Governance and democracy

Governance and democracy

  • Khumbulani Craft / The Siyazisiza Trust Comments on the 2010/11 Budget

    From an NGO point of view the budget is extremely disappointing. Whilst transport costs (highly influenced by the cost of fuel) affect black people disproportionately higher than whites, the minister has increased fuel levies by 25.5 cents per litre. In my opinion to tax the poor and unemployed is unacceptable.

    Increasing grants to pay for the higher costs creates a culture of entitlement and increases inflation leading to more pressure on NGOs.

    Whilst government has not demonstrated any ability to control costs and avoid fraudulent payments, the budget makes provision for massive future expenditure and for Government debt to increase from R526 billion to R1.3 trillion. This will result in higher funding costs which will be inflationary and could result in the Rand remaining overvalued leading to lower manufactured exports and a loss of sustainable job opportunities.

    Even though it buys votes, increasing expenses to compensate for past wasted expenditure or money stolen and spending billions on replacing infrastructure destroyed through lack of competent management is not a sustainable strategy.

    Whilst it is anticipated that the 2010 World Cup will contribute 0.5 percent towards GDP growth, this may not be of that much value to the fiscus if most of the profits are siphoned offshore. The cost of funding the R33 billion and maintaining that infrastructure for years to come will also have to be taken into account.

    With some bracket creep, the increased fuel costs and the cost of funding hundreds of billions of Rands of debt, the budget has not addressed the key national imperative of creating millions of additional jobs and producing goods for the local and export markets on a competitive and sustainable basis. The budget encourages people to live on grants which together with increased costs, could make the Rand remain overvalued and value-added South African exports unaffordable  

    Charles Stride
    Deputy Chairman
    Khumbulani Craft

    Trustee
    The Siyazisiza Trust
    Author(s): 
    Charles Stride
  • People’s Budget Campaign Comments on the 2010/11 Budget

    The People’s Budget Campaign (PBC) is a civil society coalition comprising of the Congress of South African Trade Unions (COSATU), the South African Council of Churches (SACC) and the South African NGO Coalition (SANGOCO). This coalition has for the past ten years tabled proposals on the spending of revenue by the National Treasury and argued for a participatory budget process.

    The speech sets out a brilliant political vision with which we broadly agree with. As the PBC, we therefore welcome the evidence that the Minister is guided by the five key priorities as identified in the ANC manifesto, and agreed to in the Alliance Economic Summit, which are:
    • Creation of decent work and sustainable livelihoods;
    • Education;
    • Health;
    • Rural development, food security and land reform;
    • The fight against crime and corruption.
    Much of the speech comprises proposals to address this fundamental challenge. But this vision cannot be realised without simultaneous fundamental shifts from failed macro-economic policies, such as inflation targeting, which contributed to the perpetuation of the very inequities that the Minister refers to as “inequitable growth not being sustainable for broad based development and growth”. 

    In essence, therefore, the Minister has failed to shift policy. We are therefore very disappointed that the Minister failed to shift from the failed monetary policies of the past administration, despite claiming to have learned lessons from the crisis.

    We will therefore escalate our struggle for the scrapping of inflation targeting, because we are of the view that the persistently high unemployment rate, strong exchange rate, and de-industrialization of our economy are due to the policy of high interest rates, of which inflation targeting is a form. Inflation targeting tends to maintain high interest rates, especially because our economy is vulnerable to supply-side shocks such as food price and energy price increases.

    On youth employment

    The PBC will be seeking further clarity on the proposed subsidy to employers that will lower the cost of hiring young people without work experience. While we note that such employees will be “subject to minimum labour standards”, we are still concerned that this scheme could lead to a two-tier labour market. We therefore look forward to the hearings on the issue in March.

    On Tax Relief

    The Minister has noted the massive wealth and income inequality that characterises our economy.  In this connection, he has put forward some tax relief proposals. In the light of gross income inequalities in our country resulting from the stagnation of wages in the past 10 years as opposed to the meteoric rise of executive management salaries, the PBC is proposing a revision of the R500 000 threshold (of 45 percent for all individuals earning above R500 000), noting that the number of people earning above one million has increased. We are proposing this redistributive measure to the highest income quintiles.

    On Corruption

    The PBC welcomes the much tougher line taken by the minister against corruption and will give its full support to the proposed measures, including “target lifestyle audits”, in order to root out this scourge.

    The PBC further welcomes, among others:

    • The recommitment to the Expanded Public Works Programme;
    • The extension of social grants to two million more children aged 15 to 18 years;
    • The reaffirmation of preparations to establish a national health insurance system;
    • The allocation of over 6 000 hectares of land for low-income and affordable housing;
    • Ambitious targets for skills development.
    In essence, therefore, the PBC is disappointed in the Minister’s stance regarding this conservative macro-economic framework. We do, however, welcome the notion that spending on social services will be maintained. The PBC is further pleased that the Minister has an enhanced understanding of the issues of unemployment, inequality and poverty.

    Mbali Toyana
    Researcher
    Social and Economic Justice Unit
    National Labour and Economic Development Institute (NALEDI)
    Author(s): 
    Mbali Toyana
  • People’s Budget Campaign Comments on the 2010/11 Budget

    The People’s Budget Campaign (PBC) is a civil society coalition comprising of the Congress of South African Trade Unions (COSATU), the South African Council of Churches (SACC) and the South African NGO Coalition (SANGOCO). This coalition has for the past ten years tabled proposals on the spending of revenue by the National Treasury and argued for a participatory budget process.

    The speech sets out a brilliant political vision with which we broadly agree with. As the PBC, we therefore welcome the evidence that the Minister is guided by the five key priorities as identified in the ANC manifesto, and agreed to in the Alliance Economic Summit, which are:
    • Creation of decent work and sustainable livelihoods;
    • Education;
    • Health;
    • Rural development, food security and land reform;
    • The fight against crime and corruption.
    Much of the speech comprises proposals to address this fundamental challenge. But this vision cannot be realised without simultaneous fundamental shifts from failed macro-economic policies, such as inflation targeting, which contributed to the perpetuation of the very inequities that the Minister refers to as “inequitable growth not being sustainable for broad based development and growth”. 

    In essence, therefore, the Minister has failed to shift policy. We are therefore very disappointed that the Minister failed to shift from the failed monetary policies of the past administration, despite claiming to have learned lessons from the crisis.

    We will therefore escalate our struggle for the scrapping of inflation targeting, because we are of the view that the persistently high unemployment rate, strong exchange rate, and de-industrialization of our economy are due to the policy of high interest rates, of which inflation targeting is a form. Inflation targeting tends to maintain high interest rates, especially because our economy is vulnerable to supply-side shocks such as food price and energy price increases.

    On youth employment

    The PBC will be seeking further clarity on the proposed subsidy to employers that will lower the cost of hiring young people without work experience. While we note that such employees will be “subject to minimum labour standards”, we are still concerned that this scheme could lead to a two-tier labour market. We therefore look forward to the hearings on the issue in March.

    On Tax Relief

    The Minister has noted the massive wealth and income inequality that characterises our economy.  In this connection, he has put forward some tax relief proposals. In the light of gross income inequalities in our country resulting from the stagnation of wages in the past 10 years as opposed to the meteoric rise of executive management salaries, the PBC is proposing a revision of the R500 000 threshold (of 45 percent for all individuals earning above R500 000), noting that the number of people earning above one million has increased. We are proposing this redistributive measure to the highest income quintiles.

    On Corruption

    The PBC welcomes the much tougher line taken by the minister against corruption and will give its full support to the proposed measures, including “target lifestyle audits”, in order to root out this scourge.

    The PBC further welcomes, among others:

    • The recommitment to the Expanded Public Works Programme;
    • The extension of social grants to two million more children aged 15 to 18 years;
    • The reaffirmation of preparations to establish a national health insurance system;
    • The allocation of over 6 000 hectares of land for low-income and affordable housing;
    • Ambitious targets for skills development.
    In essence, therefore, the PBC is disappointed in the Minister’s stance regarding this conservative macro-economic framework. We do, however, welcome the notion that spending on social services will be maintained. The PBC is further pleased that the Minister has an enhanced understanding of the issues of unemployment, inequality and poverty.

    Mbali Toyana
    Researcher
    Social and Economic Justice Unit
    National Labour and Economic Development Institute (NALEDI)
  • Gauteng Welfare Forum Comments on the 2010/11 Budget

    No Relief in Sight for Social Welfare Services.

    Non-profit organisations (NPOs) delivering social welfare services in Gauteng are extremely disappointed at the lack of any mention in the Budget speech of a desperately-needed new financial deal for their sector. On 28 August last year, mass action took place countrywide to bring to government's attention the plight of organisations battling to serve the country's most vulnerable people - including orphaned and vulnerable children and those who are abused, exploited or abandoned; people with disabilities; frail and destitute older people; those affected by crime and violence; homeless children and adults; refugees; poverty-stricken communities - and many more.

    In most provinces, including Gauteng, no response was forthcoming to last year's call for realistic funding for these services. The allocation made by the National Treasury to the provincial Departments of Social Development simply does not allow for them to properly meet their responsibilities for the funding of NPOs, on whom they depend for the delivery of essential services. Repeated appeals have been made to Treasury for action to address the deteriorating situation of our sector. We had hoped for good news in the Budget speech - but nothing seems to have materialised. 

    There are positive features of the budget - for example, we welcome the extension of the Child Support Grant to older children, the plans to address unemployment especially among the youth, the broadening of access to ARVs, and the increased provision for basic services to poor households. The general focus of the speech on addressing poverty and extremes of inequality is also encouraging. But there seems to be a failure to recognise that effective social welfare services to vulnerable and marginalised people are indispensable for the implementation of our Bill of Rights and the development of our nation.

    While we are fully aware of the difficulties facing Treasury in the current economic climate, we believe that these services should receive more, and not fewer, resources in times of recession.  

    Jackie Loffell
    Provincial Coordinator  
    Gauteng Welfare Forum
    Author(s): 
    Jackie Loffell
  • Umcebo Trust Comments on the 2010/11 Budget

    Umcebo Trust Comments on the 2010/11 Budget

    The Budget - A Case of Financial Faith Healing

    Firstly, our Minister of Finance seems to have presented a very prudent budget, with mention of social spending, and a caution to us, to not incur unnecessary debt. Once you move on from this, I find myself asking the same questions that I have with the budgets of the previous two years. These all revolve around the fact that the right noises are being made at a macro level, but this is once again a case of will these budget line items be effectively translated into a better way of life for the South Africans we work with on a daily basis. I can only base my answer on what has happened in the past, and to me the answer is probably no.

    Our budget is full of wonderful notions and intentions, but once the line items are allocated to the various levels of government, then the rot seems to set in. Those who are given budgets to allocate, particularly on social spending, seem at best incapable, and at worst unwilling, to process forms and allocated monies to make an effective difference at grassroots level.

    The situation is also being worsened by the fact that no capacity is being created in government to ensure effective implementation and allocation. Those tasked with allocating money, in many cases, seem to care very little about the fact that they are not being effective, as they are already eyeing out the next position further up the ladder, so by the time they are discovered, they will be somewhere else, and essentially unaccountable. A new person will replace them, and so the cycle is repeated.

    The above are not popular views to express. Many will call me a pessimist for saying this, but the fact that I am saying this is an indication of my faith in this country and its people at a grassroots level. Until we have a fundamental overhaul of the structures used to allocate monies in budgets, these budgets will essentially be a leap of faith - that we except will change the lives of the poorest of the poor, when their daily experience for the past how many years tells them otherwise.

    I salute the budget like I do each year. Do I think that it will make the lives of my crafters any better, and improve my abilities to assist them, probably not.

    Robin Opperman
    Director
    Umcebo Trust
    Author(s): 
    Robin Opperman
  • African Governments Impress World Bank

    The World Bank president has voiced his satisfaction at the actions taken by African governments to deal with the global economic crisis.

    Ending an eight-day, three-nation trip to Africa, which took him to Sierra Leone, Cote d'Ivoire and Ethiopia, Robert Bruce Zoellick says that, "I leave African impressed by the actions many governments have taken to cope with the global economic crisis.

    However, Zoellick says that governments and their partners, like the World Bank Group and others, should work harder to expand opportunities and improve prospects for economic growth.

    To read the article titled, “World Bank impressed with African govts,” click here.
    Source: 
    All Africa
  • NGO Workers Denied Work Permits

    The Israeli interior ministry has stopped issuing work permits to foreigners working for international NGOs.

    In the last few weeks, NGO workers have been given tourist visas instead, making it virtually impossible for them to carry out their work. The new Israeli policy affects 120 international NGOs, many of which provide vital developmental and humanitarian aid to Palestinians in the West Bank and Gaza.

    To read the article titled, “Israel denies NGOs work permits,” click here.
    Source: 
    Aljazeera
  • Unqualified Audit Report for Gauteng Municipalities

    The financial management of municipalities in Gauteng is steadily improving, according to the MEC for local government, Kgaogelo Lekgoro.

    Lekgoro says 11 out of 14 municipalities in Gauteng have received unqualified audit opinions, marking an improvement from the previous financial year when there were only eight.

    "When the finances of municipalities are spent and managed properly it restores confidence in the leadership of government and it strengthens the provision of services to communities," explains Lekgoro.

    To read the article titled, “Municipal finances improving,” click here.
    Source: 
    News24
  • King 3 fails to recognise governance in NPO sector

    The release of the King 3 report on corporate governance in 2009 and its imminent application have invigorated debate on corporate governance and social responsibility. Although this is a positive step, there is a need to orientate the debate towards the responsibilities of the nonprofit sector in a more meaningful way.

    According to Shelagh Gastrow, Executive Director of Inyathelo - The South African Institute for Advancement, the problem with King 3 in its present form is that it fails to mention specifically the role of governance in the nonprofit sector. As a result, it inadvertently sees nonprofit organisations’ activities within the same prism as those of the corporate sector. This is a mistake given the vast inherent differences between the two sectors and represents a misunderstanding of the significant role of civil society organisations in South Africa.

    To read the article, "King 3 is not a good fit for the nonprofit sector", click here.
    Source: 
    Business Day
  • KZN Social Development Department Defrauded

    Senior government officials have defrauded the KwaZulu-Natal department of social development of more than R40 million, according to a forensic investigation.

    MEC for finance, Ina Cronje, and of social development, Meshack Radebe, says the culprits have pocketed large sums of money for ‘projects, some of which never existed’.

    At least 179 people in Durban, Pietermaritzburg, the Midlands and Ulundi would face criminal and civil charges.

    To read the article titled, “R40m government cash goes missing,” click here.
    Source: 
    Sowetan
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