2 November 2023
SAMWU REACTION TO THE MEDIUM TERM BUDGET POLICY STATEMENT
The South African Municipal Workers’ Union (SAMWU) notes the Medium Term Budget Policy Statement (MTBPS) delivered by Finance Minister Enoch Godongwana on November 1, 2023. SAMWU believes that the Minister missed an opportunity to ensure adequate and equitable funding for the country’s municipalities, which are grappling with severe financial pressures that have weakened many municipalities and compromised service delivery. We are also concerned about the cost containment measures announced, as they may have adverse repercussions for both workers and residents.
On municipal funding
While the Union appreciates the decision by the National Treasury to review the municipal funding model, we are concerned that, despite the financial pressures faced by municipalities, the Minister has once again missed an opportunity to ensure that municipalities receive funding that enables them to fulfil their Constitutional mandate towards residents.
From SAMWU’s perspective, the National Treasury, as the custodian of the country’s finances, has once again let municipalities down. We have consistently argued that the equitable share allocated to municipalities exacerbates the financial challenges they face. In this budget adjustment, the country’s municipalities will only receive 9.9% of government expenditure.
As recently disclosed by Maropene Ramokgopa, the Minister in the Presidency responsible for monitoring and evaluation, out of the country’s 257 municipalities, 229 are either dysfunctional or in distress. We believe that these challenges are predominantly financial, and one crucial way to salvage the country’s municipalities is through adequate funding.
The Minister has also emphasised the need for municipalities to explore other revenue generation mechanisms. However, this alone may not address the core challenges faced by municipalities. Many of the country’s municipalities are unable to generate the necessary revenue to provide services on their own, primarily due to the impoverished demographics they serve. The Union maintains its stance that the review of the municipal funding model should include an increase in the allocation to municipalities.
On Eskom Municipal Debt Relief Grant
We welcome the National Treasury’s commitment to implement the Eskom Municipal Debt Relief Grant, a R59 billion package aimed at assisting municipalities with their Eskom debt. Many of the country’s municipalities are burdened with debt owed to Eskom, which they are unable to service due to their precarious financial positions.
We are particularly concerned about the uptake of this grant, especially by municipalities in dire need. As per the Minister’s announcement, only 67 municipalities have applied for the grant, with 28 of those applications approved. Of significant concern, 138 municipalities collectively owe Eskom nearly R60 billion and struggle to service their debt.
SAMWU calls on all municipalities indebted to Eskom to seize this opportunity to settle their Eskom debt. The situation on the ground is so critical that many municipalities frequently fail to pay workers because Eskom attaches their bank accounts. The Union further urges Provincial Governments to ensure that all financially distressed municipalities apply for this grant. Additionally, we call for Municipal Managers who have neglected to apply for this grant to be held personally responsible for their failure to ensure the financial viability of their municipalities.
On SRD extension
The Union acknowledges and appreciates the National Treasury’s decision to extend the Social Relief of Distress (SRD) Grant for an additional year. We believe that the SRD has been instrumental in offering crucial assistance to many disadvantaged South Africans, particularly during the peak of the Covid-19 pandemic.
While we welcome the extension of the SRD grant, SAMWU calls for a permanent solution that can address the enduring needs of our population. In this regard, SAMWU calls for the implementation of a Social Basic Income Grant that can comprehensively address the multifaceted social challenges faced by South Africans. As it stands, the current form of the SRD grant does not provide sufficient social protection for vulnerable South Africans.
On comprehensive review of job creation projects
We acknowledge the commitment by the National Treasury to lead a comprehensive review of job creation projects, such as the Extended Public Works Programme (EPWP). This commitment follows shortly after the announcement by the Minister of Public Works and Infrastructure (DPWI), Sihle Zikalala, regarding “major shake-ups” of the EPWP programme.
From SAMWU’s perspective, any “major shake-ups” or “comprehensive review” must encompass the absorption of EPWP employees directly and permanently into municipal positions. SAMWU maintains that the EPWP program has deviated from its original purpose, transforming into a conveyor belt of cheap labour for municipalities. Over the years, municipalities have exploited EPWP employees, denying them job security and benefits.
Consequently, SAMWU calls on the National Treasury and DPWI to ensure that this review and restructuring leads to the permanent employment of these workers. We, as SAMWU, will persist in fighting for the permanent and direct employment of EPWP workers on a continuous basis.
On spending reduction and cost containment measures
The fiscal consolidation project initiated by the National Treasury will have significant implications for the country, its workers, and residents. Minister Godongwana has already directed government departments to cut their budgets by 15% and impose a freeze on hiring. This decision, which seems illogical, will likely prevent many government departments from fulfilling their constitutional obligations to residents. Such a neoliberal approach will result in delayed or diminished service delivery, leaving residents waiting longer for the quality services they deserve from the government.
Moreover, by not filling vacancies, the government not only risks constraining the country’s economic growth but also pushes many South Africans further into poverty, hunger, and starvation. South Africa is home to some of the world’s most significant inequalities, with high youth unemployment. This decision could lead to further disenfranchisement for many unemployed individuals struggling to put food on their tables, potentially fostering social unrest.
We agree with the Minister’s intentions to reconfigure the government’s structure and size and address overlapping government mandates. However, we believe that this reconfiguration should not result in job losses, as it will exacerbate the social challenges faced by many South Africans.
Issued by SAMWU Secretariat
(076 580 4029)
Deputy General Secretary
(082 526 5224)
National Media Officer
(076 795 8670)