COSATU and the entire nation expects a lot from the 2019 State of the Nation Address. The nation is facing its greatest economic, fiscal and governance challenges since 1994.
This SONA needs to focus on ensuring that there is policy coherence, better management of our limited resources, ways of increasing and strengthening the capacity of the state and employment creation. It needs to break with the neoliberal policies that have undermined the task of state and economic transformation, socio-economic development and employment creation.
With an economy unable to reverse high unemployment, a more concerted effort from the state as a driver of employment is needed. Our overreliance on capital intensive employment sectors as the main drivers of our economy remains a developmental challenge. Without fundamental transformation of our growth path, South Africa will remain susceptible.
The latest unemployment figures from the 4th quarter of 2019 are further proof that the economy is bleeding, and we need decisive intervention now. The fact that in the 4th quarter no new jobs were created shows how deep our economic crisis is. If it wasn’t for the normal holiday bump in the economy, there is a real chance that the economy would have shed more jobs. We can expect unemployment to rise this quarter with the wave of retrenchments that are hitting mining, Telkom, SAA, and the retail sector. All social partners must come together for the sake of the nation.
Currently, there is a robust debate in the country about the economic policy and the federation is continuing to insist on an economic policy framework that focuses on reducing unemployment. Zero unemployment rate should be the objective of the economic framework. We hope that the SONA will articulate the vision of state-led economic growth.
The greatest challenge facing the nation is our below 1% economic growth rate, our 40% and rising unemployment rate, and growing levels of poverty and inequality.
The President held very progressive Jobs and Investment Summits. There have been positive investment revenue inflows but too little action by government and the private sector to implement their Jobs Summit Agreement obligations.
The federation hopes to hear clear actions, timeframes and resources in the SONA with regards to ensuring both government and the private sector implement their Jobs Summit Agreements.
Eskom is the greatest threat facing the survival of the economy, jobs, the state and the economy. Positive on-going engagements are taking place at Nedlac between social partners to find consensus on a social compact and an intervention plan to address the crises facing Eskom.
The federation expects the SONA to highlight progress government has made with regards to halting the crises at Eskom and what measures are being undertaken to save it.
The government needs to take the nation into its confidence in its clear plans to save key economic SOEs, including the Transnet Group, SAA, SABC, the Post Office, Denel, and the RAF. We hope that the government will outline its vision and intention of restructuring the SOEs. State asset restructuring should not be ideologically driven but should be about fixing them so that they can play their strategic economic role and raising the quality of people’s lives through providing affordable, accessible services to the people. This should be done to increase the capacity of the state so that the state can perform functions which it can perform more effectively than the market.
The state is in a crisis with departments getting unqualified audits time and again. Countless municipalities are in financial crises with dozens struggling to pay workers on time. Approximately 10% of the budget is lost to wasteful expenditure and corruption each year. Many key public services are bleeding, public servants are overstretched with hospitals, schools, and roads falling apart. COSATU expects to hear from the government how these will be addressed.
The federation expects the SONA to report on progress made with regards to fixing SARS. Equally we hope that serious progressive tax reform will begin with the 2020 budget and that this would be announced in the upcoming budget speech.
South Africa still does not have a sufficient number of highly skilled people in most professions and this demands that solid action be taken to improve access to quality education. Infrastructure spending in schools needs to speak to the enormity of the challenges there and the president needs to set the tone for the budget speech. The SONA should speak to addressing the pervasive lack of safety in South African schools. Teachers cannot be expected to deliver quality education while also worrying about their safety and that of their students in their schools.
Attempts to improve the claims process, unreported accidents and the claim backlog continue to hamper the work of the Compensation Fund. Many employers , whether registered with the Fund or not, continue to flout registration and/or fail to report accidents incurred by workers.
Enforcing health and safety laws and measures remains poor compared to international standards, resulting in permanent injuries and a large number of deaths in the workplace. Harsh measures are required to deal not only with unreported cases but unregistered employers and those failing to meet minimum requirements.
On Employment Equity, we expect decisive action to deal with company failures to comply with Employment Equity laws. The South African workplace is still deeply racialised with black people remaining at the bottom whilst white people dominate the upper level of management. COSATU wants the government to start wielding a big ax to force the non-compliant private sector to comply.
Lastly, we expect to hear from Government a clear plan to inject stimulus into the economy. We also hope to hear from the government to give us feedback about the impact that incentives that have been handed to the private sector are having on unemployment. The government has left the corporate untouched, introduced the Youth Wage Subsidy and the Youth Employment Scheme to encourage the private sector to invest and create jobs. We need to know whether this is yielding any results, or the private sector is just enjoying the perks while failing to deliver.
We also expect the President to give us an update on the research conducted by the National Treasury on the feasibility of a State Bank and the one that was conducted by the Department of Energy on the Fuel Price cap.
Issued by COSATU
Pamla (COSATU National Spokesperson)
Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 679