The Congress of South African Trade Unions congratulates President Cyril Ramaphosa’s on his first State of the Nation Address, since being elected president. We welcome his commitment to continue to base government policies on the priority policy areas contained in the ANC’s 2019 election manifesto, as evidenced by his seven identified government priorities. COSATU fully supports the president’s placing of job creation as the top priority of the government. There are however many areas where much more detail will be required before we can make a comprehensive assessment of the government’s programme.
COSATU is pleased that the President placed the need for drastic and urgent state intervention in the economy and we are inspired that R250 billion of the R300 billion promised investment from the 2019 Investment Summit is materialising. We are encouraged that R840 billion further investment will be targeted over the next five years. Whilst we welcome the plans to create 2 million jobs for the youth over the next decade, we are worried that the jobs target in this regard is only 155 000. The economy needs to be creating at least 50 000 new jobs per month if we are going to turn the tide on our 37% and rising levels of unemployment.
The commitment to locate the coordination of the jobs plan in the Presidency is long overdue and it will hopefully, place the jobs plan at the centre of all government programmes. The Federation expects that every sector and every business entity must focus on job creation and that all government departments, national, provincial and local, should align their programmes with job creation imperative.
Equally the private sector must come to the party. They must heed the President’s call and contribute to building the economy. The private sector’s failure to honour the progressive commitments of the jobs summit must be tackled. Retrenching workers in their thousands will not help reduce unemployment, poverty or dismal economic growth.
Two years ago the University of Johannesburg’s Centre for Competition, Regulation and Economic Development discovered that South African companies were accumulating reserves and not investing in the economy while acquisition-led growth had increased concentration and led to anticompetitive behaviour. The cash reserves of the JSE’s largest 50 companies were estimated to be sitting at R1.4-trillion by the centre. Our government seems to be fearful of taking solid measures to discourage cash hoarding by big companies. COSATU wants the government to slap a 10% punitive tax on cash reserves if a company does not spend more than 80% of its annual profits on investment and wage increases.
COSATU welcomes the government’s plans to grow the auto-manufacturing, clothing, textile, gas, chemicals, metals, steel, energy, water, agriculture, mining and tourism sectors. These are key to job creation, however, we are very worried about the lack of details in the SONA and hope they will be fleshed out shortly in the budget and the intended revising of the industrial strategy.
The Federation is not convinced that business or government is properly preparing for both the opportunities and the dangers of the fourth industrial revolution to workers’ jobs. The location of the Presidential 4th Industrial Revolution Commission in the Department of Communications compounds our fears. What is needed is a comprehensive plan for the entire economy as it does not impact upon communications only, but in fact the entire economy and society.
The federation supports the commitment to boosting SMMEs and exports, in particular to India and China. However, we are very worried about the dangers of rushing the African Free Trade Agreement. If not managed properly, e.g. by ensuring controls on dumping of imports from countries outside Africa, we may risk decimating fragile local industries.
Whilst COSATU agrees with the President that the Reserve Bank’s mandate is to manage inflation, support economic growth and job creation; the federation remains concerned that the SARB seems to only focus on inflation and has not actively sought to support economic growth and job creation. Our excessively high-interest rates are stifling economic growth and further impoverishing struggling working-class families and SMMEs. Equally, the banking sector must make its products affordable and stop excessively profiteering at the expense of the poor. COSATU hopes the President will now sign the National Credit Amendment Bill and provide some relief for the most indebted.
COSATU applauds the President for wearing a proudly South African made suit but his job is to make sure that all government organs must now only purchase locally made goods. Business must equally rally behind the buy local campaign because this alone has the potential to spur economic growth.
The plans to fast track digital spectrum and ease visas are welcome.
The lack of clear climate change plans is a serious problem. Both the state and business must wake up to this crisis.
COSATU is disappointed that no mention was made of plans by the government to ensure that all employers abide by all our labour laws from having to pay the minimum wage to respecting health and safety laws.
State Owned Enterprises
COSATU is very worried that the state does not appear to have a solid clear plan to save, stabilise and develop our SOEs, in particular, Eskom, SAA, SABC, PRASA and Denel. The federation applauds the positive reports the President shared on Eskom including the financial injections. However, leadership instability at Eskom and SAA is alarming. COSATU and its affiliates remain concerned that workers will be retrenched at Eskom and other SOEs. This is something that COSATU will fight at all costs and we demand that government explain what the restructuring of Eskom and the other SOEs will entail.
The lack of clear plans for these SOEs is very worrying and the President needs to take the nation into his confidence on what will be done to save them because he is running out of time. Workers are afraid that they will be made to pay the price for the failures of management and politicians.
Government’s committed funding of R100 billion worth of infrastructure will play a key role in growing the economy. Its prioritising of roads, water, student accommodation, in particular, is critical.
However, COSATU cannot agree or support the abuse of Public Works Programmes. Many Municipalities and government departments are using these as a source of cheap labour for permanent government responsibilities e.g. road maintenance, cleaning of municipal buildings, refuse collection and even municipal policing to fight gangs in Cape Town!
COSATU is disappointed that there was no indication of the government’s intentions to insource functions such as cleaning, security etc.
COSATU welcomes the numerous interventions the President has made to halt the looting bonanza, including the commissions of enquiry, new leadership for the SOEs and law enforcement agencies. The federation, in particular, welcomes the plans for the NPA, AFU and SIU to recover R14 billion stolen assets. More must be done to relocate the guilty to nearest prisons.
COSATU welcomes the planned increase in SAPS personnel and the commitment to fight gangs and drugs, as well as gender-based violence. The federation is disappointed, though, that there was no indication of redeploying personnel and resources away from desk jobs and affluent areas to where they are needed e.g. townships and specialised units.
At this rate, we are in serious danger of losing the fight against gangs and drugs. An urgent revamp of our policing strategies is badly needed.
COSATU welcomes the government’s commitment to fast-tracking land reform to address the desperate need for land in urban areas for informal and back yard residents as well as land for emerging Black farmers. This is a burning crisis cannot continue to be neglected. The federation welcomes the R3.9 billion allocated for emerging farmers and we insist that this must include farm workers in particular as well as women.
COSATU welcomes the commitment to employ ECD learners, however, the SONA’s silence on the violence engulfing our township and other schools is deeply disappointing.
COSATU applauds the President’s focus on jobs and the economy. We welcome his efforts to clean up the state and stop the looting. We are very worried though about the lack of clear plans to save the SOE and also his silence of private sector corruption that is killing this economy. Whilst we must hold the government to account, the business should not be allowed to abscond from their responsibilities for the crises we face. The President’s SONA creates an impression that business has not contributed to our economic problems and that is worrying because it means that the sixth administration does not have a plan to deal with collusion, cartel behaviour and Alliance capitalism that has crippled this economy.
Many studies have revealed that our country is spending more resources on health and education than many other developing economies, yet we perform worse than they do. This means there are leakages in our system that need to be addressed and the president does not have the luxury of time.
Issued by COSATU
Sizwe Pamla (Cosatu National Spokesperson)
011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794