Why Cosatu is wrong this time

2010-02-20 13:32

COSATU is wrong about the budget. It is a deeply pro-poor budget

with very little good news for business, the middle-classes or the wealthy.

Take the tax breaks. You ­only start paying tax if you earn more

than R 57?000 a year. This means that most working class households are now

liberated from a tax burden.

It means more money to put into education, more to buy something to

fill the pots on the stove and perhaps even a World Cup match or two.

Grandmothers who keep several rural provinces alive with their

pension payments also ­received a monthly increase of R70 on their pensions.

This is a good pro-poor benefit in a ­recessionary year and certainly one which

government ­deserves credit for.

If Cosatu should be angry with anything, it’s the hefty ­increase

in fuel tax to fund a pipeline we may or may not need. Workers, studies show,

spend far more on transport costs than they do in developing countries of a

similar size.

But Cosatu’s criticism of the budget is ideological and only part

of its ongoing skirmishes within the tripartite alliance. It is fighting for

pole position in President Jacob Zuma’s ruling coalition.

It is on red alert because ­Finance Minister Pravin Gordhan did

not, in the federation’s opinion, alter the mandate of the Reserve Bank

sufficiently. Cosatu wants the finance minister to make employment the only

fulcrum of monetary policy decisions.

Yet the expanded mandate for the Bank does place employment in a

more important position than it has ever been. No reasonable South African can

quibble with this.

Our unemployment rates are hazardous and destabilising but there

was ample recognition of this, both in policy indicators contained in the

budget, as well as in various new initiatives, including the wage subsidy for

young people.

South Africa’s ticking time-bomb sits on corners where groups of

young men gather, unemployed and unemployable. It sits in the bellies of young

women who get pregnant too early because there’s little else – but early

motherhood – for them to find meaning in.

The subsidy is an attempt to give our next generation a leg-up into

the formal economy.

But all Cosatu is interested in is ensuring that its labour

aristocracy is protected. And so, it has not celebrated this effort to grow a

new generation of ­employed South Africans, but crows only because the step may

hazard a two-tier labour market.

South Africa already has a two-tier labour market.

It comprises an employed class which enjoys Rolls Royce standards

and a huge under-class of domestic and farm workers, among other casuals, who

Cosatu does not even try to organise. There is a lot that Cosatu does right to

make ours a better country. This time, it’s wrong.

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