Black Sash Statement on the Medium Term Budget Policy Statement

Black Sash Media Statement 27 October 2016

Government, be the team of lions that protect grant recipients and the poor!

As controversy deepens and challenges mount in South Africa, the Minister of Finance, Pravin Gordhan tabled the 2016 Medium Term Budget Policy Statement. In many ways it was a unique speech. For the first time, the Minister affirmed no less than 17 Ministers by name in his speech. On more than one occasion, he referred to a Pedi saying, translated meaning, “Lions that fail to work as a team will struggle to bring down even a limping buffalo.”

Against the backdrop of possibly the largest student protest to Parliament in history, the Minister correctly made time to acknowledge the protesters at the gates of Parliament. It comes as no surprise therefore that the MTBP statement reflects significant resources for higher education, which exceed year on year increases to health and social protection.

Significant by its absence though, are two issues.

Firstly, the absence of criticising companies that have extracted wealth, often unlawfully, without informed consent, and sometimes fraudulently from the most vulnerable and poor citizens is regrettable. SARS, FIC, Treasury and the SA Reserve Bank presented to Parliament evidence that illicit money flows and money laundering have become major challenges to the economy. Earlier this week, even the FBI, US Government expressed their concerns about money laundering as a growing global phenomenon.

In South Africa, we cannot be proud of a significant growth in the financial sector of 2.2% as opposed to a growth rate of 0.5% this year, when some of this happens at great cost to the poor, fueling indebtedness and destitution.

Secondly, for the Black Sash, the increase of R10 in October 2016 for recipients of Child Support Grant’s (CSG) “to keep pace with inflation” is less than 3%, significantly less than this year’s inflation rate of 6.4% - and specifically more than 10% for food inflation, for which the increase was specifically intended to address. At best – the lowest grant, viz. the CSG was increased by a mere 2.8%. At this time it remains imperative for government to assist the most vulnerable and poor with at least, appropriate increases as a minimum support intervention.

Whilst the Minister did mention the scourge of corruption several times, quoting from Martin Luther King, to Pope Francis and Amartya Sen, there was ample opportunity to directly criticise the failure to address corruption at an unprecedented scale in the social assistance sector. More about this later.

There is a great need for reviewing the way money flows between national, provincial and local government. Reviewing the policy on allocation of conditional grants and equitable shares to local government, as recommended by SALGA, is overdue.

Failing to do so will almost guarantee that persons living in the poorest municipalities will continue to be hewers of wood and drawers of water, given the rapidly urbanising nature of South Africa, and a disproportionate focus on metropolitan municipalities. In this regard, the press statement by the Rural Health Advocacy Project (RHAP) highlights this need.

As a measure of solidarity with most people in South Africa, there is merit in reviewing the remuneration policy for public office bearers. For example, the lowest salary of an MP is R86 000 per month. We can tighten our belts collectively, together with those who are suffering the most. Also, evidence exists to reduce the number of Ministers, Ministries, Deputy Ministers – and the cost of Cabinet, possibly the highest since the advent of our democracy.

Whilst the Minister’s speech said very little about social security funds, relative to the rest of the other priorities he identified, there is an urgency to also address the scourge of unauthorised, irregular, wasteful and fruitless expenditure in provinces in local government and elsewhere.

Just last week, the Department of Social Development and SASSA were in the media for the wrong reasons, when it was learnt in Parliament, that the increase in SASSA’s irregular expenditure rose from R60 million last year to R1017 million (almost R1,02 billion) this year.

Yet, the Auditor-General of South Africa provided them with a clean audit. Significant questions were asked by MPs and many of these remain to be answered, especially those concerning SASSA’s implementation plans for insourcing social grant payments, as promised to the Constitutional Court - a matter that the Black Sash raised with the Minister of Social Development recently. We await a formal response from her to date.

Whilst great concern has been expressed about the continued poor performance of the Road Accident Fund in recent Parliamentary hearings, the silence on the UIF surpluses (R99 billion as at March 2016) needs to be highlighted. There is an opportunity for some of these funds to be used for critical needs in the Budget.

Finally, our collective dream of having “no-one left behind in our march for a better life for all,” must be heeded by those, both inside and outside the State. The Minister of Finance’s call in this regard, is to be commended.

For more information, contact: Elroy Paulus 082 748 5621 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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