South Africa

Cosatu warns: Treasury’s the new target

By Sipho Hlongwane 1 June 2012

Fresh from the battle victory over Sanral, Cosatu is now preparing for a new war with the national treasury over a whole raft of reforms to retirement investment vehicles. The leadership is hopping mad for apparently not being consulted properly. It’s the e-tolls all over again, they promised. By SIPHO HLONGWANE.

The central executive committee of Cosatu met over the weekend. Some of the meeting’s major themes, according to the statement released afterwards, were youth unemployment and the union federation’s general frustration with the government’s attempts to side-line organised labour on retirement investment vehicle.

Cosatu president S’dumo Dlamini said the reason why they were raising this was because they were concerned about being left out.

“The central executive committee raises the issue of consultation because when treasury makes this pronouncement, it is a product that excludes organised labour. You cannot conclude on these matters that affect so many of us without involving us,” he said.

The unions are not entirely against the idea of reforming the sector, but thought the reforms would ultimately hurt workers because the ideas that treasury have are misguided. Cosatu is calling for sweeping social security reforms.

“Treasury has introduced proposals for piecemeal reforms of retirement funds, knowing full well that these can’t take place outside the context of the comprehensive social security reform,” the committee statement said.

“For example, proposals for mandatory preservation of retirement funds (preventing workers from drawing funds before retirement), can’t be implemented in a situation where there is no income support for the majority of unemployed workers.”

Treasury is also reportedly calling for the abolition of provident funds, a measure that the federation called “complex and explosive”.

Extensive consultation has happened between treasury and financial-sector businesses on the proposed reforms, according to Cosatu. “However, organised labour has been excluded from this process, which has evolved since 2007, apart from minimal and superficial contact. This is an insult to workers, since decisions are being taken about them on critical issues of interest, including how their pensions, which are deferred pay, are managed,” the federation said.

Cosatu second deputy president Zingiswa Losi said the federation would request a bilateral meeting with finance minister Pravin Gordhan. “It will be proper to raise our issues at such a meeting,” she said.

Having warned that Cosatu views this as a “second e-tolling” (in the sense that the system was considered a unilateral decision the government tried to ram down the throats of the public) and will call for a national strike if treasury does not remove potential prejudicial provisions to – and safeguard measures for – the interests of retirement fund members to Cosatu’s satisfaction.

At the end of April, a coalition of citizens successfully obtained an interim order from the North Gauteng High Court, which put a halt on the implementation of the Gauteng Freeway Improvement Project. At the same time, Cosatu managed to convince the ANC to put the project on ice for a month so that alternative funding models could be explored. One of the proposals was a temporary fuel levy to start servicing the R20-billion debt incurred by the South African National Roads Agency in building the e-tolling system.

At a briefing in Cape Town on Thursday, deputy president Kgalema Motlanthe, who heads an inter-ministerial committee handling the Sanral crisis, characterised the negotiations and agreement between Cosatu and the ANC as a proposal. This infuriated Dlamini and Cosatu general secretary Zwelinzima Vavi, who described the comments as contemptuous.

Vavi said the government could not characterise an agreement between the ruling party and the main alliance partner as a “discussion between NGOs”. Instead, government needs to carry out directives from the ruling party without question. “Otherwise, why do we talk of the ANC as being the strategic centre of power?” Vavi said.

While rejecting the Democratic Alliance’s solutions to unemployment, which were first tabled by the department of finance but now have become the opposition party’s banner, Cosatu once again insisted that the only way to solve the crisis was to radicalise government policy.

“We have urged that the crisis of unemployment is structural and requires interventions to address the structural deficiencies we inherited from our colonial and apartheid past,” Vavi said, reading from the statement.

“Unless we can address these apartheid fault lines, such as the dysfunctional education that continues to sideline millions and provide them with inadequate skills, we will not solve the crisis of unemployment. A lot of the unemployed youth should in fact be at school, acquiring skills and increasing their employability potential.”

Cosatu has called for a youth employment accord to be debated and then implemented by the government as a key pillar of the New Growth Path.

Over the last few months, various union members of the federation have begun making very pro-Zuma noises, as the ANC’s elective conference at Mangaung draws closer, yet at the same time Cosatu’s leaders are growing increasingly irritated with the government.

Vavi said if the government didn’t begin implementing the sort of radical policy proposals that his organisation is championing, it would soon be blamed for the problems of the country even though it inherited them from the apartheid system.

“Here in South Africa we are not very far from a situation where the people who fought against apartheid and inherited the mess caused by colonialism and apartheid will be blamed by the victims,” Vavi warned.

“This will come about unless those in power are seen to be fighting against the structural nature of unemployment and poverty in every waking moment.” DM


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