If the South African government was a person, it would be barely able to stand today, having shot itself in both feet over the past week. Timing the introduction of the controversial and bitterly resisted e-tolling system to start the day before a fuel price rise to record levels was a case of self-inflicted political wounds fired simultaneously through two barrels.
The wounds were made more serious by comments such as those by finance minister Pravin Gordhan who referred, in an interview in London, to those opposing the e-toll system as a “strange alliance” of apparent malcontents that included “freight operators”. But he, and other members of the government, should have realised that what the protests amounted to were, in the words of one commentator, a “low-level tax revolt” led, to a large degree, by the government’s trade union partner, Cosatu.
And tax revolts, as many in the labour movement are aware, have played a major role throughout history in disrupting or toppling regimes and even empires. When the overwhelming majority of any population feels that it is being equally and unfairly taxed, massive anger can result.
And such anger does, indeed, bring together not strange, but wide-ranging alliances that often include groups that would normally be at daggers drawn. So it is this time, but with some uniquely South African features.
Because, within the cabinet that approved the e-tolling in Gauteng are not only members of Cosatu, but also of the SA Communist Party (SACP). The same cabinet also approved the recent increase in fuel taxes and gave the nod to this week’s further surge in fuel prices.
Faced with vociferous opposition to e-tolling, Jeremy Cronin, who continues to double as deputy transport minister and deputy general secretary of the SACP, noted last month that the system had been a mistake, but one that the country was, unfortunately, stuck with. However, as May Day dawned, along with the realisation of the sheer magnitude of the resistance to e-tolling, there was an apparent change of tack.
SACP general secretary, Blade Nzimande, who also doubles as higher education minister, joined Cosatu on a May Day march against e-tolling. At the same time, the SACP issued a statement maintaining that unity of the ANC-led alliance was essential “otherwise we will abandon this issue to the DA (Democratic Alliance), AfriForum, the Automobile Association and other essentially right-wing, middle-class interest groups”.
In other words, the ANC-led alliance is opposed to the toll road system imposed by the ANC-led government. Not for the first time, the contradictions inherent in this “broad church” alliance rose to the surface.
And, again not for the first time, there were hurried attempts to paper over apparent schisms and to shift the blame, this time only partially to the media. According to the SACP, the prime culprits for the e-tolling debacle are those ANC politicians in Gauteng (read: Mbhazima Shilowa) who broke away after the 2007 ANC Polokwane conference and went on to form the Congress of the People (Cope). It was they who had initiated the whole scheme of road widening to the benefit of “tenderpreneurs”.
This statement raised a number of questions within the labour movement because Cosatu’s investment company, Kopano Ke Matla, was profitably involved in the road improvements. However, the federation maintains that this was at a time when it was unaware that the improved roads would be subject to tolls; that the toll road concept only arose later. In other words, after the departure of those who left to form Cope.
Increasingly, however, these quibbles and apparent attempts at face-saving are being seen as irrelevant. There is broad agreement now that the probable lengthy delay in the introduction of e-tolling — courtesy in particular of last week’s court ruling that the matter still needs to be adequately discussed — should provide time to debate how best to proceed with the whole question of transport policy.
This has raised again the long-time demand by Cosatu that the extremely profitable fuel-from-coal producer, Sasol be taken back into public ownership. Established in 1955 as the state-owned Suid Afrikaanse Steenkool en Olie (SA Coal and Oil), Sasol is now estimated to provide up to 38 percent of South Africa’s liquid fuel requirements. And it does so at a fraction of the cost of oil-based product in a country with plentiful coal and few oil resources.
However, with the agreement of the government, Sasol sells its fuels and the polymers it produces for use in plastics manufacture, at import parity prices, making the company — listed in 2003 on the New York Stock Exchange — extremely profitable. The unions claim that much of that profit flows abroad since perhaps 30 per cent of Sasol shares are held by investors in the United States alone.
But the massive capital outlay to build plants and to develop and make more cost effective a process that had kept the Nazi war machine going for much of World War II, was borne by South African taxpayers. Throughout more than two decades of cheap oil prices, Sasol was subsidised, mainly on the backs of an exploited workforce.
When, by 1979, the world oil price had clearly outstripped the cost of Sasol product, the apartheid government privatised Sasol. In the wake of the Truth and Reconciliation Commission, this background prompted Archbishop Desmond Tutu to propose a “windfall” tax on companies that had profited hugely from apartheid.
The windfall tax idea got no official backing. Pleas for nationalisation may fare better, especially since the issue has been given added impetus by the actions over the past fortnight of those two controversial icons of large sections of the Left: Hugo Chavez of Venezuela and Evo Morales of Bolivia.
The nationalisation of oil and electricity companies in those countries may yet play a role in getting the nationalisation question back near the top of the South African trade union — and ANC alliance — agenda.
Cape Town, South Africa-based journalist commentator and author specialising in political and economic analysis and labour matters. 
Terry Bell Writes 
Tinzi Lubabalo
May 5, 2012
I don’t think that there will ever be a stage after 1994 whereby contradictions on deepening of National Democratic Revolution would be so naked as they were in 2012. The comments that were made by Minister of Finance Pravin Gordan in relation to opposition to the controversial project were unfortunate and not expected from the person of his office. As a matter of fact he is the one who should be used as a compass on the direction that is taken by the country. He is also empowered to assess the balance of forces at domestic and at global scale. It remains a fact that this government is expected to lean to the poor. Any step and act that tries to undermine this concept will meet fierce resistance from the working class and the poor. The views that are raised by Deputy Minister of Transport and Deputy General Secretary of SACP about public transport system is correct and is informed by analysis within the structures of the Party. so is the case about Blade Nzimande. It is too early to critisize the SACP Programme of Action adopted in its 12th National Congress held at PE in 2007. There is no dispute about the fact that our public transport policy needs a serious and quick overhaul not informed by e-toll only but many other weaknesses ranging from safety, reliability, integration, convenience etc. The issue of Kopano Ke Matla had been mischievously introduced into the public discourse as a defense mechanism as well as means to justify the reasons why e-toll should proceed. Nationalisation will not serve as a silver bullet to the challenges that are confronting the working class though it is a concept that ANC government can opt for after careful consideration by Alliance partners.
Terry Bell
May 5, 2012
We should not forget, Tinzi, that the 2007 congress of the SACP adopted the MTV (medium term vision)that simply amounts to seizing control of the leading positions in all facets of society. In other words, another “from the top down” approach. And one that intends to use the present system which, I argue, is the source of our current problems.
Bruce
May 5, 2012
Unless Sasol was nationalized without compensation it would cost the government in excess of R250 billion. It is doubtful that this would be a wise use of government funds when there are so many other more pressing priorities. If the concept of nationalization without compensation gains any traction then one can expect a chilling effect on private enterprise and capital flight.
Terry Bell
May 6, 2012
I think those that call for the nationalisation of Sasol do not hold that this should be done by the rules of the Stock Exchange game; that in the face of a global crisis and with the massive benefit shareholders have had from apartheid era subsidies, compensation should be assessed accordingly. Alternatively, the argument is that Sasol should face a very hefty windfall tax.
Bruce
May 6, 2012
Any form of nationalization which is not done according to stock exchange regulations would most likely lead to litigation in the United States and Sasols significant assets in the United States and in other non South African countries would be at risk. The issue of a windfall tax has been comprehensively dealt with in the past.
Terry Bell
May 7, 2012
Agreed. But a debate about all aspects of this issue is, I think, important. For example, some of those promoting the nationalisation of Sasol in SA have said: “So what? Let them have it. Perhaps workers in the USA and elsewhere might then want to think about taking over such important infrastructrure as well.”
Bruce
May 7, 2012
In 2006 Trevor Manuel initiated a thorough investigation into the issue of a windfall tax and after a thorough evaluation it was concluded that this is not the best option. The issue was therefore thoroughly debated. The question then becomes one of why must one re-debate something that has already been thoroughly debated and was settled. If something is debated and settled and then continuously re-opened and re-debated and renogotiated this creates an environment of tremendous uncertainty. This is not conducive to investment in capital intensive industry where one needs many years to pay back the high capital investment. The ongoing debate about nationalisation can be seen in a similar light.
Terry Bell
May 7, 2012
But then Trevor Manuel also supposedly instituted a thorough debate on the prospect of the abolition of VAT on books — and made an ass of himself in the process. The issue is far from settled. And we live at a time a great — and probably increasing — uncertainty because the economic system under which we operate appears to have gone beyond its sell-by date. Ratings agencies, variable interest rates and the leverage (blackmail?) that these entail belong, perhaps, in the dustbin of history. Along with concerns about parasitic investment. How to get them there and how best to reorganise the global environment in a way that is sustainable and protective of the planet as a whole is where the debates will, I hope, be headed.
Bruce
May 7, 2012
I’m not quite sure what to make of this. It appears as if you believe that converting private enterprises into state owned enterprises will be beneficial for society. The evidence does not support this notion. Although there are some exceptions there is a good correlation with state owned enterprises being value destroying in the sense that they require subsidies funded from taxes. Private enterprises that are value destroying go out of business or get taken over. In the South African case we have a number of value destroying state owned enterprises such as SAA and Denel. To the extent that government converts value adding tax paying enterprises into value destroying state owned enterprises the remaining taxes emanating from private enterprise need to pay for this and less tax revenue is available to government crowding out things such as infrastructure, education and policing. This is bad for society.
Terry Bell
May 7, 2012
I was here playing my role as the Inside Labour columnist in that I was giving ideas that I hear from withibn the labour movement. But it is clear that I have here to put foward my own ideas and these do not accept that the present economic system and the social sysyem that flows from it is either necessary or desireable; that what we need is a radical transformation of the entire system. I support the concept of a great extension of democracy, of democratic control, both in the political and economic spheres (which should never, I think, be divorced). Aspects of this can be seen in everything from Athens (esp. in the time of Pericles), the Althing of Iceland, the Paris Commune of 1871 or the various “non-chiefly” societies in Africa asuch as those in Xalanga and southern Nigeria. Yes, these were (even in the case of Athens) relatively villages where the communities could come together at regular intervals. But, today, courtesy of modern comms technology, we live in what is now widely proclaimed to. be a “global village”. Modern comms, together with organised communities (starting perhaps with the faith based and the trade unions) could be the basis of such a move toward real democratic control at a political, social an economic level. It’s worth the tought.
Terry Bell
May 7, 2012
Excuse miskeys. Done in a hurry and unedited.
Bruce
May 7, 2012
I guess our differences are ideological. I have little faith in government running enterprises. This is based on the evidence. Different people have different views as to what constitutes a good society but private enterprise has led the technological revolution starting with the industrial revolution. Using the very simple metric of life expectancy life has improved immeasurably. In non technological societies such as those to which you refer life was nasty brutish and short. A simple bacterial infection easily cured with antibiotics would result in an early death. Private enterprise based pharmaceutical companies have been part of the story associated with increased life expectancy. I would certainly prefer to live in a modern technological society than a pre industrial society even if it conformed to some utopian ideals.
Terry Bell
May 8, 2012
Ideological differences almost certainly. But you misunderstand what I am saying: I am no utopian, nor do I harken back to some mythical bygone age; I merely think we should learn from all our history to see what — if anything — might fit with our present situation. I also do not think that private enterrise should be given credit for technological and other advances, human endeavour should. For example, I don’t think the Curies or Harvey or many of the others who made the great pharmaceutical breakthroughs did so because of the drive for profit and the accumulation of wealth that is the essence of the private enterprise system. As feudalism did, in the establishment of towns, villages, cities and empires, so capitalism or whatever variety (individual ownership, corporate ownerships, trusts or state-owned) is the environment is which we have seen the most rapid advances. But like the systems that preceeded it, this one has also, I think, reached its sell-by date. Which is why we have to (awful cliche) think out of the box and not regard a future of public ownership necessarily to mean a gorvernment (any more than a private corporation) in control and operting on the same competitive path of accumualation in order better to compete.
Bruce
May 11, 2012
I agree that scientific discoveries are often made at Universities or by scientists who are interested in science for the sake of it. However private enterprise is almost exclusively responsible for commercialisation of technology. You will struggle to find a cell phone or computer made by a state owned enterprise.
Companies that are listed on the stock exchange are publically owned. The major shareholders are the institutional investors who hold the savings of individuals and the pension fund savings of the masses. Probably the largest institutional investor in South Africa is the Public Investment Corporation holding the pension savings of millions of government employees.
You seem to imply that accumulation of wealth is a bad thing. It is a good thing. People should be encouraged to save and accumulate wealth and not be dependent on the state for a pension or grant.
Terry Bell
May 12, 2012
At last we reach the nub of the issue. And it is not the nature of ownership. Whether an enterprise is owned by an individual, a trust, a company or the state is irrelevant. All are based — if they are to be successful in market terms — on the same dynamic: accumulate profit in order to better compete within a system based on competition.
Sasol, incidentally, was — and remains — a highly successful company. It had to be subsidised for more than 20 years because it produced liquid fuel at perhaps the equivalent of $30 a barrel of oil at a time when oil fetched little more than $10. Improvements in the technology probably brought this down to about $25 or less when the oil price began its steady rise and a then profitable Sasol was privatised.
Back to the dynamic that underlies the system in which we find ourselves and which is in severe and ongoing crisis: it is a crisis based on surplus capacity and production. In order to compete (and continue to be profitable) in a glutted market, costs must be cut to make products more affordable to the consumer. Labour is one such cost, but labour also comprises the consumer. Growing unemployment and the reductioin ofwages to those still with work means less disposable income and less demand for products that are being produced in ever greater quantities.
It is also not only labour that suffers. The resources of the planet are plundered and pillaged in increasingly damaging (cheaper/cost-cutting) ways. But these are all matters I have dealt with at some length in this blog. Throughout I have maintained that we must get away from the false dichotomy between economics and politics; that we need a new system that could free human potential instead of consigning much of humanity to an effective scrapheap.
Do look at Chips for a change. I think it’s filed in the economics section.
Walton Pantland (@Leischa)
May 8, 2012
Good piece. You should add a twitter button to enable easy sharing.
Terry Bell
May 9, 2012
Thanks Walton. So far I have avoided Twitter since all this other stuff takes up so much of my time. Shall think about it. BTW: what are you up to these days?
Walton Pantland (@Leischa)
May 11, 2012
HI Terry
Just started working for Union Solidarity International (usilive.org) on secondment from Unite. I also maintain cyberunions.org and release a weekly podcast on unions and technology.
You don’t have to join twitter to add a twitter button – you should be able to add it from the WordPress back end, which would enable your readers on twitter to share the story easily.
Terry Bell
May 11, 2012
Okay. Shall do. Thanks