Nothing radical or significant for the poor in Government stimulus package
MAY 2020
The Government’s announcement of a R500-billion stimulus package in the wake of the Covid pandemic is hardly a radical economic shift for the people, notes the TCOE in a statement in response to the President’s announcement.
While the measures announced might put more money on the table of very poor households, it is wholly inadequate in addressing the deep inequality and poverty experienced by many.
“For example, the amount of R350 per person per month equals a paltry close to R12 a day. This is not even the cost of a loaf of bread in a township spaza. We are of the view that the amount is set too low to make a significant impact to the lives of the unemployed and the poor in general. We support many popular organisations such as CSAAWU and the Assembly of the Unemployed that called for a Basic Income Grant for R3500 per month,” says the TCOE statement.
The organisation notes that many of the social sectors such as domestic workers, sex workers, seasonal farm workers, informal traders are excluded from benefiting in the package whist they are directly and negatively affected by the epidemic.
“We are also insisting that there be equity in the allocation/distribution of the COVID-19 stimulus package. As it stands, R100 billion is set aside for big business whilst small businesses are allocated R2 billion and social grants R50 billion. The smallest amount is allocated to the majority who are in the lower rungs of the economy. This needs to be reversed and let the biggest slice of the package go the lower sections of society.”
For the TCOE the stimulus package was in no way a break from the strictures of neo-liberal capitalism. Instead of bailing out big businesses, the package instead could have been used to restructure the South African economy away from export led, monopoly, urban based and extractive industries that have been responsible for reproducing poverty, inequality, unemployment and underdevelopment by facilitating the support and establishment of:
Rural and urban based, community and family owned processing, packaging and distribution industries that facilitate backward and forward linkages.
Visible rural public investments will go a long way towards stopping urban migration which in turn undermines and complicates the provision of services in urban centers.
Radical land redistribution with enough support in our opinion would have stimulated economic activity from individuals and communities who are currently excluded from the current mainstream economic activities.
We would have preferred that the R20 billion allocated to health towards improving primarily health care in both urban and rural communities such as through employing more nurses, community health workers and doctors as well as providing health infrastructure such as extensions and building more clinics, ambulances and medication.
The TCOE expressed concern about the allocation going to municipalities who are incapable of delivering decent services and incapable of transparent clean governance.
“We are equally worried that the looting and corruption that has characterized food distribution could be extended to new funds if no new measures among government officials are introduced immediately to combat this,” the statement added.
The TCOE also called for the involvement of civil society as stipulated in the country’s Constitution and Section 2 of the Municipal Systems Act.
“This will enhance municipalities’ capacity and ensure transparency, accountability and inclusive governance by the municipalities”.
The organisation has also demanded that in the interests of accountability and transparency, the terms of the loans that make up the package be made public so that all South Africans are aware of obligations since the money will be paid out of their taxes.
