SAFTU is not shocked by the 3.2% decline of the GDP in the first quarter of 2019
June 4, 2019
SAFTU response to the state of the nation address
June 21, 2019

SAFTU expects more hell for workers from the state of the nation address

“In our country-more than in any other part of the oppressed world-it is inconceivable for liberation to have meaning without a return of the wealth of the land to the people as a whole. It is therefore a fundamental feature of our strategy that victory must embrace more than formal political democracy. To allow the existing economic forces to retain their interests intact is to feed the root of racial supremacy and does not represent even the shadow of liberation. Our drive towards national emancipation is therefore in a very real way bound up with economic emancipation. We have suffered more than just national humiliation. Our people are deprived of their due in the country’s wealth; their skills have been suppressed and poverty and starvation has-been their life experience. The correction of these centuries-old economic injustices lies at the very core of our national aspirations. We do not underestimate the complexities which will face a people’s government during the transformation period nor the enormity of the problems of meeting economic needs of the mass of the oppressed people. But one thing is certain-in our land this cannot be effectively tackled unless the basic wealth and the basic resources are at the disposal of the people as a whole and are not manipulated by sections or individuals be they White or Black.”

ANC 1969 strategy and tactics adopted in its Morogoro conference

Today the opposite has happened! The rich have become richer and the poor poorer. The people who were supposed to have been liberated in 1994 remain the face of poverty, unemployment and inequalities. Those who were supposed to have lost power have gained more in economic terms. Their wealth has multiplied. They still occupy the mines, the land and monopoly industry.

The State of Nation Address (SONA) coincides with the marking of twenty-five years of so-called freedom and democracy. It is twenty years in which the liberated are still the face of landlessness, propertyless, poverty, unemployment, inequalities and all the social ills associated with the deepening economic disaster. The black youth is trapped in the drugs epidemic, rampant violence and general hopelessness.
SAFTU is not expecting that President, Cyril Matamela Ramaphosa’s speech will mark a point of departure from the economic paradigm that has produced these results in twenty-five years of ANC disastrous and monumental failures.

SAFTU has previously stated that as long as our economic policies still reinforce a neo-colonial economic and neoliberal framework that reproduces unemployment, poverty and inequalities, there will be no hope for the people of this country particularly the black majority who had hoped that their crisis would be resolved.

The ANC has learnt absolutely nothing in twenty-five years. The new leadership represents the old wine in new bottles.  The Washington consensus inspired medicines that they have been prescribing to the developing world have spectacularly failed to address the fundamental demands of humanity for a life free from want, diseases and ignorance.

President Ramaphosa will seek to double the dose of this medicine. The results are there for everyone to see except the leadership totally captured by the White Monopoly Capital. The economy is in the doldrums. It has not just stagnated but has now declined by a massive 3.2% in the first quarter of 2019. Unemployment continues to worsen now standing at above 38. Youth account for 63.4% of the unemployed.

“Between the fourth quarter of 2018 and the first quarter of 2019, the percentage of young persons aged 15–24 years who were not in employment, education or training (NEET) increased by 2,1 percentage points to 33,2% (3,4 million). Of the 20,3 million young people aged 15-34 years, 40,7% were not in employment, education or training (NEET) – an increase by 1,8 percentage points compared to the fourth quarter of 2018.”

A caring leader would at least announce dramatic changes in policy to respond to this catastrophe. However, we are not expecting that to the prisoners of foreign and minority interests. Instead of a response to the crisis, we hope the following from the state of the nation address.

1.    We are going to told there would be no change in the government economic policies despite the overwhelming evidence that they have dramatically failed.
2.    We expect to be told that the country will stay the course of neoliberal cocktail that spiced with austerity programmes designed to cut expenditure even deeper
•    We expect to be told that even though the ANC conference decided that the mandate of the Reserve Bank be expanded to include unemployment and other developmental challenges,  but this will not be done!
•    We will be told that even though the ANC conference decided that the Reserve Bank must be nationalised but this will not happen
3.    We expect to be told again that even though the ANC decided on the land expropriation without compensation, but this cannot happen
4.    We expect to be told that workers must be bear the brunt of the state capture that occurred and was endorsed by the ANC and all its leaders including the President himself:
•    We expect that the process to break up Eskom into three pieces as part of preparing for its privatisation will continue. We will be told that IPPS will proceed to be subsidised by Eskom and that they will slowly be allowed to produce and redistribute energy in a manner that will lead to the closure of 5 power stations which will be followed by an estimated job loss that may run to 120 000 in the Mpumalanga province
•    SABC is almost technically bankrupt and must now choose between paying salaries of staff and or the content that attracts advertising that makes 80% of its income. There will be no government intervention. Currently, government funds only 3% of the SABC mandate.
•    SAA is also almost bankrupt, and we expect to be told that we should allow for its full privatisation following it’s running down by the so-called cadres  
5.   Nothing is going to be announced to stop the deindustrialisation at the scale capable of stopping the bleeding. Manufacturing used to contribute more than 20% to the GDP. Now it is down to 11% to 12%.
6.    We expect to be told that Eskom and the public service are bloated and therefore thousands more must be slaughtered.
7.    At the end of the address, we expect the “markets” to manipulate the currency so that to feed to the mood of false hope and happiness. This happiness on their part will not lead to them announcing a real end to the investment strike in which they are hoarding up to R2 trillion rands in investible cash.

 This class of parasites won’t announce that they have decided to put   an end to the illicit cash outflows, mispricing and illicit trade     
   Every year big business, mostly transnational corporations illicitly park hundreds of billions of dollars out of the reach of tax and other regulators. It is estimated that 80% of illicit financial outflows is composed of the proceeds of tax evasion and laundered corporate transactions and not drug trading, racketeering, counterfeiting,     contraband, and terrorist financing. The most important component of illicit outflows is trade mispricing that is the mis-invoicing of international trade transactions with the ultimate purpose of diverting financial resources.

South Africa is profoundly affected by illicit financial outflows, according to data released by Global Financial Integrity. Between 2002 and    2011, South Africa lost a cumulative 1,007 billion rands to illicit outflows, i.e. more than a trillion rand. In Professor Ben Fine at SOAS     University, working with other radical economists, estimated that there was the equivalent of 23% of GDP that was illicitly transferred out of     South Africa. In 2012, the year of the Marikana massacre, SA lost     R300 billion in illicit financial flows.

This is not all. Corporations use aggressive tax planning and profit shifting, known as Base Erosion and Profit Shifting (BEPS) to dodge tax. The Davies Tax Committee estimated that this cost the country a     further R50 billion a year. The AIDC provided vivid research on this practice when they exposed how Lonmin was transferring R400 –     R500 million a year to their subsidiaries located in tax havens.    Corporations like Lonmin are not just evading tax but are involved in systematic wage evasion. Because it should be obvious when a     company illegally moves, for example, R100 million to a tax haven,     SARS loses R28 million because the tax rate for corporations is supposed to be 28%. However, for us as workers, the more significant loss is the remaining R72 million (R100 million minus R28 million = R72 million)    which has effectively been taken off the wage bargaining table.
 The ruling elites will be celebrating tomorrow night following the reading of yet another business as usual speech, which will say little about addressing the structural deficiencies of the neo-colonial economy.

8.    We expect no steps to be taken to address the quality of the public education system despite overwhelming evidence that South Africa is not ready for the Fourth Industrial Revolution. No measures will be announced to progressively use the billions piling up in the skills levy to retrain our teachers, police and other workers, in particular, those displaced in the manufacturing sector.

9.    Nothing will be announced to address the serious levels of crime which after all cannot be seriously addressed until more and not less of our youth are at schools, undergoing training or are at workplaces.

We expect hell from the State of the Nation Address.