SAFTU rejects repackaged old neoliberal and austerity programmes that have dismally failed for the past 24 years

8 October 2018

The outcome of the Jobs Summit on 4-5 October 2018 confirms all the worst fears of the South African Federation of Trade Unions, and vindicates its decision to decline the invitation to attend as an observer and be associated with a sham.

It produced nothing but empty rhetoric and no solutions to the catastrophe which has led to South Africa having one of the world’s six highest levels of unemployment, that has left almost 10 million workers with no job. We have the appalling levels of poverty, among both the unemployed and their families and thousands of employed workers as well, almost zero economic growth and the most unequal society in the world.

The Summit Framework Agreement, a massive 84-page document released early on the first day of the summit, was obviously drafted well in advance, making a mockery of the idea that the event was a platform for a free exchange of views from the Nedlac constituencies. The outcome was pre-ordained.

As expected the delegates representing government and business and, scandalously, those claiming to represent labour, showed no awareness of the extent of this economic and social catastrophe facing the big majority of South Africans.

They failed to condemn, or even to acknowledge, that the underlying cause of the crisis was the failure of successive governments, in alliance with white monopoly capital and global financial institutions, to transform the economy from the one which we inherited from the years of colonialism and apartheid.

The natural resources of South Africa are still plundered by multi-national corporations to be imported back as finished products, rather than to be manufactured here in a growing manufacturing industry which could have created thousands of new jobs and drawn millions more people into economic activity.

As SAFTU said when explaining why it would not attend the Summit, business and government are the cause rather than the solution of the crisis. They have pursued an economic strategy which started with GEAR and continued with the National Development Plan and which is enforced by the credit ratings agencies, based on neoliberal, pro-market policies which only prioritise the amassing of as much profits as quickly as possible for a super-rich elite.

For as long as government stays on this course, there was never any prospect of the Summit deciding on anything that would turn the tide, or to create jobs at the rate required even to reach the National Planning Commission’s newly amended target for unemployment in 2030 to reach a still huge level of 14%.

In a gross understatement, Sipho Pityana, President of Business Unity South Africa (BUSA) had to concede that "business was under no delusion that the summit would provide all the answers needed to get the 9.6-million unemployed South Africans into the labour market”. The truth is that it had no answers at all.

The Summit came down firmly on the side of “business as usual”, despite admitting that “long-standing inequalities stress our democratic institutions and make it harder to agree on common priorities. That in itself tends to hold down investment. 

“No democracy’” it said, “can maintain the strategies and governance required for growth unless most citizens see tangible benefits. Economic inequalities are rooted in high levels of joblessness; profoundly inequitable pay and workplace organisation; and unequal access to quality education and economic assets.”

Yet there was absolutely nothing agreed that would even begin to narrow these inequalities. For example the Summit not only endorsed the iniquitous Employment Tax Incentive scheme, which subsidizes employers with tax breaks for paying lower wages to youth, but also agreed to extend it for another 10 years.

Ramaphosa claimed that “We have committed to raising R1.3 trillion in five years and we want to get a clear demonstration that there is a commitment by the investment community that they are ready to invest”. 

This sounds like nothing more than holding an auction for a charity, or passing a begging bowl around monopoly capitalist companies and asking them to donate more funds. 

The Agreement recognised that these companies “bear the primary responsibility for initiating and implementing actions to avoid job losses” yet, as Pityana admitted, “We are here to decide on pragmatic ways to protect jobs wherever possible”.

What capitalists see as “possible” is governed by their greed for quick profits, yet they will be left with the power to decide what is or is not “possible” for the country. They will not fill the begging bowl if they decide that it is more important to increase or maintain their profits. They have the power to sabotage every one of the more than 70 specific proposals for additional spending, by simply saying it is “not possible”.

Meanwhile government has reiterated that “there will be no retrenchments in the public sector” and gave a welcome commitment “to addressing the imperative of filling all critical vacancies in the public sector”. Yet Ramaphosa dodged the question of getting rid of 30 000 jobs by other means, as already suggested by the Treasury’s statement, just after Pravin Gordhan’s 2016 budget speech, that it was considering the implementation of voluntary severance packages to reduce the public-sector wage bill.” 

This has been confirmed by Minister of Public Service Ayanda Dlodlo and Deputy President David Mabuza who have made it categorically clear that the current government wage bill is not sustainable in their view and therefore numbers must be cut, not increased. 

For SAFTU the most disgraceful outcome of the Summit was the capitulation of the leaders of the labour constituency, who won no concessions beyond a few crumbs. Speaking on behalf of labour at Nedlac, COSATU general secretary, Bheki Ntshalintshali admitted there had been several occasions where labour had wanted to pull out of the Jobs Summit, but had opted to put their differences aside and put the interests of the most vulnerable first.

He said he was surprised by the decision of an organization he did not name, to "boycott social engagement”. He that said labour had proposed a moratorium on retrenchments, an end to the "investment strike" and the filling of public sector vacancies, but conceded that not all their demands were included in the final declaration.

The truth is that none of the demands of these sweethearts were included. They capitulated to the pressure of government and employers and put their names to an agreement which will leave ten million still unemployed, their families and communities still mired in poverty and an even less equal society.

They have made this an even worse betrayal by allowing government and business to claim that the Summit reflected the united view of the whole of South African society, which is patently untrue. Not only SAFTU with its more than 700 000 members, but many community groups including unemployed formations and small business bodies were also not there.

These are the organizations, which came together in the Working-Class Summit in July, and this charade of a Summit will spur on their campaign for a complete break with the capitalist status quo.

SAFTU is prepared to join in “social engagement” in any genuine attempt to find solutions to the catastrophic level of unemployment, but rejects completely any plan which only proposes more of the same pro-big business policies. In particular the federation repeats its call for economic strategy to be based not on the dictates of credit ratings agencies and global big business.

Mass unemployment leads to a huge percentage of the population being virtually excluded from the economic life of the country, because they can only afford to buy the most basic essentials. This leads to low levels of demand for goods and services and therefore leads to even more lost jobs of the workers who produce them. Poverty pay is one of the main reasons for South Africa's economic stagnation, yet Nedlac parties are united in the view that the R20 an hour national minimum wage is an answer.

SAFTU insists that no sufficient number of jobs will be created within the framework of today’s neo-colonial economy which remains, as designed by colonialists an economy based on the extraction of the mineral wealth by multinational corporations and exploitation of cheap black labour. Nothing is going to fundamentally change if our economy is still based on the GEAR/NDP framework which have the following key elements: 

- The removal of industrial tariffs even faster than required by the WTO leading to the deindustrialisation of our economy and decimation of sectors such as clothing, textiles, footwear, steel, etc. 

- Adoption of inappropriate fiscal policies that led to the shifting of the tax burden from the shoulder of the rich to the shoulders of the poor as demonstrated by the latest VAT increase. 

- Adoption of an inappropriate monetary policy that prioritised the targeting of inflation, removal of exchange controls which allowed billions so desperately needed to build our economy to be moved offshore including through listing of important local companies in foreign countries. 

SAFTU insists that a new growth path, not by just in name but through raising new resources through such measures as imposition of wealth and solidarity taxes must be introduced. This should include taxing the over a trillion rands hoarded by business, and taking firm and decisive action to stop financial outflows, mispricing and illicit trade. 

This growth path must include re-nationalisation of both Iscor and Sasol as well as full implementation of the Freedom Charter demands to share the wealth of the country by addressing the land and property poverty of the majority through nationalisation of the mineral wealth beneath the soil and redistribution of the land under the worker control so that a process to beneficiate and build secondary industries from our minerals can begin. 

South Africa should follow the path taken by former president Lula of Brazil, who raised minimum wages and social grants. This led to an economic boom, as far more money was being spent, which turned the wheels of the economy and created more jobs to meet the higher demand for goods and services.

New jobs must be created for those retrenched.  For example, domestic workers could be re-employed by government and assigned to those who most need help, in the many understaffed hospitals and facilities to care for the elderly and mentally handicapped, like the victims of the Esidimeni massacre. They would be paid a living wage and be performing a vital public service.

EPWP workers should be permanently employed to acquire experience and skills, not, as at present, in a government cheap labour scheme to do jobs which should be done by permanent workers. They should be absorbed immediately by municipalities to deal with the backlog of infrastructure projects and with a decent wage and benefits.

In the long run however, there will never be jobs for all under a capitalist system, which exploits workers in order to amass profits and then discards them when profits fall. 

The solution must be a new democratic socialist order, with the nationalisation of the mines, banks, and monopoly industrial companies so that the wealth created by the labour of the working class is owned, controlled and shared by the working people and not a super-rich elite. 

Issued by Patrick Craven, SAFTU, Acting Spokesperson, 8 October 2018