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- The coronavirus pandemic has exacerbated inequality.
- This was evident in Finance Minister Tito Mboweni's supplementary budget.
- From a labour perspective, this highlights flaws in SA's democracy.
We should ready ourselves not so much for a spike in Covid-19 infections as for a very serious spike in unemployment and an almost certain spike in the crimes of desperation such joblessness will cause. Yet there is nothing new in the social fabric of the country being so badly tattered: the economic, and consequent social, crisis of the past decade and more has only been exacerbated by the pandemic.
The same applies around the world, but this new virus has provided governments with a way to excuse themselves from any responsibility for the economic chaos that now reigns. In line with this thinking, finance minister Tito Mboweni on Wednesday noted: "Covid-19 has turned the global economy upside down."
But what it actually did do, as never before, was to highlight the gross inequalities that exist. And this, in South Africa, has had one, small and hopefully long-term benefit: a multitude of bridges across the geographic and social divide inherited from apartheid have been created.
Many residents of the better off suburbs in various parts of the country, along with community, religious and other groups, have rallied to provide soup, solace and general assistance to the residents of the impoverished ghettoes. Without such help, more people would have starved.
Yet this reality was nowhere in evidence in the discussion by Mboweni when he delivered his "supplementary budget" on Wednesday. Although he did mention that we were now driven to "protect each other" in the face of a "fast evolving pandemic".
At times waxing quite poetic, he informed us that "the storm shall pass" and that we should face the "big struggle ahead of us" as "a united people" because "the time to push forward has arrived". But this concept of national unity is a myth in a grossly unequal society, and it continues to be promoted by people cushioned against the harsher realities of the economic storm.
However, to help steel us against the trials to come, Mboweni also had an appropriate Biblical reference from the Book of Matthew: "wide is the gate that leads to destruction". What could have been pointed out to him is that the narrow gates to betterment and wealth have always existed and have, by their nature, favoured a small minority at the expense of the majority.
But this focus on the wealthier minority was also evidenced in the reference to the cost of living — the Consumer Price Index (CPI) — that provides weighted averages of costs across all purchases. Because lower income households have to spend a disproportionate amount on transport and food than do their better off counterparts, the CPI figure usually underestimates the costs to the poor.
Mboweni noted that the CPI would be some 3%. This is true, but only for a minority of the population. The largest expense of most poorer households — again a result of apartheid spatial planning and geography — is on transport. Given the massive rise in taxi fares alone (up to 30% and beyond) poorer families will have less to spend on food, even if prices in that sector stabilise.
Many of the jobs lost over the past three months will also not return and those workers drawing unemployment benefits, have only six months before they too will have no income. The situation is indeed dire.
What labour saw
But Mboweni’s recipe, based on zero based budgeting (ZBB), is seen by the labour movement as a further attack on workers and the poor. This form of budgeting aims to optimise both costs and revenue with a stress on achieving balance.
The recipe has already drawn flak from the labour movement with the government’s trade union ally Cosatu describing the budget as "uninspiring and timid". The federation also threw down the gauntlet over public sector pay.
Government has refused to honour the final pay rises of a three-year deal struck in 2018. Cosatu wants the agreement honoured and notes: "Calling public servants’ essential workers while treating them like glorified slaves is disingenuous."
SA Federation of Trade Unions (Saftu) general secretary Zwelinzima Vavi dismissed the ZBB proposal as "more austerity politics aimed at poor and working-class people". Mboweni’s stress on reducing costs also drew calls for cuts in the pay of politicians, senior managers and other "fat cats".
However, the overall response by labour has, once again, been reactive. Having agreed, by and large that the system itself is at fault, the unions still insist on calling for policy changes within that system.
'As workers, we are on our own'
Yet as Cosatu officially commented: "This budget only served to remind us that as workers, we are on our own and the policymakers have no idea what they are doing." Most other unions and their federations would probably agree.
This being the case, surely it is time for the labour movement to put forward concrete alternatives? After all, most union meetings still ring out with the slogans: Amandla Ngawethu, Matla ke Arona, Power to the People.
But "the people" — the working-class majority, whether employed or jobless — are disempowered, handing over their collective power as individual voters to political parties every five years. To have power vested in the majority would mean radically restructuring how policies are made and how we are governed.
For the majority to truly exercise power, elected representatives should be wholly accountable to their constituencies. In one sense, this would be going back to basics for the trade union movement.
Such basics meant that all elected officials were paid no more than the highest paid union member, and were subject to recall — to being sacked — by their members. We do not have constituencies at provincial and national level, but they exist at local level and next year we have municipal elections scheduled.
Could this be time to try a form of real democracy?
