Budget Justice Coalition - Imali Yesizwe (Our Nation's Money)

Executive Summary of Imali Yesizwe (Our Nation’s Money) - an alternative human-rights based budget for South Africa.

The budget and budget processes are critical to the advancement and protection of human rights. Civil society has noted with increasing concern the continued steps by National Treasury and the South African government to cut back on the social spending that is needed to fulfil socio-economic rights which are enshrined by the South African constitution and international law. For the past five years and more, National Treasury have cut much needed resources to health, education, social development, local government and housing but all the while prioritizing expensive extractive infrastructure projects, predatory private public partnerships as well as the prioritisation of debt repayments. COVID-19 has accelerated these trends and made the country more dependent on external multilateral financing institutions like the International Monetary fund. These moves, the Budget Justice Coalition (BJC) believes, are regressive and represent the entrenchment of austerity budgeting in South Africa.

Austerity budgeting was already a concern before the impact of the COVID-19 pandemic as South Africa was experiencing systemic underinvestment in key social and economic sectors, with the poorest citizens shouldering the cost of budget cuts. The pandemic has also shed light on why using gross domestic product (GDP) as an indicator of the well-being of South Africa’s economy and people is flawed.  Austerity often results in declining investment in the real economy as a percentage of GDP, it places a greater burden of unpaid care work on womxn which is excluded from GDP even though such unpaid services have considerable value. And while Treasury may present its budget outlook as necessary, natural or inevitable, we show that there are robust alternatives that do not jeopardize human rights or risk regression on progress made to realise them.

This document - Imali Yesizwe - represents the culmination of efforts made by progressive civil society organisations working in the budget and human rights sectors to develop a viable alternative budget for South Africa. Imali Yesizwe is the product of a far-reaching partnership, research and collaboration between the BJC and other progressive organisations. Ours is a budget that puts the fulfilment of human rights first and replaces austerity with a long-term plan for socio-economic development that will ensure the economy and its people recover sustainably from COVID-19. This details our vision and recommendations for an alternative budget that is progressive, gender-sensitive, environmentally sustainable and categorical in its prioritisation of the realisation of human rights.

Section 1 outlines what a human-rights budget is, including the laws, policies and international agreements which relate to budget processes and their role in the fulfilment of human rights.

Section 2 explains what we mean by austerity, demonstrates how it is being implemented in South Africa by National Treasury and how COVID-19 has accelerated these trends. This section illustrates the varied material impacts that austerity has on access to and fulfilment of human rights, the weakening of state capacity, and how – even by its own logic – austerity budgeting does not resolve the problems it seeks to address.

Section 3 moves onto our vision for an alternative budget by examining expenditure trends in social spend, focusing on spending on the right to access healthcare, the rights to basic education, social security, food and nutrition, water and sanitation, a healthy environment as well as spending on transforming gender relations. Here we outline what needs to change in terms of expenditure to ensure that these rights are met and enjoyed by all.

Section 4 looks to sources of revenue, both new and old. Here we outline recommendations for progressive tax reform, focusing on corporate and wealth-tax, and also speak to the configuration of international borrowing agreements for South Africa. We examine revenue structures at the municipal level and other sources of income including pension funds and the Public Investment Corporation.

Finally, Section 5 speaks to broader questions of budget reform and the need for meaningful oversight, accountability and participation processes. Key to this section is the need for fiscal transparency and strong institutions.

Key demands include, but are not limited to:

  • The abandonment of austerity budgeting. This means moving away from an oversimplified and dangerously narrow focus on debt reduction through billions of Rand in spending cuts and tax increases, which are damaging for the economy and peoples rights.
  • The budget must focus instead on improving the composition of expenditure so that sufficient funds are allocated to socio-economic priorities such as health care, basic education, housing, social development, gender based violence and the battle against corruption.
    • For example, the NPA must receive the budgetary support it needs to close the net on state capture and corruption
  • At the same time, more resources must be mobilised from high net wealth and income individuals and businesses. 
  • In particular, SARS must be capacitated to combat tax evasion and avoidance and implement new tax instruments on wealth and the digital economy

To read the full Imali Yesizwe document, go here: https://budgetjusticesa.org/assets/downloads/BJC-Imali_Yesizwe-22oct.pdf

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