Labour set to battle government

Minister of Finance Tito Mboweni at his presser during his Medium Term Budget Policy Statement.
Minister of Finance Tito Mboweni at his presser during his Medium Term Budget Policy Statement.
Image: Esa Alexander

“It’s going to be a titanic battle. Let him bring it on”: the sum total of one ANC-aligned unionist’s reaction to finance minister’s Tito Mboweni’s pronouncements on Wednesday.

Addressing parliament on how the government is going to manage the public purse in the next three years, Mboweni declared that the government had identified the public service wage bill as one of the huge “risks”, saying it “remains the biggest cost pressure on the budget.

Over time‚ wages have crowded out other goods and services, and capital investment‚ particularly in health‚ education and defence.”

That was the reason, months after the state reached a significantly above-inflation wage agreement with organised labour, Treasury had now decided not to budget for the R30.2bn salary increases over the medium term, in the hope that “national and provincial departments will be expected to absorb these costs within their compensation baselines”.

“The department of public service and administration will work with national and provincial departments to help them manage the implementation of the agreement‚ while protecting our key developmental priorities,” Mboweni said.

Eastern Cape finance MEC and ANC provincial chairman Oscar Mabuyane echoed the sentiments, saying this long-suffering province would have to rejig its economic recovery plan as infrastructure projects would be affected.

The private sector – big business in particular – was quick to welcome the news, as a bold move by the former Reserve Bank governor. But is it?

Organised labour believes it is being picked on and made scapegoats for a host of problems that have nothing to do with it – among them corruption, maladministration and the ever-yawning inequality gap that workers have been highlighting for so many years.

And they may be correct, too, in their assumption that their government is not being entirely honest about what it’s actually planning to do.

Facing an election, the governing party may well be hoping to ride the wave, for now, only to surprise public servants with retrenchments after that all-important poll.

In fact Mboweni knew, long before his medium-term budget policy statement on Wednesday, that he would get a big nod from the private sector and the credit rating agencies, if he was to make the right noises about the public sector wage bill.

That’s why, last week, he gave the hint, to which labour immediately responded.

Unions made it clear they would vehemently oppose any retrenchments.

Even a freezing of posts or a belt-tightening exercise that could mean settling for no or below inflation increments, they said, wouldn’t do it.

Pointing this out to him, I asked Mboweni, after his address on Wednesday, what the government’s options were, given labour’s clearly uncompromising stance.

He reckons that over the years the government has generally been kind to its employees and that must be appreciated. And therein lies another problem.

Successive ANC administrations have bent over backwards for big business, foreign investors, ratings agencies and the likes. To what end?

Have these powerful people been grateful? No!

But the workers and the poor must be – for the crumbs that are social grants, RDP houses, and the overcrowded and underfunded hospitals and clinics they can go to.

Offering voluntary severance packages would be the most obvious starting point, Mboweni said, and from there on all would depend on the engagement between the state and the unions.

“I used to be the labour minister,” he added, before reminding me that many years ago organised labour took a hard line, making all sorts of threats when changes were first proposed to the Labour Relations Act.

Once the conversations start – and both the rationale of doing things and the consequences of not making bold decisions are appreciated – tempers will thaw.

There, another problem. The government knows there’s to be a lot of noise and threats of “blood on the floor”, but in the end it’ll do what it does best – and that’s to pander to the whims and interests of the most powerful.

As Neva Makgetla, an economist once strongly aligned to the ANC, lamented early this week, a few large companies own so much of the economy, while those occupying the top echelons earn so much money compared to workers. The wage gap is also true for most of the state-owned companies.

That the government hasn’t done anything to address this anomaly should be an indictment on an ANC that’s supposed to care about the working class, the poor and other vulnerable sections of society.

Why should workers be the sacrificial lambs?

How would getting the private sector to deal with the glaring disparities and inequalities seriously hinder them from making huge profits?

But his haughtiness, and knowing the ANC and its allies very well aside, Mboweni is caught between the proverbial rock and a hard place, and he needs all of us.

His party can’t claim that it did the best it could in the past 24 years to run this country and rebuild the economy.

Acknowledgments must be made that the past eight years were particularly disturbing, that the best the governing party gave us was a bunch of criminals who put themselves and their hangers-on first, and allied unions were complicit.

Mboweni and his comrades must realise that if, as he called upon all of us to “make sacrifices and choose a path of redemption”, that should apply to everybody.

The rest of us must now decide, whether to allow the ANC, its government and allies to continue to do what they’ve been doing since taking over from the apartheid regime, and expect a different result.

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