With what it believes was the most difficult National Budget since the dawn of democracy in South Africa, business organisation Business Leadership South Africa (BLSA) says Finance Minister Tito Mboweni last week delivered substance over bluster, which the private sector has been crying out for.

BLSA CEO Busi Mavuso in an opinion piece published on Monday stated that the Minister had delivered a tour de force by finally announcing plans to cut the public service wage bill by more than R160-billion over three years.

Mavuso said although this announcement was well taken by the private sector, the response from unions were rapid but unconstructive.

She explained that the Congress of South African Trade Unions’ (Cosatu’s) declaration of “it’s war!” was a kneejerk response that was all too predictable and unimaginative, especially considering that the Minister never mentioned any job cuts but rather a review of the rate of wage increases.

“Considering the state of our economy, a more considered response, particularly from Cosatu, which after all is in alliance with the ruling party, would have been refreshing.

“Cosatu did, after all, pledge that workers were willing to come to the party in finding ways out of the financial predicament we all face. It would be a massive boost for the country if it now put that spirit into action.”

Mavuso further stated that labour had to come to the party for the country to escape its dire economic predicament. For the best part of a decade, workers in the private sector had borne the brunt of the economic struggle as companies had been forced to cut workforces, while workers in the public sector, backed by their powerful unions, had been largely cushioned from its full effects.

“In fact, they often used their political muscle to force through above-inflation wage increases that the fiscus simply could not afford and which widened the budget deficit even further.

“Private sector earnings growth had been 8% lower than wage growth in the public sector in the past ten years and lagged inflation. According to research by the University of Cape Town, the average private sector worker earned two-thirds of what the average public sector worker earned,” she pointed out.

Further, Mavuso noted the many areas in which it was important for business to play a role alongside government to reignite economic growth.

“Plans to drive greater infrastructure investment could be better achieved if government crowded in the private sector. We need extensive investment in energy, water, roads, ports and much else.

“We looked forward to working with the National Treasury and the Presidency to develop mechanisms for the private sector to support public infrastructure investment. This would be crucial to getting the economy onto a higher growth path,” she highlighted.