COSATU says NO to the privatisation of State assets
The recently released presidential review commission report, which advocates for partial privatisation of state-owned companies is deeply troubling for the federation and will find stiff opposition from the workers. It is the latest in a series of steps by government signalling that they are prepared to outsource their developmental mandate to the private sector.
We have a clear and unambiguous position on the issue of privatisation; as mandated by our 7th National Congress that passed a resolution opposing the privatisation of state assets.
COSATU is still waiting and hopeful that government will also give other social partners, especially labour the same audience and indulgence that have been accorded to big business.
The federation is suspicious that government is handing over the keys to economic policy formulation to big business.Unfortunately, we have experienced that whenever the economy takes a downturn government goes back to the old logic of liberal economic responses. Their reaction to the economic stagnation is the reintroduction of the trickle down neoliberal economics that says the private sector knows best.
This follows the reports that government is planning to form an interdepartmental Border Management Agency. This agency is allegedly meant to police our porous borders. This agencification and privatisation of the state is a break from the ANC policies by an ANC government.
The ANC made a commitment that it was going to strengthen the capacity of the state ,and identified that the underlying reasons for an unresponsive state was outsourcing and the emasculation of the state. The ANC and the Alliance positions are unequivocal in that we need to increase the capacity of the state, so that the state can drive the movement’s developmental agenda.
COSATU is deeply concerned that government is steaming ahead with the existing policies that were inherited from the fourth administration. The commitment to a radical shift in the policy direction is no longer a main concern and the anti-state mantra is becoming more louder.
The federation is still adamant that the task of fundamental transformation of our economy, the creation of decent work and the provision of basic services to the majority of our people cannot be left to the market forces. Guided by the ANC policies of the 52nd Polokwane and 53rd Mangaung conferences, we still insist on the creation of a strong developmental state to intervene decisively in the economy to redistribute resources in order to address unemployment, inequalities, poverty, and rural-urban development divide.
We reaffirm the May 2008 Alliance Summit’s call for a moratorium on privatisation and outsourcing and the review of current outsourced public sector utilities.In its 2012 Policy Conference the ANC, committed itself to the objective of ensuring that “state-owned commercial entities operate as powerful instruments of economic transformation and remain firmly within the control of the state in order to have the capacity that is capable of responding effectively and efficiently to the developmental agenda of the ANC”.
We have heard all the myths that have been spread by the free market priests and neoliberal advocates that the “private sector is better than the public sector and that competition reduces costs and improves quality and customer care”.
But private companies have a legal duty to reward their shareholders, so they have to prioritise making a profit. This means they end up cutting corners, or underinvesting in our public services. If a government entity runs a service, people know where to go to complain. But if a private company runs a service, they are not democratically accountable to the people.
Privatisation will detrimentally affect the socio-economic interests of the poor, which includes workers and the working class in general. It will lead to decreased and inferior quality services for the poor, since they cannot afford to pay for the services provided by or through private interests. It will lead to higher prices for the provision of basic services, which will adversely affect the poor. It will limit the extension of basic social and municipal services to the poor.
It will adversely affect the state's capacity to: provide basic services to the poor; provide for infrastructural development; intervene to restructure the economy to ensure growth and employment creation; and play a developmental role in general. It will lead to significant job losses and will not provide for job creation. It will foster the casualisation of labour, with more and more workers being hired on limited fixed-term contracts of employment. It will remove workers from the bargaining units established over many years in the public sector, generally leading to a reduction in incomes, benefits and job security.
Regulatory agencies have proven unable to establish specific and effective obligations to serve the poor by extending services at affordable prices. They have few or no sanctions to impose on companies that fail to comply with obligations and have no capacity to monitor compliance.
COSATU insists that SOE’s should be funded by the state, through progressive tax system, retirement funds and insurance. They should improve their efficiency and government should conduct skills audit to check the qualifications and experience of senior managers and board members. They should stop relying o expensive consultants and should root out corruption and looting. They should cut wasteful expenditure and reduce the exorbitant salaries and benefits of the senior managers.
The big problem is that when the SOEs managers fail, they are not held accountable and only workers pay the price through job losses, salary cuts, precarious employment, and labour broking. Government needs to deal with the underlying causes behind the inefficiency of SOEs, e.g. incompetent managers, who are appointed for wrong reasons and loot the SOEs and Treasury's continuous underfunding of SOEs and their developmental mandates.
The Department of Public Enterprises needs to urgently release its long awaited SOE Shareholder Bill. This bill needs to empower government to decisively intervene in the chaos engulfing many of our SOEs. COSATU demands that government engage it on its proposals in good faith at the PSCBC, Nedlac and in an urgent bilateral. To ram this through against workers' wishes and needs will cause untold labour strife and lead to chaos across the economy.
Government must address the fundamental problems facing the SOEs and stop simply seeking to abandon its duties by creating agencies or privatising or outsourcing its mandates. Privatising SOEs may see electricity, water and many other key constitutional and human rights being made unaffordable for the majority of low and middle income families.
Workers are already struggling and exploited by labour brokers. We have repeatedly called on our government to ban labour brokers and they have failed to do so. Now they are worsening the situation by reacting to the country’s economic woes by handing over everything to big business. Government failed to stop big business from fixing the price of bread, but they want to trust them with everything.
We are not going to sit idly and watch while workers livelihoods are compromised and the poor are handed over to capital vultures for exploitation. We will mobilise against privatisation and as mandated by our 12th National Congress, we will work with all progressive civil society and other formations to protect the interests of the working class. The message from COSATU is clear, we voted for government and will not be governed by big business.
Statement issued by COSATU, 17 February 2016
