COSATU outrightly rejects the suggestion by the ANC National Spokesperson Cde Pule Mabe for pensions to fill the funding gap for emerging enterprises

The Congress of South African Trade Unions outrightly rejects the suggestion by the ANC National Spokesperson Pule Mabe for pensions to be used to close the funding gap of Small Medium and Micro Enterprises (SMMEs.The ANC national spokesperson Pule Mabe told the Black Business Council summit on Thursday that the funding gap for emerging enterprises could be filled by pensions. 

Whilst we agree that SMMEs needs to get special attention, we do not think that pensions are the solution. Pensions remain workers deferred wages and should be invested in ways that benefits workers and should not be used to deal with policy failures.

The reality is that the NDP Vision 2030 that was rammed through by the ANC government in 2012 identified the SMMEs as an engine for economic growth and employment creation but since then nothing drastic has been done to support them.

Economic programmes reflect the dominant political forces within the government and the implementation of conservative economic policies favouring the moneyed class at the expense of the SMMEs and the working class is a political programme reflecting the balance of class forces within the ANC led government.

The ANC at national level recently endorsed one of the most anti -worker budgets that gave nothing to the SMMEs and the survivalist rural and township economy that feeds and clothes many people in this country. Since the ANC sees nothing wrong with a budget that pickpockets’ workers and reduces their salaries, benefits and pensions, it is surprising, therefore, to see the same ANC talking about using the same workers’ pensions to prop up the SMME sector.

The ANC should do an introspection and then spend more energy contesting the conservative policies of its own government, instead of trying to hide behind workers’ pensions. The same ANC is enthusiastically cheering on its own government when it is victimising workers.

It would be nice for the ANC to first confront the obvious betrayal of the SMME sector and the working class by the ANC government through its policies. The country needs an alternative economic development strategy to get out of this economic quagmire. The national budget should be targeted at promoting investment in rural areas and the township’s economy because economies are made up of people. The ANC government needs to reduce the red-tape and improve coordination between government agencies and departments that are supposed to help SMMEs. 

The ANC should be spending its time demanding greater transparency and more debate before the budget is presented. The budget should be progressive and should be judged by the extent to which it moves the tax burden away from the poor to the rich.

It is also worth noting that the ANC rejected a resolution at the ANC’s National Policy conference in 2017 that was going to ensure that the budget and resource allocation was going to be made the responsibility of the Presidency.

This resolution was meant to ensure that the Presidency was going to be strengthened as the strategic centre of power in the state to drive the national development plan, resource allocation and enforcement.

In that Policy Conference, the ANC said the Presidency should not have the authority to override the Treasury’s budget and reaffirmed the Treasury’s independence as a core institution of determining budget. Now the ANC need to deal with the fact that National Treasury remains an obstacle to radical economic transformation and to the future of SMMEs.

The Federation also challenges that ANC to deal with the structural problem and that is the concentration of the banking sector. The focus should be on improving access to affordable finance because mainstream banks and financial institutions do not have small businesses, as their target clientele. As a result, these small businesses are struggling to access the finance they need to grow. The government needs to intervene and expand its offer of available financial solutions.

In the South Africa, five banks account for more than 90% of deposits, which is one of the most concentrated banking systems in the world. There is a general tendency when an organisation gets larger and larger and gets very big, essentially decisions are made without accountability and the temptations of power strike.

These big banks are not lending to SMMES and what is needed in South Africa is decentralisation of the financial sector. ANC structures should also push for a State Bank will focus on productive lending and that will allow SMMES to have affordable access to finances. They should be conducting research on a State Bank model that will be suitable for the South African situation, so that we get a bank that will make a difference instead of another version of a commercial bank under government control.

We also challenge the ANC to boldly contest the monetary policy that influences the conditions under which the private financial sector can create credit, determines the growth rate of the money supply and the level of the interest rates. The reserve bank has no appetite to impose quantitative controls on commercial banks to ensure that a portion of their loans go to priority sectors that drive the growth path and create jobs on a larger scale.

The interest rate, perhaps the most influential price in the economy is not a purely technical question but has profound implications for all aspects of economic life. Investment is driven through borrowing and the current high-interest rates make the cost of borrowing very high and unaffordable for SMMES.

Lastly, since the sixth administration is set to release the third Medium-Term Strategic Framework (MTSF), which would also be put out under the guise of long-term planning in terms of the NDP. The ANC should demand that its own government in formulating a new strategic framework should evaluate the effectiveness and failures of the macroeconomic policies that were implemented in the MTSF 2014-2019.

Pensions definitely have a huge role to play in changing the ownership patterns of the economy, but they are not a piggy bank for the ANC to cover for failed economic policies of its government.

Issued by COSATU
Sizwe Pamla (Cosatu National Spokesperson) Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794