Minister Gigaba’s 14 points and labour
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.