Short on hope, long on promises

(First published on Fin24 and in City Press, South Africa)

The annual SONA ritual played itself out again last week: the labour movement expressing the hope that, for a change, something meaningful would be said that would filter through to implementation via the coming budget. And it is the budget to be announced on February 24 that is the real focus.

From a labour perspective, SONA should stand for Same Overall Notions Again. Because such formal State of the Nation Addresses are usually delivered in tones heavy with hope, long on vague promises and where little of real import is ever announced.

The comments above were written before President Cyril Ramaphosa delivered his assessment on Thursday evening (February 11). And they were written in the very faint hope that they would be proved wrong; that clear assessments would emerge, followed by a timetable for a series of radical measures designed to right the wallowing ship of state.

After all, as the government itself notes, SONA provides “an opportunity… to reflect on a wide range of political, economic and social matters…and to set out the government’s plan of action for the coming year.” From a labour point of view, it has never really achieved this.

And, given the mess we’re in, is it perhaps too much to hope for that anything clear and comprehensive instead of another of the vague wish lists, hints at austerity and patriotic rallying cries of the past will emerge? Especially when, as several trade unionists have pointed out, the government’s most repeated cry at present is asinamali — we have no money.

As a result, contradictions abound. Last year, as part of a R500bn economic stimulus package, Ramaphosa promised R100bn for a public employment programme. But this effective extension of “job opportunities” only had some R12bn budgeted for it.

The focus for labour is, therefore February 24, when finance minister Tito Mboweni’s budget announcement will determine the real course ahead. Or as one business commentator noted, Mboweni will tell us “it is time to take your medicine”.

That medicine, if history is anything to go by, will amount to another dose of austerity, calls for belt tightening among the very masses most damaged by the present situation. A convenient scapegoat for this economic illness among the working class majority is, of course, Covid-19.

But, as unions across the board have stressed, the present turbulent waters we now face cannot be blamed on the virus — in whatever form it takes. South Africa had already been steered right into a social and economic storm before the pandemic — and some of the official reactions to it — made matters worse. And the wealthy minority already had their comfortable lifeboats ready and waiting.

Back in January last year, in those summer days without masks and concerns about social distancing, the International Monetary Fund (IMF) pointed out — again — the massive unemployment and gross inequality in the country. Two months earlier, the authoritative World Inequality Database (WID) also highlighted the horrendous wealth gap in the country.

The WID calculated that the top 1% of South African earners — some 236,000 out of a total work force of more than 23 million, nearly half of whom are unemployed — took home almost 20% of all of the declared income in the country. And the 9% immediately below them added another 45% to take home pay.

So, for every R100 declared to the SA Revenue Service as income, R65 went to just one in every ten of the country’s working age population. The R35 left over, was shared by perhaps 9 million or more employees, many of whom support up to ten unemployed family members.

In this context, “declared income” is an important distinction to make, because the bulk of the income of the very top earners usually does not come from their declared remuneration. Unlike rank and file workers who receive their total pay in a weekly or monthly pay cheque, the fat cats have access to several sources of hidden cream.

Not least among these other income streams are share options in the companies they control. Then there are the various allowances and expense accounts before even getting to tax haven investments.

And while the gross domestic product of the country has fallen from its high of R400 billion in 2011 to some R283 billion last year, wealth for a tiny minority has continued to grow as unemployment has soared. And much of that wealth has been stashed away in havens abroad that can be quickly reached should our economic vessel finally flounder.

It is against this background that the demand by unions that workers be paid agreed increases or that they be paid for work already done, should be seen and understood. And that there will be considerable anger should not be surprising. Not when, in a proclaimed “food sufficient” country, we have a realistic 50% unemployment rate, widespread hunger and demands for wage freezes as fuel and, transport costs move upward and the average price of food is estimated to rise by 5%.