analysis
Glenda Daniels
Even the most orthodox economists accept that there are instances where state ownership of utilities is appropriate.
The business of government should be give and take, with the broad view of creating a better quality of life for all, specifically the upliftment of the poor. Unfortunately, the present situation is all take and no give from the government. With the anti-privatisation strike, it is losing its last opportunity to engage with labour and do more than pay lip service to the developmental path it presumably purports to be following.
The Congress of South African Trade Unions (Cosatu) is not proposing a simple-minded, ideologically-blinded view of privatisation. On the contrary, there is real give and take. Cosatu has been joined by, among others, the South African Communist Party, the National Council of Trade Unions, the South African National NGO Coalition, the South African National Civics Organisation, the Treatment Action Campaign, the Congress of South African Students, the South African Students’ Congress and the Student Union for Christian Action, which are all throwing their weight behind the strike.
They are not proposing the halting of every aspect of the government’s privatisation plans. These significant voices of labour and civil society are saying: restructure state assets but don’t privatise basic services, because that is not in the best interests of the poor. Already the costs of health care, education, electricity, telecommunications and water are rising and well on their way to being unaffordable because of privatisation inroads.
State ownership of utilities is appropriate in some instances. Most graphically, this is illustrated where there is a natural monopoly. The provision of water is perhaps the best example. It is difficult, if not impossible, to imagine that the provision of water can be done on a private basis. Supplying clean water to all households is not only of massive benefit in improving the quality of life of those who need and use it; it also has a multiplier effect on the health and hygiene of all the people of South Africa. The economy as a whole will benefit from healthy workers, not only in their productivity but also in savings on medical costs.
So too with electricity. Affordable electricity avoids pollution and the costs and dangers of wood and coal fires. Health is improved when one is able to keep warm; and grades are improved when learners can study at home, at night.
The provision of cheap electricity stimulates commercial demands for white goods, for instance, refrigerators and stoves, all of which benefit the economy.
Even cheap telecommunications can have a national benefit. Opening up the rural areas of South Africa to communication with the world would have direct and tangible benefits. Instead the “restructuring” of telecommunications, after the sale of 30% of Telkom to Malaysian and United States firms, has led to about 15 000 job losses and a price increase for local calls by about 35%.
There are ways in which the government can ensure that we don’t completely lose the opportunity to privatise while ensuring South Africans have the basics of life. Here are some concrete suggestions. It ought not to be too difficult for every household in South Africa to be provided with clean water to the amount of R100 a month, basic electrical services to the cost of R200 a month, and free telephone calls for R100 a month.
Concrete proposals from labour include that electricity could be financed through government bonds or through the budget, the establishment of a national distributor, which would allow for cross subsidies between rich and poor areas. In transport, Cosatu proposes that an integrated rail company be created to subsidise the ailing general freight business; in health labour proposes a return of health care to the public sector, through the establishment of a national health insurance and, in the public service, Cosatu argues that outsourcing in schools, for instance, continues to see a further deterioration of maintenance, and that engagement with unions broadly on service delivery would bring about strategies that will work in the interests of both workers and the government.
The added cost of these expenses for the government could easily be recovered by marginal increases in the tariffs for those who use in excess of these amounts, notably industry.
In addition, stopping outsourcing would cut down on the number of very expensive consultants the government uses. The government keeps reminding us that its tight fiscal policies have shrunk the deficit, while tax collection rates are soaring, with R7-billion more than expected recovered in the last financial year.
Instead of those funds being wasted on, notably, arms spending, other areas could be prioritised: development and social spending, particularly service provision.
The government seems to have lost its way. Labour and civil society are trying to redirect it. The privatisation of basic services, they say, is not the route to go, and the issue affects not just workers but the entire population. Of course it is the poorest communities who suffer the most when they have to pay for increases in water supplies, electricity, telephone, education and health provision.
The government’s argument, according to Cosatu general secretary Zwelinzima Vavi, is that through privatisation black economic empowerment will take place and the poor will benefit. But this, he says, “is nonsense, because what we are seeing is the enrichment of a few and replacement of white faces with black faces”.
“Nobody is going to bully us anymore,” Cosatu president Willie Madisha told the Mail & Guardian this week.
“Workers are saying that privatisation benefits a few, and we are accountable to our membership. We are now in the middle of a class struggle.”
The upliftment of the quality of people’s lives, linked to economic growth, has to be the basic duty of any government. If the government doesn’t wake up to this fact, it will lose one of its last key chances.
So instead of vilifying the leadership of Cosatu with vicious mud-slinging and name-calling such as “liars” and “hypocrites”, take note that this federation, and those groups that are backing the strike, have real constituencies. They are listening to their people, representing these views and standing firm on their commitment to eradicate poverty and suffering.