The Congress of South African Trade Unions (COSATU) demands urgent action by government to cushion society from the massive fuel price hikes due to come into effect from the beginning of April of R5.41 per litre of petrol and R8.84 per litre of diesel. These hikes are due solely to the war of aggression in the Middle East and the havoc it has caused to international oil and gas supplies and prices.
The devastating impact these unprecedented price hikes will have upon the working class and the economy cannot be overstated, it will be a bloodbath. Projected economic growth for 2026 of an already weak 1.4%, will be shot out of the war. Businesses will not manage a near doubling of diesel prices. Many will retrench workers in large numbers. Painstaking gains reducing unemployment over the past five years will be lost.
Workers who are already drowning in debt and supporting about seven relatives each, will simply not cope. Most workers already spend an average of 40% of their salaries on transport. This will now double. This means they will now have to choose between feeding their children and travelling to work and school.
Whilst appreciating the very limited fiscal space of the state, Treasury’s public statement that “there is nothing they can do” is simply unacceptable and a shocking abdication of leadership and responsibility to cushion society, in particular the working class, and the economy from the spillover of the latest war of insanity unleashed in the Middle East.
The fundamental solution to this global geopolitical and socioeconomic crisis is for the war to immediately end and sobriety to be restored. The United Nations must wake up and act. South Africa’s government of course has a very limited say in this, but it can do much to help protect the nation from the coming pain. Key interventions that need to be put in place include:
- Suspending or lowering the fuel price taxes and levy for the duration of the war.
- Providing support to Eskom to lower the price of electricity.
- Expediting measures to return Transnet and Metro Rail to full capacity to shield food and urban commuters from inflation.
- Adjusting social grants, including the SRD Grant, for inflation.
- Expanding public employment programmes to absorb more unemployed.
- Distributing food parcels to indigent households and social grant recipients.
- Offering financial relief for embattled companies and sectors, including fixing the Unemployment Insurance Fund’s Temporary Employment Relief Scheme.
- No repo rate hikes by the Reserve Bank.
- Loan and insurance payment holidays for struggling consumers and businesses.
- A halt on retrenchments by the private sector.
It is critical that Nedlac urgently convene the leadership of government, business and labour to put in place a rapid response to this loading disaster. Sitting still or offering glib comments is not a plan, it is a failure of leadership. South Africa cannot afford to weather this storm on a wing and a prayer. Cabinet must meet and begin putting in place a bold and progressive financial, economic and social relief package.
Issued by COSATU
Matthew Parks (COSATU Parliamentary Coordinator)
Mobile: 082 785 0687
Email: matthew@cosatu.org.za