Gordhan: SA must act now or lose jobs

Cape Town - South Africa is at a cross-roads over renewed labour unrest in the mining sector, Finance Minister Pravin Gordhan warned on Tuesday.

Introducing debate on his budget vote in the National Assembly, Gordhan said something needed to be done or the country would lose jobs and investor confidence, and companies would close.

"The present uncertainty in the labour relations environment in mining and other sectors requires concerted action by organised labour, business, civic leaders, and government. There is no role for complacency here.

"We are all in this together. If we do not resolve our labour relations challenges we will be losers. We will see deteriorating confidence, job losses, and business failures."

Sensible solutions

On the other hand, Gordhan said, finding sensible solutions to the labour strife would benefit all.

"But if we find a balanced, fair, socially responsible solution, we all stand to gain and we will see higher investment, higher employment, and improvements in living conditions. This is the choice that lies before us."

Gordhan reiterated that labour unrest and stoppages at mines contributed "to much of the weaker economic performance in 2012", which was compounded by job growth of only 1%.

Referring to the rand's slide, partly in reaction to labour unrest, Gordhan said he believed the markets were "over-reacting" but stressed that "sentiment and perceptions do matter" in trying to secure investment.

This in turn was critical for creating or growing business platforms, and creating jobs.

"When we talk about jobs we talk about it fairly glibly, but 70% of the South African economy, honourable members, is the private sector ... if were to get jobs we must get investment in our economy."

He said slower growth in South Africa was partly the result of a weak global environment and he confirmed that the country's economic growth forecast remained at 2.7% for the current year and at 3.5% for next year, "all things being equal".

Both private household consumption and business investment was therefore likely to be constrained during 2013, the minister said.

Bold steps

"These are clearly circumstances in which we need to take bold steps to strengthen economic performance."

He warned that while government had several blueprints for improving the economy, from the Industrial Policy Action Plan to the National Development Plan, it had to speed up implementation of these strategies.

"We have many policies, many strategies, many action plans. But what we are not doing well enough is converting these plans into actions and implementation."

Gordhan said Treasury was responding to this by placing more emphasis on performance and measuring results in its budget and planning documents.

He told municipalities to get their house into order, saying political leaders and administrators needed to take responsibility for running local government, instead of leaving Treasury to rescue those in distress.

"The Treasury from Pretoria cannot run 250-odd municipalities."