The South African Federation of Trade Unions (SAFTU) calls on President Cyril Ramaphosa to not let the State of the Nation Address (SONA) degenerate into mere ritualistic repetition of empty promises. President Ramaphosa’s 2021 attempt to lull the masses whilst renewing neoliberal commitments was a nation-shaking failure.
The South African social powder keg’s partial explosion in July 2021 was evidence that his strategy has to change, because the furious masses cannot eat more empty promises. Therefore, President Ramaphosa must bring concrete changes, starting with clear instructions to his finance minister to reverse the austerity cuts which hinder government from providing social services and social security, and which have made basic survival impossible for so many.
Basic Income Grant (BIG)
Reports have leaked that eleven reactionaries on President Ramaphosa’s economic advisory council recently advised him not to introduce the permanent Basic Income Grant. The advisory council, unlike the panel of experts that investigated the feasibility of BIG, issued a “stern warning” against the introduction of BIG, citing in unsubstantiated manner, “the risks” to damage “economic growth” and “job creation.”
It is inconceivable that this group of supposed “high-powered experts” can claim a BIG will damage “job creation.” The inability of South African capitalism to create jobs has been demonstrated by employment-shedding across all sectors of the economy. As illustrated so clearly in the case of Israeli-owned Clover, SA’s oldest dairy manufacturer, there is a completely unnecessary jobs and wages bloodbath underway, leaving thousands on a desperate strike.
Besides, South African capitalism has always been characterised by structural unemployment, insofar as the colonial land theft, the apartheid Bantustans and the capitalists’ migrancy system created a ‘reserve army of labour,’ one that regrettably continued after 1994. This fact alone justifies the necessity of a BIG, contrary to the wisdom of “high powered experts” whose disreputable profession of ‘economist,’ so rarely corresponds to possessing knowledge about the actual economy.
SAFTU reiterates its call for the monthly Basic Income Grant of R1 500. President Ramaphosa must listen to the cries of anguish and feel the plight of our people, not take ersatz advice from a group of privileged neoliberal economists.
Fiscal framework and social services
In accordance with the fiscal consolidation that President Ramaphosa’s government is committed to, to please the global neoliberal financial institutions such as International Monetary Funds (IMF) and the World Bank which have lent $5 billion over the last 18 months, budget cuts have been imposed across nearly all government departments responsible for the provision of social services.
Last November’s Medium-Term Budget Policy Statement (MTBPS), which is a prelude to the budget to be announced on 23 February 2022, already imposed serious budget cuts in various departments.
Proposed budget cuts include;
- Basic Education: from R281,8-billion in 2021/22 to R279-billion in 2023/24 (using Treasury inflation accounts in this sector, this represents an 12.6% real decline);
- Health: from R259-billion in 2021/22 to R243-billion in 2023/24 (which with inflation of 4.9% and 4.0% the next two years, will be a real decline of 15.1%);
- SAPS: from R109,2-billion in 2021/22 to R106,2-billion in 2023/24 (a 11.7% real decline); and
- Social Development: from R399,6-billion in 2021/22 to R320,4- billion in 2023/24 (a 23.8% real decline, even though increases in population and poverty are anticipated, which will require much higher commitments).
The consequences of these cuts are substantial reductions in the headcounts of these departments, lack of infrastructure, less maintenance and repair, and shortages of working equipment. This affects the ability of the departments to deliver quality services to the 70% of our population that relies on the public sector for social services.
The very reason that SONA 2022 has to be held in the Cape Town City Hall is a reflection of this self-destructive budget cutting, according to the trade union whose members were not given overtime duty in the parliamentary building on January 1-2 this to save money. Being penny-wise and pound-foolish in this case, meant a horrific arson attack occurred that should not have, had there been more security workers on duty.
SAFTU calls on President Ramaphosa to reverse the austerity that his government is implementing and shove fiscal consolidation down the throat of IMF and WB, not the people who elected ANC to power.
Imperialism and job losses
The president and the ANC government have convinced the public that foreign investment must be sought after, even though the record since 1994 has been miserable. Hence, in 2018 he send out special envoys, dubbed the “Pack of Lions”, to go and ‘hunt’ $500 billion worth of investment.
Maybe, the takeover of Clover by Israeli-based Milco in 2019, was one of these so-called investments that the “Pack of Lion” garnered. But the experience at Clover has debunked the myth that foreign investments automatically leads to economic growth and job creation.
Despite conditions of that acquisition precluding Clover from carrying out retrenchments, and instead creating 550 jobs, the new owners carried out over 2000 retrenchments, with 812 looming this month alone. They closed two factories in Cape Town (Milnerton and Parrow) and are now closing four more in Northwest (Lichtenburg), Free State (Frankfort and Heilbron) and Gauteng (City Deep). This has not only led to job shedding in the company, but has affected businesses in the upstream of the dairy supply chain such as dairy farmers.
Not only is this happening at Clover, the acquisition of Distell by Heineken, is leading to restructuring that will potentially lead to job loses, and wage cuts.
If foreign investment was after all so magical that it can create jobs, introduce new technology, improve infrastructure, introduce our goods to new markets and ensure reinvestment, that would be one thing. But instead, we get foreign investors like Milco, which worsen working conditions and impose wage cuts. If the likes of our initial foreign direct investors – Jan van Riebeek’s Dutch East India Company or Cecil Rhodes’ British South Africa Company – and their successors were in fact supporting our economies, not looting, then South Africa would be the land of honey and milk.
The consequences of restructuring following takeovers of domestic manufactures by multinationals proves that imperialism – or in this case, Israeli sub-imperialism – is mainly concerned with export of capital in order to find conducive conditions that allow for maximisation of profits. That objective is achieved through cost-cutting measures such as the ones implemented at Clover, with devastating consequence for the workers and the economy.
SAFTU is committed to the fight against imperialism, and as such, supports Food and Allied Workers Union (FAWU) and General Industries Workers Union of South Africa (GIWUSA) for the nationalisation of Clover under the democratic control and management of workers. Equally, we support nationalisation of the means of production across the economy, so that our productive forces can be managed on the basis of need and not profit. And so that our unproductive, polluting, tax-dodging capitalists can go the way of the Bell Pottingers, CashPaymasterServices and all the others that deserve liquidation.
President Ramaphosa’s desire for foreign investment has been a tragic distraction, or worse, because across the country these corporates are playing terrible games with our economy:
- UPL snuck in from Mumbai to create ecocidal conditions in Durban when last July its warehouse burned down and poorly-stored toxic chemicals flowed.
- Foreign investor Mara from Rwanda pretended to open a smart phone factory that Ramaphosa cut the ribbon for in October 2019 at Dube Trade Port but in spite of well over R100 million in subsidies, it closed within weeks, as was only revealed this week.
- The much-celebrated car factory Beijing Auto Industrial Corporation proved to be little more than a knock-down kit assembly plant at the Coega Special Economic Zone.
- The Musina-Makhado Special Economic Zone promised R400 billion in Chinese investments but its environmental impact is devastating so has been held up for years.
- The Western firms, banks and consultancies are typically the leaders in encouraging Illicit Financial Flows and other tax dodges, as shown by how easily McKinsey, Bain, KPMG, E&Y, Deloittes, PwC, Hogan Lovells and others ripped off our state-owned enterprises and destroyed our tax services, and how more than two dozen banks – mostly foreign – manipulated the South African currency to make sneaky profits at our expense.
An end to reliance on imperialist and sub-imperialist foreign capital is vital; instead we anticipate President Ramaphosa to join the xenophobia bandwagon and attack foreign workers, many of whom are refugees from his own ruling party’s catastrophic history of backing repressive regimes in most of our neighbouring countries.
SAFTU further demands:
- Creation of jobs so that the 12.5 million people in this country who are not in any form of employment, education and training may be able to find work. It is for this reason that we call on the president to create a jobs guarantee programme that will give people jobs as they are displaced by the economy, one far more ambitious and durable than the brief job creation he committed to in September 2020.
- The transport system, in particular the railway system, must be fixed so that our people can have access to safer (compared to the kombis), cheaper and cleaner transport.
- Decisive punishment must now finally be imposed against corruption both in the private and public sector. The “State Capture” reports continue to illustrate how corruption has prevented the efficient running of State Owned Enterprises, and if government does not strengthen the judiciary to seek retributive justice against these offenders including corporate facilitators, there is no hope for development of our society and an ethos of Ubuntu. The victims of public sector corruption, are in the final analysis, ordinary working people who rely on public goods and services for healthcare, education, policing, etc.
- Open wide the doors of education from nursery schools to tertiary institutions. Our people sometimes remain beholden to backward ideas, partially because they never reached higher education, which is critical in challenging old stereotypes especially around sex, gender, ethnicity and nationality. Patriarchy’s hold over so many men, perpetuates the general violence against women and children, and a macho attitude to life that is often so self-destructive.