South Africa: Support the strike against e-tolls, youth wage subsidies and labour brokers

South African trade unions have announced a general strike from 12-14th November against the implementation of policies which, taken together, represent a major assault against the living standards of the masses of workers, the poor and large sections of the middle class.

The general strike was announced by the president of the labour federation COSATU on 25 October. The Transport Laws and Related Matters Amendment Act, the Employment Tax Incentive Bill and the amendments to the Labour Relations Act are part of a series of anti-worker policies that have been introduced by the government in the recent period. The implementation of these laws will be detrimental to the masses of workers.

These attacks come precisely when COSATU is in deep crisis. This is no accident and the responsibility must rest squarely on the shoulders of the right wing leaders of the federation.

What are e-tolls?

E-tolling is a method of electronic payment for using public roads that will now be introduced in the Gauteng province. Motorists are expected to buy a device known as an "e-tag" which will be fitted to the front window of the vehicle. This e-tag will serve as a transponder. When the vehicle passes beneath one of the 49 overhead gantries located across the province, the e-tag is recognised and a transaction is automatically recorded.

Gauteng is the country's most populous province with nearly 14 million residents. It is also the economic and commercial powerhouse of the entire South African economy. The province contributes about 34% to the country's economic output and generates about 10% of the trade in goods and services of the entire African continent. It also hosts the big cities of Pretoria, Johannesburg, Midrand and Vanderbijlpark.

All this economic activity takes place in an area that represents only 2% of the South African geographical area. This obviously poses big problems of congestion on the province's roads. Since 2004 there have been plans to upgrade the inner city roads of Gauteng in an attempt to deal with this increasing congestion. The project is called the Gauteng Freeway Improvement Project (GFIP).

Normally this kind of upgrade is funded through the collection of taxes. Additionally, South African motorists are charged a levy on the purchase of fuel. This levy annually contribute about R40 billion to the treasury department. This amount is far more than what is spent on maintaining South Africa's roads.

The problem was the government does not use these taxes to finance the maintenance of the roads but rather uses the money fund other aspects of the budget. To finance the upgrade the government  then went the way of privatisation.

In 2006 the government agency that is responsible for the maintenance of national roads, the South African National Roads Agency (SANRAL), estimated that to finance the upgrade of the 185 km of freeways would cost R6.8 billion. But a later investigation by the Competition Commission found that there was massive collusion between the private construction companies. This was part of the reason that the costs for the upgrade rose to an astounding R20 billion 5 years later in 2011.

Then, to make matters worse, in 2010 SANRAL started to erect the 49 gantry e-toll system on the freeways in an attempt to extract funds from Gauteng's motorists to pay for the cost of the upgrade. In 2009, a R10 billion tender for the collection and management of the e-tolls was awarded to the Electronic Tolling Company (ETC) which is 85% owned by the European company, Kapsch Trafficom. Kapsch Trafficom will earn R670 million per annum from the e-toll revenues.

This whole process is extremely unpopular. But despite this, President Zuma signed the Transport Laws and Related Matters Bill into law in September.

This is a classic case of how ineffective, inefficient and criminal the privatization system is. It also shows that ordinary working class and middle class people are expected to carry the burden of this inefficiency.

The result of this e-tolling business will be that the poor will be excluded from using the best public infrastructure because they simply cannot afford to pay. In the past the poor were excluded from public infrastructure by the notorious Group Areas Act. Two decades after the first democratic elections they are excluded through the e-toll system.

The proposal to exempt buses and mini-bus taxis from paying the e-tolls is of little comfort to the working class. Many workers are forced to use private vehicles simply because of the poor state of the public transport system. This public transport system is in many cases unaffordable, unsafe and inaccessible.

The e-toll charges will also increase the cost of the transportation of goods across the province. It does not take rocket science to realise that these costs will simply be passed on to working people in the form of higher prices for basic commodities. This will negatively affect the entire economy and as always the workers and the poor will have to pay the price with a fall in living standards.

It will add to the burdens of the poor in a situation of already high food prices and electricity tariffs. A City Press report released in June 2013 showed how the cost of basic commodities that the working class and the poor buy has skyrocketed over the past 5 years. A comparison was made between the cost of a basket of goods 5 years ago and the prices of the same goods 5 years later.

The cost of bread, meat, milk, cheese, vegetables, sugar and cooking oil among others in January 2008 was compared with prices for the same products in April 2013. Where consumers had to pay R 189.94 in January 2008 for these products, they now had to pay R 283.09 for the same items. That is a 49% increase compared to 5 years ago. The price of bread alone rose by 69% and the price of meat went up by 40%. Some economists warn that inflation will rise from 6% to 9% by the end of the year and as always inflation hits the poor the hardest.

The e-tolls system will force motorists who can't afford to pay to make use of alternative roads. But in many cases such alternative roads, where they do exist, are often is in a terrible condition and littered with potholes. By this measure the divisions in society are increased even further with the rich using the best infrastructure while the poor will be forced onto insufficient secondary roads.  

Additionally, the successful implementation of this system will mean that nothing will stop SANRAL from imposing similar systems in the rest of the country.     

Youth Wage Subsidies

Another deeply unpopular measure is the Employment Tax Incentive Bill which will become law on 1 January 2014. This is a scheme which will "encourage" employers to hire young workers between the ages of 18 and 29 by giving the companies tax incentives. Employers would be able to deduct the incentive amount for which they qualify from the employee's tax they would have to pay to the revenue service.  

South Africa has a huge unemployment rate. According to Statistics SA, the official rate of unemployment was 24.7% in the third quarter of 2013. This unemployment rate has averaged 25.4% between 2000 and 2013. This shows the extent of the problem. It is no cyclical problem. What we have here is permanent, organic, mass unemployment. The unemployment rate only measures the number of people actively looking for a job as a percentage of the labour force. If the broader measure of unemployment is used, then the actual figure is an astonishing 37% of the labour force. This includes a youth unemployment rate of nearly 70%.

The Centre for Development and Enterprise (CDE) states that 72% of South Africa's unemployed are younger than 34 years old. The unemployment rate for those under 25 is 49%, which is twice the national average of 25%.

Unemployment is probably the single biggest problem facing the working class. In October parliament adopted the Employment Tax Incentive Bill. Every single political party voted in favour of this bill. Now, since the material interests of the working class and the bourgeois class are diametrically opposed, this means that the formal "representatives" of the proletariat have just voted together with the class enemy to the detriment of the workers. In fact, the ruling ANC government has attacked the trade union federation COSATU for standing in the way of its proposed youth wage subsidy. ANC MP, Zukile Lukile hit out against COSATU saying:

"It's a shock to learn that COSATU can say, 'Do nothing about unemployment’. We must be honest: we are public representatives; we are representing the ANC, the organisation which represents the poor. Do you want our people to live on food parcels?  These people cannot be employed because they don't have experience. "

This is a completely baseless attack on COSATU. Firstly, COSATU has never said that nothing must be done about unemployment. As far as food parcels are concerned, that is already a reality. Hundreds of thousands of people receive food parcels from the state every day. The lack of experience is not the reason why companies are not employing young people. The real reason is because of the organic crisis of unemployment that is caused by the failure of the capitalist system.

This youth wage subsidy is a piecemeal approach and will not address the crisis of unemployment. In fact this is confirmed by that most bourgeois institution of all, the World Bank. In its 2013 Development Report, the Bank states that "aggregate employment effects are low at best" where these kinds of subsidies are concerned. The report continues: "But many studies show that they often do not have their intended effect of creating new jobs in a cost-effective fashion."

The World Bank provides three reasons for this:

(1) "The real costs of wage subsidies are often hard to calculate; the direct toll on the public purse is only part of the story";

(2) "To access the subsidies, firms might replace ineligible workers with eligible ones or dismiss and then hire the same worker under the subsidy programme"; and

(3) " If firms would have hired anyway the employment effect of a subsidy is zero."

So there we have it from straight from the horse's mouth. These schemes do not work. The World Bank concludes by stating that the best-case scenario for a wage subsidy is that relatively few new jobs will be created. In addition to this, it must also be noted that there are already incentive schemes that employers can make use of such as the National Skills Fund (NSF), which companies can use by way of internships and on the job training. But companies are not taking advantage of these schemes to provide on the job training for the youth. This is because under capitalism, employers are not in business to create jobs, but rather to create profits. Once profits begin to dry up, then the capitalist is forced by the logic of his own system to dismiss workers.

This measure also flies in the face of everything that the bourgeois economists have said for decades: that the market must be left to its own devices; that the capitalist system is so efficient that it will provide prosperity for all in the long run.

All these words have proven to be false. Capitalism cannot solve the problem of unemployment because capitalism causes unemployment in the first place.

The problem with this Bill is obvious: companies will embark on a new drive of hiring young workers at a cheap rate while they will retrench older workers in the process. The Treasury estimates that the scheme will add 133,000 jobs to the labour force in the next two years. But even if this is the case, how will this alleviate the problem when the number of unemployed workers is nearly 7 million?  

What are labour brokers?

Labour brokering is a form of outsourcing in which companies contract another company (a labour broker) to provide them with casual labour. Labour brokers are different from recruitment agencies because the labour broker handles every aspect of the worker's employment, whereas recruitment agencies are only responsible for sourcing candidates for employment. The company does not hire the worker directly. It hires a labour broker who in turn hires the worker.

The practice of using labour brokers is part of a general approach by which companies are increasingly attacking the quality of living standards of the working class. The benefits for the bourgeoisie are obvious: they are not burdened with complying with employment laws like the Basic Conditions of Employment Act.

It also means that workers on these contracts live a very precarious existence. Labour brokers are responsible for the increasing casualisation of labour in South Africa where about 30% of the workforce is casualised. Casual workers receive much lower salaries than permanent workers. The increasing rate of casualisation therefore puts downward pressure on the wage rates of all workers.

Mass resistance and anger

The continued assault on living standards is the reason why there has been such a sharp increase in community protest actions over the past decade. Coupled with this is a wave of strikes which has rocked South African society to its foundations over the last couple of years.

According to the Department of Labour, the number of strikes is at a 5-year high. Earlier in the year, as the annual negotiations for wage increases got under way, the workers responded with wave after wave of strikes in large parts of the economy. This is called the strike season.

The mood in these strikes is very militant. In fact, the situation becomes clear when you consider that almost half of all strikes are wild cat strikes. In many cases the leadership of the unions is lagging far behind the workers. Recently, an official of the IMF was shocked at the levels of militancy by the workers. When it released its Article IV report on South Africa, the official stated that a strike "should" only last no longer than one or two days. But the official had noticed many cases where strikes last as long as 8 weeks. This accurately reflects the real mood of workers.

We have seen that the ruling ANC in its Mangaung Conference has taken a sharp turn to the right. Its current policies, including the labour brokers, youth wage subsidies and the National Development Plan, are basically the same policies as those of the bourgeois opposition party, the Democratic Alliance (DA).

It is important to note that when the DA criticises the ANC, it does not criticise its policies. Rather, the criticisms relate to matters of governance, corruption, cadre deployment etc. In fact, the policies of youth wage subsidies, labour brokering, etc., are basic variations of DA policies. The DA even organized a march on COSATU HOUSE in 2012 to demand that the labour federation drops its opposition to the youth wage subsidy initiative, which resulted in them being expelled physically by union members. But this shows very graphically how brazen the opposition has become in the past period as its policies are being implemented by the government.

This clearly shows again that if you accept to work within the limits of capitalism, then you must accept everything that comes with it. You are then bound by the laws of the system and you are forced to implement plans and policies on behalf of the bourgeoisie.

The Crisis in COSATU

It is the revolutionary duty of Marxists to tell workers the truth at all times even if it is hard to swallow. This was always the method of Lenin. In the tradition of the anti-colonialist revolutionary, Amilcar Cabral:  we must hide nothing from the masses of workers, tell no lies, expose all lies that are being told and not mask any difficulties, mistakes or failures.

The passing and implementation of the laws that are mentioned above comes exactly at the time when the labour federation is completely paralyzed with divisions. It is absolutely astonishing that the president of COSATU, Dlami, refuses to acknowledge what is plain to see with the naked eye. COSATU is in crisis. The majority of the 2.2 million workers belonging to the federation know this. Ominously, the capitalist class knows this. That is why they are putting such enormous pressure on the government to further the implementation of capitalist policies.

We have already referred to the visit the IMF made to the government earlier in the year. The report of the IMF typically puts forward capitalist measures such as wage restraints in return for a hiring commitment, structural reforms, trade liberalisation, etc.

COSATU spokesperson, Patrick Craven, correctly condemned the report when he said: "It (the report) lays the blame for the poorly performing economy of South Africa on the government's poor record of controlling the wage bill and the potential spill-overs from high demand in other sectors represent downside risks.

"It thus blames the world capitalist crisis, brought on by the IMF's own neoliberal 'free market’ capitalist policies, and the shocking levels of unemployment, poverty, and inequality, on the victims of that crisis - the workers and the poor."

This is 100% correct. But what was the response of the government to the report? The Treasury department responded by completely endorsing the recommendations of the IMF. In fact, it openly admits that the recommendations of the IMF are already captured in the National Development Plan.

So if the government is implementing anti- worker policies which are endorsed by the likes of the Democratic Alliance and the IMF, and these policies are implemented against the wishes of COSATU, then how does this not constitute a crisis of the federation? Rather, it clearly illustrates that COSATU is hamstrung. The federation has not carried forward any of the resolutions from its last congress.

We must also point out that in 2010, COSATU called off the public sector strike just when it was about to be joined by workers in the private sector. This was an incredibly irresponsible decision. It is criminal to mobilise workers for a strike, only to call it off at the last minute without having achieved any of the original aims. The workers movement is not like a tap that can be turned on and off at the will of the leaders.

Every class conscious worker must support the mass action of COSATU between12-14^th November. But we must point out that two of the pieces of legislation have already been signed into law. The other one will be implemented early next year. The only way that these laws can be fought against is with a sustained campaign of mass action. That is only half the battle. Ultimately, the only way to defeat this capitalist onslaught is to fight for socialist policies.

Only when the economy is in the hands of the state and the state is in the hands of the workers can policies be implemented to serve the interests of the working class. Only then can we implement free, safe and quality public transport for the masses, create decent employment for the youth and eliminate the exploitation of man by man.

The program of "rolling mass action" takes place consecutively on different days. This is a Section 77 strike, which means that all workers are allowed to strike.

Down with e-tolls, youth wage subsidies and labour brokers!

Nationalise the construction companies! Let the ones who are responsible for this mess pay for it!

Free public transport immediately!

Reduce the working week to 35 hours with no loss of pay. This way unemployment will be eliminated with the sharing out of work.

Ban labour brokers! Create decent permanent employment for our youth. If the corporations cannot do so, then nationalise them under workers control and management.

Long live the struggle for socialism!