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FEDUSA calls on President Zuma to cut the number of ministries in order to reduce overall government expenditure as envisaged in overarching framework of the National Development Plan (NDP) which stresses the urgent need for an effective, capable and developmental state to improve economic performance. It is also critical to reduce fruitless and wasteful expenditure  in line with the expenditure ceiling of the Medium Term Budget Policy Statement, as reforms are implemented to improve the quality of public spending, particularly on infrastructure projects. Spending on education, health and social protection should remain a priority to protect the poor in our society. The notion of a smaller cabinet fits well into the vision of the NDP and the pro-active, transparent and effective implementation of Operation Phakisa to deliver tangible results.

The Monetary Policy Committee (MPC) decided to increase the Repo Rate with 50 basis points to 6.75% and the commercial banks also increased their Prime Rates to 10.25%. The MPC then reduced their GDP forecast to 1,5% for 2016 and 1,6% for 2017. The International Monetary Fund (IMF) was more hawkish and reduced their GDP forecast for South Africa to 0.7% for 2016 and 1.8% for 2017, while the World Bank is predicted to lower GDP forecast of 0.8% for 2016 and 1.1% for 2017. The announcements of the MPC, IMF and World Bank should be taken seriously. 

FEDUSA calls on President Zuma to use the State of the Nation Address (SONA) to promote decent work as a strategy to recovery from the current economic crisis through strengthening the role of small and medium enterprises (SMEs) in job creation to support inclusive economic growth, while accelerating the participation of women and young people in the labour market.

FEDUSA calls on President Zuma to advance decent work as a measure to support the recovery of the South African economy that is dominated by low economic growth and depressed by high unemployment. Unemployment, precarious work and underemployment, as well as casual and informal work remain predominant in the country. Improving the economic outlook depends to a large extent on turning around the employment trends. The South African labour market is suffering from the weakness of the global aggregate demand and domestic structural constraints, called the “negative feedback loop”.

Whilst some progress has been made in Eskom, the real reason for lack of black-out and power shedding is the collapse of demand for electricity and not Eskom efficiency. When the economy grows at 0.5%, the pressure on the generation system is non-existent. If we were to grow at 2.5% or more, Eskom would not be able to cope. We need to be alert to the facts, and not buy all Eskom’s media spinning.

Moreover, significant investments have also been made in key manufacturing sectors such as the auto sector, agro processing, electronics and leather, footwear and textile industries through the facilitation of the Industrial Policy Action Plan (IPAP). FEDUSA therefore, calls for the progressive introduction of the national minimum wage (NMW) and is of the opinion that this instrument could contribute largely to the eradication of poverty and inequality and assist to overcome the legacies of apartheid.

The planning of Operations Phakisa is complete, urgent implementation is needed to ensure solutions contribute towards unlocking the economic potential of our country. Nonetheless, FEDUSA remains deeply concerned about the following key areas ; job creation, education,  corruption in state owned enterprises as well as outsourcing, and is of the opinion that these are critical areas that require serious attention and should form part of the key priorities to be addressed in 2016.  While there has been a 1% decrease in unemployment and a number of jobs created in the last quarter, the general outlook of employment in the country still remains bleak.

The South African economy shed more than 100 000 jobs across different sectors during the 2015 financial year, resulting in thousands of workers being pushed on the edge of poverty. Employment is central to human dignity, sustainability, economic development and social cohesion. Creating and increasing decent jobs in South Africa should be the most critical objective of our government. Collaborative effort to creating new jobs and saving the existing ones is thus crucial as decent jobs as well as training and re-skilling of workers are fundamental aspects of inclusive economic growth.

With regards to education, South Africa continues to face a poor educational outcomes. The education system has failed to produce the skills in high demand by the economy. The quality of education remains poor, particularly in previously disadvantaged black schools. Quality Education is the key aspect for inclusive economic growth and social mobility of our country and a gateway for thousands of students to realise their full potential and to contribute to inclusive economic progression. FEDUSA is deeply disappointed by the silent and weak implementation of the National Skills Accord, which served as one of the first outcomes of social dialogue on the New Growth Path. Moreover, the lack of commitment by employers and state – owned enterprises to accelerate artisan and skills development by setting annual training targets and improving Sector Skills Plans is offensive and an insult to the ideals of inclusive economic growth. Furthermore, the lack of reporting by Government on the Infrastructure Investment Programme is a matter of serious concern.             

The ongoing university protests against exceptionally high tuition fees emphasises the need for collaborative work towards providing an inclusive and affordable quality higher education that will enable the creation of a new knowledge workforce. The national budget speech needs to commit further funding to fund poorer students whose only hope of breaking generations of poverty in their families is to get some kind of degree and thereby secure meaningful employment and grow the economy.  FEDUSA is of the opinion that this is an urgent matter that must be resolved in a mutually beneficial way, where the demands of the poor and deserving students will be accommodated without jeopardising the future of the higher education landscape in our country.

Furthermore, poor leadership, corruption, lack of stability, non-adherence to good corporate governance practices, financial misconduct and an imbalance between public and private interests in state owned enterprises requires serious intervention.

Lastly, and of critical importance is the issue of outsourcing in our country. FEDUSA calls for an eradication of outsourcing of jobs and services across the country and appeals to all organisations, business units, government and private entities to support and promote decent work for better workplaces, working conditions and wages and the overall economy. The phenomenon and practice of outsourcing is highly exploitative, undermines the principles of decent work, is against the objectives of developmental transformation stipulated in the NDP and creates a highly unjust system for workers. It remains highly important to collectively contribute to the recovery of the labour market, by promoting and increasing the amount and quality of decent jobs to enhancing sustainable and adequate livelihoods, as well as combat the triple challenges of unemployment, poverty and inequality.

As importantly, over the recent years SA has been focusing on its weaknesses, and this approach has undermined social cohesion. The country needs to re-focus on its strength, its resourcefulness, its diversified economic base, and its human and infrastructural capabilities. Unless we rally our nation’s resources and energies towards sustainable growth and dedicate and focus on our evident developmental challenges, we will continue to undermine the national welfare, at a huge cost to the working class and the poor. We call upon the President to lead this  process and re – focus on the urgent tasks facing us all.

Issued by FEDUSA