Yet another budget that prioritises the Apartheid debt ahead of the poor!

Media Release – Jubilee 2000 South Africa notes with deep concern that the vast majority will not “begin to enjoy the fruit” of previous Gear budgets as promised by Minister Manuel in his budget speech today. Instead, the budget is another in a five year line of Gear budgets that prioritises the servicing of the illegitimate Apartheid debt. It intensifies the privatisation of people’s assets in order to make the debt payments and continues to put the squeeze on social expenditure, making this budget another bitter one for workers and the poor.

In the face of the cholera epidemic sweeping the country, only half a billion rand has been allocated to the community water supply and sanitation programme. This makes a mockery of the promise of free water made in the run-up to the local government elections in December. The inadequate budget to address the lack of pipes and taps in so many parts of our country mean that the beneficiaries of free water will be those who already have taps in their houses and will thus exclude millions of the poorest.

Less than a third of a billion has been assigned to “targeted Hiv/Aids interventions”. With the exception of mothers at a select few pilot centres, there will still be no drugs to prevent the mother to child transmission of the HIV virus. Thousands of children will continue to die as a result.

This budget again defies the constitutional provision that local government receives an equitable share of national revenue. The minister glibly told us today that the “equitable share” for local government for this financial year will amount to R2,6 billion, a mere one percent of the national budget. This is a smaller amount than that assigned to local government under Apartheid rule.

With regard to the victims of Apartheid violence who participated in the Truth and Reconciliation proceedings, enduring significant pain in the process, Manuel offered less than one billion rand as a once off payment. This is in stark contrast to the annual payments totaling R3 billion the victims had every right to expect.

Yet again, the budget brings bad new for pensioners. In a year in which the minister has more flexibility to meet social needs, he has increased the old age pension by a mere R30. This is an increase of about 6 percent, below the inflation rate of roughly 8 percent. This thus represents a further decline in living standards for the poor and vulnerable.

These examples of the impact the budget will have on the majority reemphasize the Jubilee call for a fundamental shift in budgetting, away from the Gear budgets of the last five years to a People’s Budget. While the smallest amounts are made available to meeting people’s most rudimentary needs, government is again committing R48 billion to servicing the debt. It has given the employed another tax break of R8 billion a year, on top of the R10 billion a year given last year, with the highest income earners receiving the biggest tax deductions of all.

Government is attempting to keep the debt at manageable levels by privatising state assets and using the proceeds to repay the Apartheid debt. The people’s ownership of our telecommunications, transport and electricity infrastructure is thus being given away with nothing tangible in return. At the same time, government is incurring even more debt by purchasing military weapons in a deal now standing at R43 billion, but likely to top R100 billion. And it is taking out more foreign loans, putting us at the mercy of the volatile exchange rate.

A People’s Budget entails the scrapping of the Apartheid debt and appropriate levels of taxation for companies and higher income earners, thus releasing resources for social expenditure sufficient to meet people’s basic needs and to stimulate the creation of jobs in the process. To this end, Jubilee calls on the minister to urgently undertake an audit of government debt to identify the amount that can be scrapped.

Jubilee 2000 South Africa contact persons:
George Dor, Publicity Officer, 011 339 4121, 011 648 7000, george@sn.apc.org
Brian Ashley, National Organiser, 021 685 1565, 083 236 4026

Jubilee 2000 South Africa, February 21, 2001