The Congress of South African Trade Unions (COSATU) is heartened by the tentative fall in consumer price inflation (CPI) to 4.3% in July, down from a painful 5% in June.  Workers cannot afford to see a further rise in inflation, especially over such a short period of time, given that most workers are paid a pittance and not a living wage by their employers.  The impact of a sudden rise in inflation bleeds workers who are already drowning in debt, borrowing at unsustainable levels, simply to buy food and electricity and service other debt.

We need the wars of aggression in the Middle East to end, a genuine peace deal to be put in place, and respected by all parties, in particular the renegade, rogue Netanyahu regime in Israel.  The resolution of the Middle East conflict is central to returning international oil and subsequently domestic fuel price and supply levels to pre-war norms.  This will provide impetus to see inflation fall to the 3% norm it had been prior to the war.  A fall in fuel prices will give badly needed relief to workers (who already spend an average 40% of their wages on transport) and the economy that have both been devastated by the 25% and 50% plus hikes in petrol and diesel prices since the war started.

It is critical that the South African Reserve Bank exercise strategic patience and resist the temptation to increase the repo rate and to rather allow time for oil and fuel prices to subside as the current spike in inflation is solely due to the war in the Persian Gulf and not domestic demand.

It is equally important that government reintroduce fuel levy relief for commuters until fuel prices revert to pre-war norms as well honour long outstanding commitments to review and seek to reduce the one third of fuel prices that go towards the fuel levy and taxes.  Fixing the Road Accident Fund, including tabling the necessary legislative amendments to effect this at Parliament are key to this and urgently needed.

Equally critical is for Eskom to be assisted to reduce the increasingly unaffordable price of electricity and that investments to expand public transport (Metro Rail, buses and taxis) be ramped up to provide commuters with more affordable and faster means of getting to their destinations. 

We fear that this hopeful news of a fall in inflation may be short lived with yet another devastating hike in fuel prices expected in the beginning of September.

COSATU will continue to engage with government at Nedlac, in Parliament and in bilaterals to provide the necessary support to the working class and the economy during these turbulent economic times.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za