Vavi endorses new growth plan

2010-11-25 14:10

Johannesburg - Cosatu general secretary Zwelinzima Vavi said on Thursday that the government's new economic growth path framework released this week "accommodates" the trade federation.

The framework maps out how the government plans to create 5 million jobs over the next few years.

More attention will be placed on labour intensive sectors such as manufacturing and infrastructure.

The document also recognises the effects of the strong rand on some sectors, proposing looser monetary policy with lower interest rates and accumulation of more foreign reserves.

"There's indication that there would have been some serious compromises that were reached in order to take the process forward," Vavi told a media briefing.

"The sort of things that we have been raising for many years are now being accommodated, for example low interest rates for dealing with the rampant strength of the rand," he said.

Cosatu will meet its affiliate unions next month to discuss the framework, after which a consolidated view will be drawn up.
The framework was discussed at Cosatu's central executive committee meeting this week.

While the labour federation has welcomed the framework, it said it was worried about a few factors. 

It will measure the document against its own economic growth path released in September.

The macroeconomic policy framework that supports the new growth path and the proposals relating to wage moderation were identified as areas of concern.

The framework proposes a wage cap on salary and wage increases. It has called for discussion with business and labour, "for moderate wage settlements linked to clear commitments by business to save jobs, create new jobs and address inequality".

Moderating wage settlements will lead to even greater levels of income inequality,  Vavi said.
"If the unions in SA dare give a signal that we are prepared to moderate the wages of our workers the employers will move almost immediately to enforce that commitment," Vavi said.

"And yet if we agree that there must be a wage moderation that will include some executives to make sacrifices. We wonder if we will be able to succeed. What we'll end up with is that labour complies and they (employers) don't," he said.

The framework proposes a modest increase above inflation for employees earning between R3 000 and R20 000 per month.

Pay increases for workers earning under R3 000 would not be constrained, the document says, while increases for those earning above R20 000 to R45 000 per month would peg inflation.

High earners taking home over R45 000 per month would see increases below inflation or capped, the framework suggests.

It says that restraint in executive pay and bonuses will address excessive pay differentials and display solidarity across society.

  • Skilled Resource - 2010-11-25 14:48

    Capping R45k+ earners below inflation will just fuel the brain drain and will have the opposite effect...but since I am a white engineer working in areas where BEE is driven very hard, I was not employed for quite some time now because white people on the books look bad. So I sub-contract and charge an insane rate for my services :). How you gonna stop that?

  • Vavi - 2010-11-25 14:48

    It's a wishlist not a plan. The wishes might only come true if we radically change our labour laws and make it more employment friendly.

  • Realist - 2010-11-25 15:03

    If the ANC only plan for 5 million jobs over the next 10 years they will not be allowing for the population increase of 8 million over the next decade. Wrong plan will be a plan to fail!

  • VP - 2010-11-25 15:18

    So after 10 years, High earners will become poor earners and poor earners will be High earners and another 10 years ..the opposite applies... come on!!!!

  • Investor - 2010-11-25 15:28

    If you asked a simple minded gade 6 what they though the economic solutions were they would also come up with simplistic answers like 'weaker rand' and 'lower interest rates'. What a pathetic attempt at complex economic challenges. The Australian economy is flying with the strongest currency in the world, Brazil is creating jobs with interest rates at 10% - They have good economic policies and no labour unions dictating to government and no corruption !!!!

  • NORMAN - 2010-11-25 15:38

    Vavi endorsing something means it is bound to fail,just like our current education system,which 12 years ago he told us was the best thing since sliced bread,and look how that turned out.BTW has his wife been arrested yet for corruption?Vavi grow some real BALLS and start your own political party instead of whinning like a spoilt brat from the sidelines.

  • Craig - 2010-11-25 15:50

    So the way to create 5 million jobs is to push up the salaries of those new employees and hold the salaries of those who are using their skills to create the opportunities. OK - Got it. How did I ever pass at University. The Apartheid Government gave us false information!

  • CTheB - 2010-11-25 16:46

    Of course they tend to like the plan. They're communists and it's a plan to take a big step towards communism.

  • Investorxx - 2010-11-25 16:57

    So they want to control the salaries of the entrepreneurs that start up factories and create thousands of jobs - hahahahaha Fidel Castro and Chavez take off your masks we know you compiled this report for COSATU and the ANC

  • Freddy - 2010-11-25 17:05

    Vavi is living in a fool's paradise by endorsing the plan. The plan actually calls for "A TOTAL ECONOMIC SHUTDOWN".

  • Freddy - 2010-11-25 23:03

    Maak 'n hap Dawie Rhoodt uit die kommentare.

  • Hello - 2010-11-26 01:35

    Well maybe Mr. Patel should ask himself what happened to the Berli Wall and what about the demise of Russia from communism to democracy.That was all about redistribution of wealth which never leaor ds to prosperity and demoralizes people who have ambition ,among those being entrepeneurs who drive the economy and create jobs.So lets just ask one simple question would you rather work in a foreign country for double the salary and be rewarded for your skills and ambition or would you you rather be dead wood in an organization and not be able to achieve your goals.If South Africa wants to compete with the rest of the world then how can they expect people with skills to work here for half the salary.Surely Mr. Patel knows enough about the concept of opportunity cost .I also dont go along with his example of Chile and the copper mines as they are run by an ex executive of BHP Billiton who is definitely not working for half the salary.If this plan is implemented which I honestly doubt ,it will result in total shut down of the economy as people are highly indebted to banks and other institutions how will they pay off there debts,eg people who have taken out micro loans and charged 30% interest and more .This will lead to deflation and sharply decreased growth .Perhaps the economic advisory board can give a few hints eg. our interest rates are too high and have stifled growth for many years .Why spend billions on a world cup ,that money could have been chanelled into low cost housing ,roads and infrastucture over a period of 5 years employing vast numbers of people on a permanent basis and not a once off 3 billion on one stadium.Imagine how many houses could have been built for that amount.I dont think the government thought about alternate ways to improve the lives of impoverished South Africans who live in squater camps .Mr. Patel's plan is not a growth plan but one of disaster and is rather a desperate attempt at a solution and pathetic coming from a supposed intellectual and a minister.I challenge him to write his version of how economies should be run and see the response will be one of dismay and confusion locally and internationally.I have a suggestion for the name of his book"The Theory of Patelism".thats a new one?

  • bheki - 2010-11-26 10:36

    I will not give them the chance of living their dream I will change my vote.Mr Patel and other, please understand that we are equal but not the same. So do even try to make us the same by coming up with you capping plan. Some of us got the part of the body called-Brain and it will be used to circumvent your capping plan.

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