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Country analysis > South Africa Last update: 2020-11-27  

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2005-2006 People's Budget

Proposal from COSATU, SANGOCO and SACC

ISBN 1-875043-60-8

Published on behalf of the People’s Budget Campaign by the National Labour and Economic Development Institute

Posted by permission of the People's Budget Campaign. The document was first posted on the following website:
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Our society has taken many significant steps to eradicate poverty in our first decade of democracy. But we still face many challenges. It is from this perspective that the People’s Budget approaches fiscal policy – one of the most important tools in the struggle to uplift our people.

Fiscal policy is never neutral. Rather, it has been an area of contestation between two major groupings – each with many variants – in our society. The first grouping, mostly based in the private sector and international financial institutions, has called on government to adopt policies associated with the mantra of privatisation, trade liberalisation, deregulation and business-led development. The second grouping, based primarily in mass-based civil society organisations, has called on government to increase spending on programmes to address poverty, with a more expansionary fiscal policy.

The debate between these groupings is not an academic exercise. It has an immediate impact on the lives of our people. The People’s Budget Campaign sees this as the key test of our proposals for more rapid redistribution and expansionary fiscal policies.

To this end, our fourth budget framework seeks not a populist alternative, but rather an alternative that is credible and evidence-based. The proposals presented here are for the 2005/2006 financial year. This should ensure that government has sufficient time to engage our proposals and phase in fundamental changes, where needed.

This document aims to:

  • locate fiscal policy within an integrated developmental perspective;

  • explain our proposals for job creation and rapid poverty eradication, particularly in rural areas; and

  • provide revenue and expenditure proposals that translate our vision into practice.
The document has four parts:

Part 1. A broad approach to poverty eradication: This section outlines an integrated strategy for poverty eradication.

Part 2. Spending proposals: This section looks at measures for improving incomes, building capabilities and redistributing assets. The key measures proposed include a basic income grant and expansionary budgets for land, housing and free basic services.

Part 3. Building participation: This section analyses the budget process and recommends reforms to enhance opportunities for popular participation in identifying spending priorities at the national and local levels.

Part 4. Financing and integrated development strategy: This section reviews revenue trends of recent years, explores methods of financing new poverty eradication and job creation initiatives, and proposes mechanisms to improve the delivery capacity of the State. Each of the sections reviews the performance of government over the last ten years and points out both the many successes that government has achieved and the challenges that remain unmet. The theme of the document is thus: Eradicating poverty by 2014 – Learning from the first ten years of democracy. Our proposals have been developed through a participatory process. Over the last twelve months the

People’s Budget Campaign has:

  • Called for submissions: The People’s Budget Campaign has called on members within its constituencies and beyond to provide submissions to inform our proposals.

  • Held training workshops: Two major training workshops with the theme Budgets and Poverty Eradicationwere held in Johannesburg and East London. The training workshops served as a basis for soliciting feedback and improving economic literacy. In addition, our organisations have held internal training programmes for members. These processes also let us discuss our core proposals.

  • Convened a consultative conference:The three coalition partners held a consultative conference in Johannesburg in November. The conference adopted a series of resolutions that served as the
In addition to this, the People’s Budget Campaign has commissioned research on several areas to inform discussion and stimulate debate. While the research papers are important in themselves, they have served the more important function of building capacity and stimulating debate through a process of participation and involvement.

Finally, we are often asked whether the People’s Budget Campaign has achieved its aims. To answer this question, we have to remember that our aims are:

  • to engage with government policies through the budget process, putting forward proposals from our civil society organisations; and

  • to improve the capacity of our organisations, activists and members to understand and engage on the budget at national, regional and local level.
Since the People’s Budget Campaign vocalises demands made by much of civil society, it is impossible to separate out our influence on government decisions. The effects of these broad-based demands can be seen, among others, in:

  • the adoption of a somewhat more appropriate fiscal policy, moving away from the restrictions and cuts of the late 1990s;

  • the decision to roll out anti-retroviral treatment for HIV/AIDS;

  • the extension of the child-support grant; and

  • the expansion of free basic services.
Generally, the People’s Budget Campaign has been instrumental in keeping economic policy alternatives on the public agenda and in building support for a modest relaxation of fiscal constraints, particularly within the Campaign’s mass-based constituencies. Moreover, our research and training work has contributed to the ability of our organisations to engage more practically and specifically on these types of policies.

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