When the Taxation Laws Amendment Bill was passed by the National Assembly, Cosatu called it a “declaration of war”. When it was signed by President Jacob Zuma in January, the federation said “it will be difficult to campaign for the ANC in the upcoming local government elections while the new tax laws are still in place”.

Cosatu’s Central Executive Committee (CEC) on Thursday announced its full support of the ANC before this year’s local government elections, changing its tone since Cabinet decided to delay the implantation of the new legislation’s impact on accessing lump sums from provident funds. It was a huge victory for the labour federation and a loss would have undermined efforts to remain the country’s leading labour organisation while the National Union of Metalworkers SA (Numsa) and former Cosatu general secretary Zwelinzima Vavi look to establish a rival organisation.

“We shall campaign for the ANC as mandated by the 12^th national congress and ensure that it gets a decisive election victory. We shall participate in the drafting of the election manifesto in the coming local government elections,” said the Cosatu CEC, after a three-day meeting with leaders and affiliates this week. “We shall ceaselessly defend the unity of the alliance and ensure that its programmes are taken forward.”

After failing to convince government and its alliance partner on key issues such as the youth wage subsidy, Gauteng’s e-tolls, labour brokers and the National Development Plan, Cosatu made a point of standing against Taxation Laws Amendment Act, questioning whether to support the ANC in elections and planning massive protests. Cosatu said while the ANC-led Alliance was supporting stances like moving into “the radical phase of our transition”, in reality “there is however a chasm on the policy content” with government pursuing policies that harm workers. If Cosatu had of pushed this line ahead of elections, it could have significantly damaged the ANC, which draws from Cosatu’s support and ability to mobilise for campaigns, and played into the growing criticism that the government has failed working class South Africans.

The Taxation Laws Amendment Act sought to bring provident funds in line with retirement and pension funds in making it compulsory to invest in annuities. Under the new system, those below 55 years old would have only been able to withdraw one third of any benefits accrued after 1 March (the old laws have applied to what you’ve already accrued) in a lump sum while the rest would be invested into annuities, which will pay you out monthly. Those with a total benefit of less than R247,500 could have taken the full amount in a lump sum, like all provident fund members could before.

While the law aimed to promote savings for retirement and also improves the tax breaks for voluntary contributions, unions were steadfast in their opposition to the changes. During discussions, which have continued over the last few years, Cosatu movement was able to delay the implementation of the law for a year and also get the maximum figure for withdrawing a total benefit of a provident fund raised from R150,000 to almost R250,00.

Cosatu was adamant workers shouldn’t be told how to manage their money and that many people depend on access to their provident funds in times of need. Initially, Zuma hit back at claims that the consultation process wasn’t adequate. He then appointed a mediator and later Cabinet announced the implementation of the clauses relating to provident funds would be delayed until 2018.

While Cosatu still rejects any plans for compulsory annuitisation of provident funds, delaying their implementation is already a victory. After expelling Numsa and Vavi, who hope to attract other unions to a new federation they hope to launch, Cosatu remains split.

Its key challenge now, however, will be gearing the ANC towards the left. “The task is to build a fighting alliance beyond election period. The Alliance should continuously remain at the centre of planning and driving the revolution. The role of the Alliance Political Council and the Alliance Secretariat must be to pull the revolutionary forces together and ensure implementation of the Alliance programmes‚ including ensuring that where necessary such programmes translate into implementable government programme,” the CEC said.

“We are clear that merely calling and lobbying for the reconfiguration of the Alliance or that the Alliance be a strategic centre of power is not enough. This is a battle we will have to win on the ground through asserting our organisational presence‚ through visible campaigns in the workplace and in communities. It is a battle we will win through ensuring ideological clarity and by remaining consistent and principled in everything we do.”

Cosatu and unions in general are under pressure. The federation’s statement points to the troubles – unions under pressure from rivals, disunity in the working class, most workers not being unionised, the ongoing plan to implement the National Development Plan, challenges to bargaining council agreements and plans to legislate strike ballots, as well as retrenchments, particularly in mining.

Cosatu has won the most recent battle over provident funds but the larger fight will be having a greater voice in government policy. Without that, Cosatu and its affiliates remain vulnerable to criticism that it hasn’t done enough for workers during democracy and that they should look elsewhere for a home in the new left. DM

Photo: Cosatu President S’dumo Dlamini. (Greg Nicolson)