Sameera Casmod | sameerac@radioislam.co.za
30 October 2024 | 12:39 CAT
1-minute read

South Africa’s Finance Minister prepares to deliver the highly anticipated Medium-Term Budget Policy Statement (MTBPS), commonly known as the mini-budget, unions are issuing stern warnings against austerity measures. Matthew Parks, Parliamentary Coordinator for the Congress of South African Trade Unions (COSATU), emphasised the risk of budget cuts to critical public services, state-owned enterprises (SOEs), and municipal functions, which, he argued, are essential for driving economic growth and delivering public services.

“Public services, municipal services, state-owned enterprises have a valuable role to play in the economy, in creating jobs, building economic growth, providing public services to the poor,” Park said. “And if you cut the budget too far, it can end up damaging the capacity to do so.”

This budget is a midpoint review, with the major budget announcement scheduled for February. Parks expressed that now, from within government, many former critics of the public sector are beginning to recognise the crucial need to fund departments adequately to ensure service delivery. For instance, COSATU has long highlighted the need to fill vacancies at Home Affairs, and the current administration has finally acknowledged this pressing issue.

COSATU’s concerns also extend to the country’s economic outlook. Parks stressed that South Africa faces not only a debt crisis but a deeper revenue and unemployment crisis, calling for measures to stimulate economic growth and generate jobs to boost revenue.

“If you want to deal with the debt, if you want to have the resources to provide public services that the economy depends upon, then you’ve got to grow the economy,” he said, urging the government to support job creation initiatives.

Parks also highlighted the importance of enhancing the South African Revenue Service’s (SARS) capacity to improve tax compliance, which he argued is vital for securing the funds necessary to fulfil the state’s constitutional obligations.

As the mid-term budget policy statement is revealed, unions like COSATU are pushing for an economic strategy that prioritises growth and job creation over austerity, warning that severe budget cuts could hinder the country’s ability to provide essential services and support economic recovery.

Listen to the full interview on Sabaahul Muslim with Moulana Sulaimaan Ravat.