Media release

Statement on Cabinet meeting of 18 September 2002

20 September 2002

20 September 2002

Cabinet statement on COSATU's Section 77 notices regarding job losses, poverty and restructuring of State assets: Media briefing by Ministers of Public Enterprises, Labour, Provincial & Local Government, Transport, Public Service & Administration, Water Affairs & Forestry and Finance

On Wednesday, 18 September 2002, Cabinet received a full report on the on-going discussions between Government and COSATU under the auspices of Nedlac. Cabinet in particular noted the demands of COSATU as contained in the federations two notices to Nedlac in terms of Section 77 of the Labour Relations Act (1995). The issues under discussion relate to job losses, poverty and the restructuring of state assets.

Cabinet's response to COSATU's demands is informed by a particular set of circumstances, an overriding concern for the plight of the poorest of the poor in our country, and the fact that Government will convene the Growth and Development Summit during the first quarter of 2003.

Government's programmes of reconstruction and development have brought change to the lives of millions of South Africans. Access to social services such as housing, electricity, water, education and healthcare has been broadened - as seen in the Household Surveys of Statistics South Africa for 1995-1999, when our programmes were getting under way, and in the faster pace of implementation of programmes since then.

Nobody denies that as a country we still face major challenges in eradicating poverty. As we continue to work within the broad framework of reconstruction and development we have to address the question of accelerated implementation; of stretching limited resources, and of the impact of factors beyond our control. We are learning from experience and refining our approach as circumstances change.

To succeed we also need to build a partnership of all sectors of our society for growth and development. Government believes that all South Africans should be recruited, mobilized and joined in the struggle against poverty and inequality, because:

The plight of the poor is at the top of our agenda.

The current inflation of food prices is of great concern to government, especially because of the additional burden it places on the poor. Cabinet this week discussed an interim report on investigations into pricing in the food and agricultural sector and at its next meeting will be discussing concrete actions to be taken, some outlines of which have already been announced.

The President's call at the beginning of this year for all South Africans to lend a hand in a campaign to ensure that all those eligible for social grants are registered for them has already seen over 300,000 new child beneficiaries registered. Next month, which has been dedicated to the protection of children's rights, will see an intensification of the registration campaign.

At its midyear lekgotla Cabinet further developed its comprehensive approach to poverty eradication, combining an emphasis on creation of employment opportunities with provision for the needs of the most vulnerable. Although jobs have been created the number of unemployed has increased - our problem is not that of "jobless growth" but of the pace of investment and growth and the development of skills in a rapidly changing economy. In this context it is finalizing an employment creation strategy that will be part of its input into the Growth and Developed Summit.

We are learning from experience as we implement our mandated policy of restructuring of state assets, proceeding with case-by-case assessment in terms of the objectives of reconstruction and development.

Notwithstanding the demands by COSATU, Cabinet reaffirmed its position in the various policies that underlie Government's programme for economic transformation. Cabinet departs from the view that says Government policies are fundamentally sound. Thus, the challenge for the Government and its social partners should be to ensure the successful implementation of policy adopted by the Government over the past few years.

Cabinet noted the progress and important agreements reached between Government and Organised Labour in the restructuring of Spoornet, Denel and EDI restructuring during the course of 2001/02. Cabinet is of the firm view that these agreements have brought important benefits for employees of State-Owned Enterprises in particular, and members of the trade union movement in general. Similarly, the restructuring of state forestry assets has brought significant and real benefits to the communities that are adjacent to these forests.

Cabinet, of course, respects the fundamental right of workers to strike as enshrined in our constitution. However, the manner and timing of such actions should not be taken lightly. Consderation should always be given to whether a preferred tactic may have more negative effects on the workers themselves, ie through the loss of wages, loss of production and the spread of cynicism about the strength of our economic transformation. The experience of the workers' struggle in our country suggests that where the strike tool is used in a strategic and matured manner, it contributes to economic progress and benefits for workers. Unfortunately, the resort to Section 77 of the LRA whenever problems seem to appear, whilst other mechanisms such as the NFA and other routes remain open, is, in our view, not consistent with this proud tradition of workers' struggle.

Thus, Cabinet calls upon leaders and members of the trade union movement to reconsider their decision on the necessity of this particular action in the light of the impressive gains made in the course of the year. Government's commitment to consultation remains firm.

Cabinet discussed the demand by COSATU for a moratorium on "all privatisation initiatives". Cabinet noted the very broad definition of privatisation that COSATU uses. Any moratorium would inhibit the positive developments that we have seen emerging from the restructuring programme. Government is thus unable to accede to the demand for a moratorium.

Cabinet noted further that there is nothing unbecoming in the implementation of its Restructuring Programme. This programme remains consistent with the objectives of the Government's Programme for social and economic transformation. The programme seeks to advance critical objectives such as boosting economic growth and job creation by lowering input costs in the economy, improving the efficiency and performance of state-owned enterprises, ensuring accessible, affordable and quality services to ordinary citizens and contribute to expending ownership of wealth through black economic empowerment.

COSATU has expanded its challenge from aspect focusing on the restructuring of State-Owned Enterprises to include other aspects of Government policy. This relates to monetary policy, food pricing, unemployment and many others. Cabinet wishes to stress the position that the restructuring of State-Owned Enterprises could not be addressed in isolation from the other socio-economic demands posed by COSATU. These are approached together, in a consistent manner, within the broad economic policy guiding the Government.

Cabinet appraises on a constant basis the economic situation and how it impacts on the living standards of all citizens, especially the poor. Cabinet discussions on the spiralling g food prices and how food pricing in general has affected the staple food such as maize, is a clear demonstration of the commitment of the Government. Whilst sticking to the fundamental policy framework, Government is keen to put in place measures that could alleviate the plight of the poor in this regard. Cabinet committed itself to discussing this matter in its next meeting.

The consolidation and extension of the School Nutritional Programme is itself a concrete demonstration of the Government's preoccupation with the issues affecting the standard of living of our citizens. The issues raised by COSATU are challenges to be addressed collectively by the Government and its social partners. Therefore, these issues could not be approached in a manner that suggests that they derive essentially from the policy positions of the Government. Government is also concerned that any strike action now will impact negatively on the critical preparations of learners and scholars for their final examinations.

Cabinet further reaffirms its commitment to a Growth and Development Summit (GDS) emanating from the President's State of the Nation made in February 2002. The Summit is scheduled to take place in 2003, with preparations have begun for such an important process. The issues raised in the COSATU notices could form part of the discussions and preparations for the Growth and development Summit. Again, Government commitment to continue with consultations with the trade union movement is evident.

Once more, Cabinet appeals to COSATU's leadership to reconsider this action. This is no time for strike action that sacrifices workers' pay and costs lost production of the wealth needed to fight poverty

Government is committed to continuing engagement on these issues of restructuring, investment, job-creation and poverty eradication.

These are issues that are on the agenda of the Growth and Development Summit to be held in the New Year.

Preparations have already started.

The Summit should bring together government and its social partners to harness our national energies and resources towards faster job-creating growth and the eradication of poverty.

Joel Netshitenzhe
Cell: 082 900 0083

Issued by: Government Communications (GCIS)


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