SAMWU Reaction to the Budget Speech

21 February 2018

SAMWU Reaction to the Budget Speech

The South African Municipal Workers’ Union (SAMWU) notes the Minister of Finance’s maiden Budget Speech as delivered on the 21st February 2018. This Budget has not met our expectation, we in fact do not believe that this is a pro poor budget as we had hoped for.

We however welcome the budget’s prioritisation of social spending in the form of social grants, health and education. We welcome the additional funding to the Deparyment of Health to focus on the National Health Insurance scheme. We also welcome the R57 billion funding for fee free higher education in the next 3 years. We believe that fee free higher education is the single latest salary increase for the working class.

We also welcome the R6 billion advanced to the Department of Water and Sanitation to assist with the drought relief. We believe that this will go a long way in ensuring that the water crisis currently faced in Western and Eastern Cape Provinces are addressed. We also believe that there is a need for a holistic approach to the water crisis in the country, an approach which will particularly focus on rural areas of the county which we believe are the hardest hit by the water crisis.

We also welcome the decision to assist municipalities in putting in place mechanisms of proper and adequate revenue collection mechanisms. We however believe that these mechanisms should not be a way of marginalizing the poor from benefiting from service delivery. SAMWU is convinced that municipalities do not exists for profit making by rather their constitutional mandate which is the delivery of services.

Minister Gigaba has outlined plans for government to increase Value Added Tax (VAT) from 14% to 15% . Despite the Minister justifying the increase by arguing that the poor will be shielded through the zero VAT rating on certain food items, we are of the view that this is not necessarily the case unless the Minister wants to tell us the poor, that we only deserve to eat dried beans and pap.

As we have said before, the South African working class do not have extra money to subsidize the state which they have been doing for a long time now. We are of the firm view that the working class can not be punished for an economic situation which they did not create. We therefore believe that the decision to increase VAT is regressive in nature and does not address the circumstances which South Africans find themselves in.

In addition to the increase in VAT, fuel levy will be increased by 52 cents while an additional 30 cents will be added through the Road Accident Fund levy. In essence, fuel will be increasing by 82 cents. Again workers will be over taxed through various means. The increase in fuel will only add to the burden on the working class as this will automatically result in an increase in food and transport costs which accounts to a greater percentage of the working poor’s expenditure.

The presented budget further presents a gloomy future for Local Government given the government cut to municipal funding through conditional funding to the tune of R28 billion. We believe that this will set back municipalities as they will not be able to undertake projects which are largely funded through conditional grants.

SAMWU takes exception to the fact that the Minister is trying to influence the outcomes of salary and wage negotiations currently underway. The Minister has argued that should workers receive salary increments which are above CPI, this would not be sustainable to the budget’s expenditure limits. SAMWU considers the utterances of the Minister as a direct attack to workers and collective bargaining.

We therefore urge the Minister to desist from violating the country’s labor laws and attacking collective bargaining by seeking to unilaterally determine the increments which workers should get. The Minister should allow the salary and wage negotiations to conclude without interference. We in fact believe that CPI is not a correct measure of the forever rising cost of living and that if it should be consisted to be one, a consideration should be made that the poor experience a higher CPI compared to other segments of the economy.

It is for this reason that we will be approaching the 3rd round of salary and wage negotiation with more vigor as we believe Municipal workers deserve a salary increment which we have presented to at the South African Local Government Bargaining Council.

Issued by SAMWU Secretariat

Simon Mathe
General Secretary
(079 887 8389)


Moses Miya,
Deputy General Secretary
(082 899 2169)


Papikie Mohale,
National Media Officer
(073 710 0356)