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Shopsteward Volume 27: Special Bulletin

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  |  Memorandum

Memorandum for COSATU`s National Days of Action, 12-14 November 2013

12 November 2013

COSATU`s 11th National Congress resolved to embark on a radical programme of action in support of workers` legitimate demands.

COSATU wishes to emphasize that this action is protected and lawful. Employers are warned not to take any action against any workers, as such action would be unlawful.

The campaign is in support of demands specified in the Notice under Section 77 of the labour Relations Act for:

  • Scrapping of e-tolls and opposition to the privatisation of our roads; including reducing the expensive toll gate.
  • Banning of labour brokers;

In addition, workers may wish to raise the following other demands:

  • Affordable, accessible and efficient public transport;
  • Building houses close to workplaces and an end to the apartheid spatial development;
  • Urgent steps to address the crisis in public health and education;
  • A living wage for all workers, with a statutory minimum wage;
  • Scrapping the Employment Tax Incentive Bill;
  • Ending the scourge of corruption in both public and private sectors

1. On E -tolls

COSATU is opposed in principle to the introduction of the Gauteng Freeway Improvement Project (GFIP) open road tolling system. It will not just affect the people of Gauteng, as the government has now conceded that e-tolling will replace existing toll-gates throughout the country.

It is a lie that only the middle class use our highways. Many low wage earners use cars to travel to work, because our public transport system is so unreliable that they have no choice. Public transport is also unavailable outside peak commuting hours, or at weekends when Gauteng residents travel distances across the Province to visit friends, attend funerals, etc.
We appreciate that government has invested in the improvement of our roads, which we see every day as we drive through freeways, which is what government is supposed to do with the taxes we pay.

But we do not accept that government should link freeway improvements to e-tolling, to force the users of these freeways to pay again for improvements which they have already paid for through taxation and the fuel levy.

Tolls will impose a direct burden on the poor of Gauteng, who are already struggling with a rising cost of living and personal debt at an all time high, and will now be forced to pay to travel on previously free highways.

The latest proposed tariffs put a cap of R450 per month for cars. Sanral argues that most users will pay under R300 per month, but for a sizeable minority who commute between Tshwane and Johannesburg or between the East and the West of Johannesburg, they will hit the R450 mark, which for many is unaffordable.

Therefore, given also the lack of consensus or progress on the implementation of AARTO (including the points system against convicted drivers) and the chaos at the Road Traffic Management Corporation the levels of non-compliance are likely to be extremely high.

Sanral is already in dire financial straits, despite the R5, 7bn bailout it received from Treasury at the beginning of 2013, yet despite this the Agency has a budget of R85m per year for advertising and promoting e-tolling.

COSATU has consistently argued for alternative sources of funding for the GFIP. Taxation must be the main source. We pay taxes precisely so that government can build and maintain roads, hospitals, schools, etc. Unlike e-tolls, which take no account of the ability of the drivers to pay, taxation is progressive - the more you earn the more you pay.

Another alternative would have been a 10c addition to the fuel levy. If this had been imposed in 2006 when the project first started, the full cost of the Gauteng upgrade could already have been paid off, with over R17bn collected, at a cost of about R15 a month for the average motorist. And we would now be in a position where Sanral could start paying for urban freeway improvements in other parts of the country - without needing to toll.

Such an addition to the fuel levy could have been - and still could be - introduced with no legislation required and at no administrative cost.

Cost of collection

Another reason for opposing the tolls is the massive cost of collection, which Sanral itself has conceded will consume a massive 17% of the money collected in tolls. Even if the government makes further cuts in the level of tolls, the collection costs will become an increasingly larger percentage of the amount collected.

In July 2013 Kapsch Traffic Com (the Austrian majority partner in ETC which is the joint venture toll collection company) said it expects to increase its revenue by R650 million a year once collection starts! If true this means that over 40% of the expected revenue will go straight to Kapsch.

This means that tolls are not only an unfair but also a grossly inefficient way of raising the money for road improvements, and certainly not in the national interest. What makes it worse is that the contracts signed with these companies remain secret. All the evidence indicates that revenues are going to be enormous and that the loans will be paid off quickly, leaving the private operators to milk the public.

In addition to Sanral`s financial woes, they have been rocked by the construction collusion and price-fixing scandal uncovered by the Competition Commission, which imposed massive fines on companies involved in constructing the roads.

Tolls will also put an indirect burden on the poor of the whole of South Africa, by adding to the cost of transporting goods within and to and from our industrial heartland, which will have an immediate effect on inflation.

Tolls will perpetuate exclusion

We live in a society highly divided by the unequal distribution of wealth and income. The poorest 10% of the population shares R1.1 billion whilst the richest 10% shares R381 billion.

These inequalities are reflected in access to public services. Good health and education services are currently available only to the wealthier sections of society, who can afford to pay. The poor majority have to suffer underfunded, understaffed and inferior services.

In these areas the government is starting to move away from the pernicious and socially divisive `User-pays` principle for basic public services. Good progress is being made in the health sector, through the NHI, to bring about one universal service. No-fee schools are another example of how we are trying to escape from the `User-pays` principle for basic public services
We should not therefore be moving in the opposite direction when it comes to the equally essential public service provided by our public roads. `User-pays` means that you cannot use the best roads if you cannot afford to pay. Those without the money to pay the tolls will be excluded from access to the best roads and have to use the potholed side-roads, while those with the money glide along the highways in their fancy cars.

Toll roads will become a move back to the kind of social and economic inequality in access to basic services which we are starting to move away from in health and education.

Public transport is totally inadequate

Government has exempted registered public transport vehicles from the tolls, but very few buses and taxis actually use the tolled highways.

Meanwhile most public transport remains woefully inadequate both in quality and in the numbers that it serves. A third of our people use private cars to get to and from work, not from choice but because our public transport system is expensive, unsafe, and unreliable.

South Africa requires effective, accessible, reliable, affordable and safe public transport, not punitive e-tolls for poor working class households who have to use their cars since there is no alternative way to get to work.

In reliable research, 7% of households indicated that transport is either not available or too far away; 27% expressed concern at safety of public transport and 23% indicate that transport is too expensive.

This is made worse for workers because spatial settlement patterns remain largely reflective of apartheid where black and coloured people were pushed to peripheral townships and informal ghettos outside city centres and far from workplaces.

The promise of massive investment in our run-down commuter rail services is good news, but this will take years to come on stream and the allocations are largely for the improvement of what currently exists, and not the massive expansion of passenger capacity which is so sorely needed.

Apart from the BRTs in Johannesburg and Cape Town, not a single new subsidised bus route has been put in place for over ten years! This has left new settlements stranded, with no affordable mass public transport. And the subsidies to the bus industry for existing subsidised routes have not kept up with inflation, resulting in a deterioration of services.

The taxi industry`s economic structure and operating model dictates that fares remain high, levels of vehicle maintenance are low, and driver behaviour ill-disciplined. As a consequence enforcement of safety and employment regulations in the industry is virtually nonexistent.

COSATU has consistently opposed privatisation of public services. The introduction of a tolling system that brings in the private sector to operate the tolled roads is, in our view, a form of commodification of what ought to be an essential publicly funded public service.

This e-tolling system project was never supported by our people. It remains one of the most deeply unpopular projects in the whole country.

On Labour Brokers

COSATU has been for years calling for the banning of labour brokers, who get rich by exploiting workers and undermining their job security. Our call has always been based on the campaign for decent work; and job security is a fundamental measure of decency.

The current statutory definition of a labour broker under South African law, is "any natural person who conducts or carries on any business whereby such person for reward provides a client of such business with other persons to render a service or perform work for such client, or procures such other persons for the client, for which services or work such other persons are remunerated by such person"

So labour brokers do not create employment. They create a triangular relationship - between "client Company", labour broker and worker to the benefit of the broker at the expense of the worker. They are modern day slave owners and the system must therefore be scrapped.

Statistics South Africa does not report the use of labour brokers in the labour market directly, but by 2012 contract work of limited and unspecified duration accounted for almost 32% of total employment.

COSATU has registered progress since our presentation to the Portfolio Committee on 26 August 2009. The only remaining difference between ourselves and government has been our demand that no labour broker be allowed from day one of employment, with the ANC envisaging some role for labour brokers in the first three months. This, we argue, will open the system up to major abuse, with employers continuously rotating labour broker workers after each three-month period.

COSATU will fight until there are no months, or even a single day, in which our people suffer at the hands of labour brokers.

Employment Tax Incentive Bill

COSATU objects to Government pushing ahead with tax refunds for employers who employ young workers, or workers in special economic zones and designated industries. This has not been negotiated in Nedlac, and is just money in the pockets of the bosses, who are likely to dismiss older workers whose wages are not subsidised.

The incentives will also drive down wages as lower paid workers will attract the biggest tax refund. This must be taken back for negotiation at Nedlac.


Finally the federation once again demands a much tougher fight to rid the country of crime and in particular corruption, in both the public and private sectors, by which greedy individuals are bleeding the country dry in order to line their pockets, and stealing millions of rands which ought to be used to provide basic public services to the poor.

Our Demands

  • Scrap e-tolls and stop the privatisation of our roads;
  • Provide affordable, accessible and efficient public transport;
  • Build houses close to workplaces and end apartheid spatial development.
  • Urgently address the crisis in the public health and education systems;
  • A living wage for all workers, with a statutory minimum wage;
  • Ban labour brokers, and enforce labour laws which safeguard decent working conditions and security of employment;
  • Scrap the Employment Tax Incentive Bill, which hands to employers huge subsidies for creating jobs which they should, and in some cases are already, be creating, and displacing other workers.
  • End the scourge of corruption in both the public and private sectors

Signed on behalf of Government:

Signed on behalf of Business:

Signed on behalf of Labour: