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Introduction
Our society has taken many significant steps to
eradicate poverty in our first decade of democracy.
But we still face many challenges. It is from this
perspective that the People’s Budget approaches fiscal
policy – one of the most important tools in the struggle
to uplift our people.
Fiscal policy is never neutral. Rather, it has been an
area of contestation between two major groupings –
each with many variants – in our society. The first
grouping, mostly based in the private sector and
international financial institutions, has called on
government to adopt policies associated with the
mantra of privatisation, trade liberalisation,
deregulation and business-led development. The
second grouping, based primarily in mass-based civil
society organisations, has called on government to
increase spending on programmes to address poverty,
with a more expansionary fiscal policy.
The debate between these groupings is not an academic
exercise. It has an immediate impact on the lives of
our people. The People’s Budget Campaign sees this
as the key test of our proposals for more rapid
redistribution and expansionary fiscal policies.
To this end, our fourth budget framework seeks not a
populist alternative, but rather an alternative that is
credible and evidence-based. The proposals presented
here are for the 2005/2006 financial year. This should
ensure that government has sufficient time to engage
our proposals and phase in fundamental changes,
where needed.
This document aims to:
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locate fiscal policy within an integrated
developmental perspective;
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explain our proposals for job creation and rapid
poverty eradication, particularly in rural areas;
and
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provide revenue and expenditure proposals that
translate our vision into practice.
The document has four parts:
Part 1. A broad approach to poverty eradication:
This section outlines an integrated strategy for
poverty eradication.
Part 2. Spending proposals: This section looks at
measures for improving incomes, building
capabilities and redistributing assets. The key
measures proposed include a basic income grant
and expansionary budgets for land, housing and
free basic services.
Part 3. Building participation: This section analyses
the budget process and recommends reforms to
enhance opportunities for popular participation
in identifying spending priorities at the national
and local levels.
Part 4. Financing and integrated development
strategy: This section reviews revenue trends of
recent years, explores methods of financing new
poverty eradication and job creation initiatives,
and proposes mechanisms to improve the
delivery capacity of the State.
Each of the sections reviews the performance of
government over the last ten years and points out both
the many successes that government has achieved and
the challenges that remain unmet. The theme of the
document is thus: Eradicating poverty by 2014 – Learning
from the first ten years of democracy.
Our proposals have been developed through a
participatory process. Over the last twelve months the
People’s Budget Campaign has:
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Called for submissions: The People’s Budget
Campaign has called on members within its
constituencies and beyond to provide
submissions to inform our proposals.
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Held training workshops: Two major training
workshops with the theme Budgets and Poverty
Eradicationwere held in Johannesburg and East London. The training workshops served as a basis
for soliciting feedback and improving economic
literacy. In addition, our organisations have held
internal training programmes for members. These
processes also let us discuss our core proposals.
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Convened a consultative conference:The three
coalition partners held a consultative conference
in Johannesburg in November. The conference
adopted a series of resolutions that served as the
In addition to this, the People’s Budget Campaign has
commissioned research on several areas to inform
discussion and stimulate debate. While the research
papers are important in themselves, they have served
the more important function of building capacity and
stimulating debate through a process of participation
and involvement.
Finally, we are often asked whether the People’s
Budget Campaign has achieved its aims. To answer
this question, we have to remember that our aims are:
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to engage with government policies through the
budget process, putting forward proposals from
our civil society organisations; and
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to improve the capacity of our organisations,
activists and members to understand and engage
on the budget at national, regional and local level.
Since the People’s Budget Campaign vocalises
demands made by much of civil society, it is impossible
to separate out our influence on government decisions.
The effects of these broad-based demands can be seen,
among others, in:
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the adoption of a somewhat more appropriate fiscal policy, moving away from the restrictions and cuts of the late 1990s;
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the decision to roll out anti-retroviral treatment
for HIV/AIDS;
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the extension of the child-support grant; and
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the expansion of free basic services.
Generally, the People’s Budget Campaign has been
instrumental in keeping economic policy alternatives on
the public agenda and in building support for a modest
relaxation of fiscal constraints, particularly within the
Campaign’s mass-based constituencies. Moreover, our
research and training work has contributed to the ability
of our organisations to engage more practically and
specifically on these types of policies.
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