Cosatu asks Gordhan to ban e-tolls, keep VAT steady

2016-02-23 16:54

Cape Town - Finance Minister Pravin Gordhan should ban e-tolls, refrain from hiking VAT and avoid privatisation of Eskom and other state-owned entities, trade federation Cosatu said on Tuesday in a comprehensive statement tabling its budget speech expectations.

South Africa cannot afford to repeat the mistakes of the European Union, whose austerity approach worsened the region's economic crisis, said Cosatu.

Instead, government must emphasise infrastructure investment to kickstart the economy. "We must drive economic growth and stimulus through infrastructure development and job creation programmes," said Cosatu, adding that this is the approach which turned China into the second-largest global economy with 7% gross domestic product growth per annum, and also saw the United States cut unemployment by half.

Turning to jobs, the federation warned that failure to deal with unemployment would lead to social instability. "Our massive levels of unemployment, poverty and inequality are a ticking time bomb waiting to explode and are as a result of lack economic transformation."

SA needs 100 000 jobs per month

South Africa needs to create at least 100 000 jobs per month to absorb new labour market entrants and bring down long-term unemployment, said Cosatu. "We expect the government to mandate all government departments and other spheres to drive job creation."

Special attention must be paid to the mining, manufacturing, textile, automotive, agriculture, aquaculture, transport and tourism sectors, and "more must be done to support and stimulate beneficiation as a key of saving and sustaining our battered mining sector".

Tourism has given job creation a big boost and government must do more to grow domestic tourism and involve emerging black SMMEs. "The budget should come out clearly on how this sector would be assisted to create more jobs," said Cosatu.

It should also define ways to expand, sustain and grow the agricultural sector as a key source of job creation and a strategic economic sector. " More funds need to be allocated to overcome the effects of the drought and to support land restitution, land equity and reform for farm workers and emerging farmers," added Cosatu.

Turning to Gauteng's controversial e-toll programme, the federation said it is time to ban the project and for government to bow down to the reality that the public has rejected the e-tolls. Instead, the state should focus on "providing safe, affordable, accessible and reliable public transport in the form of trains, buses and taxis".

Cosatu expects government to provide adequate resources for the newly-created state-owned pharmaceutical company so that it can provide affordable medicines for all, and to address the issue of a fully-funded National Health Insurance.

"This cannot be delayed forever and government must not buckle to pressure from the medical industry which has grown fat on exorbitant medical aid fees," said Cosatu. At the same time, measures must be taken to ensure that public hospitals and clinics are "sufficiently resourced, well functioning and safe".

Cosatu welcomed the turnaround on new tax retirement fund tax laws: "We are happy as a federation that government has acceded to the workers' demands for the scrapping of the forced annuitisation outlined in government's retirement reforms legislation. Government must table its long delayed discussion paper on comprehensive social security," said Cosatu.  

Give pensioners more money

Pensioners must be given annual increases well above inflation levels, and all deserving students should have access to affordable tertiary education.

"Student fees for lower and middle income families must be scrapped and government must ensure that universities and colleges are adequately funded so they can fulfil this. Government must be bold and act to end outsourcing and labour broking in our publicly funded universities and colleges," said the federation.

There should be no increase in income tax on lower and middle income earners, while National Treasury should raise taxes on the rich, non-beneficiated mineral exports, luxury goods, luxury imports and sin taxes. VAT should not go up, while the youth wage subsidy should be ended.

Turning to electricity supplier Eskom, Cosatu said it should be reined in: "The state should consult with all social partners to explore funding models to help Eskom and forget about privatisation."

Don't privatise SOEs

"Privatisation would cause electricity to become an unaffordable luxury for workers. Nuclear energy at a cost of between R1.5trn and R3trn is simply unaffordable and this means that we need to invest in renewable energy. We need to see more heavy investment in this area because we will be able to create more jobs."

Cosatu emphasised its opposition to privatisation, while saying that state-owned entities should be "brought in line" with proper management. "Special attention needs to be given to the crises at SAA, the Post Office and Telkom. They cannot be allowed to mismanage public funds and then to retrench, outsource and hire labour brokers at the expense of vulnerable battered workers," said Cosatu.

The govenment should intervene in the water crisis, reconsider its approach to the housing crisis and provide the South African Police Service with adequate training and protection so that the police can do their job.

Cosatu also tackled the topic of corruption and wasteful government expenditure: "More must be done to deal with an estimated R80bn lost to corruption, R30bn spent on consultants and R70bn infrastructure funds rolled over each year."

Finally, it said that negotiations at Nedlac on a national minimum wage should be fast tracked to "reach a progressive conclusion and if needs be to pressurise business to accept and support a decent living national minimum wage".

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