The South African Federation of Trade Unions (SAFTU) fully supports the call made by Congress of South African Trade Unions on the South African Reserve Bank not to increase interest rates.
At a time when millions of workers and poor households are already drowning in debt, unemployment, food inflation, transport costs and rising electricity tariffs, any further increase in interest rates would be reckless and socially devastating.
The reasons for this position have already been articulated in previous SAFTU statements and interventions. South Africa’s crisis is not caused by excessive spending by workers or by an overheating economy. The real crisis is structural unemployment, poverty, inequality, deindustrialisation, collapsing public services, and stagnant economic growth.
Higher interest rates will not create jobs. They will not lower the cost of electricity, transport or food. They will not resolve the supply-side failures in the economy. Instead, they punish workers, indebted households, small businesses and struggling communities.
A further rate hike would:
- Increase the cost of home loans, vehicle finance and household debt repayments;
- Deepen the cost-of-living crisis facing workers and the poor;
- Discourage investment and economic expansion;
- Accelerate retrenchments and business closures;
- Push more families into hunger, indebtedness and desperation.
Workers are already carrying the burden of austerity, stagnant wages and rising prices. The Reserve Bank cannot continue to treat inflation as if it exists in isolation from the social catastrophe confronting the majority.
SAFTU reiterates its call for an economic policy shift away from austerity, neoliberalism and inflation-targeting dogma towards a developmental programme centred on job creation, industrialisation, public investment, decent work and the expansion of social protection.
SAFTU further believes that Congress of South African Trade Unions cannot limit itself to merely calling for a pause in interest rate increases while remaining silent on the broader economic policy direction of the government. As a federation in a strategic alliance with the ANC and the SACP, COSATU has a responsibility to insist on a fundamental change in the ANC government’s monetary and macroeconomic policies.
It cannot continue asking workers and the poor to vote for economic programmes that have, for more than three decades, entrenched mass unemployment, deepened inequality, accelerated deindustrialisation and sentenced millions to poverty, hunger and hopelessness. The working class needs a decisive break from neoliberal austerity, inflation-targeting dogma and anti-worker economic policies that continue to protect profits while abandoning the majority.
The working class cannot continue to pay for a crisis it did not create.
A statement was issued on behalf of SAFTU by the General Secretary, Zwelinzima Vavi.
For media inquiries, contact:
National Spokesperson
Newton Masuku
newtonm@saftu.org.za
0661682157
Media Officer
Asive Dyani
0719019564
