Geneva/Johannesburg / New York, 10/03/2018—This week a group of civil society organizations (CSOs) are using compelling evidence to urge the South African government to roll back ill-advised austerity measures feeding the systemic inequality and widespread poverty that endure twenty-four years after the fall of apartheid.
On Tuesday, October 2nd, SECTION27, the Institute for Economic Justice (IEJ), the Center for Economic and Social Rights (CESR) presented a submission and factsheet to the Committee, furnishing empirical data that makes clear the acceleration of austerity and confirms the detrimental effects these policies are having on the rights to healthcare and education in the country. The advocates argued that South Africa must take immediate action to increase spending on essential public services and explore fairer methods of taxation that would result in a greater redistribution of resources. The Committee took up a number of these issues, posing tough questions to the South African delegation.
Unwarranted austerity and avoidable resource shortfalls lead to health & education rights violations
Systemic inequality and widespread poverty persist, as nearly 50 percent of the country lives below the poverty line while the wealthiest one percent owns half of all assets in the country. In this context – where huge numbers of people rely on government services and support simply to survive – cutting government spending on social programs and services will be catastrophic for economic, social and cultural rights.
The acceleration of austerity is a response to pressure from credit rating agencies, panic over public debt levels, and lower than expected GDP growth and revenue collection. However, the country’s debt levels are similar to those of other emerging markets and lower than most developed countries.
Widespread corruption and “state capture” during the Jacob Zuma administration has reduced revenue collection, undermined social service delivery, and led to increased debt and severe mismanagement of critical state-owned enterprises.
The realization of the rights to health care and education is already being undermined by austerity, reinforcing long-standing apartheid-era inequalities in those areas.
· In recent years – with 80 percent of the population uninsured and the health system heavily overburdened – health expenditure per uninsured person has declined.
· Funding cuts to much needed school infrastructure programs and underfunding of the country’s poorest schools have left many schools in dire condition.
There are alternatives to austerity
Progressive tax reform and tackling corruption are alternatives to austerity that can help South Africa fulfill its human rights obligations.
· Tax breaks for high-income earners cost over 52 billion Rand in 2015/2016.
· Effective corporate income tax rates are among the lowest in emerging markets.
· Trillions of rand have been lost to tax evasion and other types of illicit financial flows over the last decade.
· Billions of rand each year are estimated to be lost each year through corruption, in the form of wasteful and unauthorised government expenditure.
Responding to the concerns of civil society and drawing from their submissions (as well as a range of other sources), the members of the UN Committee on Economic, Social and Cultural Rights raised concerns with the government delegation on a range of issues, including austerity measures like social spending cuts, the increase in the Value-Added Tax and related phenomena like corruption and high unemployment. The Committee noted that the tax regime is not as progressive as it could be, questioned the impact of declining resources allocated to public healthcare and schools, and asked the government what measures it planned to take to more effectively tackle tax evasion and avoidance.The Committee will issue its “Concluding Observations” and recommendations to the South African government within the next few weeks.