THE BLOG

Numsa's Expectations From The Budget Speech

The ANC will use government for advancing the interests of a few black capitalists, white capital will remain untouched and land won't be redistributed.

22/02/2017 10:03 SAST | Updated 22/02/2017 10:03 SAST
Antonio Muchave / Sowetan / Gallo Images / Getty Images
NUMSA general-secretary Irvin Jim during a press conference about Cosatu's upcoming nationwide strike in Johannesburg, South Africa on March 6, 2012.

"In our country - more than in any other part of the oppressed world - it is inconceivable for liberation to have meaning without a return of the wealth of the land to the people as a whole. It is therefore a fundamental feature of our strategy that victory must embrace more than formal political democracy. To allow the existing economic forces to retain their interests intact is to feed the root of racial supremacy and does not represent even the shadow of liberation. Our drive towards national emancipation is therefore in a very real way bound up with economic emancipation."

(ANC, Morogoro Conference, Tanzania, 1969)

This was the ANC of old, which at the time was ideologically clear. However, what we have seen over the last 23 years of ANC democratic governance, is a party which has been captured by neo-liberalist interests. It is an ANC which is unable to fulfil the objectives of the Morogoro Conference. It is an ANC which has rejected the Freedom Charter.

After eight years in power, President Jacob Zuma announced during the State of the Nation Address that the ANC government would once again embark on 'radical economic transformation', and yet the State of the Nationa Address merely rehashed the terms of the "negotiated settlement." It's clear that the ANC will use government to create regulations for advancing the interests of a few black capitalists, while white capital will remain untouched and land will not be redistributed unless market forces are used.

We have no doubt that Finance Minister Pravin Gordhan's delivery of his annual budget today, will present no new ideas and certainly no 'radical economic transformation' either!

Zuma's claims of radical economic transformation are hollow. The ANC has been in power for over two decades, and in that time, white wealth has grown and been protected, whilst African poverty has deepened and neoliberal economic policies have been entrenched. This has resulted in the creation of the world's most unequal society, characterized by crippling poverty and widespread unemployment. According to a report by Oxfam, the wealth of three South African billionaires is equal to that of the bottom half of the country's population!

The basic structure of the racist apartheid economy is largely intact, 23 years after "independence." Zuma acknowledges this in his SONA. In the years that the ANC has been in power it has succeeded in creating the kind of society which former Apartheid president PW Botha would have been proud of. South Africa today is a society of separate but unequal development. Botha's vision was to create a society where white capital continued its domination of the economy, and the creation of a small African elite whose goal was to act as a buffer against the poor majority. That is precisely the kind of society which exists in post-Apartheid South Africa today.

As NUMSA we expect the Finance Minister to continue on the same disastrous neo-liberal and white monopoly capital pleasing path which the government has been following for the last 23 years.

This situation is exacerbated by the continuing strangulation of the racist and colonial South African economy by the white dominated mineral, energy and finance Complex which, in post 1994, can legally and illegally externalise its profits, and in so doing ensures that there is no meaningful growth in the South African economy.

In addition, since 1994, the ANC government passed a raft of laws and regulations that facilitated the massive legal and criminal export of South African capital thereby robbing South Africa of investible capital. The ANC has no courage to act in the interests of the country.

The governing party knows that the only way to change South Africa's trajectory is through the whole scale and radical implementation of the Freedom Charter. That means the mineral wealth of the country must be nationalised and owned by the state, for the benefit of all the people of South Africa. That way the state will have the economic power to fund the necessary and essential human development on a wide scale. If we nationalised our natural resources we would have the money to fund free quality education; we could give our people the kind of world class health care that they deserve through the NHI, we could tackle inequality head on. But this is not possible if the state does not own the commanding heights of the economy.

The 2017 Budget

As NUMSA we expect the finance minister to continue on the same disastrous neo-liberal and white monopoly capital pleasing path which the government has been following for the last 23 years.

We expect Gordhan to continue to dance to the tune of international and local finance capital, white monopoly capital and credit rating agencies. Despite the fact that some of these ratings agencies have been discredited, Gordhan and the officials in the finance ministry will spend every waking moment slavishly attempting to appease them. Moody's was fined billions of rand for the role it played in the 2008 global economic meltdown; whilst S&P was also fined by the U.S. Department of Justice for issuing overly favourable ratings to boost demand for its services, to mention just two examples. Ratings agencies are still unable to accurately predict the impact of Brexit and the Trump presidency on the world economy.

We expect Gordhan to reassure capitalist investors - who have threatened to downgrade the South African economy to 'junk' status - by pretending that everything is under control and no radical changes are required to the neo-Liberal policies the ANC government has been following for the last two decades, which have so clearly failed, and with disastrous human consequences.

What the banks and finance capital are doing to South Africa is maintaining the structure for mass poverty, unemployment and inequality, which affects the majority of South Africans who are the black and African working class.

We also expect the minister to increase taxation on the middle class and to cut back on social spending in an attempt to implement austerity measures.

Within a context of shortfalls in revenue collection, mass poverty, widespread unemployment and Olympic levels of inequality, the simple introduction of a wealth tax would contribute directly to dealing with rising inequality and poverty, but we have no expectation that a soft policy of this kind will ever be implemented. A wealth tax on the rich is what the ministry of finance shall ignore because they have no political will to discipline capital.

On the Banks and the Export of South African Capital

The investigation by the competition commission into the corruption of the banks has highlighted just how unpatriotic the South African banking sector is. The deregulation of the financial system has given currency traders almost absolute power, and yet their day to day decisions affect the livelihoods of millions of South Africans. They act with impunity and are virtually unaccountable for their actions.

The billions of rands which are exported legally and illegally every year are one of the greatest contributors to poverty and inequality in South Africa. Every year we lose billions through legal and illegal capital outflows, in 2012 we lost $29.1 Billion (R381 billion). Why is this money not being re-invested into the South African economy?

What the banks and finance capital are doing to South Africa is maintaining the structure for mass poverty, unemployment and inequality, which affects the majority of South Africans who are the black and African working class. The banks are sustaining the Apartheid economy and society of South Africa, and entrenching white domination.

In the past two decades, South African banks have fuelled debt driven consumption on an unprecedented scale; they have facilitated speculation instead of investment in the real economy, and they have enabled the transfer of trillions of much needed capital.

Now we know that by colluding, they are also involved directly in fixing the value of the rand.

Apart from the muted and worthless rebuke made so far, we expect Gordhan and others in Treasury to defend the banks for their despicable behaviour. We also do not expect any changes to legislation to regulate and limit the flow of capital out of our country. It's the time to nationalise the South African Reserve Bank, but we know that the ANC will continue to dance to the tune of White Monopoly Capital.

A basic income of R20 per hour is not a victory for workers. It gives Capital the power to control the hours and continue to pay the majority of workers who are black and African low wages.

On the National Minimum Wage and Changes to Labour Law

We expect Gordhan to congratulate government and labour for signing an agreement to pay workers slave wages. As NUMSA we have made our position on this unequivocally clear. We represent over 350,000 workers who have rejected the adopted minimum wage. We believe that a minimum wage of R20 per hour is proof that this government is not serious about dealing with income inequality. In fact the minimum wage of R20 per hour was a compromise. It is an amount which capital is comfortable with and it is designed to appease ratings agencies.

A basic income of R20 per hour is not a victory for workers. It gives capital the power to control the hours and continue to pay the majority of workers who are black and African low wages. The majority of African workers in this country continue to suffer the apartheid wage which is incapable of supporting human life. The continuing apartheid geography of South Africa means that African workers live very far away from work, requiring them to part with a significant portion of their income for transport.

The adopted ANC national minimum wage is an insult to the Freedom Charter and a facilitator of the continuing post 1994 colonial and racist wages for Africans.

For the last 23 years this government has done everything in its power to appease ratings agencies and other neoliberal financial institutions, at the expense of the majority of the people of this country - the black and African working class and rural poor.

Far from implementing 'radical economic transformation' the ANC government has given white monopoly capital the power to consolidate its position at the expense of the vast majority of people. We now sit with a crisis of unemployment where at least a quarter of the working population is out of work.

NUMSA reiterates its total opposition to privatisation and all policies whose aim is to placate white monopoly capitalism and their credit rating agencies. We call on all workers, employed and unemployed, to join us in our United Front, and in the work we are involved in to create a New Federation. We call on workers to join us in the work of forming and developing a genuine revolutionary socialist political party of the working class.

Organise or starve!