SAFTU statement in response to the Economic decline Q3

4 December 2019

Government’s naïve adherence to economic policy that is geared towards meeting the demands of the rating agencies, big business and the IMF/World Bank has indeed been successful to make the multinationals very rich, but unfortunately, the patient (the economy) has died. The rating agencies are baying for more blood and demanding more austerity measures even evidence is mounting that these policies spells a disaster for the working class the black economically marginalised majority.

The rating agency demanded that the Medium Term Budget Framework Statement should contained categorical statements that government remains committed to neoliberalism and austerity programmes. When government did to go the full mile they demanded the biggest of these unelected and unaccountable policemen of neoliberalism demanded that government gives in completely when it presents the next budget speech in February 2019.

All indications are that government is planning to comply wholeheartedly.

Instead of announcing a full scale serious and real economic stimulus to kick-start economic activity whilst creating investment in long-term sustainable growth through:

1. Introduction of a wealth tax and solidarity tax.

2. Implementation of legislation such as a general anti-avoidance tax act to halt tax-base erosion, profit shifting and the loss of the country’s resources to illicit financial flows, that not only reduce the tax-base but more significantly perpetuate income inequality.

3. A review of the corporate taxes that were around 45% during the apartheid era (and 55% in 1994) but were driven down to 28% after 1994.

4. The review of personal income tax to ensure that those who can pay more make more contributions to the fiscus.

Government is preparing to intensify the austerity programme that will see it cutting its expenditure by R300 billion or cutting more than 1% of the GDP for each of the next 3 years.
This will plunge the economy into recession and will spell a disaster for the 10.2 million South Africans who are unemployed.

This combined with the promotion a willy-nilly Fourth Industrial Revolution (‘4IR’) that will automate our jobs, intensify surveillance over our lives, and threaten us with a technocratic dystopia. The ecological crisis deepening and the crisis in our state owned enterprises will create such a havoc in the economy as more get trapped in degrading poverty already afflicted 63% of the population.

It is in this context that SAFTU Inaugural Central Committee has recommitted the federation to leave no stone unturned in establishing a broadest front of the working class formations including with left learning political parties to fight neoliberalism and austerity programmes. SAFTU has written to all the 147 organisations that attended the Working Class Summit in July 2018 to prepare for the biggest battle of our life time to defeat the programme that has seen more and more people getting unemployed, trapped in poverty and seen massive inequalities in society.

This will include a series of general strikes of this pro working class coalition that will involve the siyalala emadolobheni to demand the reversal of the programme that does nothing but worsen the crisis of poverty.

SAFTU calls on all the left forces to make the coming budget speech a demonstration of unity of organised workers, the unemployed, youth, women formations and host of other issue based formations to demand the reversal of neoliberalism austerity programmes.

In addition to the points above, SAFTU demands:

1. Government must take practical steps to stop leakages and massive tender fraud in its procurement spending that the Treasury officials estimate to be between 30-40% of government’s R700 billion budget. That is a staggering R300 billion that could be spent strategically and make a massive difference and will render the R300 billion government want to cut in the budget unnecessary.

2. Lowering interest rates by  3% cut, re-impose exchange controls so as to prevent capital flight, thus lowering the massive debt repayment burden (now 4% of GDP  and saving billions. The Reserve Bank must be placed on the hands of the people as a whole in line with the ANC Nasrec resolutions.

3.  Government should refuse to repay the R200 billion in odious debt taken on by Eskom, from the World Bank in 2010, to finance Medupi.

4. Government must stop its plans to unbundle and slowly weaken in order to later privatise Eskom.

5. Government must reverse its plans to privatise SAA and other State Owned Enterprises. Instead government must get efficient and capable leadership which includes representatives of labour and civil society to steer the SOEs away from lost making debt ridden institutions.

6.  Government must nationalise the mineral wealth under the democratic worker control and use this power to beneficiate and build secondary industries as part of the deliberate strategy to reverse deindustrialisation of the economy.

7. Restoration and Redistribution of land so that the current inequities in land ownership can be addressed while ensuring effective usage of land for food security and food sovereignty.

8. Put a plan to address the crisis in the public education and health system.

9. Take practical steps to reform the judicial system to put an end to the culture of violence in particular the violence targeted against women and children. The violence in drive the sense of impunity as a result of a dysfunctional judicial system.

We call on workers to take a well-deserved rest but use the period to mobilise their families and working class society including progressive elements of the middle class and small medium macro enterprises which are also facing a squeeze behind these and many demands we have been making that are falling in defeat ears as the government only listens to the rating agencies and big business.

Issued by Ntozahe Douglas Mthukwane, SAFTU National Spokesperson, 4 December 2019