Aug-Sept 2014 K.indd

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www.cosatu.org.za • AUG/SEPT 2014

promoting a developmental economic policy, consolidating & advancing worker rights, promoting decent work, & addressing inequality.” The failure thus far to implement this agreement is a matter of major concern, as government is steaming ahead with implementation of a Plan, which is fundamentally fl awed in the areas we have outlined above. It is simply not good enough to punt the line, as the Presidency and business are doing, that even if the plan is ‘imperfect’, we must go ahead and implement it. Why should we saddle ourselves for the next 16 years with a fundamentally fl awed plan, which worsens our problems, when we can craft a plan which effectively addresses the country’s needs? The NDP’s vision of a national agreement around which social partners coherecannotsucceedunlesswedevelop a Plan which addresses the structural problems in our economy. Otherwise we will perpetuate features of our economy which are holding the country back from achieving the vision of full employment, and a decent standard of living, which the NDP claims to espouse. Only with such a realignment would our national plan succeed in promoting the radical economic shift, the majority of South Africans agree needs to take place. We are ready to engage in this enterprise.

than R3033 per month in 2013 3 , way below any reasonable calculation of a minimum living level (currently around R4500-R5000 pm). Socially the proposal for wage repression is a disaster, will cause chaos in the labour market, and economically does the opposite of what is needed, to revitalise and industrialise our economy. So at least in relation to the economic elements of the plan, it is back to the drawing board. THE WAY FORWARD Last year’s Alliance Summit agreement on the NDP provides the only way forward, to resolve this impasse: It begins by supporting the need for national long range planning, an idea which was pioneered by the Alliance at its 2008 Summit. But it states that “the NDP must support the effort to take forward the programme of radical economic transformation”. The Alliance resolution proposes to take forward implementation of the NDP where there are areas of agreement eg on the public service charter, proposals to fi ght corruption, and proposals to address apartheid spatial planning. But critically, the Alliance Summit agreed that the NDP should be realigned to address legitimate concerns raised by COSATU and the SACP, particularly on the economy. This realignment should “address the imperatives of reindustrialisation of our economy,

parts of the NDP, this proposal for ‘extraordinary measures to transform the labour market’ 2 is actually central to the NDP’s strategic vision. The NDP model of wage repression is very different from the proposals in governments 2010 New Growth Path (NGP), which proposed a cap on salaries at the top, wage moderation in the middle of the wage structure, and more rapid wage growth at the bottom- ie a wage solidarity strategy. The NDP’s wage repression strategy goes against the clear observation by Prof Habib in his book South Africa’s suspended revolution, ’that any proposal for a low wage growth strategy through a social accord “is a non starter”. The NDP’s proposals do not respond to the causes of current stresses in the labour market- namely growing poverty and income inequality, which require a coherent national wage policy; and the undermining of our collective bargaining framework, which requires the strengthening of our legislation. If the NDP’s proposals were implemented, it would worsen con fl ict in both areas. Those in Treasury, and other drafters of Chapter 3, need a serious reality check on their idea that we have ‘high entry level wages’. They need to look at the most recent Stats SA statistics which show that the majority of South African workers earn poverty wages- with half of all workers earning less

1 This is a revised version of remarks delivered at Wits on 24 July 2 Treasury’s underlying agenda in this regard, which it has consistently advanced since the adoption of Gear in 1996, is exposed on p58 of the NDP, where it states: “South Africa’s labour market is often characterised by contestation between pro fi table fi rms and reasonably well-paid employees. Outcomes determined in bargaining processes leave little room for new entrants to enter the workplace. To address high levels of unemployment, particularly among youth, extraordinary measures will be required”. It then goes on in the Chapter on the economy, and the concluding chapter, to propose an agreement to reduce the entry level wages of young workers. 3 And half of African workers earned less than R2600 p/m in 2013

Economy