When Minister Pravin Gordhan delivers the 2012 Budget Speech on Wednesday, much of the attention will be on the strength of his proposed interventions to alleviate the painful scourge of poverty and inequality that overwhelms so many households in our country. The nation will expect him to vigorously push the kind of high-profile, rebuild-South Africa infrastructure projects that are essential in putting the unemployed back to work and getting the economy back into reasonable shape over the next few years. –> It should be kept in mind that the infrastructure development programme announced by President Jacob Zuma in the State of the Nation Address is only a first step. Despite the massive billions in price tag, it is project based, sector specific, biased towards creation of temporary jobs, and therefore not in any way commensurate with our overwhelming community infrastructure needs or the gruesome scale of the nation’s unemployment crisis. But it’s an important step. Further details of the infrastructure development programme are expected to be outlined in the Budget Speech as well as in the Presidential infrastructure summit. To some, these details are somewhat less important than whether the programme itself is a sign that our government is ready, at long last, to engage this awful economy with the sense of urgency and bold initiatives it requires. In order to provide hope to the nation, a good faith commitment to rebuilding the infrastructure should show that government has some idea of the scale of the effort that is needed to overcome huge backlog that negatively affects our way of life and, ultimately, to build an economy that offers the prospect of a decent living to the next couple of generations. It is that idea in mind that the Budget Speech must show that what has been announced by the president is a smarter approach to infrastructure investment than some of the wasteful, haphazard, earmark-laden practices that we have become accustomed to, and it will put some people to work in jobs that pay decent wages. Jobs While Minister Gordhan is expected to link the nation’s desperate need for jobs to the sorry state of the national infrastructure in a tone that conveys both passion and empathy, for me, it is the strength of immediate interventions to deal with poverty that will resonate with the poor, as ordinary South Africans are now arguably more economically insecure than they have been since the dawn of our democracy. Desperation for jobs has intensified in recent years in the face of chronic and structural unemployment, given the fact that for a long time more and more households were sliding into poverty even during the years when our economy was in better shape.
When workers lose their jobs, their households face painful adjustments.
Although there is no single measurement standard that provides proof of this painful situation, a useful reference point is the latest figures from the National Credit Regulator (NCR) as well as the data contained in two recent reports by Statistics South Africa (Stats SA) – the General Household Survey (GHS) and the Quarterly Labour Force Survey (QLFS). Last week, these reports were again under the spotlight in Parliament and elsewhere, as was noticed on February 14 during a media briefing in Parliament by the Social Protection and Community Development Ministerial Cluster. –> As an immediate response to poverty, the Budget Speech is expected to introduce an intervention to revise a list of basic grocery items that must be exempted from ValueAdded Tax in order to enable households to obtain more balanced diet. It is also expected to commit resources to the plan announced at this media briefing to rally various government departments around an integrated and comprehensive programme to fight poverty and unemployment. The plan will include a new approach towards implementation of an integrated, inter-sectoral programme in order to support local food production initiatives. At the core of this plan is the need to encourage the use of state procurement of food as a catalyst to grow and support food production and local procurement, as well as to further enhance government’s efforts of fighting food insecurity, hunger and malnutrition. The mainstream approach to the implementation of this plan provides hope that it will not suffer the same fate of isolated departmental initiatives that were lost somewhere in government processes. This plan will be overseen by the recently establishment Inter-Ministerial Committee (IMC) on Food Security – co-led by the Ministers for Social Development and Agriculture, Forestry and Fisheries. Indeed, in this mid-term Budget Speech, government can no longer afford to downplay the right to food guaranteed by the constitution. More needs to be done to address food insecurity, hunger and malnutrition in light of yet another General HouseholdSurvey (GHS) which estimates that 20 percent of South African households haveinadequate or severely inadequate access to food.The gloomy picture painted by the survey is in addition to numerous research reports detailing how people who suffer from a lack of food also experience numerous indignities such as begging and dependence on others. This situation is made worse by the maturing HIV/Aids epidemic, which can be witnessed in the dramatic increase in the number of orphans, vulnerable children, and child-headed households. In most cases this vulnerable group of people lives in households in which there is often not enough food to share, and household members end up taking turns to eat.The assurance that we must be left with from this Budget speech that government will fight with the skill and tenacity needed to ensure that these plans to guarantee food security are brought to fruition. Another pressing challenge that the speech must respond to, and which was highlighted in the same media briefing, is the lesson that the Unemployment Insurance Fund (UIF) has provided relief to 590 000 unemployed people between April 2011 to January 2012, accounting for up to R4.7 billion in disbursement. The downside of this information confirms that the continuing wave of retrenchments has hit us particularly hard, notwithstanding indications that the rate of unemployment in the last quarter of 2011 has come down from 25 percent to 23.9 percent as a result of new jobs. When workers lose their jobs, their households face painful adjustments. This is especially true for workers in vulnerable sectors who are less likely to qualify for UIF as they are often part time workers or have been employed for less than the minimum four years. Added to this, employers in some industries often contravene labour laws by not registering eligible workers, and therefore leave them without a safety net to fall back into.
Recession However, just two days later on February 16, the irony in the picture painted by the increased number of beneficiaries from UIF disbursements was highlighted at a conference organised by the National Debt Mediation Association in –>Pretoria. At this conference we learnt that, according to the latest figures from the NCR, the number of over-indebted South Africans applying for debt counseling every month continues to surge. At the moment, over 8.3 million consumers are battling to pay back their debt and about 5000 consumers apply for debt counseling each month. This means almost half of South Africa’s 18.21 million “credit-active consumers” now have impaired credit records and will struggle to access credit, including the new housing subsidy announced by President Zuma in the State of the Nation Address when he said: “In 2010, we announced a one billion rand guarantee fund to promote access to loans. We are pleased to report that this fund will start its operations in April, managed by the National Housing Finance Corporation. The scheme will enable the Banks to lend to people…” –> Another indication of the severe impact of this recession is that, to date, there is over 294 770 debt stressed people are under review or administration since the process was introduced five years ago. Ironically, you can only apply for debt counseling if you have an income and something to offer creditors, so more and more people are using their UIF money to repay their creditors and try and meet their daily living expenses, leading to the chronic destitution of even more households. Also, we know that unlike private companies, individuals struggling to get out of debt continue to be disadvantaged because whereas companies can apply for insolvency and get a chance to start afresh, there is no corresponding legal framework for individuals who often have to pay double of double the amount owed to get free. The information is a real eye-opener, as the size, combined with the rigor of the statistics we see in these reports make these results hard to ignore. Simply stated, more and more households are facing utter economic devastation: completely out of money, with their jobs, savings and retirement funds gone, and nowhere to turn to for help. They are being forced to survive on the social grants given by government to the most vulnerable members of the household – namely children, the disabled and the elderly. That is why this mid-term budget speech will mean so much to those who invested their hopes in this government that must see through the implementation of election promises. A government that lives a lasting legacy is one that will deliver more and promise less. Nkosikhulule Nyembezi is a Policy Analyst and Advocacy Programme Manager for the Black Sash.
– By Nkosikhulule Nyembezi
