Cosatu, BBC disappointed by Gordhan's Budget 2017

Cape Town - The gist of policy direction in the 2017 Budget Speech is that it will just be business as usual, Cosatu president S'dumo Dlamini told Fin24 on Wednesday afternoon.

In his view, the 2017 Budget Speech definitely "took the steam out of" the State of the Nation Address (SONA) as far as radical social transformation is concerned.

"We note that a lot of people will argue that Finance Minister Pravin Gordhan did not have much space to manoeuvre given the current economic situation. We expected him to be at least in tandem with SONA and to give some policy direction about what radical social economic transformation would be. Yet, there is none of that," said Dlamini.

"We are disappointed about that, as it means we are not about to see the full implementation of comprehensive health insurance, comprehensive social security and job creation in the light of the crisis facing the country."

At the same time, Cosatu welcomes the taxation of the those in the R1.5m personal income bracket, although the union feels it is not going to make a dent when the big companies are not taxed enough.

"They [the big companies] still pay less tax. Income from tax increases will not be meaningful unless big organisations are getting taxed," said Dlamini.

READ: Taxpayers hit with highest marginal rate since '94

Cosatu also welcomed the R5bn for higher education and planned funding for the poor.

"It is not enough, but we still welcome it," said Dlamini.

Regarding the issue of jobs, he said Budget 2017 does not respond to the crisis of unemployment.

"If it did, the minister could have announced that it will allow for the unfreezing of the funded posts in the public service. The public service is 1.5 million strong out of a population of 55 million people. That does not balance in terms of providing services. Every day workers are told to jack up their act when there actually is a shortage of staff and materials," said Dlamini.

"We are disappointed by Budget 2017. We understand about the economic situation, but we wanted clear direction as to where we are going as a country in terms of policy directions."

The Black Business Council (BBC) is also of the view that Gordhan’s budget fell short of addressing radical economic transformation.

“The BBC calls upon government to use a wider range of macroeconomic policy tools that include exchange rates, state control and influence over finance capital, reserve requirements, capital controls, prescribed assets, credit quotas and differential interest rates. There must be a close co-ordination of monetary, fiscal and industrial policies,” it said.