COSATU Media Monitor, 25 May 2012
Patrick Craven
COSATU Media Monitor
Friday 25 May 2012
Contents
1. National Union of Mineworkers
1.1 NUM leader says faction behaving like 'baboons'
1.2 Don’t be paper revolutionaries – Zuma
1.3 I'm a good leader, Zuma tells NUM
1.4 NUM calls on Cosatu to lead 'naked march'
1.5 Cosatu calls on NUM to show respect for SACP’s decisions
1.6 NUM warns Numsa to back off on SACP
2.1 Fancourt workers on strike over wage offer
2.2 Black Business Council backs youth subsidy
3.1 Cosatu to paint city streets red over portrait
3.2 Axe Cele, inquiry tells Zuma
3.3 E-tolling: It's all about the money
4.1 Gunman misses Colombia Union leader, kills brother
5.1 SA’s trade unions the biggest obstacle to job creation
5.2 A glimmer of hope for youth unemployment
5.3 Youth Wage Subsidy: Mixing Farce with Force
5.4 Youth or Capital Subsidy: Class antagonism in the open
1. National Union of Mineworkers
1.1 NUM leader says faction behaving like 'baboons'
Kingdom Mabuza, Sowetan, 24 May 2012
The National Union of Mine Workers president Zenzeni Zokwana compared a faction in the union that wants to contest leadership positions as being like "baboons".
Zokwana was speaking at the first day of the union's congress in Kempton Park yesterday. He labelled those nominated to positions as "thankless" and of launching their campaign by using resources of employers who were exploiting them.
TheNUM is due to hold its elective congress where Zokwana's position will be contested by Joseph Montisetse, while general secretary Frans Baleni is up against deputy Oupa Komane. The elections take place on Saturday.
"You cannot depend on companies to give you resources to campaign, you are using a company car to campaign against NUM," he said.
"I was told a story when I was young that the only way of feeding a baboon is with your hand so that at all times it can depend on you for food. If you can sign a deal with an employer that if you succeed to win there will be no strikes, you are not different to a baboon," he said.
He defended the perceived sidelining of Cosatu secretary-general Zwelinzima Vavi from speaking at the congress, claiming there was no tension between Vavi and leaders of the unions.
The fact that he was not going to address the congress had nothing to do with his alleged opposition to the re-election of President Jacob Zuma. Vavi attended the congress but sat among delegates.
Zokwana slated union members for their lack of "solidarity and sympathy" for contesting NUM deputy president Piet Matosa.
"As we meet here today, amongst ourselves, there is one of us who was attacked in Impala (mine). He is today disabled. He was deployed by the union to go and do union work and he was attacked.
"Our comrades have no sense of sympathy, no sense of solidarity comrades, you were even considering getting rid of him. You speak of solidarity and yet you cannot practise it. How heartless can you be to even contest a person who has sacrificed his limb for NUM?
"He suffered disability yet NUM is now thankless and his position is being contested," Zokwana said, calling on workers to unite and build up patriotism against patronage.
1.2 Don’t be paper revolutionaries – Zuma
Gaye Davis & Gcina Ntsaluba, Pretoria News, 24 May 2012
President Jacob Zuma has urged members of the National Union of Mineworkers (NUM) not to become “paper revolutionaries”, but to become more involved in the ANC, from branch level to its powerful national executive committee.
He was speaking at the start of NUM’s four-day congress in Kempton Park yesterday, where just more than 1 000 delegates are to deliberate on crucial policy issues, elect a new leadership and possibly also debate whether to back Zuma for a second term as ANC president.
With more than 320 000 members, NUM is the largest affiliate of Cosatu. The congress, at Emperors Palace, also marks NUM’s 30th anniversary – and the cracks are beginning to show.
NUM president Senzeni Zokwana decried factional battles plaguing the organisation, which is engaged in a turf war with a newcomer, the Association of Mineworkers and Construction Union (Amcu), that has led to violent clashes at Impala Platinum (Implats).
Zuma was welcomed by a sea of red-capped and jacketed NUM delegates singing “Msholozi ebekhona ngomzabalazo (Zuma was there during the struggle)” and “uZuma lo, my president” as he mounted the podium to join the NUM leadership.
“I feel very strongly that your participation as workers in the ANC is vital,” Zuma said.
“You cannot make the issue of your ANC membership a casual one.”
“Paper revolutionaries” were those who stayed outside and hoped that things would be done for them.
“You might create a dangerous thing – to look at the ANC as not part of you,” Zuma said.
The country faced the question of how to realise the goals of the Freedom Charter.
“Don’t expect some nationalist will do it for you,” Zuma said, urging delegates to accept if they were nominated for ANC leadership positions “so you can help take decisions that are progressive”.
Zuma has previously urged Cosatu general secretary Zwelinzima Vavi, who was among the guests, to become a member of the ANC’s top leadership.
“Workers cannot be spectators,” Zuma insisted.
Like many others around the world, “this revolution is approaching a crossroads”, said Zuma.
“This union was among the first to adopt the Freedom Charter when it was unfashionable. You can’t stand by now.”
Other unions might be looking to NUM for leadership, Zuma said.
He urged delegates to discuss his call during their congress.
“This matter must feature in your commissions. What is your role in the second century of the ANC, in shaping South Africa?”
The “enemies of the movement” remained in their trenches.
Zuma said that with their sector’s 9.6 percent contribution to the gross domestic product, mineworkers were one of the biggest contributors to the economy.
They should therefore play an active role in shaping the future of the country.
Among the issues up for debate are nationalisation of the mines, and nuclear technology as a viable means of boosting electricity supplies. Speaking earlier, Zokwana warned that NUM was battling to contain factionalism.
He said some NUM office staff members were being drawn into factional battles by promising employers there would be no strikes.
“If you sign a deal with the employer and guarantee no strikes, you will render those workers leaderless,” said Zokwana.
He named Shiva Uranium as one of the mining companies that was allegedly conspiring with a faction in NUM in a campaign to “impose leadership” against the will of the union’s general membership.
At Implats, threats and killings had been used to scare off NUM members deployed there.
The mine’s licence should be suspended, Zokwana said.
He said tribalism was another basis for forming factions, which he described as “the most backward way” of deciding leadership.
“Comrades, be vigilant,” Zokwana added.
“When comrades lose understanding (of) who they are, they begin to form cliques whose mission is to destroy NUM structures.”
The NUM president also challenged those he accused of leaking information to the media to speak out in the conference, airing their views, so that they could receive answers from the union itself.
“When you lose your compass as a leader, you become a liar, you become a mole, you become a fool.”
Zokwana told delegates that the congress was significant because it would have a direct and indirect influence on the ANC policy conference next month and at the party’s national conference Mangaung in December.
1.3 I'm a good leader, Zuma tells NUM
Olebogeng Molatlhwa, Sowetan, 24 May 2012
In an unprecedented show of self-praise, President Jacob Zuma yesterday described himself as a good leader who knew what he was doing.
Hundreds of National Union of Mineworkers (NUM) delegates listened attentively while Zuma delivered a rousing finale to his speech at the opening of the union's conference in Kempton Park.
Zuma told union members that his ascendency to the highest office in South Africa was not accidental.
"People have been saying 'here is this man who does not know how to run a country'. I knew what I was doing then (during the liberation struggle) and I know what I am doing now. I am not here because I was lost somewhere. I have been here all along," Zuma said to loud cheers.
This could be interpreted as a sign that Zuma is gearing up for re-election at the ANC's elective conference in Mangaung later this year as he moved to dispel the widely held notion that he was a leader not in control of his party or the country.
Zuma also seemed to be sending a strong warning to his rivals, declaring: "There is no diplomat within me. It is either we agree or we don't agree."
Zuma also warned that alliance partners who refused to join ANC structures not to complain when the party took decisions they did not agree with.
"If you are going to stand outside of the ANC and hope that others will influence the party on your behalf, then you are nothing but a paper revolutionary," he said.
Zuma repeated his call that Cosatu members should fill the ANC's internal decision-making structures, something that the federation is to discuss at its elective congress in September.
Cosatu general secretary Zwelinzima Vavi is apparently not in favour of union leaders being in the ANC national executive committee.
Zuma's apparent re-election campaign seems to have received a boost, judging by the warm reception he received from delegates.
The president was careful to strike a cord with members by lavishing praise on NUM's achievements as well as drawing on the historical links the union shared with the ANC.
Zuma told approving delegates that NUM had influenced workers' to adopt freedom when they were in doubt.
"Your participation in the activities of the ANC are absolutely important for our achieving the revolution," Zuma said.
1.4 NUM calls on Cosatu to lead 'naked march'
Olebogeng Molatlhwa, Sowetan, 24 May 2012
National Union of Mineworkers president Senzeni Zokwana yesterday called on Cosatu president Sdumo Dlamini to lead a "naked march" to the Goodman Gallery in protest against the controversial portrait of President Jacob Zuma.
Addressing hundreds of NUM delegates at the opening of the union's elective congress on the East Rand, he said the "naked march" would give Goodman Gallery owner Liza Essers, artist Brett Murray and other artists good reason to paint blacks with their genitals exposed.
Murray's artwork shows the president with his genitals exposed.
Zokwana said only men should attend the march because they would all be naked. He did not say when the march would be held.
Echoing the sentiments of those who have been condemning the display, Zokwana said the artwork was not inspired by artistic expression but by racism.
"That painting was just an expression of how certain white people still perceive blacks," said Zokwana to loud cheers.
Murray's painting - titled The Spear - has caused an uproar since it was publicised in the media last week.
Zuma and the ANC have since filed papers in the Johannesburg High Court in a bid to secure an urgent interdict that would see the painting removed.
1.5 Cosatu calls on NUM to show respect for SACP’s decisions
Natasha Marrian, Business Day, 25 May 2012
Congress of South African Trade Unions (Cosatu) president Sdumo Dlamini called on the National Union of Mineworkers (NUM) to respect the decisions of the South African Communist Party (SACP), a likely reference to the party's decision to have its general secretary, Blade Nzimande, serve the party while retaining his cabinet post.
Cosatu has long called for the position of general secretary to be a permanent one, the issue has heightened tension between the federation and its communist ally, as the SACP refused to have Mr Nzimande relinquish his ministerial post.
Mr Dlamini defended the SACP on Friday, saying its decisions should be respected.
"The party has taken decisions on how it wants to run its affairs, we should respect that because we also want them to respect our decisions," he said, addressing the NUM national congress.
He also spoke out about a hostile stance in the federation towards those who serve on both Cosatu and the SACP's highest decision-making bodies.
There are seven members of Cosatu's central executive committee who serve on the SACP's central committee including Mr Dlamini and NUM general secretary Frans Baleni.
He told delegates that the presence of these leaders among the SACP's top brass should not be "misused" and "interpreted wrongly".
"They must never be accused because are standing there as members of the SACP... They do not represent Cosatu."
"They do not seek to sit in the central committee... to discuss positions of Cosatu," he said.
Cosatu leaders serving on the central committee appear to be closer to the African National Congress leadership, led by President Jacob Zuma .
These include Mr Dlamini, Mr Baleni, NUM president Senzeni Zokwana and National Education, Health and Allied Workers Union general secretary Fikile Majola.
Mr Dlamini urged delegates to support the ANC leadership elected in Polokwane, in line with Cosatu's 2008 resolution to do so.
"Why are we defending the Polokwane leadership? Because we were aware of an emerging tendency from our own ranks of people who were resolved to undermine that leadership, the tenderpreneurs," he said.
He was adamant that this position had not changed and questioned those challenging it.
Mr Dlamini condemned public spats and bickering in the ruling alliance, saying this served only to embolden the "enemies of the working class".
"What else should they do when they see us strangling ourselves in public?" he asked.
Mr Dlamini told the federation's largest affiliate that unity among them was paramount. This comes as the leadership contest in the NUM has caused divisions, with allegations of impropriety hurled by the two factions contesting the poll.
One faction is pushing for the incumbent leadership to remain in place while the other wants to see Mr Baleni replaced by deputy general secretary Oupa Komane.
"Don't make the mistake of creating factions... Factions must never be elevated to issues of principle," he said.
Mr Dlamini's unifying message echoed that of Mr Nzimande — when he addressed the congress on Thursday — and Mr Zuma, who spoke on Wednesday.
The congress was set to take decisions on its stance toward the nationalisation of mines and on the ANC leadership question on Friday and voting will take place on Saturday.
1.6 NUM warns Numsa to back off on SACP
Olebogeng Molatlhwa, Sowetan, 25 May 2012
The National Union of Mineworkers and the National Union of Metalworkers of South Africa seem to be on a collision course over SA Communist Party leaders who also hold government positions.
In a political report, presented yesterday by NUM general secretary Frans Baleni, the union effectively warns Numsa to back off and refrain from interfering in internal SACP affairs.
Numsa has supported a call that SACP general secretary Blade Nzimande and his deputy, Jeremy Cronin, step down from their government posts and return to the party full-time.
Nzimande is also Minister of Higher Education and Training while Cronin is Deputy Transport Minister.
Now the impasse has attracted the attention of NUM, who have come out in support of the SACP.
"This tendency has also sought to attack and isolate fellow revolutionaries for being active in both the ANC and the SACP," the report states.
"All of a sudden it has become a problem to be a leader in the SACP and ANC. All of a sudden it has become problematic to be a leader in the SACP and government."
Addressing what might be interpreted as Numsa interference in the leadership dynamics of the SACP, the union says: "The last issue the party within its structures should engage and resolve on pure organisational grounds is the question of the availability of SACP office bearers on a full-time basis on the provincial and national levels.
"This debate should be handled within the party structures."
The report warns labour federation Cosatu against being anti-government.
Cosatu recently emerged as the ANC and government's fiercest critic.
Cosatu's general secretary Zwelinzima Vavi led a popular march against the e-tolls in March, in which he warned that Cosatu would intensify protest action against the government if it failed to scrap the tolls.
NUM's report says Cosatu should "avoid the dangers of masculine populism which sounds rhetorically militant but in actual fact isolates the movement".
NUM has also criticised the alliance for being "indecisive" even when partners had agreed on certain issues.
It also called on the ANC to vet its members and to introduce political education.
2. Workers
2.1 Fancourt workers on strike over wage offer
Janine Oelofse, Business Day, 25 May 2012 |
About 100 golf estate workers went on strike yesterday to drive home their wage demands, protesting outside the gates of Fancourt, the prestigious golf estate and hotel in George. The workers want a 10% wage increase, 100% bonus, as well as additional meal and transport subsidies, while Fancourt, one of the largest employers in George, has offered a 5% pay hike and a 50% bonus. The strike is the second this month to hit luxury golf estates along the Garden Route after one at Simola golf estate, outside Knysna, almost two weeks ago. Fancourt sales and marketing director Carl Reinders said about 80 to 100 of the South African Parastatal and Tertiary Institutions Union’s 222 members were taking part in the protest. Those who were not participating had either come to work or were staying away because they were being intimidated by other union members, he said. Mr Reinders said operations at Fancourt were not affected because a detailed industrial action plan had been implemented, including replacing the strikers with casual labour. Union general secretary Ben van der Walt said members were hopeful of breaking the deadlock with management. He said the wage increase trend in SA was between 6% and 8%. Mr Reinders said the personal wealth of the Fancourt shareholders, often raised during wage talks, created a "false sense of security amongst employees despite the tough economic climate and business performance". The Simola strikers demanded a 15% pay hike. South African Trade and Allied Workers Union regional organiser Manuel Mandeka said yesterday some workers were earning R1200 a month, while "white management" was earning R45000 a month. |
2.2 Black Business Council backs youth subsidy
Penwell Dlamini, Sowetan, 25 May 2012
The Black Business Council has expressed its support of the proposed youth wage subsidy, calling for conditions to prevent exploitation.
The national Treasury proposed that the wages of all workers aged between 18 and 29, who earned less than R60,000 a year, the current tax threshold, be subsidised for a period of two years.
Registered employers would receive the subsidy via credits on their Pay As You Earn accounts. Treasury estimated that the programme would subsidise 423,000 workers. Of these, 245,000 jobs would be created.
The job creation plan proposes that the youth wage subsidy would reduce the financial costs of hiring inexperienced youth and help to make their training more affordable.
Cosatu has rejected the proposal, saying it would enable the private sector to get cheap labour and would result in jobs losses since firms would release older people to hire less expensive labour.
The Black Business Council (BBC) yesterday also endorsed the proposal, but said it should go with certain conditions.
"We should explore every possible avenue to fight unemployment, in particular among the youth population in which it is alarming," BBC spokesman Sandile Zungu said.
"An intervention aimed at encouraging people to employ young people, such as the youth wage subsidy, should be welcomed. We therefore welcome the youth wage subsidy."
But Zungu cautioned, saying: "Many times very smart interventions such as this have unintended consequence. Corporates would look at them as additional sources of revenue that would minimise their costs of employment.
"The focus should be the checks and balances to make sure that the concerns that have been expressed by Cosatu, which are legitimate, are not realised in the scheme."
3. South Africa
3.1 Cosatu to paint city streets red over portrait
Mpume Madlala and Sapa, Daily News, 24 May 2012
Organisers of the SA Traditional Music Awards (Satma) and members of Cosatu plan to march in Durban on Saturday to protest against the now vandalised artwork depicting President Jacob Zuma.
The painting, titled The Spear, was part of Cape Town artist Brett Murray’s exhibition Hail to the Thief II.
Satma founder Dumisani Goba said the “disrespectful” artwork, in which Zuma’s genitals were exposed, had compelled them to stage the march in the Durban CBD.
“It is a cultural event which strongly opposes the artful depiction of our president,” he said. “This is against ubuntu principles and our culture.”
Goba said cultural practitioners, musicians, cultural groups, artists and the public were expected to join the march.
Cosatu KZN general secretary Zet Luzipo said they were hoping for about 5 000 marchers. “We are not happy about the conduct of (Murray) and we will be voicing that,” he said.
The march will start at King Dinizulu Gardens, opposite the Durban Christian Centre, at 11am and proceed down Pixley Ka Seme (West) Street to the city hall where a memorandum will be handed over to the Department of Justice. A stage would be set up outside the city hall for performances.
on Wednesday, four men appeared in court regarding the painting that was on display at the Goodman Gallery in Joburg.
Spray-painting
Businessman George Moyo appeared in the Hillbrow Magistrate’s Court for allegedly spray-painting the first three letters of the word “respect” on the gallery wall.
Louis Mabokela then appeared alongside Barend la Grange. Mabokela was filmed smearing black paint over the painting just moments after La Grange painted two red crosses over the artwork.
Gallery security guard Paul Molesiwa appeared in the same court on an assault charge, laid by Mabokela.
Molesiwa will return to court on May 28.
On Thursday, a full bench of the Johannesburg High Court will hear an ANC application to have the painting taken down.
Commenting on the defacing of the painting, art expert Ruarc Peffers said it would not enhance its value.
“I don’t believe the value will change… In a week or two this will be a distant memory.”
The ANC and Zuma have applied to have the painting removed from the gallery on the grounds that it violates his and the party’s dignity and rights. It also wants the City Press newspaper to remove a photograph of the painting from its website.
The Freedom of Expression Institute said on Wednesday that it supported the Goodman Gallery’s refusal to remove the painting.
“We do not want to go back to a situation where art is censored because it offends the ruling party, or some take it upon themselves to dictate to others what is tasteful and acceptable. We want to celebrate our artists, and not denigrate and control them in the way of apartheid, though they may provoke, push the boundaries and even cause offence,” it said.
3.2 Axe Cele, inquiry tells Zuma
Sam Sole, Mail & Guardian, 25 May 2012
A court challenge by suspended police chief Bheki Cele could stymie the president's bid to save crime intelligence lynchpin Richard Mdluli.
President Jacob Zuma looks set to fire suspended national police commissioner Bheki Cele following receipt of a damning report into Cele’s fitness to hold office.
The three-person board of inquiry recommends unanimously that he should be sacked.
But Cele is fighting back.
He has lashed out at the report as “a crude stitch-up job” and has given notice that he will seek an urgent court review.
Zuma set up the inquiry last year to consider Cele’s role in the police leasing scandal in which property mogul Roux Shabangu procured South African Police Service (SAPS) leases for buildings in Pretoria and Durban. Both were cancelled following an investigation by the public protector.
The report, which the Mail & Guardian has seen, was delivered to the president last Friday and urges him to remove Cele in terms of the Police Act.
Cele received a copy of the report on Tuesday and was given until the end of the week to make representations regarding its findings.
According to a reliable source, Zuma’s legal advisers suggested that Cele be given 10 days to respond but this was cut to four. The urgency, according to the same source, related to the need to “move forward within the police environment, considering the current situation”.
Unexpected resistance
This “situation”, it appears, refers to the need to replace acting national commissioner Nhlanhla Mkhwanazi. He has emerged as unexpectedly resistant to executive interference with the investigation of crime intelligence lynchpin Richard Mdluli.
Mkhwanazi’s decision to give notice of his intention to suspend Mdluli again has the potential to torpedo the government’s efforts to rehabilitate Mdluli, despite the accusations of murder and corruption hanging over him.
Although Zuma is obliged to consider Cele’s representations, senior police sources say plans are already under way to replace both Mkhwanazi and Cele.
The frontrunner is said to be another KwaZulu-Natal stalwart, Nathi Nhleko (see “Why Nhleko is police chief frontrunner”)
Former chief whip
Nhleko is a former ANC chief whip who found himself in the political wilderness during the Thabo Mbeki presidency, reportedly because of his closeness to Zuma.
But a swift transition to the leadership of the SAPS may be stymied by Cele’s intended high court action.
Although government advisers believe Cele’s legal prospects are poor, the inquiry report does contain some evidence and inferences that might open the door for a challenge.
The board was asked to consider “whether the national commissioner acted corruptly or dishonestly or with undeclared conflict of interest”.
Although the board found the evidence fell short of proving that Cele acted corruptly, it ruled that Cele was “dishonest in denying knowing Shabangu and having had dealings with him”.
“The national commissioner’s resolve to ensure, at all costs, that the SAPS was going to rent buildings … linked to Shabangu, at demonstrably exorbitant rates, when he clearly knew Shabangu … indicates that he acted with an undeclared conflict of interest.”
Hlela’s evidence
The board’s finding that Cele was dishonest is based on its acceptance of the evidence of Hamilton Hlela, the former deputy national commissioner in charge of procurement and the man who has emerged as Cele’s nemesis in the leasing saga.
Key to Hlela’s evidence was his testimony that in March 2010 Cele called him back to a function in Boksburg after he had already left to return to Pretoria.
According to Hlela, Cele wanted to move out of the old Wachthuis police headquarters in Pretoria and Cele told him to expect a call from someone about a building available for occupation.
On the same day, Hlela said, Shabangu contacted him.
In his evidence, Cele confirmed that he had discussed accommodation with Hlela but emphatically denied he had said anything about anyone contacting Hlela about it.
In their argument to the inquiry, Cele’s lawyers pointed out that Hlela’s claim that he was instructed by Cele to expect a phone call surfaced for the first time in his statement to the board inquiry - it had not been mentioned during the public protector’s earlier investigation.
Motive
They also suggested that Hlela had a motive to implicate Cele because the commissioner had called in the Special Investigating Unit to probe the procurement division.
Shabangu refused to give evidence at the inquiry.
Cele testified that he met Shabangu for the first time in July 2010, more than three months after the conversation with Hlela.
But the report found there was “no reason to doubt” Hlela’s evidence.
It noted: “This is corroborated by the fact that, on the same afternoon, Shabangu, a person completely unknown to Hlela, telephoned him.”
The report argues that Cele’s alleged dishonesty can only have been motivated by a secret conflict of interest.
“The most plausible and reasonable inference to be drawn from the set of facts is that the national commissioner knew Shabangu and that he gave him Hlela’s contact numbers. He consequently thus had an interest in Shabangu securing the lease.”
Protector
The public protector in her report found no evidence of any improper relationship with Shabangu and it is expected that Cele’s lawyers will argue that the board made errors of fact and law in coming to these conclusions.
Even if Cele succeeds in rebutting the findings of dishonesty and a conflict of interest, there seems less chance of countering findings related to mismanagement of the procurement process.
The report concludes: “The evidence established that the national commissioner, as the accounting officer of the SAPS, grossly misconducted himself with regard to the procurement of the Sanlam Middestad and the Transnet buildings …
“The evidence demonstrated that the national commissioner favoured the buildings owned by Shabangu and that he, together with Shabangu, pushed for the entire buildings in both Pretoria and Durban to be leased by the SAPS, even when the needs analysis showed that a lesser amount of lettable space was required.”
The board treated Cele’s claim that he relied on the advice of his subordinates as an aggravating factor.
“The insistence of the national commissioner on his innocence in this regard demonstrates palpably that he fails to appreciate the nature and importance of the responsibilities which attach to his position.”
‘No critical assessment’
Vuyo Mkhize, a spokesperson for Cele, said: “The board appears to have accepted the evidence of Hlela without any critical assessment …
“Hlela made concessions during his testimony on how he, personally, initiated the procurement process; how he met Mr Shabangu and arranged a presentation on his own; how he approached the acting director general of DPW [department of public works] to motivate a single-supplier procurement process … all of which were done without the knowledge of General Cele …
“Surprisingly, the board attributes these and other violations of the supply chain management of SAPS to General Cele, without explaining the basis for such a conclusion.
“This report is nothing but a crude stitch-up job designed to mislead President Zuma into believing that there is justifiable cause to rob SA of the services of the best police commissioner the country has ever had,” Mkhize said.
“General Cele is busy finalising an application to the high court for a review of this report.”
3.3 E-tolling: It's all about the money
Farzana Rasool, ITWeb, 24 May 2012
Of late, Gauteng motorists and SA citizens in general have been feeling like not much more than a collective pie for government to dip its fingers into.
This has largely been due to the controversial e-tolling system that sparked public outrage and heated debate across different sectors and income groups. The biggest problem is that, instead of government sticking its fingers into several different pies, the taxpayer is the sole source and already heavily dug into, sometimes by more than one outstretched forefinger.
The electronic tolling system was established to pay off the SA National Roads Agency's (Sanral's) R20 billion debt and to fund future maintenance of the road network in Gauteng.
It has been plagued by several problems and unanswered questions since its most recent introduction to the public. These include questions around the relevant legislation being in place, whether sufficient consultation was carried out, why a largely foreign company was selected to implement and operate the system, and how much the system costs.
The most recent controversies around the system are about who actually benefits from e-tolling and where the money will essentially go. Links have been made between the system and the ruling party, the Congress of SA Trade Unions (Cosatu), the Government Employee Pension Fund (GEPF), and companies involved in the arms deal. Pie, meet fingers.
The real motivation
Finance minister Pravin Gordhan denied that the additional R5.75 billion funding, which was provided by Treasury to Sanral to help ease its debt, was motivated by GEPF bonds in the agency.
He admitted that National Treasury did know the Public Investment Corporation (PIC) had acquired bonds in the agency, to the sum of R17 billion, but the additional funding was provided to ease affordability concerns around the e-toll tariffs.
The PIC is wholly owned by government and manages investment funds on behalf of public sector entities. Clients of the PIC include the GEPF. The GEPF confirmed that, as at the end of February 2012, it holds roughly 50% of Sanral bonds, valued at about R15.7 billion.
“Our investment in conventional and inflation-linked bonds, issued by government and state-owned entities (including Sanral), is informed by our investment policy, which takes into account our long-term liabilities as a pension fund. Importantly, the crafting of our investment policy is done in consultation with the minister of finance, who acts as a guarantor of the fund on behalf of government,” says Arthur Moloto, chairperson of the board of trustees.
The Inkatha Freedom Party (IFP) said this is the real reason behind government's push to ensure the controversial Gauteng e-tolling project succeeds.
Describing the investment as “pre-1994 tactics”, IFP's spokesperson on finance and on the e-tolling project, Narend Singh, says it is finally clear why government wants to save this project at all costs, despite it being unfeasible and despite it receiving so much public resistance.
"Never could one have imagined such a huge cover-up in our post-democratic dispensation. It is now clear that there are huge economic issues at stake. If the tolling project fails, government will not only have to bail out Sanral, but it will have to bail out the civil servants' pension funds as well,” he comments.
Why so secretive?
This month it was reported that the ANC is set to profit from e-tolling as well.
However, the party denies this. “There is no e-tolling that is linked to the ANC. It is individual people. The ANC is not linked to e-toll profits,” says national spokesperson Jackson Mthembu.
For this reason, Democratic Alliance (DA) Gauteng caucus leader Jack Bloom called on Sanral to disclose all 33 sub-contracts involved with the Electronic Toll Collection (ETC) consortium that will be running the e-toll system.
E-toll revenue vs costs
ETC has reportedly only disclosed nine of the 33 sub-contracts. This includes catering company Tsebo Holdings, which is 15% owned by Nozala Investments and 15% by Lereko. Nozala is headed by Salukazi Dakile-Hlongwane, a trustee of ANC front company Chancellor House, and Lereko is owned by former environment minister Valli Moosa and Chancellor House trustee Popo Molefe.
“Another company is Gijima, which is 35% owned by well-known ANC backer Robert Gumede, which was awarded a multimillion-rand contract to design and run the entire IT system for the project,” says Bloom.
Sanral and ETC declined to provide details of the contract, saying confidentiality clauses are in place. “Why all the secrecy on contracts paid with public money?” asks Bloom.
He adds that this feeds all sorts of speculation that needs to be put to rest, including a possible link to an arms deal company.
Foreign boost
The DA also referred the e-tolling system to the public protector's office in light of a possible link with suspected arms deal corruption.
Bloom says there are allegations of links between Swedish companies involved in the arms deal, and the Vienna-based Austrian company Kapsch TrafficCom, which is the largest shareholder in the ETC consortium.
“Swedish Kapsch TrafficCom holds 40% of ETC, while Austrian principal Kapsch has the remaining 25%. The Swedish arm was previously part of Swedish manufacturing company Saab Aerospace and later became part of Kapsch AG.
“Saab, which sold 28 Gripen jet fighters to SA in the arms deal, sold a subsidiary called Combitech Traffic Systems to Kapsch. Together with arms deal company BAE Systems, it formed a company called SANIP, which was the joint venture between Saab Aerospace and BAE Systems to fulfil their obligations under the Arms Deal Offset Programme, which has been revealed to be largely empty,” says Bloom.
Also, Kapsch TrafficCom reported a boost in its 2010/11 financial year, partially thanks to its involvement in e-tolling.
Revenue in its road solutions projects segment, under which e-tolling falls, grew 247% year-on-year, to €158.9 million.
“This positive development resulted largely from electronic toll collection system implementations in SA and Poland,” states the annual report. CEO Georg Kapsch writes in the report that the year to March 2011 was the “most successful fiscal year to date in the corporate history of Kapsch TrafficCom”.
Double standards
Despite its vehement rejection of the e-toll system, Cosatu apparently benefited from the project, to the tune of R24 million.
DA shadow minister of transport Ian Ollis calls the federation's behaviour hypocritical. “Cosatu's disapproving public stance on e-tolling as being 'ill-conceived, corrupt and too expensive for this country's poor' clearly does not apply to their investment arm.”
Ollis says the trade union federation reportedly made R24 million profit through investment in a construction company, which benefited from the Gauteng Freeway Improvement Project (GFIP), for which e-tolling was created.
Cosatu's investment arm, Kopano Ke Matla, reportedly holds a 3% stake in road construction company Raubex, and Raubex received R800 million from a project that forms part of the GFIP.
“As Kopane's 'sole beneficiary', Cosatu has thus made a significant profit from a road-infrastructure project that they have vehemently opposed on every possible platform. This is pure hypocrisy. While lamenting the impact of rising energy prices and transport prices on SA's poor, Cosatu have in actual fact been capitalising on their misery,” says Ollis.
He adds that Cosatu general-secretary Zwelinzima Vavi claims he was unaware of the investment company's involvement in toll roads and the federation has withdrawn its investment from Raubex.
Financial erosion
The financial woes related to e-tolling isn't limited to where the money will go, but also to what will happen if there is no money at all and what needs to be done until money comes in.
The DA says Gordhan must shed light on the status of Sanral's debt following the e-toll delay. The system has been postponed pending the outcome of legal processes brought against it.
Delaying the implementation of e-tolling is credit negative for Sanral, according to Moody's Investors Service.
Sanral relies on e-toll revenues to service its debt of R20 billion, which it incurred to finance the GFIP. “The postponement adds uncertainty and establishes a precedent for a final court decision on GFIP e-tolls, which we expect by the end of May or June,” says the service.
“Any final pronouncement against GFIP e-tolls will have severe credit negative repercussions for the road agency and will exert further negative pressure on the finances of the South African national government (A3 negative), Sanral's unique shareholder and guarantor of a large proportion of the agency's debt. Indeed, the national government will be required to step in and service or redeem debt incurred by Sanral to finance the GFIP project.”
Moody's subsequently downgraded Sanral's ratings, in light of the e-toll issue. Its global scale, local and foreign currency issuer ratings downgraded to Baa2/P-3 from Baa1/P-2; and its South African national scale issuer ratings downgraded to A2.za/P-2.za from Aa3.za/P-1.za.
“The delay in GFIP e-toll collection adds pressure on Sanral's finances and raises concerns over its medium-term financial sustainability," says Kenneth Morare, Moody's lead analyst for Sanral.
The service adds that, so far, delayed implementation and lower-than-anticipated toll tariffs have resulted in a revenue loss of about R2.7 billion for Sanral (40% of its estimated 2012 annual budget), which will grow to R3 billion by the end of May as a result of the recent postponement.
“These losses will grow by an estimated R100 million each month the delay continues and will gradually erode the company's cash buffer.”
Pension risk
DA shadow minister of finance Tim Harris says finance minister Pravin Gordhan must brief the Parliamentary committee on the status of Sanral's debt, considering the GEPF's stake in Sanral. Arthur Moloto, chairperson of the fund's board of trustees, confirmed that only half of the R15.7 billion worth of bonds have a government guarantee.
“This raises the question of government pensioners' exposure to default risk associated with almost R8 billion worth of their pension,” says Harris.
Media liaison at the GEPF, Khaya Buthelezi, says, as an investor and bondholder in Sanral, the GEPF is waiting for guidance on the matter from the agency. “We are still observers at this point in time. We don't want to comment right now on the figures being thrown around.”
No liquidation
Harris also says Gordhan must answer questions on the fiscal impact of e-toll debts.
“The result from the delay in Gauteng's e-tolling will have important implications for South Africa's fiscal policy, the funding of infrastructure, and National Treasury's influence in government.”
He explains that from a fiscal policy perspective, if National Treasury has to provide a backstop of taxpayers' money for all of Sanral's debt, there will be a material effect on the fiscal framework and key debt-to-GDP numbers. “This will also raise questions about whether all debt issued by state-owned enterprises should be regarded as contingent liabilities for the national fiscus.”
Treasury confirmed Sanral has R37.9 billion worth of debt and R21.4 billion of this, or 56%, is guaranteed by government.
“The halt in the e-tolling project raises serious concerns about Sanral's ability to repay this debt, but the Treasury director-general today confirmed that Sanral would not be allowed to liquidate and that National Treasury would meet their debt obligations for at least six months,” says Harris.
Treasury did not respond to requests for further information and comment by the time of publication.
However, Gordhan, at the World Economic Forum on Africa on 11 May, reportedly said SA's budget will not be affected by the e-toll delay and the impact of this postponement will be managed.
The delay also means that e-toll call centre staff, staff at e-toll outlets, and rent for these spaces are being paid while the system is indefinitely postponed. Sanral has not responded to questions around the costs being incurred even while the system is on hold.
Where's the logic?
The projected annual revenue for e-tolling in the 2013 financial year is R1.01 billion, yet the operation costs for the system in the same year will be R1.12 billion.
This is according to transport minister Sibusiso Ndebele, in response to a question at the National Council of Provinces (NCOP).
The minister said the projected income from e-tolls for 2012 cannot be determined, because the system has not yet become operational, but the toll operation costs will be R519.6 million.
The projected annual toll revenue on the Gauteng toll route for the 2014 financial year is R2.49 billion and the toll operation/collection cost for the same period will be R1.42 billion.
The cost of maintenance and improvement of roads for the 2012, 2013 and 2014 financial years will be R2.29 billion, R668.7 million and R373.7 million, respectively.
DA member of the NCOP in KwaZulu-Natal Alf Lees says the figures demonstrate that the implementation of the Gauteng tolls was ill conceived and poorly planned. He adds that the high cost of administering the tolls explains why the cost of travelling on the toll roads is so outrageously high.
“On these grounds alone, the toll roads should never have been given the go-ahead by the Gauteng government. Treasury and the Department of Transport argue that tolling is necessary to fund this type of road infrastructure. And yet they do not seem to consider just how much operating the e-tolls actually costs.”
The high operational cost of e-tolling is the main issue most organisations have with the system.
Financial honour
Cabinet has appointed a committee to be chaired by deputy president Kgalema Motlanthe to co-ordinate all work around the GFIP.
Other members of the committee are the ministers of transport, finance, public enterprises, and performance monitoring and evaluation.
“This committee will, among other things, move with urgency to ensure that Sanral's financial stability is not affected in any way. The committee will assess the government's response to the North Gauteng High Court ruling and other related legal matters. It will also meet with appropriate stakeholders in order to find constructive solutions and consensus on the outstanding matters.”
Cabinet says the decisions government makes regarding the future of the GFIP will have serious implications for how SA finances future infrastructure projects. “We must also guard against decisions and actions that may impact negatively on our track record in the prudent management of government finances. Government has to act responsibly, ensure that it and the state-owned enterprises honour their financial obligations timeously.”
4. International
4.1 Gunman misses Colombia Union leader, kills brother
Sowetan, 25 May 2012
A gunman opened fire on a labor leader in the Colombia city of Cali but missed, killing the man's brother and wounding two other people, including a 4-year-old girl, police said.
Adolfo Devia, vice president of the Cali Municipal Corporations Workers Union, escaped the Wednesday night attack uninjured, Cali police chief Fabio Castaneda told The Associated Press. But his 26-year-old brother, Jonathan, died of a gunshot to the head, Castaneda said.
He said neither of the two people wounded were in serious condition.
Colombia's national police director, Gen. Oscar Naranjo, said the 21-year-old gunman was captured by the union leader's bodyguards and was being questioned.
Two other leaders of the union, known as SINTRAEMCALI, received death threats last month signed by The Black Eagles, a far-right militia, inviting them to their own funerals, according to a letter that 10 U.S. congressmen sent to U.S. President Barack Obama last week.
Noting "an intensification of violence against labor activists" in Colombia, the letter urged Obama to ensure the Andean nation keeps its commitments to protect labor leaders under a free trade agreement between the countries that had just taken effect.
SINTRAEMCALI has been pushing for reinstatement of 51 workers that it says were illegally fired for union activities and that the International Labor Federation has recommended be rehired.
Colombia is the world's most dangerous country for union organizers, according to the International Trade Union Confederation.
So far this year, seven trade unionists have been killed in Colombia, compared to 30 for all of last year, said the National Union School, which keeps count.
5. Comment
5.1 SA’s trade unions the biggest obstacle to job creation
Loane Sharp, Business Day, 25 May 2012
SA’s labour market is a shambles. About 8,5-million people are out of work or underemployed. Last year, SA lost double the number of working days due to strikes than at the height of rolling mass action against apartheid. This year, labour productivity fell to the lowest level in 40 years.
Labour’s share of national income is at a 50-year low. Over the past three years, wages have risen by 11,5% a year on average — treble the consumer inflation rate over the period. Growing numbers of employers are using automation, mechanisation and other labour-saving methods as an alternative to labour, with the result that the economy’s labour intensity has fallen sharply — by 8,1% in the past three years alone. It now takes 36,2% fewer workers to produce a given unit of output than it did in 1960.
According to the World Economic Forum, some aspects of South African labour laws are the most restrictive in the world. The International Monetary Fund believes aspects of these laws need to be relaxed, and even the drafters of the 1995 Labour Relations Act have called for reforms. No matter how you look at it, we can surely all agree that labour market outcomes — including the most important, unemployment — demand an urgent rethink of the labour environment.
One thing is certain: we will not get the necessary rethink. Employed people, at 13,5-million, outnumber unemployed people, 8,5-million, by a ratio of nearly 2: 1. There is a great deal of stealth around membership figures for African National Congress (ANC)-aligned organisations, but the most credible figures suggest the Congress of South African Trade Unions (Cosatu) has 1,2 -million members and the ANC Youth League 360000 members — a ratio of more than 3: 1.
The voting calculus — if we assume that the circuitous path of democracy in SA derives its ultimate direction from the voting booth — suggests that established workers will trump the unemployed. Minimum wages, which are supposedly intended to maintain a living wage for workers, are in fact designed to keep young and inexperienced job-seekers out of the workplace. Businesses respond to minimum wages by retaining the workers (mostly older, trained and experienced workers) whose productivity justifies the minimum wage, and retrench the rest.
Opposition to the youth wage subsidy has the same object, namely keeping young people out of work. Young people, having neither practical skills nor prior work experience nor on-the-job knowledge to offer employers, can only compete by offering themselves to employers at lower wages, which in turn tends to lower wages for all workers. Trade unions will not tolerate this.
Wage subsidies have existed since the 1950s in 45 countries around the world, and Cosatu’s fears have not been realised in any of these countries in any period. The prominence given to Cosatu’s idle conjectures is a measure of the dominance of its sheer membership numbers in the ANC’s electoral reckoning. It is high time that we recognise that Cosatu is the biggest single impediment to job creation in SA.
A further impediment to the efficient functioning of SA’s labour market is the government education system. The cost of producing a matriculant in this system, excluding parental contributions in the form of school fees, is now nearly half a million rand — way higher than the equivalent in private education. This is largely the result of relentless increases in teachers’ and bureaucrats’ wages, but the cost is dispersed and practically invisible since it is largely paid by the taxpayer and non-transparently reported.
Teachers’ and bureaucrats’ salary gains have been the work of the South African Democratic Teachers Union (Sadtu), a Cosatu affiliate with 247000 members out of 386000 teachers, or a unionisation rate of 64%. And while salaries have been rising in government schools, outcomes have been deteriorating. Sadtu is the prime mover in this, too — it has consistently vetoed the government’s proposal to use learner performance as a basis for evaluating teacher performance, and has persistently refused to allow any performance agreements at all.
SA spends 6% of gross domestic product on education, more than Canada, France, or the UK. But the results are appalling. There is a significant negative correlation between education spending per learner and literacy and numeracy performance, meaning that money is being substantially wasted.
For those who enjoy a good conspiracy theory, it is not beyond the bounds of possibility that Sadtu is deliberately dumbing down SA’s youth to prevent them from competing with established workers. The rising cost and deteriorating quality of government education is the biggest single obstacle to long-term equality of opportunity and income between the races: SA’s government schools keep black kids poor, and a lot of people seem to want to keep it that way.
We may summarise as follows: teachers’ unions’ influence over government schools makes black kids unemployable, and trade unions keep black youth who by some miracle become employable out of work. It is high time, in other words, to crush the power of the trade union movement.
We can do so in several practical ways, all of which are consistent with article 23,1 of the Universal Declaration of Human Rights, the so-called "right to work":
• repeal the "closed shop" laws that compel job-seekers to join a trade union as a precondition for obtaining a job;
• repeal the "agency shop" laws that compel workers to pay union membership fees whether they belong to a union or not;
• require that trade unions ballot their members ahead of a strike, and further require that a two-thirds majority votes in favour of a strike;
• prohibit open ballots and require secret ballots: open ballots lead to intimidation of union members who vote against a strike;
• prohibit employers’ collection of trade union dues on trade unions’ behalf;
• prohibit the automatic extension of bargaining council agreements to entire industries or sectors, so that these agreements are voluntary;
• on a nationwide basis, place an upper limit on wage settlements so that wage increases may not exceed labour’s marginal nominal productivity growth; and
• make unions liable for the loss of earnings that occurs during work stoppages.
Although, as predicted earlier, there will be no rethink of SA ’s labour laws, this would be an opportune time to reassess trade union regulations, because trade unions, viewed as economic entities, have suffered two major setbacks in recent years.
First, union membership has fallen since official records began in 2006, from 3,5-million to 3,3-million members, a loss of 129424 members representing membership dues of R95773760 a year. Second, trade union members’ participation in strikes has been low (on average since 2006, just 1,4% of union members turned out for strike action) and highly variable (ranging from 0%-8,8%, depending on the goals, duration and time of year of individual strikes).
This opportunity to smash the unions and enhance the economy’s long-term job-creating potential will be lost, for entirely political reasons. Keeping some of the most senior politicians in power and, by implication, out of jail, means that unholy alliances will be made. The clamour for greater disbursement of taxpayer resources means that populist causes and contradictory promises will grow unchecked, as will the disillusionment that follows. A clumsy and haphazard equilibrium will stay in place until the unemployed outweigh the employed in political calculations, which will occur only in about 20 years’ time, given current rates of population, labour force and employment growth.
We can only hope, in the meantime, that populism, youth radicalism, xenophobic violence, tribalism and service delivery protests — all of which are ultimately manifestations of joblessness — do not erupt into an uncontrollable conflagration.
• Sharp is a labour economist with Adcorp.
5.2 A glimmer of hope for youth unemployment
Terry Bell, Business Report, 25 May 2012
Continually lost in the ongoing row about the mooted youth wage subsidy is the context in which it is being proposed. Not just the national, but the global context.
It is a context in which there are fewer and fewer jobs for more and more job seekers. At the same time, there is a widespread assumption that there will be jobs to be had if only the millions of unemployed youth in particular were provided with adequate skills.
But both surplus capacity and surplus production, together with the ongoing development of technology make this highly improbable. The end result is not only increased, and increasing, joblessness, but also a sharp rise in temporary and part-time work and a steady decline in the disposable incomes of working families.
As the British Trade Union Congress noted this week: “While part-time or temporary jobs may be better than no work at all, people are having to make huge salary sacrifices, reduce their hours and trade down their skills to stay in work.”
In the longer term this means major structural changes are probably necessary. But, in the meantime, there seems consensus that steps should be taken to alleviate some of the worst aspects of this crisis that affects more than 75 million young people alone.
This is the context of the current youth wage subsidy row. In the verbal cacophony emanating from all sides, two simple truths emerge: 1. youth unemployment is a critical and potentially explosive issue and, 2. the labour movement is united in opposing a simple youth wage subsidy.
On all sides there is a shortage of detail, and little in terms of models for any structural, let alone palliative measures. Yet there is evidence, over several years, of at least one highly successful project in South Africa of youth training and job placement, that has, until now, largely been ignored.
There is also a degree of misinformation. Although Democratic Alliance leader Helen Zille claims that her party, business “and the country’s second largest trade union federation, Fedusa” support the proposal, she is wrong. The Federation of Unions, like Cosatu, the National Council of Trade unions, and the Confederation of SA Workers’ Unions remains opposed.
Says Fedusa general secretary Dennis George: “We are concerned that an unconditional wage subsidy would create a two-tier labour market open to misuse by employers who seek to maximise profit and improve their bottom lines.” Yet none within the labour movement disputes that funding will be essential for any moves to remedy the situation.
“However, any subsidy has to be made conditional on an adequate training and educational component,” says George. Apprenticeships and “mentoring” are mentioned as examples, although the labour movement is usually criticised for simply opposing any wage subsidy.
Commentators have also pilloried Cosatu in particular for being concerned only with “the bigger picture”, with the search for alternatives to the crisis-wracked capitalist system. Cosatu general secretary Zwelinzima Vavi was criticised on this score for his statements to the federations’ international policy conference last week.
But Vavi was speaking about international policy, about the fact that the global system is in crisis and that, in the long term, remedies have to be found to deal with the system as a whole. In the meantime, he, together with the rest of the labour movement, proposes a range of measures on the domestic front under the heading of “structured education and training”.
Yet such structured education and training is exactly what is happening in a small, but highly successful way in the middle of that semi-arid vastness of the Karoo. In the Colesberg district of the Northern Cape, the Hantam Community Educational Trust (HCET) draws its students from among one of the most historically disadvantaged communities in the country, and has racked up a series of successes.
Established 23 years ago by a group of farmers’ wives as a pre-school centre for the children of farm labourers, the trust project has developed steadily over the years. Today HCET, funded mainly by business and private donors, boasts a school from Grade R to Grade 9 with 174 students, a primary health clinic, pharmacy, outreach programme, and catering course. There are also academic bursary and vocational training programmes for graduates, along with in-service training for teachers.
Graduates from the school taking courses as welders, hospitality workers or hairdressers are all given special life skills training, assisted to get driving licences and given coaching in areas such as interview skills, budgeting and the preparation of CVs.
One of the vocational graduates, Themba Matyeka, is now an instructor in welding on the West Coast via winning the title of the country’s champion welder. Other students have gone on to tertiary education while still others, having graduated from the Trust catering course in Colesberg town, are now in full-time employment.
“The simple truth is that there is no silver bullet to solve this youth unemployment problem,” says HCET project co-ordinator Lesley Osler. “A solid educational grounding is essential and then we provide mentoring for our students when they go on to higher education, or into vocational training; even when they start their first jobs.”
Cosatu’s Patrick Craven admits: “This is exactly the sort of thing we in the labour movement would like to see.” It is also accords with the advice of such diverse organisations as the World Bank and the International Labour Organisation.
As early as 2003 a study published by the Bank revealed that it is “difficult to reverse education failures through training”. And both the World Bank and the ILO acknowledge that no single programme or policy has yet emerged that provides an answer.
On the structural front, and on a global basis, answers, let alone action, may be a long time coming. But at least, a model of successful “structured education and training” does exist in a small, educational and development project in the middle of the Hatam Karoo. Whether it will be adopted remains to be seen.
5.3 Youth Wage Subsidy: Mixing Farce with Force
Leonard Gentle, Daily News, 24 May 2012
The spectacle of the blows between a DA-led crowd and Cosatu (Congress of South African Trade Unions) would have been the stuff of farce if it weren’t so tragically unedifying. The DA has every right to march and be “provocative”. Cosatu’s response betrays its own hard-won struggles in the past for the right to march, assemble and protest.
This was no kristalnacht or fascist street gang about to storm the workers’ movement. This was a DA rent-a-crowd happy to don any T-shirt. The simplest response would have been to take their memorandum and invite them to the next Cosatu meeting. After all, there are so many Cosatu resolutions about organising the unemployed and the unorganised.
The whole event was layered with irony upon irony. Two forces that have almost no relation to the unemployed or the informalised working class, came to blows over an issue that is being pursued by a third party that wasn’t even present at the brouhaha.
So why did this happen?
Like some French farce in which characters set up elaborate deceits while the audience is invited to laugh at the multiple contrivances going on, each character was carrying out some hidden agenda, which requires close attention lest we lose the plot.
The DA knows that the ruling party is constantly ahead of it rolling out SA-style neo-liberalism because the ANC has the liberation credentials to do so with legitimacy. In fact, the DA is so happy with the ANC’s main policy thrust – the GEAR policy – that it has declared the ANC’s, Trevor Manuel, South Africa’s best finance minister. It bestows similar accolades on his successor.
On the “youth wage subsidy” it is in total agreement with current ANC finance minister, Pravin Gordhan’s, plan. So it cannot schedule a march to the Union Buildings, let alone to the ANC’s Luthuli House.
So it invents a fiction: The youth wage subsidy is stalled because Cosatu is blocking it.
Well, this is the Cosatu that campaigned against GEAR, privatisation, high interest rates and the privatised Reserve Bank – all unsuccessfully. It is the Cosatu that fought for the banning of labour brokers, but couldn’t get its tripartite ally, the ANC, to comply. In every case, the ruling party simply swatted Cosatu away and went ahead with its plans anyway because it knows that Cosatu will simply endorse the ANC at election times, as the leader of the “National Democratic Revolution” (NDR).
And yet the DA wants us to believe that on the youth wage subsidy, things are different…why?
Well one answer is “Mangaung”. President Jacob Zuma needs Cosatu now. So, for once, Cosatu’s wishes are carrying the day. But why then, in the year of Mangaung, does Cosatu lose out on its call for banning labour brokers?
The DA knows Cosatu is no block to ANC policy. The DA also knows that on economic policy, it has no difference with the ANC. At most it positions itself as a kind of moral sound-check nodding along with every rim-shot from the Treasury whilst attacking the occasional high-flown rhetoric from some ministers about a “developmental state” and “industrial strategy”.
But Cosatu has been stealing the DA’s thunder on everything else that the official opposition positions itself on - as the watchdog on corruption, the moral turpitude of state officials, government inefficiency and so on.
So the DA has to invent a fiction: Cosatu is the enemy.
Meanwhile Cosatu, while wearing the cloak of the working class, is happy to deflect attention away from its neo-liberal partner, the ANC government, by casting the DA as the villain.
Neo-liberalism
Way beyond the DA’s station, Cosatu affiliate leaders rushed to the defence of its headquarters hysterically proclaiming the DA as the “class enemy”, as the spokesperson of the capitalist class, as the voice of neo-liberalism. To be sure the DA aspires to this, but the position of neo-liberal spokesperson has already been taken. That post has been filled by the ANC and the largely white capitalist class is very happy with the incumbent, thank you very much.
The youth wage subsidy is not an invention of the DA. It is a project of the ANC government. So as to steal Helen Zille’s thunder, Western Cape ANC leader, Lynn Brown, even claims that it was the ANC in the Western Cape that first experimented with it.
But the ANC is Cosatu’s ally, so it has to invent a fiction: Fighting the youth wage subsidy means fighting the DA, not the ANC.
By responding in this way, Cosatu has played directly into the hands of the DA, seeking to present the trade union federation as a labour elite against the unemployed, and as thugs opposing the right to march and to protest.
But what about the merits of the youth wage subsidy?
We have all heard the government and DA argue that it is possible to create some 400 000 jobs in this way.
Against this, Cosatu’s arguments are well known: that it will create a two-tiered labour market; that companies will not use the subsidy to employ more people, but simply dismiss current workers and replace them with cheaper young workers and that the whole exercise is simply a further bail out for the rich that doesn’t address the root causes of unemployment.
The whole exercise smacks of a public snapshot of the debate at NEDLAC where, notoriously, and inevitably, some compromise will be found where the youth wage subsidy will go ahead to the joy of some employers accompanied by a little tightening of regulations, which will satisfy Cosatu.
It will all most likely go the way of other initiatives to throw money at the bosses, like the Skills Development Funds and the 2009 National Jobs Initiative, which did nothing to dent unemployment, youth or otherwise.
All of this disguises the need to look at what is really causing the near-40% unemployment that is ruining the lives of the majority of South Africans.
The School of Economic and Business Sciences at Wits University has shown that there are two major structural reasons for South Africa’s high unemployment rate:
1) The restructuring of the state (historically the biggest employer), which led to the 1987 commercialisation of state enterprises followed by the rationalisation needed to incorporate the Bantustans after 1994 and the adoption of GEAR in 1996; and
2) the shift of South Africa’s major firms to financialisation and capital flight.
The biggest single job shedder in the last 30 years was the commercialisation of South Africa’s biggest single employer, the old SA Railways and Harbours. A most damning recent statistic by University of Western Cape’s School of Public Health also shows that a 40% vacancy level still exists in the public health sector, unfilled since 1996.
In short, the consequences of a “lean and mean” state and the investment strike by South Africa’s world-class firms means that we’re left with both a crisis in public services and a crippling unemployment rate.
This is exacerbated by high real interest rates, which encourage speculation and increased debt rather than expanded investment in job creation.
Youth wage
Instead of looking at these causes, the idea of the youth wage subsidy falls squarely into the current dominant mode of economic reasoning: the supply-side obsession of neo-liberalism.
Firms want to invest, want to make money - the argument goes - but the costs involved are too prohibitive. There are too many obstacles like pesky trade unions and regulations. If they take their ideology seriously, of course, the neo-liberals would need no help from the state. But in reality they do need the state’s assistance.
So they proclaim that the role of the State is to make the “costs of doing business” less. Less “red tape” (meaning less environmental, social and planning processes), less tax and lower input costs of electricity, water and of course labour costs.
In other words cheapen the “supply side” by taking “obstacles” away. In short, let’s sacrifice our social needs and then businesses will flourish. We will get employment and will all benefit. It’s the classic trickle-down argument.
A common refrain is to blame the unemployed themselves. They do not have skills or the right skills, they enjoy too many unemployment benefits and/or they’ve become discouraged.
In this kind of neo-liberal phase - let’s call it Neo-liberalism Phase One - the role of the state is to cut benefits, which discourage work-seekers, remove obstacles and then get the hell out of the way so that business can do what it does best. This can also be called the “race to the bottom”.
It has been tried now, globally, for almost 30 years and still unemployment worsens to the point that a 2010 International Labour Organisation (ILO) report argues that global unemployment has now reached levels of World War One.
So in the last few years what we are now being introduced to is a new phase: let’s call it Neo-liberalism Phase Two. Here the call is for a kind of state, which actively intervenes in the supply side to help make the cost of business less by “topping up the pot” as it were. A state, which spends money on infrastructure like railways, roads and new ports for freighting and increases broadband connections so that businesses can reap the benefit of sweeteners -- all at the public expense.
Only after public resources have been skewed in this way will we receive the benefits of burgeoning businesses. Notice that we’re back to “trickle down”.
In both cases, the starting point is that the role of the state is to make it possible for business to profit. In both cases, the reasoning is that what is good for business is simply good for everyone else. In both cases we must make sacrifices so that businesses can profit. That private greed is public good. In both cases the public is encouraged to be grateful for getting what “trickles downs”. But, in the former, the state must simply deregulate and the get the hell out of the way, while in the latter the state must actively molly-coddle business so that it can become winners.
Whilst the ANC and the DA are both wedded to neo-liberalism and are both competing for the attentions of big businesses (although the ANC has won that battle for now). The rhetorical difference is that the DA speaks to the latter perspective and the ANC to the former. I say, rhetorically because when it comes to the substance of South Africa’s kowtowing to financialisation and its globetrotting monopolies, there exists not an iota of difference between the ANC and the DA.
The youth wage subsidy is an example of this latter. The state will pay employers and give them tax credits if they employ young people. For the DA, as some in the business media have remarked, this marks a shift into the ANC’s territory (to Neo-liberalism Phase Two) and so it’s hard to maintain the profile of being the official opposition.
Hence, the idea of focussing on Cosatu…who promptly took the bait.
And what about the so-called DA marchers themselves - poor, black and unemployed – and Cosatu’s natural constituency in its 80’s and 90’s heyday?
If the DA are able to get a crowd of people ready to march on Cosatu then the question arises, “Why has Cosatu been so singularly unsuccessful and, even disinclined, to organise the unemployed and the informalised sections of the working class into a genuine people’s movement against neo-liberalism?” This, at a time when the “service delivery” struggles of largely unemployed township dwellers have made South Africa the protest capital of the world.
If we can answer this question, perhaps then we’ll be able to end this farce and do something serious about unemployment.
* Gentle is the director of the International Labour Research and Information Group (ILRIG), an NGO that produces educational materials for activists in social movements and trade unions. This article appeared on The South African Civil Society Information Service website.
5.4 Youth or Capital Subsidy: Class antagonism in the open
Ruth Mawethu, Moneyweb, 25 May 2012
On 15 May 2012, Democratic Alliance (DA) rented few black human shields, which they cleaned up, wore them blue t-shirts and took them to the streets of Johannesburg for some dancing and singing. All this done in a façade that COSATU is blocking what is in the interest of job creation in this country. They claim more than 200 000 jobs or job opportunities will be created by this bogus solution.
DA has over time attempted to project our democratic government, ANC, SACP and COSATU as inherently corrupt, not caring, self-serving and not capable of proving appropriate policies in response to South African needs and aspirations. All this has been done in systematic plan to isolate people’s organs and erode people’s confidence in their own government and organisations.
In several occasions, our own actions have contributed to the ‘credibility crises’, these may include our own policy choices such as GEAR, failure to decisively attend to property relations, slow service delivery. The situation is made worse by some amongst us who on one hand are revolutionary by day while on the other use their political credentials to amass personal wealth and parade it in faces of young men and women who live in state of despair while they possess enormous potential to be productive and on the other talk about bringing meaningful change for all.
Over time right wing organisation such as DA and their twins in liberal camouflaged organisations (some NGOs) have been growing confidence in their propaganda and this provided an opportune time to test waters, whether they have sufficiently tilted balance and their ideas are beginning to resonate with desperate, toiling masses of reserve army of unemployed youth.
Owing to the vulnerability of youth whom remain largely unemployed and trapped in structural poverty, exist a space for for zama – zama’s and chance takers arises to rally the youth to revolt against their organisations. We must alive to this as real treat, and decisively deal with economic marginalisation of youth, (just imagine if DA brigade had succeeded in bull dozing its way to the COSATU House.
In this instance DA tried its luck that youth is being denied work or retrenched in millions by COSATU but tomorrow it could be another populist with correct rhetoric and slogans. Another dimension is that DA having grown confidence, it is becoming bold in showing its colours and representing its main constituency (capital ruling class); in driving back any proposals that threatens its constituency. With capitalism trapping and falling all over the place, desperation from white monopoly capital to sustain if not increase its profits, is revealing. Even commentators such as Steven Friedman recently wrote “The real story here is an intellectual and ideological assault on the labour movement...an assault on the idea of trade unionism in the country.”
The likes of DA are not only desperate to defend the past gains but they are pressed to be on offensive on new ways of stratifying the working class, with even greater means of exploiting the class while increasing profits, that is why DA has been vociferous that problem in South Africa is that labour laws are rigid making costs of doing business to be high. This is the reason they are cheer leading the labour brokers, banning of unions, youth subsidy etc, the pressure from capital to continue make super profits at expense of vulnerable workers is increasing.
Perhaps one area which has been less emphasized in the post 1994 is that the mass democratic movement, regardless of being voted in office by overwhelming majority; however we have been unable to inculcate progressive values on society consistent with kind of society we seek to create. In the same vein, values of South African society are increasingly being liberal and embracive of capitalist ethos. Experience in countries such as China although with its dangers but Communist Party of China has been largely successful in its program because CP of China values and ethos has been embedded in society in that CP of China values are inculcated in society, wherein in SA we must succeed in this project if we are to adequately defeat the neo – liberal ideology in our society.
Over the past 16 years, the South African government has presided over an economic growth path with little to no trickling down effect. This scenario has been as a result of combination of apartheid legacy and the objective constraints and inherently limited policy positions adopted by the government. The South African bourgeoisie, which consists of largely white capital controlling portion of the population, together with a small segment of black unauthentic and unproductive bourgeoisie have gained immensely from the abovementioned economic growth path. This has resulted in property relations in South Africa remaining largely unchanged.
So where are we?
The South African economy became one of the most inequitable in the world. Unemployment levels remained ridiculously high, with young people being the most severely affected as jobs for new entrants dwindled. Reports indicate that in the first quarter of 2010, 42% of young people between the ages of 18 and 29 were unemployed, compared to 16% of those aged between 30 and 65.
The dimension affecting young people is that even when they find employment they are remunerated with ridiculously low wages. Reports show that during the third quarter of 2008, half of all employed people earned less than R2500 a month and over a third earned under R1000 a month. These jobs are often unsustainable; casual in nature or at times these young people work as permanent casuals with no access to any benefits such as bonuses, leaves, job security etc. Semi or unskilled work has been created and there is often no security of employment with most of these jobs culminating in a dead end. Research has shown that the informal sector, agriculture and domestic work contributed a third of all employment in South Africa. Two thirds of employed people in South Africa earned under R1000 a month. Moreover, one in five employed African women was a domestic worker.
YCLSA in its Jobs for Youth Summit 2 further distil the situation and assert that “Given that the youth comprises the majority of the South African populace, the youth also makes up the majority of those who are unemployed. Borrowing from the definition of youth that classifies those that are 15–34 years old as youth; it means that youth accounts for approximately make up 75% unemployed people in South Africa. Statistics further show that, 62% of the unemployed have less than secondary school education and 33% have completed secondary education but have no tertiary education. In short, 95% of the unemployed do not have tertiary education”.
Government resolved to respond to this youth unemployment crisis by, amongst other strategies, the introduction of the youth subsidy. The main purpose of this paper is to interrogate in principle whether the youth can provide any form of relief particularly in relation to the high levels of unemployment amongst the young people of South Africa, while we wait for discussion document.
Minister of Finance Mr Pravin Gordon announced in parliament during his budget speech that: “As promised last year, details of a R5 billion youth employment subsidy are set out in a discussion paper, for further consideration in the House and at Nedlac. We must offer young work-seekers real hope where at present there is despair. We need to do things differently. We need to have the courage to pilot new approaches and build new partnerships, promoting innovation throughout our economy.”
Basically as articulated the proposal by government is to subsidies the struggling private capital in different scales as form of inciting them to employ young people. It hopes it can motivate capital to consider young people, then subsidies for remuneration of such employee. It further provides for relaxation of application of labour laws and affords the employer to fire and hire at will, apparently studies say if you allow to be super exploited and be recycled in youth and accept that boss is boss then whenever he or she feels like firing you, as young person you ought to be grateful to your ‘bass’ you may, just maybe be considered by the your masters in future.
So what are we being told?
In specific terms NPC document suggest that high levels of youth unemployment have been caused by:
We have simply not grown fast enough, given the demographic bulge and growth in labour force. This can be attributed macro-economic choices, reinforcing apartheid spatial distortions and mineral, energy, finance complex that is been anchored on export orientated economy with very little beneficiation and value adding let alone productive capacity as we have compromised industrial capacity.
Secondly in that while the labour force was growing, the school system failed. Low skill intensive sectors such as mining and agriculture declined and skills intensive sectors such as finance and business services grew, owing to macro-economic choices.
Somewhere they make reflection that growth has been largely skewed towards skilled and services sectors, confirming lack of inducing or galvanising productive forces
It correctly makes observation that by international standards, our labour laws are not rigid
NPC emerging conclusions are that:
If the market clearing wage is too low to be socially desirable, then subsidising must be considered as means resolve the failures of market.
The motivation for Youth Subsidy from Treasury is that:
Work experience plus on-the-job training contribute to lowering the perceived gap between real wages and productivity.
The proposal further argues that:
Relative cost of labour is high in South Africa – this discourages employment particularly for young workers who have low skills levels and capabilities.
Youth employment subsidy will address this, lowering the relative cost of low skilled, inexperienced young people.
Are NPC and Treasury arguments compelling?
At a strategic policy level
With the levels of unemployment being as high as they are in South Africa, the state cannot afford to forfeit its responsibility of enforcing appropriate employment regulations. This is based on the fact that the employers inherently seek after cheap and vulnerable labour that is easy to hire and fire while on the other hand the employee wishes for better pay, better working conditions etc.
In an equal and classless society the negotiated contract between employer and employee must be able to resolve such situations. Unfortunately under capitalist system of production with high levels of unemployment that attract jobs from largely non-skilled or semi-skilled sectors such as agriculture, security, home maids etc the bargaining powers are seriously skewed against workers.
Out of sheer desperation, young people accept any form of work in many instances without even knowing the contents of the contract, terms and conditions, salary and even the type of work that they will be doing with trust that one day it will improve. In fact even if they were to know the contents such information will make very little difference as they have no bargaining power. It is therefore irresponsible of the ANC government to want to subject the youth to such a lion’s den of an environment.
Concrete realities of economic hardship have shown that because of desperation for jobs and consequent willingness to enter into any form of contract as long as it would bring food onto the table, many employees enter into contracts of employment with aspirations that conditions of employment would improve and that job security would be ensured with time. On the other hand, from the employer’s point of view, it would probably mean ease of termination.
In my treatise in NMMU I found an interesting argument raised by a scholar of labour law, Mr John Grogan who outlined what he believes warrants legislation:
“(a) The common law contract of employment is individualistic in nature, paying no regard to the collective relationship between employees and employers, which became of increasing importance with the growth of the trade union movement.
(b) The common law does not cater for the inherent inequality in bargaining power between the employer as the owner of the means of production and the employees, who are entirely dependent on supply and demand for their welfare and job security.
(c) The common law pays no regard to the employment relationship, giving the employee no inherent right to press for better conditions of employment as time goes by.
(d) The common law emphasis on freedom of contract encourages exploitation of labour.
(e) The common law does not promote participative management, in which workers have a meaningful say in at least those management decisions, which directly affect their working conditions and legitimate interests.
(f) The common law does not provide effective protection to the job security of employees.”
This is a significant limitation of the youth subsidy as founded on common law principles leaves employees at the mercy of employers. In that it fail to recognize that with high levels of unemployment, desperation has arisen among those employed and therefore there is no individual bargaining hence they will end up doing worst of jobs for next to nothing. This in our view must remain role of government to discipline capital and provide social security for its people.
This lead to massive or super exploitation if not enslaving of young people under worst conditions, worse is that should they dare question this plight they are immediately dismissed. This has been foundation of neo-liberal contract of employment that is primary concerned is to ruthless maximize profit. Some argued correctly that this approach is equally not in the interest of employers as improved conditions of employment and secure jobs would amount to happy employees, with a commensurate increase in productivity levels and standards.
On Labour Relations and future of organizing workers
The youth subsidy not only reverses the gains of workers for collective bargaining, but it also promotes the undermining of the collective relationship between employees and employers. Unionisation will be weakened and undermined as youth will have no job security or rights, the power relations would ridiculously favour employers with workers having no alternative or means of bargaining. Safety and minimum requirements will not be enforced as it will be a ‘take it or leave it’ type of arrangement. Workers will be highly exploited with no available remedies than to quit. Participative management with workers will be a thing of the past; there will no job security for workers.
All these elements prove that the youth subsidy is not in the interest of working class youth but is designed to serve the selfish interests of employers whom must make it cheaper to do business while attracting massive profits through the sweat of the young people of this country.
Labour unions particularly COSATU correctly argue that labour market deregulation complements the liberalization of global commodity and money capital flows. In particular, labour market flexibility increases worker vulnerability by disrupting workers’ ability to organize. In addition, labour market flexibility atomizes workers, intensifies competition among them, which drives down the real wage relative to productivity. Even if workers successfully resist these pressures, capital, through state policy, draws in immigrant labour that has been beaten to submission by neo-liberalism in order to weaken the bargaining position of the working class.
The state itself through outsourcing, the allowance of casual labour, the use of labour brokers and illegal immigrant labour, pursues the interest of the capitalist class in a bid to restore profitability. Labour market deregulation also makes it impossible to combine employment with significant skills development because of the precarious nature of employment.
Even before the financial crisis, there had been a decades-long decline in workers’ real wages, one driven by neo-liberal globalization of production, outsourcing and technological breakthroughs especially in communications and information technology and by the doubling of the worldwide workforce available to the transnational corporations. The relentless downward pressure on working peoples’ salaries has been a huge factor, with the result that inequalities have soared everywhere, both within our individual countries and also between the richer and the poorer countries. This is one part of the systemic crisis caused by neoliberal capitalism.
In this regard the working class must never be blackmailed into pledging loyalty to the employer as the employer will not hesitate to retrench them in pursuance of his/her profit margins. In this regard any people who in their comfort suggest that social combat in pursuance of new growth path means workers must make sacrifices must be smoking something because workers have nothing to sacrifice.
The limitation of relying on private capital for job creation
The myth that private sector establishes business to create jobs when interrogated by test of time has again found not to be true like many other capitalists myths. With full knowledge of this country in that even when as from 1994 the government has adopted business friendly policies with the first decade being in business favour, nonetheless business has been engaged in investment strike for some time now. We are not obvious of the happenings in TELKOM; TRANSNET; ACSA etc wherein public purse monies were cashed in by private business with no tangible outcomes.
All parties can witness that development of South Africa through tenderization is not delivering and promoting corruption who can forget the outsourcing and over reliance into consultants corruption and failure to deliver. We must never be blackmailed in that the inefficiencies in the public sector for believing that private capital are a genuine partner in job creation. In capitalist production, employees are valued as a commodity that its costs must always be minimized, the slightest threat to their profits the ruling class will not hesitate to retrench or lay –off workers.
The primary intent of any business is never to uplift or service any worker or community but it’s the ruthless pursuance of profit at any cost and workers are valued like any other commodity. As seen with the recent financial crisis, once their profits were threatened almost 1 million people lost their jobs while executive management and shareholders were continuing to earn millions for exceptional work they thought they were doing.
Business and employers will utilize energetic force of youth to generate profit and pay them peanuts with no benefits and dismiss them once they put any demand or adherence to any S.A norm and replace them with other one’s that are fresh and venerable. The business will forever seek to minimize the cost of doing business and workers amount to implements or commodities to work means of production the employer will forever seek to minimize the cost of workers expenses.
This then will lead to the old guard full time employed be retrenched in millions using section 189 and 189 A of Labour Relations Act under pretext of operational requirements. In many instances these forms of employment restrict the choice of workers to join union or embark in strikes, it general creates no framework to cushion workers it basically transgress all labour laws and rights of workers. The right of workers to collectively bargain is basically taken away.
Creation of two- tier labour system
The intention of doing business primarily is to generate profit; the hiring of employees is a cost to a company and their value to work as means to produce the intended profits. If at any day the employer finds cheaper and effective technology of working means of production affected employees will be laid-off with no consideration of families they feed or loyalty of service they have showed over years. For example if the employer needed 10 employees to off- load cement on train to store at an overall cost R 5 000 for a day and found a heister that overall cost R 20 000 per month but still be able to do same amount of work, at any given day whether how long those employees have been loyal to the employer they will be equally be off- loaded.
This example seeks to reinforce that business of business is profit and naturally all employers seek to minimize amount of doing business worse where the outcome could be equal standard. The unintended consequence of the youth subsidy is the employer knowing that if you hire a young person you will be subsidized and exempted from labour laws then retrenching old workers is unavoidable logic. The excuse by treasury that it not make business sense to dismiss productive and experience workers fail to acknowledge that such will apply only in skilled work environment where in any way younger persons are able to negotiate for their skills to receive better working conditions.
But if you take into account the South African economy that has been producing as shown in the context of this discussion, jobs in security sector, domestic workers, informal sector, agriculture etc then such logic does not apply as young people whom are eager to succeed and have energy can do such jobs without or little training.
This will create its own tier of labour laws that is govern by laws of profit, but further the conditions of work will not be the same. For younger workers flexible hiring and firing will apply with no consideration of labour relations Act and once the younger becomes more smarter to be unionized and demand better wages and conditions they will equally be dismissed to get another bunch of young workers whom will be desperate to work. This will create a vicious cycle of another tier of labour laws that govern the younger workers and those whom are employed full time, in-fact it cannot be farfetched idea to predict that permanent employment will gradual disappear at a lower chain to be the privilege of those skilled or in high chain of value in the workplace. It is unattainable to create labour laws for the young and older workers.
It is not a sudden change of heart to care for workers struggles that has made organized business and DA to warmly welcome the youth subsidy but primary as they have pronounced because it’s to make cost of doing business cheaper with automatic mean without increasing the productive capacity that saving translate into being a profit because it not going to the workers profit or new entrants as it were. DA of-course remains the mouth piece of right wing capitalist that are alive to any opportunity to make profit. This further works in their favour in weakening the collective bargaining that has made unions to have leverage of power in the work place with youth subsidy as we have already argued that will take a serious knock resulting not only in new entrants but general weakening the balance of power leaving workers vulnerable for exploitation without protection and or living wage.
The new entrants particular those organized youth formation and student organization such as YCL, ANCYL & SASCO in this regard must take up this struggle for reason that it is their constituency and graduates whom are shop assistants, securities, domestic workers, waiters and hair or dress makers and it is in this sectors that youth will be recycled for cheaper vulnerable labour not for their interest but particular for capitalist class interest.
What must be done?
The new thinking in government as far as it realize that growth at all costs does not automatically lead to creation of jobs must be welcomed in that economy must responsive and create decent work. We make mention of decent work even if you to apply the liberal interpretation as designed by ILO which defines decent work “as employment and income opportunities, fundamental principles and rights at work and international labour standards (essential organizational rights and freedom from coercion and discrimination), social protection (which includes decent working conditions) and social security and social dialogue and tripartism”
Central therefore in decent work is a living wage, decent working conditions, social and work rights and protection that the government have been asserting that jobs created must be decent. But the youth subsidy undermines all such efforts as its content is to create the second tier of labour system in which its participants do not earn living wage, have no social or employment security and working conditions are not a product of bargaining but merely take it or leave scenario. Therefore any scheme that its content is to undermine the creation of decent work cannot be celebrated.
This must have provided us with opportunity to begin a process of breaking the property relations in the country to actually galvanize the strategic productive forces in our country and with government providing lead explore those productive forces with young people being organized and taking active participation in exploring those strategic productive forces.
Secondly alternative forms of development ought to have been explored that the current tenderization of state that have become so normal, why for instances young people in the area cannot be organized and they are skilled to build their community houses, roads, schools, clinics as part of infrastructural development and Extended public works program.
If the alternative forms of ownership are to be explored we require the state to take a strategic role in this regard we must for example support that the state must identify strategic sectors in economy for investments in the interest of the society as a whole this could be done as a drive to diversify economy and break the strangle hold of mineral-energy complex core i.e in steel production and petro-chemicals should be in the hands of the state in order to build state power to direct industrialisation. Co-operatives should also be supported and be closely linked to state initiatives in order to build a progressive alliance between collective forms of ownership in the economy.
Special focus must be made on productive small and medium enterprises particular those who are in processing and beneficiation i.e. as the country we export a lot of primary goods to only import them as finished goods, focus must paid in his area. Also we have to examine what neo liberal terms has been said to be informal economy for reason that it has dynamic relationship with economy that is organised, sophisticated and monopolised economy. This sector of economy requires radical focus and attitude as it is rooted among the people and responsive to their needs. We have in same vain put brakes on developing a country through consumptive, parasitic, unproductive tenderpreneurs whom rely to the state for consumption
Locating this discussion of youth development within the growth path which we are finalising our response must mean its foundations are decent job creation, an activist developmental state that seeks to decisively intervene in the economy for and behalf of the poor, stricter monetary control measures that monitor the financial sector, balance of payments and imports, strengthen South to South dialogue, transformation of international financial institutions and consolidation of global movement for progressive forces, stricter control of money exchange from one country to another in rapid instances. Basically the state must discipline capital otherwise their lust for profits is uncontrollable and its consequences are dire for working class and society in general, therefore disciplining capitalist is in interest of society in the immediate and of revolution in medium to long term.
A need arises for us to stimulate local productivity and demand we need also to ensure that our industrial policy program aligns with infrastructure construction. Too many of the construction materials, components and technologies are being imported when they could be produced locally. This means we spend billions of rands, but fail to maximize the local job-creation possibilities. It also means that we reproduce our historic trade deficit vulnerabilities – we remain an exporter of primary commodities and an importer of more expensive capital goods.
It is important to note that we have to stimulate and diversify local economy even worse primary output as we argue using example of Eastern Cape, in that about 60.6 percent of the Eastern Cape’s output and 77.2 percent of the province’s value added originate in the tertiary sector, whilst the for the secondary sector are 37.4 percent and 20.4 percent, while those for the primary sector are 2 percent and 2.4 percent respectively. Tertiary industry further account for the most labour intensive activity in the Eastern Cape where labour represents 51.3 percent of total value added.
Concerning area is that while we referred to province such as Eastern Cape as rural province which ordinary it must be relying on primary outputs particular agriculture put its output account for lowly as 2%.While the low contribution of agricultural to the provincial output is partly a reflection of underutilization of arable land in the former homelands. This is despite the fact that two-thirds of the province’s population is based in the former homelands and largely depend on social grants and subsistence Farming (Eastern Cape Provincial Government, 2007). Hence the revival of agriculture holds the greatest potential for tackling unemployment and poverty in the rural areas of the province.
Relationship between obtaining of skills or education and labour force is developing or could be traced for example in Eastern Cape in 2004 only 21% of learners who were able to enter formal further and higher education in fact did so. This is worse when it is considered that in 2000, the dropout rate from Eastern Cape the province HEI was 20% in the first year, with only 15% of the designated year group graduating after four years.
This then means it must be the responsibility of left forces to see to it that education depart from dictates by market and dominance of neo- liberal agenda accompanied by this should be seeing to it that schooling system is functionally that is to say teachers and pupils are in school 7 hours a day engaged on learning and teaching culture, books and lab’s are in place, governance structures are functional, school transport and nutrition is on order etc but schools must function first and foremost.
Secondly FET must be re-orientated to focus on producing of skills and artisans that are competent and qualified, because not only are we challenged by unavailability of artisans and skilled labour force but it also aging white males
If the skills revolution is to taken serious we must reconfigure the role and content work of SETA’s their placing in higher education and training department must emphasize on their training component , in- house capacity on factories must once again be encouraged it was not long ago that VW and ESKOM would develop and accredit qualified engineer at the workplace from practical interaction with work nothing is stopping this area to be expanded as to enlarge skill base while they are employed and therefore earning a living, it also assures that the person can actual do the work as he or she is produced by work. We also have to legislate that work experience must be recognized in that many people who spent greater part of their lives in workplace and earning experience while this is not recognized and thereafter not compensated.
The HE must equally be focused to be developmental and activist university that dynamic interacts with its communities, the information it produce must be to develop and reproduce its societies for example university if Fort Hare and WSU must be on edge catalyst on research and producing knowledge on agrarian reform, agriculture and rural development.
Conclusion
We have noted with interest the opportunistic rejection of the youth subsidy in some quarters that in their rejection have advocated for monies to be invested in youth in business as to harness the entrepreneurs and SME of young people with trust that in the medium term it will create jobs for the young people.
The limitation of these calls is that accept that young people must be confine within the productive system that pre- suppose that majority of have not’s exist with privilege few that own means of production amassing the wealth, it consolidate the inequalities and huge imbalances with enrich the few that measure success with bling-bling and sushi. These entrepreneurs are often more than not unproductive and inauthentic they rely on parasitic relationship with the government and in many instances with corrupt practices and political connections if not occupying political offices as to patronize and bully people in accumulation path, its tendencies reflect the ‘new tendencies’ that is not so new.
Progressive youth formations, organized labour and students must vehemently oppose the youth subsidy proposal as it stands for reason that its re- inventing what we rejected even in the ANC congress of Polokwane of dual labour system for class interest of the capital where labour laws are ignored and youth is fired and hired willy-nilly, while the employer are having a free ride all the way to the banks in the backs of vulnerable workers. Alternative forms and avenues of youth development as among things suggested in this document must be explored.
Rune Mawethu is National Deputy Chairperson of YCLSA and Master of Laws (Labour Law with NMMU)
Patrick Craven (National Spokesperson)
Congress of South African Trade Unions
110 Jorissen Cnr Simmonds Street
Braamfontein
2017
P.O.Box 1019
Johannesburg
2000
South Africa
Tel: +27 11 339-4911 or 010 219-1339
Mobile: +27 82 821 7456
E-Mail: pat...@cosatu.org.za