Min­is­ter Gi­gaba’s 14 points and labour

CityPress - - Business - Terry Bell busi­ness@ city­press. co. za

Fi­nance Min­is­ter Malusi Gi­gaba’s 14-point plan to “take the coun­try out of re­ces­sion” will cer­tainly ex­ac­er­bate ex­ist­ing ten­sions be­tween gov­ern­ment and the labour move­ment be­cause it again raises the twin spec­tres of aus­ter­ity and pri­vati­sa­tion.

These are is­sues the pub­lic sec­tor unions will cer­tainly take up when their wage and wel­fare talks be­gin. Along with the more than 150 000 job va­can­cies in the sec­tor.

The unions are also un­likely to budge from de­mands for dou­ble-digit pay rises and a oneyear agree­ment, along with im­prove­ments and “equal­i­sa­tions” in hous­ing and med­i­cal al­lowances. And they will very much have an eye on Gi­gaba’s vaguely enun­ci­ated 14 points.

The unions are aware that this lat­est in a string of an­nounced pro­grammes, plans and ini­tia­tives is geared to­wards try­ing to ap­pease the rat­ings agen­cies, two of which are sched­uled to make an­other as­sess­ment of the South African econ­omy in Novem­ber.

The fear is that there could be a fur­ther down­grade be­cause there ex­ists, in the rat­ings world, even worse than ini­tial “junk” status.

If the na­tional debt of South Africa re­ceives a fur­ther down­grade, it is likely to trig­ger the al­most in­stant flight of per­haps up to R200 bil­lion as gov­ern­ment bonds are dumped.

South Africa Inc could end up bank­rupt, so Gi­gaba is com­ply­ing with the agenda of the agen­cies. And their agenda is plain: cre­ate con­di­tions in which cap­i­tal of what­ever shade can max­imise profit. And with­out much con­sid­er­a­tion of the con­se­quences.

Gi­gaba’s 14 points have al­ready been de­scribed as “hot air” by main­stream economists such as Azar Jam­mine. They could have added the ad­jec­tive “stale” be­cause we have heard it all be­fore.

First, there was Growth Em­ploy­ment and Re­dis­tri­bu­tion (Gear), then the Ac­cel­er­ated Shared Growth Ini­tia­tive (As­gisa), the Na­tional Growth Plan (NGP) and the Na­tional De­vel­op­ment Plan, fol­lowed by Pres­i­dent Ja­cob Zuma’s for­get­table nine points and now Gi­gaba’s 14.

All are based on the same widely dis­cred­ited ne­olib­eral “trickle-down” the­ory of eco­nomic growth lead­ing to re­dis­tri­bu­tion; that if the rich get richer, more wealth will trickle down to the poor. It doesn’t work. It never has.

Faced with this re­al­ity 21 years ago, the com­bined labour move­ment pro­posed, in a doc­u­ment ti­tled So­cial Eq­uity and Job Creation, that the the­ory be turned on its head – let re­dis­tri­bu­tion lead to job creation and so to eco­nomic growth.

This pol­icy pro­posal was based on the years of work done by the ANC’s own macroe­co­nomic re­search group.

Although the labour move­ment gen­er­ally op­posed gov­ern­ment’s col­lapse into the arms of na­tional and in­ter­na­tional cap­i­tal, there was much clutch­ing at straws.

For ex­am­ple, when As­gisa was pro­posed, it was hailed by Cosatu and the SA Com­mu­nist Party as “a de­par­ture from Gear”. It was not.

The NGP was also thought by some unions to have “some pos­i­tive el­e­ments”. This was much like say­ing it is pos­si­ble to be just a lit­tle bit preg­nant.

The labour move­ment may be more or­gan­i­sa­tion­ally frag­mented and unions per­haps in­di­vid­u­ally weaker, but there is more of a unity of pur­pose now. And Gi­gaba seems to have added to it.

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