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Labour Wrap: The budget's common denominator

THERE was one common denominator among all the individuals and groups that put forward proposals for South Africa’s National Budget on Wednesday, says Terry Bell in his latest Labour Wrap. 

All of them, from Finance Minister Nhlanhla Nene and his cabinet colleagues to government, along with with Cosatu, the labour movement as a whole, the United Front, Right2Know and human rights groups, agreed: the state needs more money.

And that, says Bell, is where the differences came in: how the additional funds should be raised and where they should be spent. Even before Wednesday's maiden National Budget, Nene had indicated that he would embark on a policy of austerity. 

Because, what deeply concerns the government, says Bell, is the fact that its level of debt and problems of debt servicing have pushed the country to the brink of junk bond status.

Junk status doesn't worry the poor

Such matters, even in the wake of the budget, are of little concern to the opponents of the government’s economic orientation. For them, the priority is to deal with the yawning gulf between wealth and poverty in a country where more than half the population lives below every acceptable poverty line.

And while some groups, such as the Right2Know, merely listed desired spending priorities, others have given often considerable detail about where the money should come from. Crudely put, much of this comes down to the simple slogan: soak the rich, those individuals and companies that have become consistently wealthier over recent years.

Cosatu, in line with the resolutions from its last national congress, lists some interesting suggestions, ranging from taxes on financial transactions to export levies and charges on luxury goods.

READ: Cosatu wants radical transformation

This because the rich have become increasingly richer in both a corporate and individual sense, while more than half the population wallows in varying degrees of abject poverty.  

And this, Bell says, is the underlying and undeniable reality of the economy with which any national budget has to deal.

* Add your voice to the big labour debate or simply ask Terry a labour question.

WATCH:

- Follow Terry on twitter @telbelsa.

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