COSATU's comments on SoNA 2015
Unfortunately the 2015 SONA will come to be remembered less for the content of the President's speech than for the dramatic events which preceded it. In COSATU's view it was utterly deplorable that what ought to be a highlight of the Parliamentary year and a showcase of our new democracy became a violent shambles.
There must be the fullest possible investigation into all these events and those found to be responsible to be brought to book.
The chaos started when it was discovered that internet coverage within the chamber had been scrambled, so that nobody could send out SMSs, tweets, photos etc. The SONA was changed from afternoons to evenings precisely so that more South Africans could watch it, yet here was an unconstitutional attempt to cut the flow of information from parliament to the people. Fortunately the measure was quickly reversed, but not before much angry controversy.
Whoever is found to have been responsible for ordering this act must be identified, named and shamed and disciplined severely.
As if this was not enough, the EFF carried out the threat they have made to disrupt the State of the Nation Address by abusing the privileges accorded to MPs. SONA was deliberately delayed by EFF MPs raising a series of ‘points of privilege' and/or ‘points of order' to the Speaker, requesting the right to question the President on the Nkandla issue. While they have the right to ask questions, it was made clear in vain that parliamentary rules already provide opportunities to do this.
Their continued repetition of exactly the same points made it clear however that their intention was not to ask questions but to prevent the President from delivering his SONA. Regardless of the people involved, this amounts to an assault on Parliament as an institution and democracy itself, and it would have created a terrible precedent for free speech and democracy.
This action by the EFF was thus an insult to the memory of the 1000s of South Africans and people from neighbouring states who died for our hard-won democracy. Rights come with responsibilities too.
COSATU condemns this behaviour in the strongest terms possible.
COSATU is equally dismayed by the sheer opportunism demonstrated by the Democratic Alliance. Clearly worried that the EFF will grab all the headlines, the DA sought to compete with the EFF's negative tactics. Whilst they may have a point to raise a concern on whether members of SAPS were involved in the forceful removal of the EFF MPs but staging a walk out was irresponsible and childish and accordingly is condemned by the Federation.
On the Content of the State of the Nation Address
The Congress of South African Trade Unions, consistent with how it has engaged with the public debates on SONA and other important events, issued a statement in the run up to the SONA outlining its expectations based on its 11th National Congress call for a radical economic transformation and for what we have called creating our own Lula moment. In this statement we reiterated demands workers have been making enshrined in those resolutions.
The SONA falls far below workers' expectations contained in those resolutions which were outlined in the 11th National Congress declaration:
1. Decisive state intervention in strategic sectors of the economy, including through strategic nationalisation and state ownership, and the use of a variety of macro-economic and other levers at the state's disposal, which can be deployed to regulate and channel investment, production, consumption and trade to deliberately drive industrialisation, sustainable development, decent employment creation, and regional development, and to break historical patterns of colonial exploitation and dependence.
2. Radical overhaul of our macro-economic policy in line with the radical economic shift which we all agree needs to happen. To this end we engaged with our alliance partners in the run-up to the ANC Mangaung conference, on the macro-economic policy review; this requires that institutionally the Treasury, which constitutes the biggest obstacle to the government`s economic programme, needs to be urgently realigned;
3. A new mandate to be given to the Reserve Bank, which must be nationalised;
4. The National Planning Commission to be given a renewed mandate, to realign the National Development Plan, in line with the proposed radical economic shift
5. Aspects of the New Growth Path to be realigned in line with the proposed new macro-economic framework;
6. All state owned enterprises and state development finance institutions to be given a new mandate;
7. Urgent steps to reverse the current investment strike and export of South African capital;
8. Capital controls and measures aimed at prescribed investment, and penalising speculation;
9. The urgent introduction of comprehensive social security;
10. State intervention in strategic sectors including through nationalisation;
11. Measures to ensure beneficiation, such as taxes of mineral exports - channelling of retirement funds into productive investment;
12. Comprehensive land reform, and measures to ensure food security; and
13. The more effective deployment of all state levers to advance industrialisation and the creation of decent work on a large scale.
The 11th Congress noted lessons derived from the Brazil and from progressive developments in Latin America, which are part of the resurgence of left alternatives throughout the Latin American Continent, characterized by a rapidly expanding role of the state in the economy, pursuit of expansionary macro-economic policies, active promotion of social ownership, particularly through a huge increase in cooperatives, progressive interventions to transform the labour market by formalising employment, combating atypical work, raising wage levels and promoting collective bargaining.
Using this declaration as the benchmark, President Zuma's 2015 State of the Nation Address, failed to come to grips with the massive challenges that the country is facing.
COSATU agrees with the president that "Our economy needs a major push forward", and has no problem with his nine-point plan to ignite growth and create jobs:
1. Resolving the energy challenge.
2. Revitalizing agriculture and the agro-processing value chain.
3. Advancing beneficiation or adding value to our mineral wealth.
4. More effective implementation of a higher impact Industrial Policy Action Plan.
5. Encouraging private sector investment.
6. Moderating workplace conflict.
7. Unlocking the potential of SMMEs, cooperatives, township and rural enterprises.
8. State reform and boosting the role of state owned companies, ICT infrastructure or broadband roll out, water, sanitation and transport infrastructure as well as
9. Operation Phakisa aimed growing the ocean economy and other sectors.
Based on the nine points above, we believe a discussion is possible where we can pursue our congress mandate by engaging both government and our Alliance formations. We call for the immediate roll out of the 9 priorities.
The critical challenge for the President was that, as COSATU's SONA Expectations statement said, "Thecountry is still confronted with triple challenge of unemployment, poverty and inequalities". Yet the President did not even mention the words ‘poverty' and ‘inequality' anywhere in his speech.
This is extraordinary given that just nine days earlier, StatsSA reported that more than half the population of South Africa live in poverty. Given the Freedom Charter's promise that "The people shall share in the country's wealth" it is surely concerning that the President of the world's most unequal country made no reference to either that fact, or to the dire poverty in which 53.8% of South Africans are living.
Even more worrisome is that one measure which can do more than anything else to reduce poverty and narrow inequality - the national minimum wage - received only a passing mention. As the President was talking about the revitalisation of the mining towns, he said that "Government will implement the agreements reached with Business and Labour, including the consideration of a national minimum wage" (our emphasis).
The NMW is an official government policy; the public hearings and Nedlac discussions now taking place are dealing with the ‘modalities' of its implementation. They are not ‘considering' whether they should be a NMW! We hope that this was just bad drafting but we need urgent clarification on this.
The other area where COSATU was expecting good news from the President was the long awaited report on comprehensive social security, which is a crucial component of the steps we need to alleviate poverty. Sadly however ‘social security' was another phrase which did not get a mention in the address.
Unemployment did get mentioned, but only with the comment that "the situation is more promising on the jobs front. Two days ago, StatsSA released the employment figures for the last quarter of 2014. The report shows that there are now 15, 3 million people who are employed in South Africa. Jobs grew by two hundred and three thousand."
But both COSATU, and StatsSA itself, warned that these were just one quarter's figures and did not necessarily indicate a trend. StatsSA deputy director-general for social statistics, Kefiloe Masiteng, said that some of the jobs created were driven by the seasonality associated with the festive season as evidenced in the sectors that created mainly "casual" jobs. She also warned that "economic growth is not coming at the levels that are able to create the jobs that are needed currently for the economy."
COSATU added that these figures covered a period before the crisis caused by load-shedding which has put many thousands of existing jobs in peril and is sure to slow down the rate of new investment which could create more new jobs.
So there are no grounds for the complacency the President was exuding. South Africa still has the eighth highest level of unemployment in the world, still at over 35% by the more realistic, expanded definition, and, as Comrade Zuma himself said: "Our ambition of achieving a growth target of 5% by 2019 is at risk, because of the slow global growth as well as domestic constraints in energy, skills, transport and logistics amongst others".
The Minister of Finance's estimate for growth in 2015 is 2.5%, only half of that target, and even that has been questioned by many economists, including the IMF, which has reduced its 2015 forecast to growth of 2.1%.
Also on employment, the President boasted proudly that "our investment in youth employment is also paying off" and that "The Employment Tax Incentive which was introduced last year directed mainly at the youth, is progressing very well".
The evidence for this is a highly misleading figure from the Treasury, which said that "two billion rand has been claimed to date by some 29 000 employers, who have claimed for at least 270 000 young people".
The evidence from academic researchers is that this tax-payers' subsidy to employers has in all probability created no jobs which would not have been created anyway, and SARS and Treasury have admitted that they cannot confirm if the subsidies claimed are for new or existing jobs and how many older workers have been displaced.
While we welcome the creation of a million work opportunities, we wish to remind the country that these are not permanent decent jobs, but based on Expanded Public Works and Community Works Programmes. Concerns remain that these are temporary, low-paid jobs which are replacing what should be permanent decent provincial and municipal jobs. These jobs, whilst playing an important role in cushioning the poor from extreme hunger, they do not liberate workers from poverty. At average of R800 a month, workers engaged in these jobs are a typical example of what we call the working poor.
We were encouraged by the information the President reported in relation to the leather and auto industries. This vindicates our strongly held view that only industrialisation will put us in a different growth path and realise the goal of a decent work. While the address points out that the manufacturing industry and the auto sector in particular are getting support from government and thus resulting in more exports, it not clear how many jobs have been created. StatsSA reports show a consistent decline in jobs in the manufacturing sector. In fact we have not managed to reverse deindustrialisation now running for past two decades.
We welcome President's response to widespread public concern with regard to the energy crisis. COSATU welcomes the "plan which involves both short, medium term and long term responses" to the Eskom catastrophe.
We welcome Government's assurance that it "will honour its commitment to give Eskom around R23 billion in the next fiscal year" and that "the ‘War Room' established by Cabinet in December is working diligently around the clock with Eskom, to stabilize the electricity supply system and contain the load shedding".
We remain concerned however about government implementing this timeously. The deadlines for the Medupi station coming on stream have been repeatedly changed.
The federation also welcomes the speech's emphasis on the long-term expansion of the energy sector, which will be critical to the success of our economic transition, though we have grave reservations about the potentially deadly use of nuclear energy, and the negative environmental impacts of fracking.
This commitment to expanding energy production also requires a change in the mandate and governance of Eskom, to move it away from its commercialised orientation, and to develop an appropriate funding model, to allow it to properly execute its mandate.
We were however disappointed that government did not heed our advise in relation to the aluminium smelters continue to be allowed to consume such massive amounts of electricity (up to 7% of total electricity consumption), at taxpayers' expense, and without adding any significant value to the economy. Government urgently needs to look at how to close the remaining smelters down.
We reiterate our opposition to the expansion of nuclear energy generation based on costs and safety considerations in particular. We note that government is steaming ahead with shale gas extraction and our concerns in that regard include water contamination, health effects, green-house gas emissions and the destruction of the political economy of the Karoo.
In relation to transport, there was no reassurance that the e-tolling debacle will come to an end and no update on the rolling out of public transport promised in the 2014 SONA.
On healthcare the President said that over the past five years, Government has scored significant gains, yet his address made no mention of a major push to implement, and fund, the National Health Insurance scheme, which should have long ago been rolled out so we can build the foundations of a universal healthcare service which is delivered regardless of people's income and put an end to the two-tier provision of healthcare we inherited from apartheid.
The speech said nothing about the state of public hospitals particularly in Gauteng and Eastern Cape. Workers and the economy continue to be on the receiving end of endless queues, at times lack of medicines and chronic shortages of doctors and nurses as well as dilapidated infrastructure.
On education, we congratulate government on providing more schools with water and electricity and support the programme to address water leakages by hiring 15000 young people to do this. We welcome the opening of new schools, colleges and universities but worry about the ominous silence on the NSFAS chaos or the January 8th commitment to employ more teachers. As with healthcare however, we are still concerned that we have a similar two-tier level of service delivery and the speech did not come up with proposals on this.
COSATU is pleased to hear the assurance that "the fight against corruption continues to be taken forward by the Anti-Corruption Inter-Ministerial Committee" and that the President signed into law the Public Administration and Management Act which amongst others prohibits public servants from doing business with the State, has seven anti-corruption institutions and seventeen pieces of legislation which are intended to combat corruption.
The Federation continues to be concerned however at the slow rate at which all these laws are being enforced. As Comrade Zuma reported, in the 2013/14 financial year, a mere 52 persons were convicted in cases involving more than five million rand and just 31 public servants were convicted in the first quarter of 2014/15.
The Auditor General mentioned billions of rands lost to corruption but the President only mentions action over millions, and he did not mention tender corruption. The Treasury have told the country before that we lose 5% or between 25 to 30 billion rands of the infrastructure budget to corruption every financial year. R5 million in that context is a small drop in an ocean.
COSATU welcomes the fact that last year, "we reopened the second window of opportunity for the lodgement of land claims and that more than 36 000 such claims have been lodged nationally", but we remain concerned about the existing 70 000 unsettled claims.
We are also concerned that two thirds of land reform beneficiaries have failed due to lack of systematic departmental support.
We also welcome the programme announced to build agriculture. The sector has been growing in terms of jobs, reinforcing our view that a minimum wage does not lead to job losses. We will work with government to ensure that the measures announced are reinforced so that we can address the food security challenge and confront the current challenge of 13 million South Africans facing hunger and going to bed without food.
The Federation backs measures to achieve stability in the mining sector but insist that this has to be accompanied by the mining companies implementing the commitments they agreed to in the Mining Charter, and stern action taken against companies that failed to do so.
We are also concerned that mineral beneficiation has been promised many times and yet there is little progress.
COSATU welcomes the news that 134 informal settlements will be upgraded, yet there are more than 200 informal settlements in Cape Town alone. Most are on private land and lack access to basic services. Government must expropriate this land and provide these badly needed services.
The federation support the rolling out of broadband to municipalities and the clarity on progress to implement digital migration by July 2015
COSATU strongly welcomes the long overdue return of the remains of, worker and liberation struggle heroes, Comrades Moses Kotane and JB Marks
COSATU expected "business unusual" from the 2015 SONA, but overall it was "business as usual". In 2014 the President said that the economic crisis of unemployment, poverty and unemployment must "take centre stage", and that "the most effective weapon in the campaign against poverty, is the creation of decent work, and that creating work requires faster economic growth".
But this year there was an alarming lack of any reference to this view or any sign of how the government is advancing the radical economic transformation, or the Second Phase of the Democratic Transition, to which the ANC is committed, still less the Freedom Charter.
COSATU will therefore continue its campaigns on key issues we intend to take up in coming months including:
1. Ending poverty, and combating inequality, through a national minimum wage, defence of collective bargaining and comprehensive social security
2. Defending workers' right to strike
3. Resolving the crisis at Eskom
4. Transforming the lives of vulnerable workers
5. Eradicating racism and sexism in the workplace
6. Opposing e-tolls and campaigning for better public transport
7. Fighting corruption, particularly in the union and their investment companies
We shall continue to press for the promise in the ANC's 2014 election manifesto for a radical transformation of the economy - in the "second phase of the democratic transition" - to be the centrepiece of government policy over the next five years.
Statement issued by COSATU, February 14 2015
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