Finance minister Tito Mboweni. Picture: RUVAN BOSHOFF
Finance minister Tito Mboweni. Picture: RUVAN BOSHOFF

Union federation Cosatu has submitted a formal response to the National Treasury’s economic reform paper saying that it will increase conflict in the labour market and should be submitted to the National Economic Development and Labour Council (Nedlac) for discussion, urgently.

Cosatu also says it disagrees strongly with a number of the policy recommendations, such as exemption for small and medium enterprises (SMEs) from the national minimum wage and the privatisation of Eskom power stations. A policy intervention that relies on “starvation wages” of workers will not result in economic growth and job creation, it says.

The deadline for comments on the paper was September 15, which was met by Cosatu, some government departments and some business organisations. The ANC, which has said it still intends to comment, began a process of discussion this week. The paper will be discussed at a meeting of the economic transformation committee on Friday September 20 and by the national executive committee (NEC) at the end of the month.

Cosatu says it is particularly aggrieved by the lack of process followed by finance minister Tito Mboweni in releasing the paper and his failure to take into consideration the processes at Nedlac, which resulted in the job summit agreement last year. In a review of the job summit earlier this year, President Cyril Ramaphosa committed to monthly meetings with the government and the social partners. 

“These meetings are convened by the president. The Treasury is part of these processes. The paper directly contradicts, conflicts with, confuses and undermines these collective approaches. Many of the very issues raised in the paper have, in fact, [been] or are being engaged [with] in these Nedlac processes,” it says in its submission.

It is also an act of “bad faith and extreme provocation” that the Treasury, which was part of the negotiations in Nedlac, [which agreed to] to a national minimum wage should now “seek their unilateral collapse”.

Cosatu also criticises the Treasury paper for its limited focus on micro-economic reforms when there is a need for macro-economic policy changes that could ignite growth.

“Does the Treasury seriously expect the economy to grow without any macro-economic policy changes? Surely after 25 years of the same policies and a resultant 40% unemployment rate, it realises that it cannot retain the same macro-economic policies and expect different results?”

patonc@businesslive.co.za