Why Cosatu is wrong this time
2010-02-21 13:00
COSATU is wrong about the budget. It is a deeply pro-poor budget
with very little good news for business, the middle-classes or the wealthy.
Take the tax breaks. You only start paying tax if you earn more
than R 57?000 a year. This means that most working class households are now
liberated from a tax burden.
It means more money to put into education, more to buy something to
fill the pots on the stove and perhaps even a World Cup match or two.
Grandmothers who keep several rural provinces alive with their
pension payments also received a monthly increase of R70 on their pensions.
This is a good pro-poor benefit in a recessionary year and certainly one which
government deserves credit for.
If Cosatu should be angry with anything, it’s the hefty increase
in fuel tax to fund a pipeline we may or may not need. Workers, studies show,
spend far more on transport costs than they do in developing countries of a
similar size.
But Cosatu’s criticism of the budget is ideological and only part
of its ongoing skirmishes within the tripartite alliance. It is fighting for
pole position in President Jacob Zuma’s ruling coalition.
It is on red alert because Finance Minister Pravin Gordhan did
not, in the federation’s opinion, alter the mandate of the Reserve Bank
sufficiently. Cosatu wants the finance minister to make employment the only
fulcrum of monetary policy decisions.
Yet the expanded mandate for the Bank does place employment in a
more important position than it has ever been. No reasonable South African can
quibble with this.
Our unemployment rates are hazardous and destabilising but there
was ample recognition of this, both in policy indicators contained in the
budget, as well as in various new initiatives, including the wage subsidy for
young people.
South Africa’s ticking time-bomb sits on corners where groups of
young men gather, unemployed and unemployable. It sits in the bellies of young
women who get pregnant too early because there’s little else – but early
motherhood – for them to find meaning in.
The subsidy is an attempt to give our next generation a leg-up into
the formal economy.
But all Cosatu is interested in is ensuring that its labour
aristocracy is protected. And so, it has not celebrated this effort to grow a
new generation of employed South Africans, but crows only because the step may
hazard a two-tier labour market.
South Africa already has a two-tier labour market.
It comprises an employed class which enjoys Rolls Royce standards
and a huge under-class of domestic and farm workers, among other casuals, who
Cosatu does not even try to organise. There is a lot that Cosatu does right to
make ours a better country. This time, it’s wrong.