Mboweni ‘ must go back ’ to drawing board
Federation rejects minimum wage exemptions, warns of labour conflict
Union federation Cosatu has submitted a formal response to the Treasury’s economic reform paper, saying that it will increase conflict in the labour market and should be submitted to the National Economic Development and Labour Council for discussion, urgently. Cosatu also said it disagreed strongly with a number of the policy recommendations, such as exemption for small and medium enterprises from the national minimum wage and the privatisation of Eskom power stations. /
Union federation Cosatu has submitted a formal response to the National Treasury ’ s economic reform paper, saying that its proposals will increase conflict in the labour market and that it should be submitted to the National Economic Development and Labour Council (Nedlac) for discussion — urgently.
Cosatu also says it disagrees strongly with a number of the policy recommendations, such as exemption for small and medium enterprises (SMEs) from the national minimum wage and the privatisation of state-owned Eskom ’ s power stations.
A policy intervention that relies on “starvation wages ” for workers will not result in economic growth and job creation, the federation says.
The deadline for comments on the paper was September 15. The deadline was met by Cosatu, some government departments and some business organisations. The governing ANC, which has said it still intends to comment, began a process of discussion this week.
The paper will be discussed at a meeting of the economic transformation committee of the ANC on Friday and by the national executive committee (NEC) at the end of the month.
Cosatu says it is particularly aggrieved by the lack of process followed by finance minister Tito Mboweni in releasing the paper and his failure to take into consideration the processes at Nedlac, which resulted in the job summit agreement in 2019.
In a review of the job summit earlier this year, President Cyril Ramaphosa committed to monthly meetings with the government and social partners.
“These meetings are convened by the president. The Treasury is part of these processes. The paper directly contradicts, conflicts with, confuses and undermines these collective approaches. Many of the very issues raised in the paper have, in fact, [been] or are being engaged [with] in these Nedlac processes,” Cosatu says in its submission.
SURELY AFTER 25 YEARS AND A 40% UNEMPLOYMENT RATE, IT CANNOT RETAIN THE SAME MACROECONOMIC POLICIES?
It is also an act of “bad faith and extreme provocation ” that the Treasury, which was part of the negotiations in Nedlac, [which agreed to] to a national minimum wage, should now “seek their unilateral collapse ”.
Cosatu also criticises the Treasury paper for its limited focus on microeconomic reforms when there is a need for macroeconomic policy changes that could ignite growth.
“Does the Treasury seriously expect the economy to grow without any macroeconomic policy changes?
“Surely after 25 years of the same policies and a resultant 40% unemployment rate, it realises that it cannot retain the same macroeconomic policies and expect different results?” Cosatu asks in its response.