Robbing workers in broad public daylight won’t do the job
In effect, the budget downsizes core national functions to save an airline that cannot compete with private suppliers
The 2020 budget has brought home the cost of rescuing Eskom and SAA through fiscal transfers. To pay for them, the government plans below-inflation increases in funding for education, health care and the police. The Treasury has in effect bet that it can impose a wage freeze on public sector workers to save services despite the real cuts in budgets.
Nonetheless, the planned payments to Eskom and SAA come at the cost of crucial investments in citizens and communities. That points to the need for much more rigour and innovation in designing support for the state-owned enterprises (SOEs).
For the coming year the budget provides R56bn for Eskom and R10bn for SAA. That sum equals just 3.4% of non-interest expenditure, but it will absorb almost two-thirds of the total planned increase in nominal rand. It’s wishful thinking to believe we can avoid paying for Eskom’s bad decisions and incompetence around new electricity investments over the past decade. The question is whether fiscal transfers are the best available option. It would make more sense to use the savings in the Unemployment Insurance Fund (UIF), which now has a surplus of more than R150bn, and public servants’ pension funds, to avoid real cuts in health, education and community safety...