[South Africa] Spend more on social services, urge unions

from The Mail and Guardian

While calling for increased expenditure on social services such as health and education, which they argue would result in affordable or free quality service, trade unions believe that Minister of Finance Trevor Manuel's 10th Budget will not have a serious effect on the fight against poverty.

While the Congress of South African Trade Unions (Cosatu) wants Manuel to increase the allocation on poverty-relief programmes, including raising expenditure on education, the National Council of Trade Unions (Nactu) also wants the state to spend more on a "social wage".

A social wage refers to an increased amount and access to facilities -- such as education and training, health and running water -- in poorer areas where problems include poor public transport, bucket systems and a lack of school material, said Nactu secretary general Mahlomola Skosana.

"The minister is more concerned with relieving the rich, and to do that he takes money from the system and gives it back to the rich; these billions are not going to the poor," Skosana said, adding that Nactu is in favour of the current foreign-exchange restrictions.

This is in sharp contrast to the business community and economists that hope for or expect a relaxation of forex controls when the minister tables the Budget 2006/07 on Wednesday.

"He used to say there was a trickle-down effect if you give the money to businessmen and high-income earners to boost spending, but he doesn't talk about it any more. He has realised that this IMF [International Monetary Fund] theory does not work. There is no trickle-down effect; instead, the money goes back to the rich or, in the case of forex controls being lifted, manufacturers will take their money to India, adding to joblessness here," Skosana said.

Skills development
An economist at Solidarity, Lullu Krugel, said Manuel should channel an additional R40-billion towards skills development to achieve sustainable growth levels as opposed to raising allocation to items such as education, welfare and social security and health.

"All of these are real issues in South Africa, but throwing more and more money in that direction and less to other items will not necessarily solve the problems," Krugel continued.

"The availability of skills, the correct allocation of resources and having the necessary systems and right people in place to distribute the billions that are already going towards health and education [are] more necessary than more money."

She also alluded to President Thabo Mbeki's State of the Nation address in arguing that the development of the skills base is high on the national agenda, but cautioned against the red tape in skills-development levies.

On the other hand, Cosatu economist Neva Makgetla and Skosana called for more spending on education, but also ascribed the poor level of education standards in rural and township schools to both inequitable distribution and a lack of service delivery.

Cosatu proposes the scrapping of school fees in addition to compensatory increases in funding. This would ensure improved standards of staffing, textbooks and infrastructure. The federation describes school fees as a major burden on the poor, arguing that it maintains an "exclusive and inequitable economy".

Tax
While Cosatu and Nactu oppose further tax cuts, Solidarity wants Manuel to effect a change in the minimum tax-free amounts for persons below 65 in order to encourage the culture of saving.

"We also hope to see a tax incentive for companies that create jobs, for example allowing them to deduct, over a period of a few years to ensure that it is sustainable, a certain percentage of the salary of new employees for tax purposes," Krugel said.

While recognising the high levels of unemployment, which Statistics South Africa estimates at almost 40%, the unions do not expect the minister to inject more cash towards job-creation programmes.

Makgetla said the planned pebble-bed modular reactor (PBMR) project is not only a "hi-tech fancy toy" whose returns on investment are uncertain, but it goes against the spirit of job creation because it is not labour intensive.

She called for the scrapping of the project in which the government was recently involved -- referring to the R17,5-million and R312-million deals with United States group Westinghouse and Equipos Nucleares of Spain, respectively -- ahead of the proposed construction of the PBMR's demonstration power plant at Koeberg.

Underspending
Turning to the underspending that characterises provincial structures and government departments alike, Krugel said: "All funds that are allocated to state departments should be utilised effectively and correctly, and there should not be rollovers of R1,5-billion in a country with the alarming levels of poverty and shockingly high unemployment that South Africa has."

Skosana said it is about time that the government starts considering dismissing officials -- such as ministers and local government bosses -- who don't deliver services to their communities or the nation.

"Employees that don't perform get fired; how about applying this to Cabinet ministers?" he asked.

"The problem with the speeches they [politicians] make is that they are just speeches that don't translate to fact. The Budget fails to go to the heart of the matter -- creating better conditions for the disadvantaged. Workers still have problems with trains; our clinics are without medicines," Skosana continued.

Cosatu is proposing an increased funding of operational costs for health in order to provide for adequate staffing, access to medicines and other materials, and the expansion of public works programmes for home-based care and auxiliary personnel to support medical professionals.

According to the country's largest trade union federation, the health sector remains one of the most underfunded services.

Cosatu and its partners in the People's Budget campaign propose the acceleration of the roll-out of anti-retroviral treatment, especially in Limpopo and Mpumalanga, which have fallen well behind on targets.

Half-a-million South Africans need anti-retroviral treatment, but this is a far outcry from the 75 000 people that receive the treatment in the public sector at present.

"The shortfall spells death for tens of thousands. At the same time, we would like to see fast-tracked training for educators, health workers and police on a mass scale, which would do a lot to help eliminate the stigma and improve the quality of life for people infected with and affected by HIV," the coalition said.