The Budget Justice Coalition (BJC) commends the South African government for the pace at which it has implemented measures to limit the spread of COVID-19 and provide accurate information about the spread of the virus. BJC welcomes recent measures announced, including the lockdown. However, these measures do not adequately protect and support livelihoods, which BJC define as the capabilities, assets, and activities required for a means of living. The measures announced thus far leave the majority of the poor and unemployed vulnerable, and are largely blind to gender and the structural inequalities in this country. 50 million South Africans may not be able to take preventative measures to protect themselves from the harsh implications of COVID-19. Our already high unemployment rate of 29% is likely to rise beyond current levels due to the depressive economic effects of COVID-19. Without a comprehensive economic programm to beat COVID-19 and address our vulnerabilities to current and future pandemics, we stand no chance of withstanding the coming storms.
A proper remedy, in our view, is for the state to commit to a comprehensive pro-poor economic stimulus; first to stabilise the health and pending food security crisis and then to catalyse an inclusive economic recovery.
The 2020 Budget can no longer stand
BJC is deeply disappointed that the cuts proposed in this year’s Budget have not yet been re-considered in the light of the threat that COVID-19 poses to the nation. In total, the 2020 budget proposed a reduction to planned spending on government programmes and services by R66 billion in 2020/21. BJC raised concerns that these budget proposals are regressive and undermine the progressive realisation of constitutionally mandated rights. BJC notes that the 2020 Appropriation Bill is currently being considered in the National Assembly and will be the subject of public hearings in April 2020. The responsibility lies with elected representatives to ensure that executive budget decisions respond to the needs of vulnerable communities.
Per capita spend on health care has been declining since 2014/15. The state has been underinvesting in critical parts of our public health care system, including facility maintenance and medical equipment and supplies, which will have ramifications for how we are able to handle this crisis. In the 2020 Budget, expenditure on health was planned to increase only by 0.6% in real terms over the next three years, which is 1.2% below population growth. This increase also does not reflect the rising cost of health – medical price inflation remains higher than CPI inflation. Now, more than ever, we need adequate resourcing for our health system, which is overburdened and deeply unequal.
The Coalition is concerned that the pending wage bill cuts will undermine service delivery and capacity. In May 2018, there were 38 217 vacant posts in the public health sector, yet plans to implement the Public Sector Wage Bill appear not to be halted. The government noted that the proposed reductions would likely have an adverse impact on personnel-heavy departments including health, education and policing – which will be crucial during the lockdown, and which are already experiencing critical shortages.
The BJC welcomes the proposal to accompany the lockdown with a public health management programme that will increase screening, testing, contact tracing and medical management. BJC is, however, not satisfied with the government’s proposal to fund this work through the Solidarity Fund. The fund is voluntary and government has only provided seed capital of R150 million. While setting up the fund is a promising step, voluntary funding will not be enough, and we need firmer – and more substantial – commitments from government to curb COVID-19. Government’s commitment to spend an additional R500 million allocation for the purchase of essential medical products is a move which we welcome. Overall, however, BJC holds that the effects of such measures are undermined by the government’s continuation of health budget-cuts. Such cuts, which are worth R3.9 billion over the next three years, are unacceptable during a time of crisis such as this, and will disproportionately affect vulnerable sections of society.
It is clear that additional spending is required to deal not only with the economic pressures we already face as a nation, but also the pre-existing health crises of diabetes, HIV and TB, among others, and the additional strain that COVID-19 will put on the health system.
We need a targeted pro-poor COVID-19 stimulus
The BJC notes that South Africa’s economy is already in technical recession after suffering two successive quarters of economic decline, but has been in a real recession for most people for a decade. Currently, the stimulus package mobilised by the government equates to R13.5 billion. In the context of budgetary cuts, this is not a stimulus. The government must implement a meaningful stimulus package, injecting at least an additional 3% of GDP back into the economy. This is below the fiscal stimuli that a number of countries successfully implemented in the wake of the global financial crisis in 2008/09. Initially, some of this must be geared towards improving state capacity – particularly in the health sector – to conduct mass testing for free (and not at the cost that opportunistically takes advantage of the crisis to make exorbitant profits), to contain the spread of the virus effectively and to treat all infected.
BJC notes that the SARB announced a 1% cut in the repo interest rate. This may be the biggest cut in a decade and provide some relief to people with loans and mortgage debt, but given the circumstances a much bigger cut was warranted. Further repo reductions must be considered in the future. This is particularly important given that SA has some of the highest real interest rates in the world. To offset the potential capital outflows that our high interest rates attract, and the effects from a possible Moody’s downgrade, the government must put in place similar capital controls to what Malaysia (1998) and Brazil (2018) did in the face of financial collapse.
Additional resources for healthcare, both financial and human, are needed. These entail sufficient staff, health equipment, protective gear for all public workers, and medicine, all of which will be necessary to manage a mass outbreak of the virus. Community health care workers play a critical role at grassroots level, ensuring that everyone gets the right information. These workers should be provided with sufficient protective clothing and equipment to protect their health as they contribute to the COVID-19 response. An estimated 60 000 community healthcare workers remain informally employed and reliant on a paltry stipend with poor equipment and training. They must also be well-remunerated for their services, including employee benefits.
In a mass outbreak scenario, there will be a shortage of critical care beds and other key equipment like ventilators. Planning ahead, the state must get the manufacturing sector to increase the production of ventilators. The state needs to take additional measures to ensure that medicines for patients with HIV, TB, diabetes, asthma and other conditions do not stock out at this time. It should also require private health institutions to provide treatment of COVID-19 patients for free, and be compensated for this on a cost-price basis, as if operating like a public hospital. If required, the state should convert hotels and public buildings into additional healthcare facilities. Further, mobile clinics and testing facilities must be deployed to rural areas that are the most under resourced. Now more than ever we need a universal health care system, which ensures that everyone has access to quality care, regardless of their ability to pay.
Such measures could mark the beginning of a meaningful national discussion on how the private-public division of healthcare services deepens inequalities. Healthcare must be a public good that serves the public interest and not a means of enriching a few, leaving the poor and working class untreated.
We must take care work seriously and protect livelihoods
On 16 March, the president announced that schools would close early. This was an early indication of gender blindness in the government’s response to the crisis. Children require care, yet caregivers, who are overwhelmingly women, had not been released from their work responsibilities. Even with the lockdown, we anticipate that women and girls will continue to shoulder the bigger responsibility for childcare.
BJC also notes that women carry more of a burden in social provisioning and require more access to public services which budget cuts have been eroding. Further responses to COVID-19 should include provision of sanitation kits, including sanitary towels. Many children are dependent on school nutrition schemes which are now not operating, and so BJC demands the establishment of feeding schemes in poor communities. Elderly people and their carers – who are often women – are at risk of infection. A comprehensive care plan must be considered for cases where primary caregivers need to be state quarantined.
BJC remains concerned about crimes against women and children, which are likely to increase due to more people being at home for longer periods, under heightened stress conditions. Department of Social Development (DSD) workers, NPO child protection workers, and those providing GBV counselling and support services are going to need support – cuts in these areas should therefore be reversed. A comprehensive strategy, including communications to the public about preventing and accessing help in relation to GBV, must be devised which takes into account policing and support for those who will be affected.
BJC welcomes the mobilisation of the Unemployment Insurance Fund (UIF) to protect workers. BJC also welcomes the business support for small business, tourism and industry. We applaud the efforts to include informal worker protections. However, the amounts mentioned will not be adequate for the size of need. Current measures will benefit houses with formally employed workers, and will leave the majority of vulnerable households and 10 million unemployed people unprotected. BJC believes that the current grant mechanisms can be altered to reach this category of the population and could be the quickest way to help these groups in the immediate lockdown period.
BJC also welcomes the implementation of price controls on essential goods – this is critical to ensuring that the economically vulnerable are not disproportionately impacted by COVID-19’s effects. Such policies, including the provision of water, should be extended after the virus has stabilised given how many cannot access these goods in general.
BJC recommends that the state, in consultation with the Competition Commission and private banks, put in place a three month holiday on all household mortgage payments (like they have done in Italy and the United Kingdom). The lockdown will likely be ineffective if people are at risk of becoming homeless while job uncertainty also remains high.
The BJC recognises the role of individuals, religious leaders and non-government organisations in promoting responsible behaviour to fight COVID-19. But the actions of individuals can only do so much: government must put an end to austerity and invest in a comprehensive pro-poor stimulus in order to combat COVID-19 and improve the healthcare system sustainably.
For media queries, contact Mangaliso Ndabeni (066 025 0949) or Kirsten Pearson (082 936 1898)
STATEMENT ENDORSED BY THE FOLLOWING ORGANISATIONS
Agenda Feminist Media, Black Sash, Children’s Institute, Corruption Watch, Foundation for Human Rights, Oxfam South Africa, Refugee Social Services, Rural Health Advocacy Project, Social Change Assistance Trust (SCAT), Social Justice Coalition, Teddy Bear Foundation, Women on Farms Project