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Shopsteward Volume 27: Special Bulletin

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  |  COSATU Speeches

Speech delivered by COSATU President, Comrade S'dumo Dlamini at the National Congress of FEDUSA

17 November 2016

The president of FEDUSA

The entire leadership of FEDUSA present here today
Invited Guest

The delegates who come from the workplaces, the real backbone of trade unionism I bring to you the message of Unity from the entire membership of COSATU

COSATU Central Executive Committee and the entire membership of the federation said I must tell there is no difference between a worker in a FEDUSA affiliated union and a worker in a COSATU affiliates. We are all workers confronted with the painful reality of exploitation .

The history of our country may have place on the social categories which makes us to define each other as the white workers on one side and black and African workers on the other side. But the reality is that we are all fighting for the improvement of working conditions, we are all fighting for the improvement of our salaries, we are all fighting for job security and we are all fighting for policies that create jobs, grow our economy and improve the lives of the poorest of our people.

We are all confronted with the world capitalist economy that is currently being hit by two interconnected and increasingly toxic processes, the worsening economic stagnation, lowering growth rates across the board, and the mounting risk of a major financial crisis arising from the consequences of the flood of cheap money pumped out by the world's central banks over the past seven years.

The International Monetary Fund has downwardly revised its global growth forecast for this year to 3.1 percent from its April estimate of 3.5 percent. It says that the world economy will expand at its slowest pace this year since the global financial crisis, as growth in China and emerging markets continues to fall.

According to the McKinsey Global Institute released in June this year shows that a significant majority of the population in 25 of the world's most advanced countries experienced declining or stagnating incomes between 2005 and 2014. An estimated 540 million to 580 million people, 65 to 70 percent of the population of those countries, had real incomes that were flat or fell during this period. These countries, whose total population is 800 million, account for half of the world's economic output. This is the reality we have seen in South Africa.

Recently at the Congress of the World Trade Unions held in Durban we received an account of the unfolding reality in Denmark from a leader of young workers in that country who said and please allow me to quote him extensively.

He said "in many countries, politicians hold up the Danish welfare system as an ideal in order to gain votes in parliamentary elections. We hear that tune from politicians in Europe as well as in the USA. It is true that ordinary people in Denmark until now have enjoyed a certain measure of social welfare. This was the result of the struggles of the working class.

But it is equally true that this is now a thing of the past. Through repeated reforms, all of our fought-for social benefits - be it unemployment benefits, sickness benefits (paid sick leave), or social security - have been downgraded to such a degree that people depending on such income can only be described by the German expression, "arm trotz Arbeit", literally "poor despite work," that is, "working poor".

Our early retirement system has been abolished, and the retirement age has been raised to 72 years for people of my generation. A large number of part-time jobs have appeared in the retail and cleaning trades and in the public sector - and in industry too, we see a rising number of temporary jobs.

The aim of these policies is to create a supply of labour that exceeds the demand because this will break down the standards of wage and working conditions safegurded until now through our collective agreements. Whatever cutbacks and reductions monopoly capitalism forces upon us, our unions just adapt themselves to the new situation and try to make the best of it - and what they hold on to is far from good enough".

This is the reality confronting the world today, that if we are not carefull we will gradually be forced through blackmail to accept less than what is being expected by workers in the context where workers are confronted by the reality of exploitative and declining incomes from an economy that declining. FEDUSA and COSATU and all our three federations must refuse to be blackmailed to a corner of accepting everything as the best as if we don't know what is best for the workers.

The reality of South Africa is that we have exceptionally high levels of working poverty. Five and half million full-time workers, or 54% of full-time employees, earn below R4 317 and together we have demanded a legislated National Minimum Wage. This demand for the National Minimum Wage must not be seen as disconnected from the demand for the National Health Insurance and the demand for a comprehensive Social Security.

We must together stand up and refuse bussines proposal to peg the NMW at the bottom of the sectoral determinations that is in the low R2000's because this will deepen inequality, increase the number of the working poor and defeat the whole purpose of introducing a NMW. A National Minimum Wage, which would equate to a daily wage of R100, would be meaningless to most workers, who already earn above this, and have no impact on the current wage structure. It would entrench the legacy of our apartheid cheap labor system.

We need a meaningful national minimum wage which will make a qualitative difference in the lives of the working people .The overarching objective should be to come out with a real transformative wage policy. This is a battle we cannot afford to loose. It is a battle which COSATU and FEDUSA will have to fight together until victory is secured.

We will have to meet urgently and agree on practical strategies on how we can aggressively get everyone to address the current areas of disagreement which include, the appropriate level of the national minimum wage, the structure of the NMW, and its relationship to other wage minima in Collective Bargaining and Sectoral Determinations (SDs), the need for the NMW to be part of a new wage policy, which addresses the excessive inequality in our current wage structure, the continues and unhelpful contestation around research & evidence and force an agreement on the timeframes for finalizing negotiations, and implementation.

COSATU, FEDUSA and NACTU need to be united in a fight for a Comprehensive Social Security if we are serious about addressing the plight of workers and the working class in general.

The reality is that in our country there has always been social security but it was only meant for the white population at the expense of Blacks and African population.

We inherited a fragmented social security system, which was not based on comprehensive coverage for the population as a whole, but started as a social security net for mainly whites. As a result of such discrimination, the amount of welfare going to Africans was considerably restricted. The low spending on African non-pension welfare primarily resulted from the exclusion of Africans from certain non-pension benefits, such as child maintenance grants.
Secondly, social insurance on the other hand is generally tied to formal sector employment. The coverage of social insurance schemes does not cover more than two thirds of the formal sector.

A large sector of those in informal employment and the unemployed are not covered. Moreover, the level of social insurance benefit is generally considered very inadequate. For example, in the case of the Unemployment Insurance Fund (UIF) an unemployed contributor can claim only 45% of his/her last wage, and then only for a maximum period of six months.

Thirdly due largely to the lack of adequate social assistance and compulsory social insurance protection, many basic services and benefits are increasingly being provided through private employment related systems. There is also a bias against part-time and temporary workers.

With the absence of publicly provided social security and income-earning opportunities, remittances (sharing of wages) within households play a de facto social security role. In particular, remittances play a decisive role in supporting the poorest households.

The state's approach to social protection has been fragmented and narrow. The state focused on traditional social support measures such as Child support grants; Old age pensions; Income support for those that could not work because of sickness.

We have also noted that the South African retirement insurance system has a huge private insurance industry subjected to the for-profit private administrators and asset management companies. The retirement system is currently fragmented and goes against social security principles of solidarity; particularly as middle and high income earners are able to enjoy public subsidies in the form of tax rebates. There is insanely high costs of administration imposed by the private sector which severely reduces the benefits to workers.

The country has poor regulatory laws and lack of capacity to monitor and enforce the law.

International experience indicates that privatized social security systems are more expensive than publicly administered systems. International evidence also shows that yields of privately administered funds are quite low.

We have noted that women generally earn less money and work fewer years than men, fully privatized pensions schemes discriminate against them.

We have expressed our concern that the basic framework of the inherited welfare system remains in place, in which social assistance (grants) is designed to target the "vulnerable groups" to the exclusion of the chronically unemployed.

We have noted that since 1994 government has introduced a number of piecemeal reforms which are not aligned or coherent, including a proposal for mandatory preservation of retirement funds and the termination of provident funds and measures to tighten the regulation of the retirement insurance industry.

Our country's history will also show that the Nationalist Party during its years in power forced investors to Invest in Government Stocks and Bonds that were paying low yields by passing the Long Term Insurance Act in 1943 which compelled investors to invest 53% in such Assets. This was abolished in 1989.

As a result of this history white Asset Managers have an overarching control of Retirement funds Assets as compared to Black Managers.

It is in this context that we have to campaign for a comprehensive social security system which would include a Basic Income Grant (BIG), a revamped Unemployment Insurance Fund (UIF), comprehensive retirement scheme and the National Health Insurance (NHI) as the centre of the campaign.

We have also called for a single national pension scheme with a bias towards a strong defined benefit model; the consolidation of all existing pension funds, both in the public and private sector, into a mandatory publicly administered and managed pension scheme.

We want government to use the capacity which has been developed by the Public Investment Corporation (PIC) in respect of asset management.

We have been very clear that government should resist any attack on workers' retirement fund rights and to demand for organised labour to have an integral voice in determining any retirement fund reforms mooted by government.

We have also made a call for the transformation of the Retirement Funds Industry with a specific focus in grooming black asset managers through debating the issue of prescribed assets; improving the BEE scorecard for companies in level 3 and 4 and preventing BEE fronting; the provision of bursaries for aspiring black asset managers; establishing a coordinated programme to empower black asset managers; encouraging non black asset managers to commit to transformation and black investment skill within established time frames; Insulating asset managers' space against influx of global asset advisors with anti-developmental practices.

The current struggles against the Taxation Laws Amendments Act emanate from this perspective and it has long been coming. Whilst government has postponed the implementation of the Act but the problematic sections of the Act have not been scrapped yet.

Our position remain that we reject the piecemeal approach to retirement reforms and we want all our federation to occupy the front ranks as we take up these struggles. This is about the future generations.

We must demand that government must table the long awaited discussion document on the comprehensive Social Security. It must be clear to all of us that there is nothing which the workers and the working class in general will ever secure without a fight and we need each other as we take up these battles.

Let us imagine a country a South Africa with a comprehensive social security system which would include a legislated National Minimum Wage, a Basic Income Grant (BIG), a revamped Unemployment Insurance Fund (UIF), comprehensive retirement scheme and the National Health Insurance (NHI).

As COSATU we have come to this congress to ask for unity amongst our federations as we take up struggles for that which belongs to the workers. We wish this FEDUSA Congress all the success and that it comes up with practical answers to the challenges confronting all workers in our country.