Cosatu wants 3% in interest rate
November 4, 2009
By Michael Hamlyn
Cosatu told MPs on Wednesday that it wants to see the interest rate set by the Reserve Bank at 3%; the federation's officials also praised the Finance Minister, Pravin Gordhan, for his bold response to the economic crisis in setting the budget deficit as high as 7.6% of GDP this year.
Prakashnee Govender from Cosatu's Parliamentary office however told a joint meeting of Parliamentary finance committees studying the medium-term budget policy statement tabled last week by Gordhan that the unions noted that the deficit reduces year-by-year.
"We are concerned that the expansion actually starts to get more constrained in the medium term," she said. "We are concerned that this is going to be an inadequate and inappropriate response to the structural trends of poverty and inequality in the country."
The trade union group also called for a tax to be placed on non-essential consumption imports, which Govender said destroyed local jobs. It also expressed concern about the "business-friendly" proposals to reduce exchange controls.
A major Cosatu affiliate, the health workers' union Nehawu, endorsed the federation's call for the Treasury to insist on local procurement for purchases by national, provincial and local government.
Nehawu also backed Cosatu's call for more details on the National Health Insurance scheme, and wondered why there was very little provision to be seen in the medium term statement.
Although Cosatu praised the extension of the child support grant until 18, Govender said the unions wanted more clarity on what the rate of the grant would be in 2010, saying that the grant has not been inflation-proofed and is now worth much less than it was.
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