Cosatu will never accept ‘DA-inspired’ NDP

2014-07-25 15:29

Cosatu says its 2.2 million members will never accept the National Development Plan (NDP) – because it’s a replica of the Democratic Alliance’s economic policy which promotes wage repression and fosters greater inequality.

Speaking at the first of ten events in the OR Tambo Debate Series, Congress of South Africa Trade Unions (Cosatu) strategist Neil Coleman said the NDP “threatens to reverse progress made by the government over the last few years.” Coleman said the NDP diminished workers’ rights and failed to look at structural problems or ways to systematically address these issues.

“The NDP contradicts the mandate set up by government [that of redressing inequality and alleviating poverty] but complements the economic policies of the DA of labour deregulation. It (NDP) has ambitions of reducing the gini coefficient to 0.6. That will still leave South Africa as the most unequal society in the world,” said Coleman.

The DA has come out in support of the NDP with leader Helen Zille calling it “an exciting and significant development”.

In addition, Zille said: “The NDP is rooted in the same analytical framework that underpins the DA’s own political philosophy – the open opportunity society for all. And this is exactly why the NDP will struggle to get off the ground under the current ANC government.

The ANC’s alliance partners will almost certainly block the implementation of the plan for reasons of ideology and self-interest.”

Coleman said the NDP was incoherent and could not be implemented. He said the NDP proposed “business as usual” and was problematic in terms of job creation because it “creates menial jobs outside the core section of the economy”.

He said what South Africa needed was a radical economic shift, focusing on the root of the structural problems, and not a policy that undermined workers’ rights.

In addition, he said, the NDP followed the wrong economic model: “Inflation targeting is a problem. During the [2008] financial crisis, economic leaders of the world agreed [the] inflation targeting framework was intrinsically flawed. It is based on a model of wage repression. You can’t say you want to grow the economy and create employment when targeting inflation.”

Last Thursday, the Reserve Bank increased interest rates by 25 basis points, leaving the commercial bank prime lending rate at 9.25%, putting more strain on labourers and consumers.

Governor of the Reserve Bank Gill Marcus attributed the interest rate increase to the inflation rate, which is above the 6% bracket. She also said the Monetary Policy Committee was on a negative-outlook inflation watch, suggesting there may be further interest rate hikes in the future.

Coleman also said the job plan followed in the NDP was flawed.

“It says 90% of jobs will come from small businesses but they want to deregulate labour and remove minimum wages. Brazil drastically reduced its inequality over the last ten years because they formalised their informal sector and increased minimum wages, yet we do the opposite and want the same results,” said Coleman.

He said the NDP reflected a product of no meaningful engagement. “The Treasury re-introduced ideas they knew labour would reject in Chapter 3 of the NDP,” he said, and without the buy-in of labour, the NDP would be rejected.

Political analyst and Wits University vice-chancellor Adam Habib also criticised the up-down approach of the NDP: “You need to deal with poverty in a way that you deal with inequality.

Brazil put trillions into the informal sector. We put trillions into BEE, not the informal sector. The NDP puts trillions into big business. That will further increase inequalities and the backlash to inequality is [political and economical] instability.”

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