Last-minute deal: Deputy President Cyril Ramaphosa announced a R20-an-hour minimum wage this week.
After two years of jostling and negotiation, President Jacob Zuma was finally able to boast that an agreement had been reached on the national minimum wage just days before his 2017 State of the Nation address.
But it was touch and go until the very last minute. Cosatu pulled the rug from under Zuma’s feet, deciding not to participate in the signing of the agreement for a wage of R20 an hour. The trade union federation reportedly said it wanted to consult with its central executive committee on some concerns, which included annual increases in the hourly wage and the minimum working hours would be provided for.
But in a last-minute rescue just two days before Zuma’s address to the nation on Thursday, Deputy President Cyril Ramaphosa announced that Cosatu had given the go-ahead for the agreement to be signed without it.
“In pursuit of these objectives, the social partners have reached agreement on modalities for the introduction of a national minimum wage of R20 an hour to be implemented from no later than May 1 2018,” he said.
Ramaphosa stressed that Cosatu had asked for time to report back to, not consult with, its central executive committee later this month.
A national minimum wage was one of the promises made in last year’s State of the Nation address. This time last year, Zuma said that “deliberations were still underway on the level at which the national minimum wage should be placed”.
Although a minimum hourly wage has now been set, the quick save does not deflect from other important promises that have still not been delivered on since last year.
Effective operation of SOEs
In last year’s address, Zuma promised that state-owned enterprises would be managed better and that the recommendations made by a presidential commission would be implemented. Out of the 31 recommendations made by the commission in 2013, only one has been set in motion — a presidential state-owned enterprises co-ordinating council has been created.
But the most vital recommendation — drawing up a state-owned enterprises Act to supersede all current legislation on parastatals — has yet to be implemented. This Act was meant to decide the terms of reference for running parastatals. Not even a draft Bill is in place.
One of the ideas to be included in the proposed legislation was to create a central remuneration authority to guide parastatal boards on their remuneration decisions, assess the fairness of executive perks and promote transparent processes. This, however, has also not yet been done.
Such an authority would have gone a long way towards regulating the controversial increase of SABC executive Hlaudi Motsoeneng’s salary by R1.5‑million in the space of two years when the public broadcaster was making a loss.
The government has also fallen short on the recommendation to create a centralised funding model for commercial state-owned entities. Instead, institutions such as the Post Office and SAA have been plagued by recurring financial woes. In 2016 SAA received the nod for a R5‑billion state-guaranteed loan, one of many bailouts the cash-strapped airline has had to survive on in recent years.
Perhaps Eskom could be commended for implementing the proposal that parastatals transform their procurement processes. But because the transformation has meant awarding a multibillion-rand coal-supply contract to the Guptas, that may be viewed with scepticism.
The Guptas, through their company Tegeta, were awarded a contract to supply coal from their Optimum Coal Mine. The contract, Eskom said, provided the power entity with value for money and was in line with its efforts to award coal supply contracts to black-owned companies. Unfortunately, the cloud of controversy that hangs over the agreement, as well as suggestions of political interference highlighted in the public protector’s State of Capture report, somewhat nullify Eskom’s efforts.
Spending of public funds
During last year’s State of the Nation address, Zuma said the government would spend public funds wisely and cut wasteful expenditure. But its failings on parastatals extended even to this area. According to auditor general Kimi Makwetu’s most recent audit report, state-owned entities fared the worst of all state institutions on curbing fruitless, wasteful and irregular expenditure.
The Passenger Rail Agency of South Africa (Prasa), for one, was forced to explain R14‑billion in irregular expenditure to Parliament.
Overall, Makwetu noted a 40% increase in irregular spending by government departments and parastatals from R25.7‑billion in 2014-2015 to R46.36‑billion in 2015-2016. This was because they did not comply with supply chain management procedures, despite Zuma calling for better monitoring and evaluation last year.
Health services delivery
Providing quality health services was prioritised in last year’s State of the Nation address, with Zuma promising that the government-owned pharmaceutical company Ketlaphela would start to manufacture and distribute its own antiretrovirals (ARVs) starting in the current financial year.
The science and technology department later clarified, however, that the company would not have the capacity to manufacture ARVs until about 2019 and would instead partner with four private companies, acting as a sort of middleman.
The rollout of these new HIV drugs has not yet started, although Science and Technology Minister Naledi Pandor said the first batch may be distributed in early 2017.
The government did, however, keep its promise to launch an HIV prevention campaign targeted at young people. Last June, Health Minister Aaron Motsoaledi launched the first step of the three-year campaign, targeting adolescents and young women aged 15 to 24, who are most at risk of HIV infection.
Four Sona 2016 promises that were kept
• The 50/50 land ownership programme, on which the government buys half the land owned by participating farm owners to give ownership rights to long-term farm workers, is being implemented.
• South Africa managed to avert a ratings downgrade through a government/business/labour partnership, after President Jacob Zuma called for an effective turnaround plan in last year’s address.
• Foreign investment was boosted through the department of trade and industry’s InvestSA initiative, which, according to the agency’s acting head Yunus Hoosen, managed to secure one multimillion-rand contract for each month of 2016.
• The government has increased support for black industrialists through the Black Industrialists Programme, which the trade and industry department says has created 1 082 jobs since last year.