Vavi disappointed with budget

2010-02-18 14:01

COSATU general secretary Zwelinzima Vavi was disappointed that the

strides made in the alliance on monetary policy did not filter into Finance

Minister Pravin Gordhan’s budget.

He welcomed a letter written by Gordhan to SA Reserve Bank governor

Gill Marcus which sought to clarify the role of the bank, Vavi said today.

“Regrettably that is taken forward in the context of a policy the

minister knows there’s no consensus around.

“[That is] inflation targeting, and you know, there’s not even an

attempt to meet us halfway, at least to change the band from three to six

percent to something else that is much more manageable.”

Vavi said South Africa’s preoccupation with wanting the same

monetary policy as its European counterparts was absolutely wrong.

“Europe does not have the same levels of unemployment and

underdevelopment as we have. They are on the other side of the hill while we

have to start our journey,” he said.

The Congress of SA Trade Unions believed progress was being made in

the alliance on the matter with a task team established last year. But the task

team was not convened.

“In the meantime government processes are not waiting for us. The

minister is galloping as we now know.”

He said the alliance summit resolutions indicated that the partners

were closing the gap on differences at policy level.

“The mood was that the inflation targeting policy had to be

reviewed, the band had to be reviewed, we have to keep an interest rate regime

that is low, we’ve got to have a competitive exchange rate, we’ve got to

consider speedbumps so that we don’t lose out in terms of investment moving out

of the country,” he said.

This was a package referred to the task team but the problem,

according to Vavi, was that the task team never met.

“It is then left to the minister alone to manage and to decide what

is good and what is not good from the alliance summit,” Vavi said.

Cosatu would issue a more detailed statement on its reactions to

the budget later today.

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