Introduction

1. NUMSA Submission on the 2013/2014 Budget to the Joint Meeting of the Standing and Select Committee on Finance, Parliament RSA 06 March 2013

2. Introduction • The National Union of Metalworkers of South Africa (Numsa) welcomes the opportunity to engage with government on the announcements made by Minister PravinGordhan on the 27th February regarding the 2013 budget. • We note the difficult and uncertain economic environment that the country currently faces and consequently recognise the difficult task confronted by the Minister of Finance to carry out government’s five priorities as restated in the 2013 State of the Nation Address.

3. Positive Sentiment: Tax Policy Review • The review of the tax policy framework in order to ensure that it better supports the objectives of inclusive growth, employment, development and fiscal sustainability. • As NUMSA, we have, for several years called for a tax policy review which would not only expand the number of zero VAT rated goods, but would also target wealthy, high income earners by placing a tax on luxury goods in order to ensure a more redistributive tax system. • we have called for the introduction of a financial transaction tax to limit short-term capital outflows • root-out tax avoidance by multinational companies.

4. Positive Sentiment (continued) Local Government Equitable share formula • The reformulation of the local government equitable share formula in order to provide a subsidy for free basic services which will benefit 59 percent of households. Infrastructure programme • The announcement that R827 billion has been earmarked for the infrastructure programmeover the next three years. Chief Procurement Office • We are pleased that progress has been made in the establishment of the Chief Procurement Office and that a name will soon be announced for the role of the Chief Procurement Officer. • Intensify steps to combat corruption

5. Positive Sentiment (continued) Parliamentary Budgetary Office • We are also pleased about the establishment of the Parliamentary Budgetary Office which will assist Parliament in ensuring that fiscal policy is aligned to government’s five priorities of education, health, rural development and agrarian reform, taking forward the fight against crime and creating decent work. Green Fund • Increased funding for the Green Fund (R800m – topped up by additional R300m)

6. Negative Sentiment: • NDP The NDP is utilised as a point of departure for the budget. Considering the severity of the country’s socio-economic challenges, as NUMSA we are extremely disappointed that the failed GEAR and neo-liberal macroeconomic policies are once again being hailed, under the facade of the National Development Plan (NDP), as the perfect vehicle for addressing the country’s challenges. • Youth employment incentive More clarity on work opportunities for young people: while we welcome further measures to expand further education and training opportunities in both the public and private sector, we are concerned about the following: tax incentives aimed at sharing the cost of employing young work-seekers ?

7. Negative Sentiment (continued) • Social wage: R60 increase for old age and disability grants; R30 increase for foster care grant; R10 increase on child support grant: this is OUTRAGEOUS! • NHI No new allocations from the fiscus but the Minister has not ruled out future tax increases - all he says is that the department is working with the Department of Health to examine funding options. However, the idea of a costing model in the absence of a coherent health policy framework is problematic. • Procurement: rolling stock and SWH’s • Wasteful expenditure on Consultants • Land and Agrarian Reform Thank You