Labour thumbs down for SA medium-term budget

Posted on October 27, 2011


A failure of imagination. A disaster in the making. More of the same, and a drop in the ocean. These were just some of the reactions by trade unionists to finance minister Pravin Gordhan’s medium term budget policy statement (MTBPS).

Overall, the MTBPS has been given a fairly resounding thumbs down by the labour movement. And not just by trade union federations, officials, shop stewards and rank and file members; among the army of the recently retrenched are workers who gave a similar verdict as details of the statement became known.

The only “glimmer of hope” noted was in the recognition by Gordhan of the importance of manufacturing. But, says SA Clothing and Textile Workers’ Union (Sactwu) research director, Etienne Vlok, the R4.2 billion a year (for six years) of incentives announced in this area will need to be watched closely for a “quid pro quo on job creation”.

For many, this seems a forlorn hope, not only because of the international glut in textiles, garments and footwear: more than 600 000 students are now writing their final matric exams, and most of them are destined to join the already massive army of more than 3 million unemployed youth.

Most of these prospective new entrants to the job market do not have skills, but even if they do, they may face difficulties. Take, for example, the 2 000 mainly highly skilled Cape Town garment workers who were retrenched in June last year: most are still without work.

“It is a terrible waste of human resources,” admits a Sactwu official. A minority of the retrenched garment workers have found jobs, some as cleaners and at least one as a domestic worker.

Yet this group — they are mainly women — is among the more fortunate of those recently made jobless, having received retrenchment packages and the savings of provident funds. Those over the age of 55 also have the right to free medical attention at a union clinic. “But that is only for as long as we can afford it,” says Vlok.

However, the retrenchment packages and the taxed savings in the provident fund hardly amount to a life of ease. Take the case of Joan, for example. A skilled machinist, with 18 years of service in the company from which she was retrenched, she received a package of R12 000 and an after tax payment of R77 000 for the savings accumulated in her working life .

Sixteen months later — and with a family to support — there is little left. Echoing the comments of many of the working class unemployed she says: “We want to work and we need to work.”

However, the prospects of work are slender and, according to the unions, Gordhan’s outline will do little or nothing to improve the situation. “The R25 billion in incentives that was announced is just a subsidy to profits,” says Confederation of SA Workers’ Unions, general secretary Khulile Nkhusubana.

Although trade unionists are, for the most part, cynical about Gordhan’s incentive proposal, most ire is directed at his insistence that wage rises in the public sector be capped at 5 per cent. This one issue alone seems certain to result in major confrontations between the wider labour movement and the government.

It has also once again increased tensions within the governing alliance, with Cosatu’s public sector unions and the federation angrily opposing the capping proposal. “It’s part of an ongoing push to undermine collective bargaining and it doesn’t make sense,” says SA Municipal Workers’ Union media officer Tahir Sema. However, he concedes that, because of the recently passed Municipal Systems Amendment Act, the minister can now intervene in bargaining council decisions.

Samwu members are particularly angry about this Act. When it was tabled shortly before the local government elections in May, the union threatened to strike because it proposed “ministerial interference” in pay and conditions bargaining. The union leadership was hastily summoned to meet with the ANC “top six” and given an assurance that the matter was still open to discussion and the strike was called off.

“Then, after the election, they just steam rollered it through,” says a Samwu regional official. “We did nothing and Cosatu did nothing. Now we have to fight.”

However, the Municipal Systems Act applies only to local government employees, not to the majority of workers in the public sector. And here the unions are also united in opposition the wage cap proposal.

“It is illegal and contrary to the conventions of the International Labour Organisation to which South Africa is a signatory,” says Manie de Clercq, deputy general manager of the Public Servants Association, one of the country’s “Big Five” unions in terms of membership..

After a meeting on Wednesday of representatives of the various PSA sectors, De Clercq was mandated to point out that the union members wanted it known that they would not accept a wage rise cap. They also want it stressed that they do not negotiate with the finance minister or parliament; that negotiations will be conducted through the bargaining council.

“The government has acted in bad faith [about the wage cap] and all this rhetoric is doing nothing for the poorest of the poor,” says National Council of Trade Unions general secretary Manene Samela. Nactu, in company with the other union federations, has also rejected Gordhan’s stress on Industrial Development Zones as a way forward to job creation.

Ironically, a plea this week by the Chamber of Mines has also added fuel to union demands for more radical and imaginative policies to deal with poverty and job creation. The chamber raised the issue of the rising cost of “electricity, transport, and potentially, water” as “one of the major constraints inhibiting the growth of the mining industry”.

“But these are things that affect everyone — and especially the poor. The chamber is worried about a reduction in company profits, but for the majority of us, the reality is that these can be issues of life and death,” says National Union of Mineworkers media officer, Lesiba Seshoka.