Floyd Shivambu. Picture: MARTIN RHODES
Floyd Shivambu. Picture: MARTIN RHODES

Tito Mboweni and EFF deputy president Floyd Shivambu exchanged sharp words in parliament on Thursday over whether the budget presented  by the finance minister on Wednesday was an austerity budget.

On Thursday, Mboweni and his team from the Treasury appeared before members of four parliamentary committees of finance and appropriations to brief MPs on the details of the budget and to answer questions.

Shivambu slammed what he said was an austerity budget which was being imposed in an era of  high unemployment and a huge debt to GDP ratio. He said: “What is the economic basis for this? What economy has ever been saved through austerity measures? Where?” Shivambu said the IMF had conceded that austerity budgets had never worked anywhere. They simply worsened unemployment and poverty and stifled economic growth.

He said there was no science or economic logic in cutting the budget by R260bn and the wage bill by R160bn. “This is the most neoliberal budget that has ever been presented in the post-democratic dispensation by a  minister of finance. It is  not going to achieve anything. It is just going  to make things worse.”

Replying to MPs' questions, Mboweni said there was no substance to Shivambu’s comments, which were just  sloganeering  at the lowest common multiplier. “This one multiplies into a large amount of nothing.” He recalled a politician who likened being attacked by Sir Geoffrey Howe in parliament to being savaged by a dead sheep. “I feel like that with honourable Shivambu ... no substance but sloganeering.

“It’s as if I am going to lecture a heart surgeon on how to operate. I can’t lecture a heart surgeon on what to do,” Mboweni said

Shivambu hit back, saying Mboweni overrated his understanding of economics. “There is a crisis under your leadership now. It is a fact and we must criticise you. Don’t become foolish.”

Finance committee chairman Joe Maswanganyi called the meeting to order.

The Treasury has been criticised for planning a huge cut in the public sector wage bill without having opened negotiations with the public-sector trade unions.

But Mboweni said that it was not correct that there had been no conversations about planned cuts in the public-sector wage bill. There had been multipronged conversations including among the political leadership at the level of the alliance involving Cosatu, the SA Communist Party and the ANC, and between himself and public service & administration minister Senzo Mchunu and some public sector trade unions. Conversations within the National Economic Development and Labour Council would continue on Friday when Mboweni briefed the council about the budget.

A formal submission was made to the Public Sector Bargaining Council this week.

“So this is not a surprise to anybody who has been involved in the process. But naturally people are going to say things publicly,” Mboweni said.

ensorl@businesslive.co.za

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