Real SA Budget: a frantic daily struggle

Posted on March 1, 2015

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Wednesday was Budget day in South Africa, an annual event for the state. But for most citizens, budget day is every day or, if they a slightly luckier, a weekly or monthly calculation to try to remain at least afloat economically. So what happened last week, along with the plaudits and the protests reflected in the media, will not cause any excitement for more than half the population.

And who can blame those who live in a state of penury? While the state can effectively wallow in debt, with its functionaries able to live high on the hog, debt for people on the ground often means malnutrition and a slow descent into sickness and premature death. For, unlike the government, big business or the historically wealthy, there is little — and usually no — access to loans at anywhere near reasonable rates to tide poor families over a rough patch.

The mashonisas and those money lenders who remain just on side with the law, ensure that repayments are cripplingly high for those forced to borrow. And there are no allowances made for the recipients of grants that, in most cases, do not even cover the cost of an adequate diet.

It is an awareness of this that underlines the arguments by the labour movement for more expansionist policies and for a more equitable redistribution of resources. This year, with more fears of job losses and in the face on an ongoing economic crisis, there is greater urgency being expressed about these demands.

Yet calls for such policies run counter to requests for belt tightening, however these are presented. These calls are also based on the labour supported assumption of a macro-economic foundation of widespread redistribution, of labour intensive work leading to a “virtuous cycle” of economic growth: the opposite of the government’s growth first orientation.

The focus for these policy debates is invariably how to create a better life for all
South African families. And, according to official, Stats SA figures, most men, women and children live below the poverty level. Cosatu general secretary Zwelinzima Vavi also maintains that a family of five would need R4 750 a month to rise just above this.

Yet most family incomes are below R3 000. And the generally estimated number of dependents surviving on the incomes of the nearly 11 million people employed in the formal sector is five or more.

Nearly a quarter of the working population is also covered by ministerial sectoral determinations and these, for the most part, amount to barely more than R2 000 a month. A domestic worker, for example, now has a minimum wage of R2 065.47. Out of this must come often hefty travel costs to and from work.

And, despite the 25% decline in the petrol and diesel prices since July last year, there has been no reduction in travel costs. Nor, according to a survey by the Pietermaritzburg Agency for Social Action (Pacsa) has there been any overall reduction in the price of food, where transport and, therefore fuel, costs are an important factor.

In time for this Budget week Pacsa also produced its latest figures on the current cost of adequately feeding a family, taking account of family size and the ages and nutritional requirements of family members. An adequate, balanced, but basic diet for two healthy, active adults with two children, under the age of nine, costs R2 144.52 a month.

For a family of seven — a more realistic average — that includes a pensioner, two active adults and four children, two under nine, one of ten and one of 16, Pacsa puts the monthly cost at R3 754.05.

For most South Africans, it is these figures, combined with the cost of transport, school fees, clothing and shelter, along with wages less than R3 000 a month, that constitutes economic reality. Wednesday’s Budget did little to change this, but these are facts should give added impetus to labour’s demand for a national minimum wage that makes for an at least tolerable life.