into account the conservatively estimated inflation in the corresponding period, as NEHAWU we call on government to return to the PSCBC negotiations for consideration as to how this would translate in relation to pay for the low and middle-income public service workers. We nonetheless remain firm on the demands that we have tabled. We condemn the fact that the process of collective bargaining negotiations has be inexplicably interrupted and we would like to issue a warning that any attempt to negatively revise the offer that has already been tabled by the employer at the PSCBC is likely to plunge the bargaining process into a crisis and may indeed precipitate a dispute. It must be taken into account that over the past three years there has been a steady decline in the head-count of public service employees, and this largely affected the blue-collar workers in the lowest rung of the public service. This has significantly increase the work overload whilst vacancies remain unfilled. As NEHAWU we call on government to reduce the number of ministries whilst preserving the departments and budget allocations to key programmes under those ministries that would be affected. In addition, we call on government that all the funded vacancies in critical coal-face service delivery areas to be filled.

Post-schooling education and Training:

NEHAWU welcomes the increase in expenditure on Post-schooling education and training by 13,7 per cent, per year, as a result of additional allocation to NSFAS for Fee-Free Higher Education and Training, However, we are disappointed by the absence of a coherent funding framework for the Post-schooling education and training that includes infrastructure funding mechanisms for the TVET sector which is supposed to drive skills formation to drive industrialization agenda.


NEHAWU welcomes the announcement of additional allocations R700 million, R1.4 Billion and R2.1 Billion over the next three years which will be funded through amendments to the medical tax credits. We are deeply concern about the pace at which government is implementing the NHI, soon through parliament we will respond in detail. The allocation to health once again fails to provide for the absorption of the Community Health Workers, despite the finalisation of the policy in 2017. This dampens the welcomed overall sustained and above inflation increase of the health budget. The continued delay in the absorption of the Community Health Workers undermines government's efforts to establish a firm foundation for the National Health Insurance through a properly functional primary health care system.

Expanded public works program:

The National Union notes that 74 billion has been allocated to the Expanded Public Works Program, we welcome this and looking forward to the increase employment Community Health Workers who continue to provide health services to our communities.

Overall, the 2018 Budget Speech was a disappointment it lacked vision, courage, decisiveness and a program to reindustrialize, transform and diversify the structure of the economy. This is demonstrated by lack of tangible and practical mechanism to increase employment and drive progressive and active social policies.

It lacks the will and courage to crush unemployment which is now at more than 27%, it shifts the burden of adjustment to the already poor house-holds, it has a potential to deepen social inequality. Because its orientation and approach remains neoliberal and conservative; The austerity measures it is proposing are not guided by a quest to put the economy on a different manufacturing-led growth trajectory, it is devoid of the reality and a vision of state-building, nation building and social cohesion as espoused by the ANC led-government. Minister Gigaba will be remembered as a Minister that presided over the looting of State-Owned Enterprises, by a coterie of primitive accumulators with links with the Gupta family, who plunged the South African economy into an unbearable, hardship, crisis and pain. Farewell Mr. Gigaba!

Issued by NEHAWU Secretariat

Zola Saphetha (General Secretary) at 082 558 5968; December Mavuso (Deputy General Secretary) at 082 558 5969; Khaya Xaba (NEHAWU Media Liaison Officer) at 082 455 2500 or email: Visit NEHAWU website:

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