The more things change the more they stay the same.
Yesterday, as Finance Minister Gordhan prepared to deliver his maiden budget speech to Parliament, hundreds of rural and urban women from several grassroots organisations and NGOs gathered outside Parliament. Their demands were simple. They wanted jobs, increases in grants and pensions, especially for the aged and for the child support grant. Those from the rural areas focused on access to land, rural livelihoods, an end to farm evictions, security of tenure for farm workers and their families, and the speeding up of land reform.
So how well has the budget fared to meet the needs of those protesting outside?
The conservatism displayed in yesterday’s budget illustrates the fact that despite all the rhetoric of Polokwane and the “shift away from Mbeki’s neo-liberalism” we see a startling similarity. Thus Minister Gordhan vowed to; “maintain prudent macroeconomic policies that promote a favourable environment for investment and job recreation through low stable inflation and interest rates”. (The Times, 18/2/2010).
He closed debate on the independence of the Reserve Bank and inflation targeting, confirming the current conservative monetary policy that has killed job creation while guaranteeing the value of inventors’ speculation. He also confirmed an exchange rate policy that will allow the country to be flooded by imports while putting our exports under pressure. Ultimately, this policy will make us more reliant on speculative hot money to fund growing current account deficits. One has to question whether tax reductions, even if it is for the middle class and not the very rich, is the best way to stimulate savings. COSATU sums this up well when they say Gordhan has, “poured old wine into new bottles.”
Where Gordhan was innovative, for example, stimulating youth employment through subsidising their wages, he paves the way for a two-tier labour market – something the labour movement has been fighting against tooth and nail. In terms of support for a new growth plan and for stimulating industry (as part of government’s new industrial plan) we wonder why priority is not given to small-scale agriculture. In this regard, organisations like the Trust for Community Outreach and Education (TCOE) whose work focuses on rural development and land reform, saw yesterday’s budget as a major disappointment. The new Ministry for Rural Development and Land Reform was allocated a measly R860 million extra over three years. This is not to say that the R1,2 billion for on-site water and sanitation is not important, but it certainly is not equal for more resources for land redistribution and the development of small-scale agriculture.
The Land Claims Commission was not allocated any additional funds. This level of budgetary allocation for rural development and land reform has been an important indicator over the past decade of the low priority government has towards land reform and restructuring of the rural economy.
Now even the ANC’s limited promise of redistributing 30% of white-owned land to blacks by 2014, is a pipe dream. According to Business Day’s Stephan Hofstatter; “at this rate it will take more than 60 years for to reach the 30% target.”
This level of fiscal conservatism has been the approach of our government over the past years, yet unemployment in the country continues to remain deep. The impact of the global recession on our economy has shed close to one million jobs, yet the budget does little to allocate resources that will create real jobs and livelihoods. Its emphasis on the expanded public works programme and job opportunities is closer to social welfare than job creation. Unfortunately the unemployment crisis will get deeper and we can expect more xenophobic explosions as the poor seek scapegoats amongst themselves. In this regard the increased expenditure for policing is probably justified.
It is useful to point to the fact that the infrastructure expenditure of R787 billion, which has been associated with the preparation for the World Cup, has been increased to R846 billion of which a large percentage is earmarked for Eskom, Transnet and commuter railways, all intended to stimulate job creation. However, unless this extensive state investment is backed up by a procurement policy that favours local products and services, linked to skill development for young job seekers and monitored, the lion’s share will seep out of the country, go into company profits, consultants and salary packages of the corporate elite.
Unless, there is a complete rethink in dealing with the structural nature of unemployment, very marginal amounts will trickle down to the poor.
Trust for Community Outreach and Education