‘What is needed now is to grow the economy–pickpocketing the public is not the solution’ says COSATU leader Solly Phetoe

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COSATU General Secretary SOLLY PHETOE

‘WHAT is needed now is to grow the economy. That is the only sober and sustainable path to pay down our worrying debt trajectory. Pickpocketing public servants is not a solution,’ writes Cosatu general secretary Solly Phetoe.

In an opinion piece, Phetoe said: ‘The Congress of South African Trade Unions (Cosatu) rejects National Treasury’s reckless attempts to impose misguided austerity budget cuts across government in the run-up to the Medium-Term Budget Policy Statement (MTBPS).
‘The federation is deeply dismayed that Treasury has written to all State institutions instructing them to slash budgets by up to 15%, freeze all vacancies and infrastructure rollout programmes.
‘Whilst we appreciate the very real fiscal constraints facing the State and the need to cut fat and re-prioritise expenditure, the solutions offered by Treasury of slashing expenditure and further de-capacitating the State when the economy is in desperate need of stimulus and a well-oiled and capacitated public services, will only serve to choke the economy and further weaken an already enfeebled government and undermine its ability to provide the quality public and municipal services that the working class and the economy depend upon.
‘What is needed now is to grow the economy. That is the only sober and sustainable path to pay down our worrying debt trajectory.  Pickpocketing nurses and underpaying police officers is not a solution.
‘Cutting the public service wage bill is exactly what Treasury has being doing since 2020, when the then Minister for Finance Tito Mboweni imposed a unilateral wage freeze and since then adjusted the wage bill at below inflation rates.
‘The narrow fixation of Treasury on cutting the wage bill is a lazy option and one that will not resolve the multiplicity of crises the country is facing. Underpaying a nurse will not get the trains to run on time.
‘What it will do is fuel the brain drain of skilled public servants, in particular, doctors, nurses, teachers, engineers, police officers, amongst others, to pack their bags and move to better paying and less stressful jobs overseas.
‘The crisis we are facing is not an expenditure crisis. The wage bill has been stable at 35% of the budget for more than a decade. The crisis is a collapse in company tax.
‘This is because of the rapid deterioration in the capacity of Transnet to transport mining, manufacturing and agricultural exports and products to their markets timeously. Mining, in particular, is a major contributor to the state of company taxes and an earner of foreign investment and exchange for the economy.
‘If the government does not turn things around at Transnet fast, we will face a jobs bloodbath in the mining industry and a crisis of revenue that no amount of pickpocketing public servants will fix.
‘If we are to grow the economy, and reduce unemployment, and thus increase the revenue, the state needs to reduce debt. Then, the government needs to deal with the real obstacles suffocating the economy, workers and businesses, namely to:

  • Provide additional support to Eskom to reduce and end load shedding and ensure reliable and affordable electricity.
  • Urgently intervene at Transnet and Metrorail to secure and rebuild our freight and passenger railway network and modernise our ports.
  • Stabilise and overhaul disfunctional municipalities and restore basic services that communities and businesses depend upon.
  • Allocate additional resources to the South African Revenue Service to tackle tax evasion and customs fraud and conduct lifestyle audits on the wealthy, and thus generate badly needed state revenue.
  • Fill critical front-line service vacancies in the public service, especially the police, National Prosecuting Authority and courts, enabling them to crack down on crime and corruption.
  • Give relief to commuters and the economy by reducing the taxes currently consuming 28% of the fuel price and place the chaotic Road Accident Fund under administration to lessen its need for fuel levy hikes.
  • Expand the Presidential Employment Programme to accommodate one million active participants by October’s MTBPS and two million by February’s budget speech to help young people earn a salary, gain invaluable experience and enter the labour market.
  • Enhance the invaluable Social Relief of Distress Grant to recover value lost to inflationary erosion by raising it to the Food Poverty Line and link it recipients to skills and job opportunities.
  • Expedite and not freeze the badly needed infrastructure investment programme.

‘If the government can show the necessary fortitude and vision and implement these common-sense interventions, the economy can grow and soon meet the 4% growth target. This will set the nation on the path to a prosperous job creating economy, a capacitated developmental state and ensure the fiscus is set back on a secure path.
‘Cutting medication to a patient in the ICU ward at hospital will achieve little besides killing that patient.  Workers can no longer afford to live on hope and prayers, whilst Treasury experiments with economic theories that have been rejected across the world, including in the industrialised west.
‘Cosatu is engaging the leadership of the government and the Alliance to seek a more pragmatic and sustainable path to rebuilding the economy.’

  • SAMWU Eastern Cape  Deputy Provincial Secretary Lorna Lubedu has said in a statement: ‘The South African Municipal Workers’ Union (SAMWU) notes and welcomes the dismissal of the application by Enoch Mgijima Local Municipality to be exempted from the last leg of the 2021 salary and wage collective agreement concluded in the South African Local Government Bargaining Council (SALGBC). According to this agreement, municipal workers throughout the country were supposed to receive a 5.4% salary and wage increase effective from 1 July 2023.

‘Through the South African Local Government Association (SALGA), Enoch Mgijima Local Municipality brought an application to be exempted from paying workers at the municipality the salary and wage increases that are due to them. Of great concern to us is that the application was brought by SALGA, the representative of the country’s municipalities.
‘At SAMWU, we view the active involvement of SALGA in exemption applications on behalf of municipalities as an enabler for municipalities to renege on collective agreements which were concluded and signed by trade unions and SALGA on behalf of municipalities.
‘It cannot be correct that a party that was involved in the negotiations and conclusion of the agreement is now the one actively encouraging municipalities to deny workers their salary and wage increases. For us, this action is tantamount to union bashing and undermining collective bargaining in the sector.
‘We have as a Union picked up that many municipalities have, in an attempt to undermine collective bargaining and deny workers their salary increases, made it fashionable to apply for exemptions months after workers were due to receive their increases.
‘In the case of Enoch Mgijima, the original exemption, which was defective, was made in the month wherein workers were supposed to receive their increases. Essentially, the municipality sought the ratification of its decision to deny workers their salary increases as the municipality had already exempted itself.
‘We are however pleased that the Senior Commissioner, who was assigned this exemption application, saw through the inconsistencies and that the application was frivolous as the municipality could not prove beyond reasonable doubt that it is not in a position to pay workers their salary and wage increases as agreed in the SALGBC.
‘In delivering the ruling on the 29th September 2023, the Commissioner dismissed arguments made by the municipality that its wage bill was bloated, while also emphasising that the financial situation which the municipality finds itself in is of its own making and as such, workers should not be blamed for a crisis which they did not create.
‘As SAMWU, we are of the view that the municipality does not have any financial challenges but rather financial management and governance issues coupled with continuous flouting of Municipal Finance Management Act as revealed by the Auditor General.
‘Additionally, if the municipality really had financial challenges, it would have applied for the Eskom Relief Grant which was announced earlier this year by the Minster of Finance. The decision not to apply for this grant is indicative of a municipality that has financial resources to cover its operations and pay creditors.
‘The ruling by the Comissioner reflects the importance of upholding fair labour practices and the rights of workers. Enoch Mgijima Municipal has been ordered to review and adjust its budget promptly, prioritising salary and wage increases for its employees, in strict accordance with the provisions of the salary and wage collective agreement.
‘The municipality has further been directed to pay- stipulated salary and wage increases for the period spanning from July 2023 to February 2024 on the normal pay day toward the end of February 2024. Subsequently, the municipality is directed to continue paying the salary and wage increases on a monthly basis for the remainder of the financial year.
‘SAMWU applauds and welcomes the award, which affirms our commitment to safeguarding the rights and interests of municipal workers. This outcome is a testament to the importance of adherence to collective agreements and the just compensation of our hardworking members.
‘The Union remains dedicated and committed to advocating for the rights of municipal workers and ensuring that they receive fair compensation and treatment. We will continue to monitor the implementation of the award to ensure that Enoch Mgijima Local Municipality complies with its obligations as ordered.