Gigaba ‘offers no hope’: Cosatu

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COSATU is deeply disappointed in Government’s 2017 MTBPS.  The nation is in the midst of its worst governance and economic crisis since 1994.  Yet government has produced an MTBPS which says nothing, proposes nothing and offers no hope.  In fact it points towards a worsening of our economic crisis and a deepening of the collapse of good governance in the state. 

COSATU had hoped, against all hopes, that government would listen to workers, COSATU, civil society and the public at large.  We had hoped that government would, for once in this administration, rise to the occasion.  That it would acknowledge and apologise for its failings and produce a meaningful plan to arrest the collapse and looting of the state and to spur economic growth and create decent permanent jobs for all workers.

Yet it has offered no plan, no changes, and no hope.  Government has failed.  It is for this very crisis in leadership that COSATU has been calling for the President to step down and make way for a new government led by the Deputy President.  It is because of the raging crises from SAA to Eskom to SABC to SASSA to the mining sector that COSATU and its affiliate unions have been calling for the Ministers asleep on the job to do the honourable thing and resign. It is mind-boggling that given these burning fires that these Ministers remain untouchable during the revolving doors of cabinet reshuffles every few months.

Jobs

The African National Congress campaigned and was elected upon a manifesto of creating 5 million jobs in 2014.  Unemployment has nearly doubled to a real rate of 38%.  Quarter after quarter, workers are retrenched and lose their jobs across sectors, from mining to retail to banking to SAA, the Post Office, Telkom etc.  At the same time the state is actively reducing the number of jobs available in the public sector.  Municipalities and provincial departments are increasingly outsourcing permanent public sector jobs to the Expanded and Community Works Programmes, where workers are paid R78 per day with contracts lasting a few months at a time.

The MTBPS shows the Departments of Agriculture, Environmental Affairs, and Tourism amongst others woefully failing to meet their job creation targets.

Other departments simply don’t even bother with any job creation targets.

The Presidency promised organised labour and business and Presidential Jobs Summit in September 2016 to bring social partners together to stem this jobs bloodbath.  None has been called.

We cannot turn the economy around on the backs of 38%, and rising, unemployment levels.

COSATU is deeply disappointed that the Department of Labour has failed to deliver the Unemployment Insurance Amendment Act due to two typing mistakes.  This progressive law would have seen billions in UIF funds given to the thousands of retrenched workers and mothers on maternity leave.  This law has been delayed since 2013 simply due to capacity challenges in the department and a lack of political urgency.  Now it is only expected to be implemented in 2018.  The UIF is workers’ money and they must be allowed to access it when workers are being retrenched across the economy.

Governance

Society is rapidly losing faith in government.  Government’s word no longer holds value.  These sentiments are no longer the words of the opposition parties, but the public cries for leadership from the most senior veterans of our beloved liberation movement.

Yet the MTBPS is deafeningly silent about our governance crisis.

Corruption

The Auditor General, senior Cabinet members and countless media articles paint a picture where more than R100 billion of the state’s trillion Rand budget is lost to corruption, wasteful and irregular expenditure.

No Minister, parastatal CEO, private sector CEO, Director General etc. has been sent to prison despite this avalanche of looting.  The stripping of the state has now become the norm that Ministers no longer bother to even issue a statement of denial when they and their friends and families are exposed on the front pages of the newspapers.

State Owned Companies

The collapse of good governance and widespread looting are well known at SAA, Eskom, SABC, Transnet, SASSA, Denel etc.  Yet the MTBPS offers no meaningful intervention or plan to stop this crisis.  Vague mentions are made of changing SOE boards.

SAA has required R50 billion worth of bail outs over the past decade.  R10 billion alone was given to SAA this year. Eskom has racked up debts worth R350 billion.  Yet government is silent on where the money went.  New boards are a positive step.  We hope they will not fall into the state-capture game their predecessors played in.  But this is not enough.  A full scale forensic audit is needed of SAA, Eskom, SABC, SASSA, Denel and Transnet.  These are the epicentre of the state-capture war.  The guilty need to be prosecuted and sent to prison.  Their assets attached and returned to the state.  Nice, vague commitments in the SOE are meaningless.

Downgrading

It is abundantly clear that the President and Cabinet are not worried that South Africa is dangerously close to being downgraded again.  Such a further downgrading risks the calamity that foreign investors will be compelled by their fund rules to withdraw from South Africa.

Government does not seem to worry that such a downgrading may see the state then having to pay SAA’s R19 billion and Eskom’s R350 billion (state guaranteed) debts immediately.  This would collapse government and see hundreds of thousands of public servants’ jobs, salaries and pensions at real risk.

At this rate and with no plans reflected in the MTBPS, we are in serious danger of government seeking a bail-out from the IMF and World Bank.  Such a development would threaten all of government’s progressive socio-economic delivery programmes, hundreds of thousands of public sector jobs and the economy as a whole.  Yet government is silent on how it will arrest this situation.

COSATU hopes have died that the MTBPS’ silence on government’s previous desires to use the PIC (public sector workers’ pensions and workers’ UIF and compensation funds) to bail out SAA, SABC, Eskom and Denel.  COSATU will not accept or tolerate such a declaration of war on workers.  Workers will take to the streets and deal with anyone who seeks to loot their hard-earned money.

If government wants to ask the PIC to invest in SOEs in exchange for above-inflation returns, then it must do its job and clean up the mess it created and apply to the PIC like any other economically viable entity that has clean audits and governance.

It is time for the pensions of the President, Cabinet, MPs, MPLs and SOE CEOs etc. to be invested in the GEPF and PIC.  Perhaps that it will help them to appreciate workers’ outrage.

Fiscal Policy

The economy is barely out of a recession.  There is space for the South African Reserve Bank to lower interest rates to help lift workers out of bone-crushing debt levels and to spur economic growth.  The SARB needs to play a more active and progressive role in protecting and creating jobs.

Revenue and Taxation

COSATU has no sympathy with government’s pleas of poverty whilst the AG and Cabinet members estimate that up to 10% of state revenue is lost to corruption and wasteful expenditure.

The economy cannot afford to allow government to keep over-taxing working and middle class families.  We cannot afford any more income tax hikes nor a VAT increase.

If government wants more revenue, it must deal with corruption and wasteful expenditure.  It must end the R6 billion social grant outsourcing debacle that SASSA seems wedded to.  It must sort out SAA.  It must end looting at Eskom. It can cut a Cabinet of 78 Ministers and Deputy Ministers by half -easily.

Government can increase taxes on luxury goods and raise tariffs on imports.  It can do lifestyle audits of the leadership of government, the SOEs and the private sector and force the rich to pay their due taxes in full.

Government needs to engage with workers and taxpayers on what assets it wants to sell.  COSATU will not support privatisation, as this will see permanent decent jobs scrapped in favour of labour brokers and will wreck havoc amongst workers’ salaries, security and pensions.

Debt and Expenditure Levels

COSATU is deeply alarmed at the massive rise in state debt.  It cannot be business as usual when the MTBPS projects a rise in state debt from R2 trillion today to R3 trillion by 2020.  This is unsustainable and putting workers’ jobs and pensions, service delivery, and the nation’s sovereignty at risk.

Debt levels need to come down, urgently.  The bleeding of the state needs to end.  Government needs to engage with unions on ways to stabilise the state.

Government needs to stop blaming teachers, nurses, police officers, prison warders, doctors and municipal street cleaners for the wage bill.  It must reduce the out-of-control salaries of SOE CEOs and executives, Cabinet (members) and Directors General.  We cannot blame nurses earning less than R200 000 whilst the CEOs of Transnet, Eskom etc. make R8 million.

Government needs to learn the value of engaging workers and should go to the Public Sector Collective Bargaining Council to discuss which posts are critical for service delivery, and cannot be frozen, and which posts are not.  It is difficult to have faith in government when it freezes critical health and education and wants to reduce police posts – yet we see a massive rise in the size and budget of the Presidency and other policy departments.

If government is serious about a way forward then it must engage unions, and it will find real progressive solutions are possible.

Service Delivery

Government has achieved many life-changing service delivery goals since 1994.  COSATU will always be proud of the victories our ally, the ANC, has delivered.  However many of these are now under serious threat of collapse.

Energy

Energy remains the epicentre of state looting.  It is the catalyst which threatens to cause the state’s collapse.  COSATU welcomes the MTBPS’ acknowledgement that Eskom and Nersa must stop fleecing workers and the economy with massive above inflation hikes.  Yet it is silent on how it will bring Eskom under control.

The MTBPS is silent on government’s unaffordable and unnecessary R1 to R3 trillion nuclear plans.  If demand for electricity caused Eskom to close 5 coal plants, where will the demand come from to sustain trillions of Rand spent on nuclear energy?

Social Security

Social security has provided a life line to millions of poor South Africans, especially women and children.  This has long been a key victory of government.  However despite the President’s 2015 January 8 speech’s commitment to end outsourcing in the state and the Minister for Social Development’s rhetoric to defeat white monopoly capital, the payment of social grants has been outsourced to a foreign white owned monopoly at a cost of R6 billion per annum. Despite several Constitutional Court judgements and interventions and ANC policy conference resolutions, the Ministry and SASSA continue to delay insourcing this function to the Post Office and Post Bank.  We have to ask why the Minister and SASSA are seemingly married to this company?

National Health Insurance

COSATU strongly supports the envisaged NHI.  However we are deeply concerned it is being delayed and watered down under extreme pressure by an industry that sees its exorbitant profits under threat whilst workers die of easily curable diseases.

COSATU is also deeply concerned that government is in a rush to cancel medical aid tax rebates for workers whilst it has not shown itself to be capable of managing funds and infrastructure in line with the good governance objectives of the PFMA.

Basic Education

COSATU is shocked that the Department of Basic Education has only built 3 out of a target of 115 new schools, provided water to 1 out of a target of 344 schools, provided sanitation to 4 out of a targeted 257 schools, and electricity to 29 out of 77 schools so far this year.  This is shocking.  Yet government is silent on how it will fix this mess.  Learners and teachers deserve a decent and safe teaching environment.

Higher Education

COSATU strongly applauds the massive increasing in funding that government has given to tertiary students and universities over the past few years.  However there is no plan emanating from government on when and how will free tertiary education be delivered.  It is deeply worrying that the Presidency is not sharing the Heher Commission’s report on higher education with the nation.  We cannot afford to delay whilst students battle to cope with massive fees and universities are buckling to fund quality education.

Water and Sanitation

South Africa is one of the 30 most water scarce countries.  Cape Town will run out of water by March.  Many informal areas lack decent sanitation.  Schools as well.  Yet the Department has failed to achieve more than 90% of its targets this year.  And the MTBPS is silent.

Transport

Transport is the lifeline of creating jobs and growing the economy.  Yet government and the MTBPS have no urban transport plans.  They only refer to MyCiti busses in Cape Town.  And the rest of the country? They are silent on the governance and corruption crisis in PRASA.  They are silent on the collapse of E-Tolls.

Housing

The Department’s – and its provincial and local counterparts’ – failure to meet 90% of their targets this year is deeply alarming.  Yet the MTBPS is once again silent on this.  This happens whilst the number-of informal areas – and homelessness – are rising across our cities.

Conclusion

There are few who doubt that government, the economy and the nation are in their worst crisis since 1994.  This is a crisis spurred by our leadership.  The fundamentals are there to turn the state and economy around.  Yet the MTBPS is deafeningly silent on the extent of the crisis and how to stop and fix it.  It is a missed opportunity that will cost us deeply.

Matthew Parks is the parliamentary coordinator for Cosatu

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