Volume 1 No 2 April 2004


E'VE received a number of positive comments and encouragements from readers in response to the launch of the newsletter. It seems as if it is meeting the need to stimulate debate and thought in the development sector. We are obviously pleased about this. Given that we are in the eye of the election propaganda storm, we will not use this newsletter to say another word on the elections. Instead, we offer the engaging perspective of analyst, Samantha Flemming (in her personal capacity), on the government's development agenda as embodied in Trevor Manuel's budget speech. Please engage us on this perspective and share your thoughts on the matter. In the next edition, Christa Kuljian will offer her thoughts on the implications of the recent Civicus conference (that took place in Gaborone) for thinking about the relations between different types of civil society organisations.

We happy to report that significant momentum is building around our forthcoming book, Voices of the Transition. Frank Meintjies and Cedric Nunn discussed the book on Good Morning South Africa a week ago. It is also being featured in a competition on Democracy 10 on SABC 2 and a number of radio interviews and reviews have already been done with more in the pipeline. For updated details on the launch, see below.


What does the government budget offer for the poor?
by Samantha Flemming

N FEBRUARY of every year, the president opens parliament with his state of the nation address, and a few days later, the minister of finance delivers the government's national budget. These two are inextricably linked, since policy directions outlined in the President's speech, inform budgetary commitments that will determine the success and achievement of government policy. While a national budget is merely a glimpse into government revenue collection and spending at one time, it is worthy of some interrogation since it reveals our policy direction as a country, and the provisions we make for the most vulnerable in our society. As Minister Manuel said in his speech, quoting Austrian economist Joseph Schumpeter: 'a country's fiscal history is a good illustration of the spirit of a people.'

These days, there is little surprise on the day of the budget speech. The South African budgetary system provides a fair lead up to the annual presentation, within the Medium Term Expenditure Framework (MTEF). Thus, every year we can gauge the planning for what will come in the following two years. Every November, there is also a Medium Term Budget Policy Statement (MTBPS), giving direction for what will appear in the upcoming national budget of February.

This year, the government budget has been praised for its focus on expansionary social spending (more than half of planned expenditure) and the ANC for its increased focus on the role of the state in economic development. In the minister's speech, there was much less touting of the problematic Growth, Employment and Redistribution Strategy (GEAR), espoused by the ANC since 1997, and some say, a return to the values of the Reconstruction and Development Programme (RDP), much more popular with civil society groupings. (For example, see Ferial Haffejee's perspective in: 'Shades of "Che" ', Mail & Guardian, 20 February 2004.)

Around budget time, figures are thrown around like dough in a bakery. Provinces were given R65 billion for education; R41 billion for health and R48 billion for welfare. Infrastructure spending will increase to R5 billion this year, and land reform and restitution received an additional R700 million.

But what do these figures really mean?

The budget indicates that the government does care about the poor. But the question is, is it enough, and appropriate? In general, social expenditure has been increased with a particular focus on education, HIV/Aids, infrastructure and job creation through an expanding public works programme.

Particular provisions aimed at the poor were the increases in the Old Age Pension, from R700 to R740, and a R10 increase in the Child Support Grant to R170, with the latter also being extended to children under 11 this year. While any increase is welcomed, in real terms and because we live in a moderate inflation society, these marginal increases amount to very little extra cash in the pockets of the poor, according to Idasa's budget review (www.idasa.org.za/bis). This is especially true when considering that in many households, this is the only cash flow that exists, with many more than just the one recipient of the grant living off the money, for food, transport, education, clothing, and rent.

To HIV/Aids, a further R2.1 billion was committed, taking the total spending on HIV/Aids to R12.4 billion over the three years of the medium term expenditure framework, which includes specific directives for anti-retroviral drug roll-out. This was welcomed by HIV/Aids activist groups and opposition political parties, whose primary remaining concern was that the money be well spent.

Other measures that were aimed at lower end benefits were: tax cuts which went mostly to low-income earners and pensioners; and the transfer duty threshold was raised to R150,000 to facilitate lower end housing development.

While these measures have been welcomed, civil society groupings have criticised the budget for gaps they had hoped to be filled.

There was disappointment by civil society interest groups that VAT had not been removed from books. The minister noted in his speech that "tips for Trevor", a campaign to solicit public input on the budget, had raised this issue but he didn't bow to pressure, preferring to use tax revisions for organisations that 'promote literacy and reading.'

The government's response to a call from civil society, for a comprehensive social security provision in the form of a universal grant, was once again muted. The Basic Income Grant (BIG) Coalition, a civil society grouping that advocates for a universal grant to 'address the immediate effects of poverty in a developmental way' were disappointed that government missed this opportunity to provide a comprehensive social security net for the poor, but they also welcomed the Minister's invitation to NGOs to discuss the possibilities of the extension of social grants.

It is apparent that government prefers to approach poverty alleviation through the lens of job creation and skills, using infrastructure projects that are labour based, to expand the public works programme and create jobs for the unemployed. Very real concerns have been raised about how such a programme will only create part-time or temporary jobs at a low skill level, which doesn't provide a long-term, sustainable solution to widespread unemployment and poverty. President Mbeki wrote in the ANC's online publication, ANC Today, that while the budget had provided for increased expenditure to meet the needs of the people, the government could not allow more people to depend on social grants.

While Manuel's post-budget media relations included a plea to NGOs 'not to bankrupt government', there is a worrying underlying thread that runs through both the state of the nation address, and the budget speech, which assumes that current government policy and direction is sufficient to address the swallowing abyss of poverty in which many South Africans live. The only concession from government is in the lack of implementation, rather than the direction of policy. Such an argument doesn't recognise that not enough is yet being done to cater for the poor, or to alleviate poverty in any meaningful way, particularly for those who fall outside of the existing social security net. Moreover, even if poverty is marginally alleviated, economic inequality is likely to worsen without direct and purposeful intervention by the government.

In the short term, the catchment area of our social security net must be widened so that the vulnerable have rights equal to those who are not so vulnerable. And real debate about the direction of government policy needs to occur to ensure that poverty and inequality reduction are our nation's top priorities, and show in our 'country's fiscal history' that the 'spirit of our people' is to care for those in need. Surely, that's why we fought so hard for socio-economic rights in our Constitution, to make them just as important as political rights. In fact, that's why we fought so hard to call ourselves a democracy.


E ARE thrilled to announce that Isandla's latest book, Voices of the Transition: The Politics, Poetics and Practices of Social Change in South Africa, will be launched at the new Constitutional Court on the 4 May 2004 at 6pm. Please note, the previous date has been changed! However, the Cape Town launch is still taking place on the 12 May at the SA National Gallery at 6pm as well. If you want to attend either (or both) of these launches, please contact the organiser, Saskia Boonzaier at: admin@isandla.org.za. We look forward to see you there!

Isandla Institute Director, Edgar Pieterse presented a paper titled: "Building with Ruins and Dreams…" at a fascinating conference - 'ID Documents: Images and Imagination in Public Culture', 12-13 March 2004 in Cape Town. The workshop was organised by the Centre for the Study of Public Scholarship in association with the District Six Museum, Iziko Museums of Cape Town and the Robben Island Museum. The paper was presented on a panel looking at urban public cultures. The panel included eminent photographers Omar Badsha and Chris Ledochowski, as well as pioneering architect, Peter Rich. Edgar's paper will be posted on the Isandla website soon.

Finally, Edgar ran a session on 'globalisation and culture' as part of the Master's Programme in Sustainable Development of the University of Stellenbosch and the Sustainability Institute. The session took a tour of Hip Hop and World Music to explore whether globalisation necessarily implies the Americanisation of the world. The music playlist that formed the spine of the talk will also be listed on the Isandla website.

Contact details
PO Box 12263 Mill Street
Cape Town, 8001

Editorial collective: Edgar Pieterse, Katherine McKenzie
and Mirjam van Donk