ANC stops gravy train (again)

In a bid to re­vive SA’s ail­ing econ­omy, the rul­ing party will be forced to take a busi­ness-friendly ap­proach

CityPress - - News - SETUMO STONE setumo.stone@city­

The im­ple­men­ta­tion of the ANC’s rad­i­cal left­ist poli­cies is poised to take a back seat as the eco­nomic crunch forces the gov­ern­ing party to take a more busi­ness­friendly ap­proach in a bid to re­vive the ail­ing econ­omy. The “pro-busi­ness” dis­cus­sions dur­ing the ANC’s na­tional ex­ec­u­tive com­mit­tee (NEC) lek­gotla last week are ex­pected to set the tone for Pres­i­dent Ja­cob Zuma’s state of the na­tion ad­dress (Sona) this week and the bud­get speech later this month.

Pro­pos­als in­clude con­tain­ing so­cial spend­ing, freez­ing va­cant pub­lic posts, more free­dom for busi­nesses and the re­lax­ing of labour laws, City Press has heard.

The ANC’s 2012 elec­tive con­fer­ence in Man­gaung and last year’s na­tional gen­eral coun­cil re­solved that the govern­ment should push ahead with rad­i­cal eco­nomic trans­for­ma­tion – a move that is now set to be put on hold.

The lek­gotla serves as an ad­vi­sory body to govern­ment, which there­after has the re­spon­si­bil­ity to find in­no­va­tive mech­a­nisms to im­ple­ment the ANC’s pol­icy pro­pos­als.

In­sid­ers who at­tended the lek­gotla said the meet­ing felt that it was bet­ter to put ide­ol­ogy aside and take a prag­matic ap­proach to re­viv­ing the econ­omy dur­ing th­ese dif­fi­cult times.

An­other fac­tor was govern­ment’s need to re­store the con­fi­dence of big busi­ness as a re­sult of Zuma’s mis­cal­cu­lated de­ci­sion last year to fire Nh­lanhla Nene as fi­nance min­is­ter.

Ahead of the Sona, Western Cape Premier He­len Zille has thrown into the mix a pro­posal that the 7.5% salary in­crease reached with work­ers last year be re­vised down to the orig­i­nally bud­geted 5.5%, as pub­lic sec­tor salaries are the main ex­pense that has hit govern­ment’s cof­fers.

Op­posed to the pro­pos­als at the ANC lek­gotla were the party’s left­ist al­liance part­ners, labour fed­er­a­tion Cosatu and the SA Com­mu­nist Party, which warned that the ANC risked so­cial in­sta­bil­ity if it placed the in­ter­ests of the rich ahead of those of poor peo­ple in the coun­try.

“There are too many poli­cies that are be­ing pur­sued by the state whose con­tent is meant to hol­low out and erode the hard-won rights of the work­ers,” said Cosatu this week.

Joel Net­shiten­zhe, a mem­ber of the NEC’s eco­nomic trans­for­ma­tion sub­com­mit­tee, said: “I do not think there is a stark choice be­tween what some may char­ac­terise as rad­i­cal poli­cies and busi­ness-friendly poli­cies.”

He said all poli­cies that en­cour­aged growth were good for busi­ness, and added that un­der the cir­cum­stances, govern­ment had to make a choice be­tween in­creas­ing so­cial grants in real terms by mar­gins that were much higher than in­fla­tion, or us­ing what­ever spare re­sources there were to en­sure an in­crease in in­vest­ment in the econ­omy and job cre­ation.

“I would ar­gue that the lat­ter is more sus­tain­able. It is not about cut­ting so­cial ex­pen­di­ture as such, but a ques­tion of con­tain­ing its growth in a man­ner that en­sures the long-term sus­tain­abil­ity of the fis­cus,” said Net­shiten­zhe.

“There comes a time in the life of any econ­omy where you would have to make de­ci­sions on what to pri­ori­tise against the back­ground of the re­sources that are avail­able.

“The ques­tion is what would be the most pro­duc­tive and most ad­van­ta­geous ar­eas to al­lo­cate re­sources to,” he said.

He said that in terms of freez­ing va­cant pub­lic posts, “a while back, dur­ing wage ne­go­ti­a­tions in the pub­lic sec­tor, there was a ques­tion on whether to in­crease the pack­ages of the em­ployed pub­lic ser­vants by such a mag­ni­tude that it would be dif­fi­cult, if not im­pos­si­ble, to em­ploy any new peo­ple”.

“The ar­gu­ment by the pub­lic ser­vants was that we should in­crease the pack­ages and, I think, to some ex­tent, that was done. The con­se­quence of that is that you will now have to freeze posts to pay those who are al­ready em­ployed,” he said.

Net­shiten­zhe also said “there might also be mo­ments where an ex­ist­ing state-owned en­ter­prise did not have suf­fi­cient re­sources to do what it wants, and is reach­ing the lim­its of its bor­row­ing power”.

He added that ques­tions needed to be asked about whether pri­vate equity in­jec­tions would ben­e­fit state en­ti­ties in terms of en­sur­ing their sus­tain­abil­ity and abil­ity to im­ple­ment pro­grammes for the ben­e­fit of the coun­try.

“So it is not so much about privi­ti­sa­tion or na­tion­al­i­sa­tion as such,” he added.

How­ever, a se­nior al­liance leader who at­tended the lek­gotla said the de­ci­sions the ANC had made were “strait­jack­eted by the fear of in­vestors”.

“The re­al­ity is it is just an of­fen­sive against the poor and the have-nots in this coun­try. We are told that rat­ings agen­cies are wor­ried about grades and we have to al­low busi­ness to grow,” he said.

He said the ques­tion of the bal­loon­ing pub­lic sec­tor wage bill was be­ing pre­sented in pub­lic as if the po­lice, nurses and teach­ers were them­selves re­spon­si­ble for it. But those peo­ple were at the bot­tom end of the salary scale, he said.

“The peo­ple who have more ben­e­fits and money are di­rec­tors, di­rec­tors-gen­eral and their deputies, the mag­is­trates, judges, tra­di­tional lead­ers, politi­cians and mem­bers of the leg­is­la­tures. Those are the peo­ple you have to tar­get if you want to re­duce the bill,” he said.

He said that freez­ing va­can­cies in the pub­lic ser­vice meant fewer teach­ers and nurses in a work­force that was sup­posed to serve the peo­ple.

“Those in the sys­tem will be over­bur­dened. There will be volatil­ity be­cause those who are over­worked will go on strike,” he said.

He said South Africa rated badly on em­ployee re­la­tions be­cause of high lev­els of worker ex­ploita­tion.

“The hir­ing and fir­ing in this coun­try is ridicu­lous,” he said.

A num­ber of ANC-run provinces, in­clud­ing Gaut­eng, the East­ern Cape, KwaZulu-Na­tal, North West and the North­ern Cape, were look­ing at cut­ting so-called non­core ser­vice-de­liv­ery items – such as cater­ing, venue hire and travel – which of­ten in­vited waste­ful ex­pen­di­ture.

To­gether with Mpumalanga and KwaZulu-Na­tal, the North­ern Cape had al­ready put a mora­to­rium on fill­ing va­cant posts.

Ned­bank econ­o­mist Isaac Mat­shego said the eco­nomic crunch had high­lighted the need for govern­ment to work more closely with the pri­vate sec­tor, as ev­i­denced in the meet­ing last week be­tween Fi­nance Min­is­ter Pravin Gord­han and CEOs from many of the coun­try’s ma­jor com­pa­nies.

There are too many poli­cies that are be­ing pur­sued by the state whose con­tent is meant to hol­low out and erode the hard-won rights of the work­ers

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