What was called for in this week’s budget speech was substance, rather than bluster about how we must do something about the crisis in expenditure and rising debt. For the most part, finance minister Tito Mboweni delivered.
To steal a quote from an economist, it was “a fascinating budget” as the minister threw the kitchen sink at the unions with his plans to reduce the public-sector wage bill – for about 1.2-million staff in national and provincial governments – by more than R160bn.
Cognisant of the health of the economy, Mboweni is not planning massive job cuts, which would immediately lighten the expenditure load. Rather, he has chosen to review the rate of wage increases.
On Tuesday we’ll get our GDP figures for the fourth quarter of last year and all indicators suggest we will be lucky to escape the technical definition of a recession.
What is certain is that, for yet another year, our economy will have dipped below the 1% growth mark. We’ve had an underperforming economy perhaps since as far back as 2013. More recently this has been evidenced by the poor corporate earnings season.
For the best part of a decade, workers in the private sector have borne the brunt of our economic struggle as mining companies, for example, have slashed jobs in the face of sluggish commodity prices and rising costs, such as electricity.
Workers in the public sector, backed by their powerful unions, have been largely cushioned from its full effects.