In the first and second of this three-part series, Thozamile Botha argued SA doesn't need a new economic plan – existing platforms, including Nedlac, can be used to help drive economic growth. In this chapter, Botha looks at the role of labour - and the thorny issue of the public wage bill.
When he addressed Parliament on 15 October 2020 on the country's Economic Reconstruction and Recovery Plan (ERRP), President Cyril Ramaphosa said: "We welcome the commitment by trade unions to ensure their investment companies increasingly invest in companies that buy from local manufacturers."
This is the only specific reference to the labour social partner we found in the ERRP and in Ramaphosa's relevant Parliamentary speeches of 15 and 21 October 2020.
I recall the joint statement made by the Congress of South African Trade Unions (Cosatu) and the South African Communist Party (SACP) in December 2020 in which they said:
"The SACP and Cosatu bilateral meeting reiterated the shared stance - we are neither for neoliberal nor state capture networks. Ours is a developmental and caring programme of structural transformation. This is in line with our shared perspective, that of the necessity to place the national democratic revolution, our democratic transition, into a second radical phase towards the achievement of the goals of the Freedom Charter."
One would therefore expect that as one of the social partners in Nedlac, labour, led by Cosatu, would do its best to play a leading role in the effort to elaborate the relevant socio-economic transformation plan.
Let me consider one matter in this regard.
To respond to this reality, government has raised the matter of the reduction and reprioritisation of public expenditure.
On 28 October 2020 the State News Agency, SAnews, wrote: "Stabilising government’s debt will come with difficult decisions, and the public sector wage bill is the main area where government will impose reductions aimed at returning public finances to a stable position…
"In its Fiscal Risk statement, the National Treasury said over the last 15 years, public-service compensation spending has grown at an unsustainable rate that is nearly 1.5 percentage points faster than the rate of growth of GDP, largely because of increases in average remuneration.
"The result is that public-service compensation now accounts for the equivalent of 11% of GDP, up from 9% in 2004/05.
"Without a major reduction in public spending, debt will continue to accumulate and interest payments – which already consume 21 cents of every rand of main budget revenue – will crowd out other spending."
Last month, in January, news broke out in the Eastern Cape which again drew attention in an egregious manner to the challenge of a high public wage bill.
The news was that between 2013 and 2018 the Amathole District Municipality in the Eastern Cape put on its payroll 900 people it did not need, 500 of them in a single month in 2013. As a result of this, the municipality ended up not being able to pay its employees.
For two years it could only address its wage bill through bank overdrafts, which proved to be an unsustainable process. Finally, this year, because it could not pay its "1 670 workers, including councillors and traditional leaders", it appealed to the provincial and national governments for a bailout.
The reflection on the immediately preceding matters seemed necessary because in the Cosatu statement on SONA, one finds the following: "Cosatu and workers expect an unequivocal statement and commitment in SONA that the government will abide by the Constitution and Labour Relations Act and respect workers’ rights to collective bargaining. The conduct of government on the wage bill over the past year is a recipe for labour market strife and instability."
Of great concern in this regard is what follows, where Cosatu says: "None of the SONA commitments (including the Economic Reconstruction and Recovery Plan) will be realised if this issue is not resolved. A dissatisfied and disillusioned public service workforce will not be useful in fixing the myriad of problems facing the government."
Urgent resolution needed
Literally this means that if the government does not resolve its wage/salary dispute with the public sector trade unions (and therefore Cosatu), these will ensure that the economic plan intended to uplift especially the millions of the poor and the unemployed, and rescue the country from a deadly downward spiral, comes to nothing.
In September 2019, Employment and Labour Minister Thulas Nxesi addressed the 24th Nedlac Summit Meeting. After pointing to some of our national challenges he said: "Colleagues, this is the reality we are facing. We can either lament, or we seek the means to recreate and re-engineer our future. Our history is a story of overcoming adversity – a mindset I hope we all share. Remember, the hopes and aspirations of our people lie with us. We dare not fail them.
"We are all in this together for the common good of our people – as government, business, labour and communities, in a spirit of cooperation – with the understanding that the sum of the whole is made up of its individual parts.
"That is the kind of commitment that this gathering should engender, a spirit that says we are all winners in this. We are not in a zero-sum game, winning at any cost or embracing the winner takes all philosophy. I believe in our collective capabilities and I am fully persuaded that we can overcome the challenges we face…
"That is my pledge to you as the minister of employment and labour - that we will strengthen Nedlac as a vehicle to re-invigorate social dialogue and the social compact."
When one reads what the Cosatu statement threatened – that the particular interests of the public sector workers and their unions would take precedence over, and override the most fundamental aspirations of the millions of our working people, including the poorest and most vulnerable – I recalled what Nxesi had said in 2019.
Specifically, I asked myself the question – was the minister correct when he said we are all in this together for the common good of our people – as government, business, labour and communities – in a spirit of cooperation?
Almost 18 months after Nxesi's speech, on 8 February 2021, Bheki Ntshalintshali, general secretary of Cosatu, was interviewed by one of the national television stations. The interviewer confronted him saying that the alliance to which Cosatu belonged (with the ANC and the SACP) has been party to the process of paying lip service to the challenge of fighting corruption, which was robbing the public sector of resources it needed.
Ntshalintshali responded immediately and said: "You can’t blame the watchdog! The trade union movement is a watchdog. We are keeping government accountable. Government has all the resources to be dealing with corruption."
I believe that a worker who reads will ask the question – as a member of the alliance, with the ANC and the SACP, what role is Cosatu playing in Nedlac to encourage the adoption by all the social partners of an Economic Reconstruction and Recovery plan which advances the goals of the NDR? Is it possible for Cosatu to play such a role when, to the surprise of the rest of the progressive movement, Cosatu has now turned into a watchdog, evidently having given itself the watchdog task of monitoring the activities of its own.
The author is a former member of the national executive committees of the South African Congress of Trade Unions (SACTU) and the ANC and a former civil servant.