Speech Delivered by the COSATU President at the SADTU 2012 Policy Conference

23 March 2012, at the Emperor`s Palace in Kempton Park, Gauteng

The president of SADTU comrade Thobile Ntola
The chairperson of the session
The entire leadership of SADTU
Invited Guests
Comrades and compatriots

Please accept revolutionary greeting from number 110 Jorissen Street - COSATU House - your new offices.

The Central Executive Committee and the more than 2 million members of COSATU are interested in the outcome of this meeting because it will set the tempo of our engagement moving forward.

Comrades as we meet here today the world is going through a qualitative change, occasioned by an economic crisis which started as a financial crisis right inside the epicentres of capitalism in the USA and in Europe and has now developed into a fully fledged global economic crisis.

The response to the crisis has been to shift its costs onto the shoulders of working people as far as possible. The class content of the rescue policies has been first to defend the interests of financial capital by protecting bondholders and other lenders, secondly, to promote the interests of industrial capital and creating space for continued by crushing labour costs.

For an example, according to the report by Forbes International, during 2007 and 2008 when the financial crisis was officially acknowledged, the world`s billionaires saw their wealth grow by 50% and their ranks swelled to 1,011, from 793. During that period the number of US billionaires grew to 403, up from 359.

Asia-Pacific region had 234 billionaires, up from 130 the previous year. Europe had 248 billionaires, despite having twice the population of the United States.

The combined net worth of these 1,011 individuals increased to $3.6 trillion, up $1.2 trillion from the year before. On average, each billionaire had his or her wealth increase by $500 million.

The holdings of these 1,011 individuals were larger than the gross domestic products of every country besides China, Japan, and the United States.

The wealth of the 403 US billionaires could more than cover the 2008 US federal deficit, with money left over for the states.

Yet during the same period, governments throughout the world were being advised by the same capital, based on the very same rules that brought the world to unseen misery caused by their own crisis, to give bail-outs to banks.

It is estimated that the US government alone used $425 US billion to bail-out banks, insurance companies and automakers, and provided $45 US billion in housing program assistance.

According to the recent report by the "World Wealth Report", the assets of the wealthy in 2010 rose by almost 1 percent to a record high of $42.7 US trillion. Their wealth has even exceeded the peak of $40.7 US trillion reached in 2007 before the financial crisis. In Germany there are 924,000 millionaires, according to the study—an increase of 7.2%. Among the super-rich in Germany there are 839 households with wealth exceeding $100 million.

But it is a life of hell for the working class!

If we take the Greek situation alone, the austerity measures imposed by the Coalition government, the Troika consisting of the European Union, International Monetary Fund, European Central Bank and also by the Greek plutocracy has worsened the life of the working class.

The new memorandum of impoverishment which was voted on February 12 included, amongst others, the following measures:

1. Salaries

Reduction of basic salaries by 22% (National General Collective Agreement - NGCA, sectoral and professional agreements).

a) The basic salary for the newly hired workers will be further reduced by 10%, besides the 22% reduction, i.e., a reduction of 32%.

b) Abolition of sectoral bargaining agreements.

c) Freezing of wages till 2015.

d) Full-time employment will be converted to part-time employment, upon the decision of the employers.

e) Automatic wage increases based on seniority are suspended till unemployment falls below 10%, in fact they are abolished.

f) Collective bargaining agreements will last for maximum three years. All collective bargaining agreements which apply today will expire one year after the adoption of the new memorandum.

g) Review of the new NGCA by the end of July in order to align with the basic salary in rival countries (Portugal, Turkey, Central and SE Europe).

h) Abolition of unilateral recourse to arbitration.

2. Pensions - Social contributions

Reduction of pensions by 300 million euro annually. The new cuts will affect both basic and auxiliary pensions. Further cuts in basic pensions of several pension funds which will apply retrospectively from 1/1/2012.

a) Merging of all auxiliary pension funds by June 2012 and the beginning of s study "a sustainability factor that adjust benefits to promptly eliminate any future imbalances should they occur" which will lead to new cuts to auxiliary pensions as well as to retirement compensations.

b) Two percent reduction of the social contributions of the employers through the abolition of the contributions for the Workers` Housing Organization and social benefits. The respective organizations will close down.

c) New reduction of the contributions that the employers pay for IKA (the biggest pension fund of private sector workers) from 1/1/2013 by 3%.

3. Employees in public sector - Former state-owned enterprises - Banks

a) There will be abolition of permanent employment in former state-owned enterprises and banks and reduction of salaries new dismissals of 15.000 employees in public sector 2012, through "labour reserve".

b) There will be reduction of employees in public sector, who work with temporary contracts, by means of not renewing contracts.

c) There will be cuts of 636 million Euros on the salaries of the employees in public sector who are paid according to special wage scale by the end of July 2012.

d) There will be new cuts on the salaries in public sector by means of revising the wage scales.

e) There will be reduction of the number of public sector employees by 150,000 till 2015 and employment in line with the rule of 1 recruitment for 5 exits.

f) There will be reduction of the overall intake in academies (military, police) that guarantee automatic employment in public sector. Closure of public organizations and entities by June 2012

4. Additional measures in 2012

a) The country will see reduction in the sector of healthcare and pharmaceutical spending by 1.1 billion Euros.

b) There will be cuts in a series of social benefits, by enacting criteria based on income.

c) Reduction of benefits for families with more than 3 children.

d) Reduction of operational and consumption spending of the state by 300 million Euros.

e) Cuts on several entities supervised by the ministries of Education and Culture by 200 million Euros.

f) Reduction of expenditure on the overtime of doctors in hospitals by 50 million Euros.

g) Reduction of Public Investment Programmes by 400 million Euros.

h) Reduction of expenditure on military equipment for the defence of the country.

i) A new tax system in June 2012 which will abolish a series of tax breaks which have remained for sections of the workers.

A similar trend is being manifested all over Europe in countries such as the UK. According to the Office of National Statistics, public sector employment in the UK dropped by 4.4% over the year ending last September, with a loss of 269,000 jobs. In local government, it fell by 6.7% or 195,000 jobs, making up the lion`s share of the total.

In this context there is an international trend of powerful waves of opposition directed against public sector workers and at their unions This has been sustained for years and is gaining more intensity during this economic crisis which Capital wants to ensure has an outcome that favours their accumulation interests.

At the centre of this attack is an argument that the state has been too generous with their employees, and that union contracts are a prime cause of the recent surge in government budget deficits.

There is increasing talk of trimming pensions, benefits, and salaries for public sector workers and enacting laws that curb union political influence.

There are two widely shared misperceptions helping to drive this attack.

The first one holds that public sector workers now earn more on average than their private sector counterparts.

Exponents of this view in the USA for an example argue that the average government workers are making $30,000 US a year more than the average private-sector worker.

The second perception is that collective bargaining contracts have been major contributors to the growing budget deficits of government.

But a study in 2010 published by John Schmitt found that government workers earned on average 4% less than private sector workers who possessed similar characteristics.

The facts also challenge the perception that public workers` collective bargaining contracts are driving state deficits and leading to pension obligations that taxpayers cannot meet.

But do these attacks have any basis? Are public workers in any way benefiting?

The fact is that such ‘benefits` for public sector workers that are being observed from a distance constitute an illusion of reality and facts. Employees in the public sector are twice as likely as their private sector counterparts to have a college or advanced degree.

When the comparison is adjusted to take education into account, state and local government workers actually earn between 11-12% less than their private sector counterparts.

On closer inspection, public sector workers, due to waves of hiring freezes, tend to be on average 4 years older than private sector workers, and have more time on the job.

To properly make the case, therefore, that public sector workers` wages and benefits are excessive would require a match with workers in a similar cohort within the comparable sections of the private sector.

This is never done. Needless to say, the right`s case against government workers is not scientific, but propagandistic: to play both sides against the middle.

But comrades there are fundamental differences between private and public sector workers that the international right-wing seeks to ignore.

In Marxist-Leninist terms, the fact of the matter is that public sector workers do not, for the most part, produce marketable products and therefore do not create exchange value for the system.

Public Sector workers are actually being exploited, because they - like all other workers - are paid not for their entire expenditure of labour time, but for their socially determined reproduction costs alone.

But as a cost item, the outlay on their wages and benefits represent a portion of the unpaid labour time of the private sector`s total exchange value that needs to be sacrificed for the reproduction of the system as a whole.

To the extent that working people in the private sector pay taxes to the state, that portion of the working day represented by state revenues that do not flow back to the working class in the form of services - as part, in other words, of the social wage - are converted from paid to unpaid labour time. To that extent, the capitalist state is a source of additional exploitation.

Its expansion and growth is predicated on the unpaid labour that can be squeezed from private sector workers either in the form of taxes on profits or wages.

Public sector workers find themselves under attack not because they really are a privileged stratum but because they are an attractive target of opportunity during hard times.

Behind the assault against public sector unions is a real recognition that public sector has the highest concentration of unionized workers in the capitalist economy, particularly in the epicentres of capitalism.

This attack against the public-sector unions is actually an attack on the labour movement as a whole. Public-sector unions are the de facto face of the labour movement today and the last bastions of union power.

So even in our own country we should not be surprised to hear the DA consistently launching an attack on the teachers` unions; it is part of the strategy by capital and its surrogates all over the world. The DA will even choose to deliberately misquote the president`s State of the Nation Address in order to give false credibility to its agenda of anti unionism.

We want to tell Zille and her DA which she runs like her private property that they will never succeed in reversing the hard-won rights of the workers of this country.

The right to strike is in the constitution, unless she wants to have government change the constitution. If that is the case let`s talk about removing the property clause and let`s talk about the constitutional clauses that have stalled our democratic advances including the right by the DA to reverse democracy and transformation using the courts.

Actually more and more the DA is being exposed for what it is - they are just right-wing opportunists who will use every opportunity they get to defend white privileges.

In the eyes of the DA, the Western Cape is for whites and when our people who are mainly black and African go to that province they see them as ‘refugees`. This is what Zille and the DA are about. For them South Africa is a federal country in which the Western Cape is for whites and black people , Africans in particular can only go to that province only by invitation or approval by the DA .

I am sure they even wish there was a passport to that province. We want to remind Zille and the DA that South Africa is a unitary country. That means that our people have a right to travel across the length and breadth of this country without any hindrance. The DA represents the danger we are confronting in this country.

The attack on SADTU by the DA is part of the bigger political agenda. We want to call on our government to consider coming closer to monitor racism in the Western Cape.

There is no fundamental difference between the recent statement by Zille which sees black and African people in the Western Cape as refugees and the statement made Peter Mulder that ".., Africans in particular never in the past lived in the whole of South Africa. The Bantu-speaking people moved from the equator down while the white people moved from the Cape up to meet each other at the Kei River. There is sufficient proof that there were no Bantu-speaking people in the Western Cape and North-western Cape. These parts form 40% of South Africa`s land surface".

Both of these statements reveal the reality of racism being harboured by the two organizations and their leading individuals.

It is on the bases of this false history that both the Helen Zille of the DA and the Peter Mulder of the Freedom Front meet to form an alliance against our people like their forbearers did when they met in 1910 to form the Union of South Africa whose basis was to institutionalize the treatment of blacks and Africans as the refugees in their own country.

We will defeat both of them in the same way that we defeated colonialism and Apartheid.

This answers question why the DA no matter what tricks by Helen Zille can never be the friends of COSATU. The ideological gulf is too wide, and the recent statements by Zille and what the DA stands for with regard to the transformation trajectory of this country tells a story of two diametrical opposed sides.

UTata uMandela warned us when he wrote, in an article titled The Shifting Sands of Illusion in June 1953, that "It becomes clear, therefore, that the high-sounding principles enunciated by the Liberal Party (the DA equivalent at that time), though apparently democratic and progressive in form, are essentially reactionary in content. They stand not for the freedom of the people but for the adoption of more subtle systems of oppression and exploitation. Though they talk of liberty and human dignity they are subordinate henchmen of the ruling circles. They stand for the retention of the cheap labour system and of the subordinate colonial status of the non-European masses together with the Nationalist Government whose class interests are identical with theirs. In practice they acquiesce in the slavery of the people, low wages, mass unemployment, the squalid tenements in the locations and shanty-towns.

The DA represents an enemy of the working people of this country and that is engraved in the philosophy and political DNA of their existence the day the DA see eye to eye with COSATU it would mean one of us have ceased to be what we are all about!

Having said these comrades it does not mean that our unions should not be careful about the strategies we employ during our bargaining engagement.

The history of intensified attack against the public-sector workers during the hardest economic times like the current global economic crisis can be traced back in the 1970s. When recession struck in the 1970s in the US, public sector workers came under attack, and public opinion polls traced a decline in support for public sector unions. Usually the attack is strategically directed to teachers.

For an example when US Public Sector workers began to organize in large numbers in the 1960s, public school teachers helped lead the way and this led to the growth of teacher unions. In the 1970s teachers were the most militant government workers, willing to strike even when it was illegal in order to press their demands.

Through this period teachers elevated their pay and benefits and won significant reforms, especially reductions in class sizes and increases in education funding. As they did so, teachers successfully held the moral high ground, fighting not only for themselves but for their students` interests as well.

Even with these gains, they never escaped criticism by the right wing. Teachers and public sector workers had always been attacked that they do not prioritise the developmental interests of the country but were narrowly focusing on their working conditions, salaries in particular.

This means that for the public sector and the teacher unions in particular it is always necessary to take society along during the bargaining process to consistently demonstrate the mutual relationship between their demands and the developmental needs of society.

This is the task that SADU has if we are to secure qualitative victories during the period of economic crisis. Let us always take society and our membership with us.

Our engagement must be inspired by our past victories and yet be informed also by our past failures and blunders.


Patrick Craven (National Spokesperson)
Congress of South African Trade Unions
Tel: +27 11 339-4911/24
Fax: +27 11 339-5080 / 6940
Mobile: +27 82 821 7456
E-Mail: patrick@cosatu.org.za