Labour’s controversial proposals have pitted it against business, write Jacquie Golding- Duffy and Madeleine Wackernagel
Labour and business were in direct conflict this week with the release of labour’s proposals on growth, development and job creation. The document says “hard choices” have to be made by the economic elite if social equity is to be achieved.
Businesses may not know just how hard, especially if the Congress of South African Trade Unions (Cosatu) has anything to do with it.
Cosatu assistant general secretary Zwelinzima Vavi says the document is “crucial” and will have to be central to any economic policy that is formulated by government, business and labour.
The blueprint, Social Equity and Job Creation — the Key to a Stable Future, was released this week by Cosatu, the National Council of Trade Unions (Nactu) and the Federation of South African Labour Unions (Fedsal).
The document follows similar initiatives by government, and the South African Foundation’s input into the debate on economic transformation.
Vavi says Cosatu wants “whites to give up their privileges” and stop resisting the fact that they have to let go of the economic reins of power.
In a scathing attack on the SA Foundation and its document, released at the end of February, Vavi says the document is Growth for a Few as opposed to Growth for All.
“Business is not being singled out. Workers are also making sacrifices but [business] has to realise that the stage has been set for a fight between us and them.”
Labour’s blueprint does not aim to please the business sector — nor does it. The document raises “serious concerns”, says the South African Chamber of Business (Sacob), while Nico Czypionka, chief economist of Standard Bank and one of the architects of the SA Foundation’s framework, calls it “unworkable”.
“There appears to be a basic difference in the philosophical approach which drives the labour proposals and the views of the business community — with labour appearing to favour an approach that ‘protects’ jobs and creates employment by harbouring inefficiency and increasing rigidity,” says Sacob.
The tax proposals worry Sacob and Czypionka. Any increase in business taxes would deter foreign companies, whose interest in fixed investment here was tenuous at best, says Czypionka.
Zunaid Moolla of the National Institute for Economic Policy believes the plan had much to offer: “Myths about the impact on foreign investment are misplaced; once we have got growth going, and income distribution is improved, investment will pour in.”
A bosberaad is due between government, labour and business and, says Vavi, labour’s blueprint will be central to it. He says the other documents submitted will be considered, but labour’s position is now been spelt out. Mass strikes by Cosatu’s affiliates to achieve its goal, he says, are not “an impossibility” and “cannot be ruled out”.
“It is clear that business feels government should remain out of the picture and merely play an administrative role but labour feels government should be more involved,” Vavi says.
The National Economic, Development and Labour Council (Nedlac) says it “welcomes the document as labour’s input into the process of debate on economic transformation”.
Nedlac programmes director Debra Marsden says the documents submitted by all quarters to further the debate on transformation and economic empowerment will serve as the basis of discussion over the next few months within the highest ranks of the council.
Vavi stresses that a critical requirement for the new democracy is “the active promotion of social equity ” and this is the key objective organised labour has set for itself.
The document outlines that social equity in South Africa, and particularly the reduction of the vast inequalities in the society, must entail:
l redistribution of wealth,
l the eradication of poverty,
l the promotion of worker rights,
l increased employment
l the development of the full human potential of our people, and
l the provision of basic infrastructure and services to all citizens.
Vavi says labour’s contribution to the economic debate is a bid to clarify what it sees as the current economic situation and also to expand on labour’s overall vision for the future.
The document continues to say that the inequalities prevalent in South African households are not accidental but are the natural outcome of low wage policies followed by the private sector and the deliberate policies of the former state to under-spend on social services for black people.