/ 10 August 2008

‘We don’t speak in tongues’

Cosatu’s national strike in protest against food, fuel and electricity prices this week hit economic activity hard, slamming the brakes on mining, manufacturing and transport. Matuma Letsoalo quizzed deputy general secretary Bheki Ntshalintshali about the strike.

Many have condemned the strike as doing more harm than good to the economy.
We submitted a section 77 notice to Nedlac, where we indicated that the proposed electricity tariffs will have a negative impact. It’s not for Cosatu to determine whether we should exercise the right to strike — this had to be determined by all the stakeholders in Nedlac, which include government, business and labour. We called for dialogue on this issue and said if we find solutions we would not consider the strike. But we were not taken seriously by different stakeholders.

What solutions?
The first issue was that government and Eskom should not go to the national energy regulator [Nersa] [on the proposed electricity increases]. We all agreed Eskom needs money. There was also a view that electricity is cheap in South Africa. But we said before Nersa gave the increases we needed to come up with a policy that will separate households from industrial users in terms of payment. We argued for a tariff that will exempt the poor from paying high electricity prices. We agree Eskom needs money, but disagree [about] where that money comes from. We also disagreed with some employers who indicated that because of the power cuts they will retrench workers.

Won’t the strike affect employment creation?
We can’t rule that out but we can’t take the blame. The blame should go to those who refused to come to the table. They never took us seriously.

The economy is growing but it doesn’t create jobs. The statistics show that 60% of workers earn less than R2 500 a month. We will always complain when the economy grows but doesn’t create enough jobs.

Observers suggest your strike had more to do with embarrassing President Thabo Mbeki and his Cabinet than with workers’ interests.
They are wrong. They should show evidence. We don’t speak in tongues. If we want tea, we won’t ask for water. The fact of the matter is that we are in crisis. Why should we embarrass anybody? That’s not our business.

Aren’t your demands unrealistic and unlikely to receive the attention of government?
We are not only talking about the current [electricity price] increases. We’re talking about tariff policy. Our main worry now is what is likely to happen after the 27% increase. Municipalities have indicated that they will add their own prices on top of it; Nersa indicated that in future huge electricity price increases will be needed. We’re aware that the minerals and energy department is looking into the tariff policy, but it isn’t involving us. We need broader policies that include the poor. They need to bring this matter to Nedlac.

Yet the strike action hindered coal production, which is central to electricity generation.
What we find strange is that Eskom did not increase its stockpile when it had time to do so. We have huge coal reserves: if we’re honest and want to develop stockpiles we can do it.

Cosatu’s critics say that prices are determined by global market forces, not domestic policy.
Those who say so, say it because they don’t understand global markets. There is no invisible hand in the market.

Cosatu has also called for more foods to be zero-rated, but many say this is not a long-term solution to high food prices.
If the VAT on food equals 15% of the price, it’s a huge increase. The government fears it will lose revenue; for us any relief will be welcome. What we reject is government’s reluctance to debate the matter.

Cosatu leaders say they want radical policy change when a new government takes over. But ANC leaders, including Jacob Zuma and Gwede Mantashe, insist there is no need to review key macroeconomic policies such as inflation targeting and the budget surplus.
At the recent alliance summit all parties agreed we need to debate the appropriateness of inflation targeting and look at whether the current 3% to 6% range is realistic or affordable.

The ANC in Polokwane said any policy should be based on job creation and we should nationalise Sasol. Whenever we go to ANC policy conferences we become close in our debates, but when the time for implementation comes it’s a different story.

Which policy issues will Cosatu raise at the alliance’s upcoming economic summit?
We will raise a number of things, including industrial strategy, inflation targeting, interest rates, skills development and the separation of ministries, such as [splitting] the education ministry.