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The Congress of South African Trade Unions welcomes Finance Minister Pravin Gordhan's commitment to address the South African Reserve Bank's inflation targeting policy when he unveils the national budget.

He told a radio interviewer: "We are talking, working, thinking, reflecting, interacting with the key stakeholders from within the government and listening to the voices from outside and will inform South Africa where we intend to go on February 17th".

COSATU and its allies have argued strongly for a change in the SARB's mandate, so that its Monetary Policy Committee has to take regard of broader national priorities - particularly economic growth and job creation - rather that a narrow concern only with inflation targeting.

This policy has resulted in excessively high interest rates over a long period, which has imposed unnecessarily heavy burdens on both individual consumers and businesses, and caused thousands of workers to lose their jobs. Around a million jobs were lost in the first three quarters of 2009, and there is still no sign of any decline from the outrageous levels of unemployment.

High interest rates make it harder for new small and medium-sized companies to raise and pay for the capital they need to start up or expand, and take on new workers. They have maintained the running costs of existing businesses at a higher level than they need have been, which has undoubtedly caused some to retrench workers, whom they might have been able to retain if the burden of interest payments had been lighter.

COSATU therefore welcomes Gordhan's assurance that employment creation is still "a major concern" and looks forward to seeing this concern turned into fresh job-creating monetary policies, including a big cut in the repo rate to give an incentive to investment, a stimulus to economic growth and job creation and a lifeline to workers facing possible retrenchment.

The federation reiterates that it is arguing for a change in policy, not challenging the independence of the SARB, which is enshrined in the constitution, or trying to dictate to the Bank.

COSATU, the SACP and others have however questioned the threat to the Bank's independence from the fact that it is owned by private shareholders, one of less than five reserve banks in the world which is not state-owned.

While the private shareholders are forbidden from trying to influence the Bank's policies, there must be concern that behind the scenes, they try to steer policy in directions which are in their interests as financiers and business people. Its independence will be much more secure if the Bank is publicly owned and answerable only to the people of South Africa, and not to any private interest groups.