Anti-austerity budget protests climaxed once again when the finance minister, Mr Enoch Godongwana, delivered his 2022/23 budget statement to cheering members of parliament. Minister Godongwana’s budget, in step with the traditions of his predecessors, set out to reassure big corporations and their hangers-on, both locally and overseas, of the ANC’s ambitions to qualify as exemplary servants of a neoliberal bourgeois state. This 2022/23 statement of government’s income and spending plans again shows that the ANC is unable to pass this test from the standpoint of its paymasters- the capitalist class – after being the governing party for almost 30 years.
Godongwana – another neoliberal poster boy
As ritual dictates, the finance minister took his directives from President Cyril Ramaphosa’s state of the nation (SONA) speech of 10 February 2022. Godongwana did not just translate the priorities that featured in Ramaphosa’s speech into rands and cents. Budget allocations also followed the principles of capitalism that the head of state and the governing party propagate with so much zeal. Ramaphosa’s unapologetic assertion in the SONA was a precursor to the budget statement:
“We have been taking extraordinary measures to enable businesses to grow and create jobs alongside expanded public employment and social protection. We all know that government does not create jobs. Business creates jobs. Around 80 per cent of all the people employed in South Africa are employed in the private sector. The key task of government is to create the conditions that will enable the private sector – both big and small – to emerge, to grow, to access new markets, to create new products, and to hire more employees.” (Ramaphosa, SONA, 10 February 2022. Emphasis added)
Thus spoke Ramaphosa as the leading representative of his government’s aggressive anti-working class policies. The president framed this onslaught on the labouring majority as the centrepiece of his ‘new consensus’, with undertones of Thabo Mbeki’s illusions in an ‘African Renaissance’. Besides the deafening applause that this excerpt from Ramaphosa’s speech received from members of parliament, it also inspired what Godongwana uttered in the budget presentation.
Steeped in ANC neoliberal economics, Godongwana is not new to the economic cluster of government. In 2012, Godongwana resigned as deputy minister of economic development under a cloud of scandal (https://mg.co.za/article/2012-01-20-godongwana-resigns-amid-outrage/). Serving in the leadership of the Economic Transformation Committee of his party, he was in effect an understudy to former finance ministers. When Tito Mboweni, arch capitalist with private business interests similar to Ramaphosa, resigned as finance minister, space opened for Godongwana to be catapulted into this critical vacancy in August 2021. Since his elevation to the helm of National Treasury, Gondongwana has embraced his stardom as a neoliberal protégé and poster boy. In the months leading up to his maiden austerity budget, he concentrated on World Bank and IMF ‘consultations’.
Like other apologists for a profiteering minority, Godongwana camouflages his multipronged onslaught on the labouring majority through a mix of euphemisms and falsehoods. Through spin, the budget speech sustains the ruthless ideological attack of the state on the exploited, impoverished and dispossessed. Instead of privatisation, a hallmark of neoliberal austerity, the budget speech talks about ‘structural reforms’ and the ‘rationalisation and consolidation of state-owned enterprises’. Through various incentive schemes, the state is determined to ‘crowd in private investors for bulk infrastructure’ and ‘build private-sector confidence and investment’ (p9). Yet every worker knows that contrary to the rhetoric, privatisation is synonymous with job shedding and precarious work. Capitalist “structural reforms” always impose greater hardships on the working class and landless peasants. This ideological offensive is far more insidious in that it sabotages the resistance by the oppressed and exploited. The political elites, including Ramaphosa and Godongwana, do so through these word-games that aim to politically misguide and organisationally disarm anti-austerity fightback campaigns.
Workers Pay for Capitalist Stagnation and Decay
The finance minister told parliamentarians that South Africa has been in the grip of “economic stagnation” for more than a decade (Godongwana, Budget Speech, 23 Feb 2022, p8), but failed to trace this disaster to the system of private profit accumulation. Evidence of the stagnant economy is clear from the country’s unemployment catastrophe. Towards the end of 2021, unemployment hovered around 35% of the workforce (7.84 million out of 22.4 million, according to STATSSA), with almost 80% of jobless workers (6.27 million out of 7.84 million) in long-term unemployment (National Treasury, 2022 Budget Review). This means that 4 out of 5 unemployed people have never and will never find jobs because decaying capitalism has failed to absorb them!
Neither Minister Godongwana’s speech nor treasury’s voluminous Budget Review mentions the brutal cuts in social spending they have launched. Instead, this side of their onslaught has been disguised behind big words such as ‘fiscal consolidation and sustainability, fiscal deficit reduction and public debt stabilisation’. To millions trapped in socioeconomic misery they preach belt-tightening while lavishing the big corporates and elites with abundant welfare handouts. Private businesses do not only benefit from price premiums for selling goods and services to the state but also benefit from subsidies and cuts in corporate tax rates (slashed from 28% to 27%!). Looking at this spending and income plan of the state in its totality shows that the distribution of social benefits through the budget favours the rich and powerful at the expense of the have-nots. In fact, Budget Review 2022 concedes that ‘annual spending on interest payments exceeds the budgets for health and basic education.’ (National Treasury, 2022 Budget Review, p2)
The state has failed to reign in and control the growing public debt bubble, it ballooning mainly due to corruption, greedy finance capitalists and wasteful spending. Total public debt, for instance, is in the order of R4,3 trillion, with the debt-to-GDP ratio soaring from 51% in 2018/19 to 70% in 2021/22. Debt repayment costs already top R330bn! Recently secured IMF and World Bank loans, include the typical austerity conditionalities and expand the weight of imperialist creditors as holders of public debt.
While Godongwana celebrated the surprise jump in tax revenue for 2021/22, closer inspection reveals this as an illustration of insoluble contradictions in bourgeois public finances. This extra income of R181,9bn is ‘windfall tax revenue from higher commodity prices’. Of this figure, 45% went to debt repayment whereas 55% went to social spending, merely proving that the inequalities in state budgets favour a profiteering minority. But this also demonstrates the addiction of SA to mineral extraction for exports, despite the irreversible ecological and social damage that mining generates.
Movements for anti-neoliberal budgets
Almost three decades of neoliberalism and austerity budgets have sparked widespread dissent and resistance on the part of the labouring masses. Trade unions and social movements continue to fight in the frontlines against these onslaughts. SAFTU, for instance, publicised its rejection of the budget cuts in statements which also feature demands for a people’s budget coupled with a call for mass mobilisation and action. After detailing how far the budget falls short in meeting people’s needs, SAFTU put forth alternatives such as a wealth and solidarity tax, an urgent overhaul of the economy and the nationalisation of big corporations. A coalition of social movements, Cry of the Xcluded, staged a once-off march on parliament to hand over a memorandum of demands that overlap with the trade union inspired people’s budget. The Budget Justice Coalition, a group of social justice NGOs, decried the absence of gender equity from the budget, asked members of parliament to reject the budget and proposed the adoption of a human-rights based budget.