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Cosatu tells Mboweni to stay in his lane

Organised labour rejects plan to review wage increases in the coming financial year.
Nothing to negotiate – Cosatu president Zingiswa Losi says Mboweni shouldn’t ‘even anticipate’ that the collective bargaining process will end with a cut in public servants' wages. Image: Moneyweb

When Finance Minister Tito Mboweni announced cuts to the public sector wage bill in his budget speech without having secured a collective agreement between government and unions he overstepped in his duties, trade union federation Cosatu said on Thursday.

On Wednesday Mboweni said the public sector wage bill would be reduced by R160 billion over the next three years, which involves reviewing increases for the final year of the three-year wage agreement unions entered into with the government in 2018. 

The day before the budget, government tabled a proposal at the Public Service Co-ordinating Bargaining Council (PSCBC), the focus of which is to “discuss the containment of costs in the final phase of implementation in the current wage agreement”.

Read: Tito Mboweni begins work to cut the public sector wage bill

The final-year increase is supposed to come into effect on April 1, but if the state has its way, the increase will be reduced by R37.8 billion, the saving Mboweni said government aims to achieve in the next financial year. 

The public sector wage bill accounts for 35% of the government’s consolidated expenditure and has been identified as the easiest way for the state to cut expenditure, as it battles with a widening budget deficit and declining tax revenues.

“Organised labour understands where we are, they have made constructive proposals on a range of issues,” Mboweni said. 

Stay in your lane

On Thursday Cosatu’s leadership voiced a different perspective.

Cosatu president Zingiswa Losi said Mboweni spoke about issues that are not in his competency and the federation would not accept that. 

“It was irresponsible of the minister to make mention of a process he is not part of,” Losi said, explaining that the minister of finance is not part of the Public Service Bargaining Council (PSBC) process, which falls within the ambit of the public service and administration ministry. 

“You can’t bring issues of negotiations when there are processes of collective bargaining into your budget vote and even anticipate that the end result of that process will end with a cut in public servants’ wages,” said Losi.

No room to negotiate

Mike Shingange, Cosatu’s first deputy president, told media that government had taken a unilateral decision that it was trying to impose on workers and they won’t “allow it to go ahead”.

This country has been founded on the basis of social dialogue and has established institutions of social dialogue [such as] Nedlac and bargaining councils,” said Shingange. 

“The minister must pronounce a settlement that is a result of a collective agreement reached by the social partners; when you have a minister of finance pronouncing things that must be discussed and agreed upon in the bargaining council, you are undoing and undermining and actually attacking the principle of collective bargaining”.  

Shingange said that government’s proposal at the PSBC was “mischievous” because it comes just 20 days before the final year of the agreement is supposed to be implemented.

“When Treasury has taken a decision and says this is what needs to be cut, what is left to negotiate? Because the government has taken a decision,” said Cosatu general secretary Bheki Ntshalintshali.



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The trade unions dictating the government of the day.
Only in Mzansi.
There are far more unemployed then union members in SA.

Well at least those union contributions are doing a fine job in stimulating the production of fine leather garments – specially the red coloured ones.

Wow exactly why we get nothing done in South Africa-everything is collective decision making and requires endless discussions.

Mr Mboweni stick to your guns please – it is the only way to solve the crisis!

The dreaded “collective” again!!!

Even Dudu is hiding behind the collective.

This “collective” thing is just another word for blame shifting, not accountable, yellow belly, not me always some one else to blame.

I have suggested a new Collective Noun to the OED:-

“A collective of delinquents”

From chat show host to leader in marxist ideology, Stalinist thuggery, communist economic “theory” and muck raking populist twaddle.

Heaven preserve us from the indolence and folly of the anc communist troika and wannabe “revolutionaries” who wallow in the proceeds of capitalism!

Love the red leather jacket! R5 k Government is going to have to toughen up hopefully we will be having a split in the ANC and the Costu and SACP can have their own party and do as they please.

Our dress makers and designers are going to miss this lot and MP’s wives when the “austerity” measures kick in……

Good spot Martin! Maybe worth even more than R5K!

I’m hoping we witness a new approach. Treasury need to calculate what the total amount is that can be afforded.The total amount is NOT up for negotiation. Make it reasonable and realistic. Then let the bargaining take place over how many unnecessary posts can be scrapped departmentally. The more useless posts that are scrapped the more that is left over for the remainder to share. Big lesson? By scrapping one high level post you can probably save 15-20 posts at the bottom of the department. These are the comparative poor who struggle to put food in the plate. The end result? The equivalent of at least a 10% increase is available for those who occupy essential posts.

Radical situations require radical solutions. Pay homage to ex president Zuma for teaching us about R.E.T. The naysayers will say this is impossible. It is impossible if you want to hide behind maintaining the status quo. It’s a lot more comfortable there.

Aag COSATU! Just get your “Members” to pay their ESKOM bills. Including arrears.

The taxpayer is expected to foot the bill for these unproductive and overpaid Cosatu members. As part of the tripartite alliance, they basically determined their own remuneration. They right their own cheque on the taxpayer. The ANC enables Cosatu to plunder the taxpayer. Now, this untenable situation has lead to instability in government finances. Their pay is destroying their jobs. The parasite has killed the host.

Prof. Huerta du Soto describes the mechanism by which Cosatu and the ANC destroyed te economic activity that allowed their very existence.

“We must remember that profits are the signals which guide entrepreneurs in the market in their constant search for sustainable investments. And a tax system that falls on profits essentially smudges the traffic signals that guide us in the market, and this inevitably makes economic calculation chaotic and gives rise to a misallocation of scarce resources. Also, taxes on capital have a particularly adverse effect on wage earners, and especially on the most vulnerable, since their pay depends on their productivity, which in tum depends on the accumulated amount of well-invested capital per worker. Therefore, to stimulate economic development and push up wages, what is needed is the accumulation per capita of an ever-increasing volume of well-invested equipment goods. If capitalists are harassed and capital is taxed, the accumulation of capital is blocked at the expense of labor productivity and, ultimately, wages.”

We had the same issue in Canada late 90s early 200s. The Auto Workers Union priced themselves out of existence, they had so much muscle they were untouchable. The result was that the motor industry in Ontario was decimated, factories closed and workers laid off. The big firms simply closed shop. The jobs left and moved mostly to Mexico. They never recovered.

The same will happen here.

Somebody has to lose this fight and the ratings agencies are watching who it will be. Cosatu may finally work out that there members are hopelessly overpaid, unproductive, incapable and think that they are a privileged clique.

That a country with 30% + unemployment, no growth, failed SOEs, declining asset values, 18m people getting grants etc is rated investment grade boggles the mind.

@SAM: “Cosatu may finally work out ….”. Alas, I do to share your optimism. The phrase “there are none so blind …” will apply forever among the socialists – Maduro, Corbyn, Sanders, etc etc. Our bunch are no different, specially those with the communal-decision driven mindset.

We need leadership in our country at this stage – not committees and ongoing discussions and meetings, especially not with trade unions. Union leaders only care about today and not about the future

And union leaders especially only care about 1) themselves 2) their members who pay them fat dues. The rest of the 56 million South Africans? Tough on them. We don’t care if we pull SA’s economy down. We will toyi-toyi for our ‘rights’. We demand, we demand, we demand…..

It’s time to squash COSATU – just like Maggie did back in the 70 s

SA government workers are overpaid by a third – according to economist Mike Schussler.

Also, SA government workers are amongst the most highly paid government workers in the world, only Germany and Sweden pays relatively more.

During Apartheid government workers earned considerably less than the private sector.

It is high time for a readjustment.

And (most) are good for the square root of F’all…..

End of comments.



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