Labour groups welcome austerity promises

ORGANISED labour this week cautiously welcomed Finance Minister Nhlanhla Nene’s promises to trim the fat and do more with less state resources.

SA’s labour federations also called for a fair settlement for SA’s 1.3-million public servants, who are bargaining with the state for salary increases for next year.

Mr Nene on Wednesday delivered his medium term budget policy speech that promises additional pressure on wasteful expenditure, as the state seeks to increase revenue and cut costs. The Treasury on Wednesday reiterated the public sector wage bill remained one of the primary threats to fiscal stability.

“Lower government consumption also requires prudent management of the public-sector wage bill, while maintaining the real value of public service salaries,” Mr Nene said on Wednesday.

“New posts will have to be funded from existing allocations and natural attrition. Posts that remain vacant will be reviewed,” he said.

SA’s public servants will require a new wage deal by the end of April next year, and have tabled an opening 15% wage demand.

In a lengthy statement ahead of the announcement, however, the Congress of South African Trade Unions (Cosatu) called for the state to tackle tax evasion and failure of departments to spend their budget allocations. Continued and often subtle forms of privatisation and outsourcing “all add to and create new opportunities for corruption and more public money being wasted, which certainly must not be used as an excuse to deny public servants’ fully justified wage increases,” Cosatu said.

Cosatu is expected to respond more fully in coming days, with leaders on Wednesday locked in the second day of a three-day central executive committee meeting where decisions on the federation’s future are expected to be taken.

On Wednesday, however, it called on Mr Nene to “definitely ignore advice from, among others, ratings agencies, the World Bank and International Monetary Fund”.

These institutions along with some analysts were “bombarding him with instructions to move in exactly the opposite direction to the ANC”, Cosatu said.

Federation of Unions of SA (Fedusa) general-secretary Dennis George said on Wednesday Mr Nene had been “clear and direct” on the need to be more efficient with resources. Fedusa had also welcomed Mr Nene’s call for the private sector to increase investment, he said.

“What we really need is much deeper commitment from business and the state, as well as labour,” he said.

Fedusa would also welcome greater focus on tax evasion practices, with the Davis Commission having been “seething” on issues such as transfer pricing. SA did not yet have a grip on the scale of the problem, he said.

The downward revisions of the economic growth forecast had called into question building momentum around the National Development Plan, and “in a framework like that you are not going to get the jobs we need to create,” Mr George said.

Fedusa in a statement on Wednesday called for a “realistic and practical wage agreement with trade unions in the public sector”. A fair settlement spoke to inclusive growth in SA’s economy, the federation said.

National Council of Trade Unions (Nactu) president Joseph Maqhekeni said on Wednesday the federation welcomed the direction taken by Mr Nene in tightening the state’s belt, but said SA should be mindful of continued inequality.

“Cutting costs for example should, within government, be focused on high salaries such as those earning above R30,000 (per month),” he said.

“We need to get that ceiling up at the bottom level … these are long-standing issues,” he said. Nactu would also welcome belt tightening for ministers and MPs, he said.

Should taxes increase next year, the focus should again be on the highly paid in the private sector, he said.

Basil Manuel, chief negotiator for the independent labour caucus, said on Wednesday there was still an expectation that the state may respond with a wage offer in the next two weeks.

“The negotiations are still upbeat and positive,” he said. The other noted comment from Mr Nene was the freezing of posts and the withdrawal of funding for posts that have been vacant for extended periods. This could again be a case were managerial failings impacted on public servants and on those relying on state services.

“While it is easy to sympathise with the sentiment often this is due to departmental inefficiencies or political wrangling, not because they are not critical posts,” Mr Manuel said. – BDLive