President of Cosatu Zingiswa Losi. Picture: THULANI MBELE / SOWETAN
President of Cosatu Zingiswa Losi. Picture: THULANI MBELE / SOWETAN

Labour federations on Workers’ Day called on the government to introduce radical policies to kick-start the economy that has been negatively affected by Covid-19.

On May 1, the government eased the coronavirus lockdown regulations by downgrading restrictions from level 5 to level 4. Under level 4, about 1.5-million people will return to work as key sectors of the economy, including mining and manufacturing, will be among the first sectors to reopen.

In their Workers’ Day messages on Friday, trade union federations called for a radical transformation of the economy post the coronavirus pandemic, which has infected 5,647 and killed 103 people in SA, as of Thursday.

Cosatu president Zingiswa Losi said this must be characterised by “more radical policies” and decisive action to effect what she described as a thoroughgoing socioeconomic transformation.

Considered a key ally of President Cyril Ramaphosa, Losi called on the government to impose a moratorium on retrenchments in the businesses it is bailing  out during the Covid-19 pandemic. “If our taxpayers’ money is going to be used to bail out and help businesses, we need all those companies that are going to receive the money to agree to a moratorium on retrenchments.”

She said her union looked forward to the tabling of a new budget aligned to the needs of an economy reeling from Covid-19. “This budget needs to expand the stimulus package to a minimum of R1-trillion if we seek to defeat unemployment,” said Losi.

According to projections by the National Treasury, SA could lose up to 7-million jobs and see unemployment shooting up from 29.1% to 50%. It projected the economy to contract by 6.4%.

This week S&P Global Ratings downgraded SA further into junk status, citing the effect of the Covid-19 pandemic on the economy and heightened concerns about the long-term sustainability of the country’s debt.

More optimistic

The ratings company said it expects the economy to shrink by 4.5% in 2020, compared with its November forecast of a 1.6% expansion. That’s still more optimistic than the Reserve Bank, which sees GDP declining 6.1% in 2020. Moody’s Investors Service said last week it expects a decline of 6.5%.

On April 21, Ramaphosa announced a R500bn social and economic package aimed at keeping the SA economy going during the pandemic.

It included a special R20bn Covid-19 health budget, wide-ranging support for the most vulnerable through R50bn in expanded social grants, the distribution of food parcels and vouchers, and a R200bn loan guarantee scheme for firms that need additional resources to bridge them through the crisis.

Additional funding of R20bn will be made available to municipalities for the provision of emergency water supply, increased sanitisation of public transport and facilities, and the provision of food and shelter for the homeless.

Losi called on the private sector to join the government’s efforts and called for investments that will spur “inclusive economic growth and create jobs in areas like ports, railways, energy, health, broadband spectrum”. Local procurement must be at the heart of rebuilding the battered economy, she said.

Cosatu thanked the role played by SA health-care workers in the fight against coronavirus in the country.

It also welcomed the Cuban medical team that arrived in SA this week, despite an outcry that they will cost the taxpayer R440m. The Cuban embassy in SA has hit back, saying the medical brigade of 187 Cuban personnel were here to save lives, not enrich themselves.

“Thank you Cuba for your selflessness, and Cosatu workers welcome you with open hands to join our battle to save lives. We do know that certain vested interests are threatened by your acts of solidarity and true humanism,” said Losi.

“We urge tight team work with our health-care professionals and communities to save our people’s lives.”

Cosatu said the coronavirus pandemic has exposed the “ugly reality of corruption, parasitism and rampant looting” as thieves were helping themselves to food parcels meant for the poor. In some cases, councillors allegedly distributed them only to people affiliated to a particular political party.

National Council of Trade Unions (Nactu) president Pat Mphela said public servants were in a Catch-22 situation: save people’s lives or save the economy. “We will forever be indebted to our front line workers … for their relentless spirit in fighting the pandemic,” he said.

Mphela said the government must identify opportunities for job creation through localisation to boost the struggling economy.

Federation of Unions of SA (Fedusa) general secretary Riefdah Ajam said they marked Workers’ Day by launching a R100,000 fund to assist its affiliated unions to procure personal protective equipment.

“This new Fedusa facility has been driven by the need to urgently address the rising demand for social protection and support programmes to an unprecedented level of importance as the economy reopens under level 4.”

mkentanel@businesslive.co.za