BHEKI NTSHALINTSHALI: State has suffocated economy with policies that largely ignore employment creation
Cosatu says it is unacceptable that there is no solid plan for the state to deal with ‘the generally huge’ pay and benefits structures within SOEs
SA workers are looking to Thursday night’s state of the nation address (sona), to be delivered by President Cyril Ramaphosa, with heightened levels of expectation and concern about the future. The latest job figures and economic projections paint a dire picture of the pending gloom in the coming months, with yet more people expected to plunge into poverty.
This is alarming considering that more than half of the working-age population is officially unemployed. It is calamitous for the country because it means millions of workers and young people will be dependent on the state for their wellbeing, and that of their families.
The government’s decision to suffocate the economy by implementing a framework of economic policies that do not place employment creation as a priority but are geared towards reducing the budget deficit and containing the debt burden, has backfired. Even in January, when the IMF urged countries to “spend as much as they can” in the face of the prevailing contraction, our government superstitiously held on to its destructive neoliberal austerity straitjacket.
The Sona should set the tone for the Treasury that this is the time to remove that straitjacket. While Cosatu shares concerns about the rapidly rising debt service costs, we have nonetheless consistently argued that rather than choking the economy with austerity measures we need to implement policies that support economic growth as the most sustainable way of reducing the budget deficit and drawing down the public debt. The cause of the macroeconomic quagmire is stagnation, not debt.
To deal with huge unemployment, deepening poverty and a health crisis, the Sona needs to be imaginative and pragmatic. The ANC, working with its alliance partners, developed its 2019 manifesto to help guide government. The governing party's commitments include to “promote a developmental growth path”, to ensure that “we not only create new jobs but work hard to protect existing jobs”.
It committed to the building the core industries of manufacturing, agriculture and agro-processing, mining and beneficiation, energy and renewable energy, tourism, the ocean economy and creative industries. This includes promoting investments “to diversify the economy in sectors like mining, forestry, manufacturing, telecommunications, transport, energy, water, agro-processing, consumer goods, pharmaceuticals, infrastructure and financial services”.
The manifesto also spoke about repositioning Eskom to play an active role in the renewable-energy sector and promote public ownership in renewable energy infrastructure.
Ramaphosa has the manifesto and the recently adopted Economic Reconstruction and Recovery Plan (ERRP) as guides. The latter speaks to some of the manifesto commitments while also dealing with the new challenges Covid-19 has thrown our way as a country. It offers some relief for the most vulnerable in society, focuses on rebuilding the productive capacity of the economy, and commits to the rollout of an infrastructure programme.
Workers expect the president to give an update on government's efforts to promote the Buy Local campaign. Increased local procurement will promote local industrialisation and safeguard local jobs, and it is consistent with the declarations of previous jobs summits.
There are 15 sectoral master plans the department of trade, industry and competition has been developing to unlock economic growth and create jobs in sectors like auto manufacture, poultry, clothing and textile, sugar, renewable energy, hemp, mining, digital communications and technology. The Sona needs to outline clear and specific interventions to urgently deal with regulatory impediments to growth in these sectors.
The Eskom Social Compact initiated by Cosatu has been adopted at Nedlac, and the president needs to update the nation on progress by government, Eskom and business with regard to investing in new generation capacity, accelerating maintenance, and eradicating corruption and wasteful expenditure. We need a more stable and affordable electricity tariff regime conducive to industrial and economic growth. Eskom is crucial to this economy — there cannot be an economic recovery without an efficient and stable Eskom.
Cosatu also wants a coherent plan to stabilise key state-owned enterprises (SOEs). The state of deterioration and collapse at SAA and SA Express, Denel, Transnet, Metro Rail, the SABC and the Post Office, remains an albatross around the nation's neck and is destroying lives of innocent workers.
It is unacceptable that there is no concrete plan for government to rationalise and align the generally huge pay and benefits structures within the SOEs. Even the bailouts given to these SOEs, which are now taking place on a regular basis, tend to incorporate these huge executive remuneration structures and exorbitant board fees. The question of performance or productivity is never raised, even though these SOEs have been failing at a huge cost to the fiscus.
The auditor-general was scathing about the ineffectiveness of the annual turnaround plans for SOEs and the continuing and frightening financial mismanagement in government in general. It is staggering and alarming that year after year the auditor-general uncovers the same problems yet there are virtually no consequences for those responsible.
The Treasury must disabuse itself of its narrow fixation with the compensation envelope of public servants. We need to see the same ideological zealotry in terms of the numerous outsourcing contracts, corruption, fruitless and wasteful expenditure. If anything, the Zondo commission has underscored the monumental failure of the Treasury as a custodian of public finances, especially given the fact that the common thread is about public-private partnerships, which it peddled and institutionalised during the heady days of Gear.
Treasury must appreciate that in addition to allocating funds it has an ethical duty to see to it that the money is used for its designated purposes. Where there are persistent less-than-clean audits it needs to proactively support capacity building and accountability during the bidding phase of the budget process, rather than pompously mouthing empty rhetoric about “zero-based budgeting”. The Public Audit Act was adopted and we need an update from the president on how it is being used to pursue the officials responsible for irregular expenditure.
On the rollout of the infrastructure programme, the ERRP provides a clear infrastructure road map and the Sona needs to indicate how far we are with regard to those that will see our ports modernised, freight rail upgraded, a decimated and vandalised Metrorail rebuilt, and water infrastructure rehabilitated and agriculture boosted.
Cosatu has a problem with the outsourcing of services by government. These outsourced operations are some of the services and infrastructure roll-out channels through which the state is haemorrhaging scarce resources through parasitic public-private partnerships.
On the public service, the federation wants to hear about the filling of critical service delivery posts, and plans to deal with incompetent political officer bearers and managers. We want a single, transparent, online public procurement system for the entire state.
The ban on public servants doing business with the state should include national and provincial political office bearers of governing political parties and the spouses and children of politically exposed persons.
To combat corruption, we agree with the Special Investigating Unit report on personal protective equipment corruption allegations, which says: “The SIU recommends that legislative amendments be considered to provide for safeguards when state institutions are to contract with domestic prominent influential persons and their immediate family, as well as entities in which they have an interest, or are beneficial owners of.”
For the Sona commitments to be realised, the government needs to declare education a priority investment area. The transition from the third to the Fourth Industrial Revolution has resulted in job losses. Upskilling workers to save jobs is key to economic recovery. Without a skills revolution, the ERRP will fail. Covid-19 has also reminded us of the need to build the skills critically needed to drive the recovery plan and build a sustainable and resilient economy.
Finally, the president cannot avoid the public service wage dispute indefinitely. Defunding the public service will exacerbate SA’s problems, not resolve them.
• Ntshalintshali is Cosatu general secretary.
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