Numsa Media Monitor A daily compilation of local, national and international articles dealing with

labour related issues

Monday 10 October 2016

Numsa

Automotive sector on track to avoid strikes this year

Roy Cokayne, Business Report, 10 October 2016

Johannesburg - Prospects of the new vehicle manufacturing sector avoiding disruption caused by strikes in allied sectors has been boosted by a three-year agreement being concluded by the new tyre industry and progress being made in negotiations on a new agreement for the retail motor industry.

The Automobile Manufacturers Employers’ Organisation (Ameo) and the National Union of Metalworkers of SA (Numsa) successfully concluded negotiations for a new three-year wage agreement early last month without any disruption to production.

Ameo and Numsa agreed on a 10 percent wage increase in the first year of the agreement and an 8 percent wage hike in each of the following two years.

Negotiations have been continuing between Numsa and the new tyre and retail motor industries, with Numsa in July declaring a dispute and deadlock in the wage negotiations with the Retail Motor Industry Organisation (RMI) at the Motor Industry Bargaining Council (Mibco).

RMI’s chief executive, Jakkie Olivier, said on Friday that negotiations with Numsa were at a sensitive stage but negotiations in the week had reduced Numsa’s outstanding demands to only a few issues. “We think a settlement is a real possibility,” he said.

Olivier said the RMI and Numsa needed to get a new mandate from its members on one or two issues and the parties would reconvene again early this week.

He confirmed issues on which agreement still had to be reached included the rate of pay, the pay threshold for inclusion in any agreement reached at Mibco and on participating with research to be conducted during the period of the new agreement about the alignment of negotiations for the retail and vehicle manufacturing sectors, particularly for the automotive component sector.

Mark Roberts, the convener of the Chapter 111 sector at Mibco, said the council was finalising its position on the rate of pay, although agreement needed to be obtained on whether the wage hikes were on minimums or actual rates of pay. He said the council also needed to get a mandate on Numsa’s demand for research about industry alignment for the component sector.

But Roberts said agreement was “very close”, and it looked likely a settlement could be reached without a strike.

Nobuzwe Mangcu, the managing executive of the SA Tyre Manufacturing Conference, confirmed that negotiations had been successfully concluded with Numsa on a three-year agreement for the new tyre manufacturing industry.

Three-year deal

Mangcu said in terms of the agreement, workers would receive an 8.5 percent wage increase in the first year of the agreement and an increase of 8 percent for each of the following two years.

“The agreement provides the industry with a degree of certainty for the next three years and as such, acts as a platform for longer-term planning for the tyre industry,” Mangcu said.

She said new tyre manufacturers were pleased negotiations could be finalised without disruptions to production, which represented a significant milestone because it was the second consecutive period that disruption to the industry had been avoided during negotiations.

She also praised the role of the facilitator from the Commission for Conciliation, Mediation and Arbitration during the negotiations to safeguard and guarantee procedural fairness.

http://www.iol.co.za/business/news/automotive-sector-on-track-to-avoid-strikes-this-year-2077917

South African workers

SAA sets a collision course with pilots

Bekezela Phakathi, Business Day, 10 October 2016

SOUTH African Airways (SAA), the financially hamstrung national carrier, is forging ahead with plans to rationalise flight deck crew costs, which may land it in a court fight with its about 800 pilots. The company says there is a need to interrogate and amend the regulating agreement with the crew.

Amending the agreement, however, requires buy-in from the South African Airways Pilots Association (Saapa). The association has previously indicated that it will oppose proposed changes to existing agreements.

In a recent SAA internal document, seen by Business Day, the airline discusses the effect of the flight deck crew regulating agreement and the strategy to address the "onerous" collective agreements with crew.

SAA says certain sections of the regulating agreement do not keep with the spirit of the Public Finance Management Act, which states that a public entity must maintain a procurement system that is cost-effective and must take effective steps to manage working capital efficiently.

SAA spokesman Tlali Tlali confirmed that "there is a process of engagement currently under way between SAA and Saapa which relates to the existing recognition agreement between the airline and its pilots. We are not at liberty to share details on progress of the process until all engagements have been concluded". He said both the airline and the association are aware of the sensitive nature of the process and would rather focus on attending to the substantive issues "to ensure that we are not derailed from what we seek to achieve".

Saapa chairman Jimmy Conroy could not be reached for comment at the weekend.

According to the document seen by Business Day, the regulating agreement with crew teams contains numerous terms that are "extraordinarily indulgent and onerous to SAA. Furthermore, not only does the regulating agreement contain multiple onerous provisions, it is an evergreen agreement in that in cannot be terminated on reasonable notice like other collective agreements. Therefore in order to rationalise flight deck crew costs, there is a need to interrogate and accordingly amend the agreement with crew."

For example, the agreement does not allow for the displacement of pilots and/or their beneficiaries by business class-paying passengers. SAA says the agreement is costing more than R511m per year. Reports emerged in September that pilots receive five-star accommodation and generous travel benefits‚ at a cost of close to R700m a year for SAA.

In 2015 board chairwoman Dudu Myeni said salaries paid to SAA pilots were "exorbitant and unaffordable". Myeni said SAA pilots were a "paltry" 12% of the carrier’s total workforce but accounted for more than 40% of the airline’s salary bill.

SAA has reported consecutive losses for the past five years. For working capital and to remain solvent, SAA has been surviving on guarantees provided by the government, totalling R19bn to date.

http://www.bdlive.co.za/business/transport/2016/10/10/saa-sets-a-collision-course-with-pilots

Cosatu breathes fire over job losses

Wiseman Khuzwayo, Business Report, 10 October 2016

Johannesburg - The government has come under fire from the labour movement for the latest losses in employment, with Cosatu calling the administration “feckless and uninspired”.

Employment in the formal sector fell by 0.7 percent or 67 000 jobs to 9.218 million in the second quarter compared with the previous quarter, a survey by Statistics SA showed.

Cosatu, which marched for decent jobs, said this proved that “our feckless and uninspired government is out of (its) depth”, and accused the private sector of hoarding R600 billion.

Although the manufacturing sector rebounded in real terms in the second quarter, it shed 7 000 jobs during that quarter. The survey also showed jobs were shed in the mining and transport sectors.

Biggest decline

The biggest declines were in the government sector, where 48 000 jobs were lost. Stats SA said this was reflective of the temporary jobs that were created by the Independent Electoral Commission during the local government elections, which fell away once the elections were over.

There were also job losses in mining and transport.

Kamilla Kaplan, an economist at Investec, said labour market dynamics remained weak, and subdued economic activity and depressed business confidence continued to restrict private sector employment growth.

“On a trend basis, the growth in public sector employment is expected to slow, as the budget aims to reduce the growth in civil service compensation. The magnitude and growth of civil service remuneration has been a key risk area for the fiscal outlook.”

The SA Reserve Bank and the World Bank forecast growth of 0.4 percent this year, while the International Monetary Fund projected gross domestic product (GDP) of 0.1 percent.

Gerrit van Rooyen at NKC African Economics said the statistics provided further evidence of lacklustre employment and economic conditions.

“Given that our latest real GDP growth forecast for 2016 is only marginally in positive territory, there is little to suggest that South Africa’s structural unemployment dilemma will improve over the short term.”

Cosatu said the government’s vacillation was destroying workers’ livelihoods. “Government ministers continue to make excuses and lament over something that they are supposed to fix.”

Abandoned

Cosatu said the progressive policies of the ANC had been abandoned and replaced by policies that pandered to big business and ratings agencies.

“The alliance’s decision for the overhaul of the economic and labour market chapter of national development has been ignored. This contributes to the building... of a standing army of angry, desperate and unemployed citizens.”

The Federation of Unions of SA said it was distressed by shrinking employment. President Koos Bezuidenhout said the announcement of job losses was worrying as a delegation led by Finance Minister Pravin Gordhan returned from a conference in the US to convince rating agencies and investors that the government and its social partners were working together to challenge structural problems.

http://www.iol.co.za/business/news/cosatu-breathes-fire-over-job-losses-2077919

Samwu calls for an end to councils hiring casuals

Penwell Dlamini, TimesLive, 7 October 2016

“Samwu will be demanding the end of casualisation of work particularly in local government. Casualisation and privatising municipal services has resulted in exploitation of workers through the use of tenders and the Extended Public Works Programme (EPWP) ‚” Samwu said earlier this week.

“Samwu is of the view that EPWP workers are rendering municipal services and as such they should be employed directly and permanently by municipalities with all the benefits that municipal workers are currently enjoying.”

EPWP workers are known for their orange overalls and doing basic work such as cleaning the streets in cities and town across the country.

In a response to TMG Digital‚ the SA Local Government Association (Salga) said it “does not have an adopted policy position on the EPWP workers being permanently employed in municipalities”.

“Salga‚ however‚ subscribes to the notion of creating decent work opportunities in the municipal sector without necessarily placing a recommendation that EPWP workers should be permanently employed due to affordability and sustainability challenges confronting municipalities.”

The call by Samwu is seen as a tall order for Salga as the employer in the local government sphere. Placing thousands of EPWP workers on the local government payroll would have serious implications for towns and cities which are struggling to get revenue that matches the services being provided to residents.

But Samwu is adamant that municipalities across the country should employ all temporary workers permanently.

“This despite the recently amended Labour Relations Act‚ which clearly stipulates that any worker employed for a period longer than three months on a contract basis should automatically be employed on a permanent basis.

“We will therefore be using this day to campaign and demand the immediate and full implementation of the LRA by all municipalities‚” the union said.

http://www.timeslive.co.za/politics/2016/10/07/Samwu-calls-for-an-end-to-councils-hiring-casuals

Water cuts loom large in Eastern Cape due to Samwu’s wildcat strike

Mike Loewe, HeraldLive, 7 Oct 2016

Just four Amatola Water employees are keeping drinking water flowing to large parts of the province.

Water supply is threatened in Buffalo City Metro (BCM)‚ Mthatha‚ Bhisho‚ Grahamstown‚ Alice‚ Port Alfred and Stutterheim‚ and even St Albans Prison in Port Elizabeth.

The supply is hanging by a thread with hundreds of South African Municipal Workers Union (Samwu) workers out on an unprotected strike.

Eleven of the board’s treatment plants were being run o Friday morning by only four senior technical employees. The plants supply bulk drinking water to an area covering 45794km²‚ which includes Amatola district‚ 40% of BCM‚ and part of the Chris Hani district.

On Thursday night‚ Samwu’s regional chairman Victor Potolo said: “If workers are on strike this weekend‚ there will be no water.”

A weary and distressed Amatola Water CEO Lefadi Makibinyane said on Thursday night that the operators were exhausted.

The plants normally supply 110megalitres a day‚ but after more than 368 workers aligned to Samwu withdrew their labour earlier this week‚ supply is down by about almost half‚ at 55 to 60 megalitres‚ said Makibinyane. A megalitre is 1-million litres.

The strike is about politics and not about pay or work conditions‚ explained Makibinyane‚ who was desperately awaiting private operators to step in on Friday and provide operational support to the plants.

The four stalwarts keeping the water flowing have been on their own since Wednesday‚ when the wildcat strike hit.

On Thursday‚ BCM spokesman Sibusiso Cindi announced that water had run out in an area covering the inland half of BCM from Berlin‚ including the Bhisho provincial government.

Tankers were being rolled out.

At the heart of the crisis is a demand from Samwu to speak to Minister of Water and Sanitation Nomvula Mokonyane about its demand for the sacking of Amatola board chairwoman Nokulunga Mnqetha‚ whom workers accuse of being involved in fraud.

http://www.heraldlive.co.za/news/2016/10/07/water-cuts-loom-large-eastern-cape-due-samwus-wildcat-strike/

Nzimande meets with Nehawu president, chair of Zululand University

Koketso Motau, EWN, 8 Oct 2016

In the separate meetings, Blade Nzimande tried to assist the parties in ending the Fees Must Fall strike.

JOHANNESBURG - Higher Education Minister Blade Nzimande has met with the chairperson of Zululand University Cyril Gamede and Nehawu President Mzwandile Makwayiba at the university today.

The meetings were held separately in a bid to try to assist the two parties in ending the prolonged two month Fees Must Fall strike.

Minister Nzimande says the labour dispute has been under mediation of the Commission for Conciliation, Mediation and Arbitration but has not yielded any results.

He says students are nearing the end of the year which is a critical time in higher education.

The department’s Harold Maloka said, “The minister appreciates that he cannot get involved in the labour issues but he felt it was necessary for him to get involved in this particular matter as an informal member trying to assist the two parties to get the academic programme to be reinstated so that it can be completed by the end of the year.”

http://ewn.co.za/2016/10/08/Nzimande-meets-with-Nehawu-president-chair-of-Zululand-University

State job cuts lower wage bill growth 28%

Claire Bisseker, Business Day, 10 October 2016

THE government’s undertaking to slash its wage bill was met with the usual incredulity, but it appears the state has done just that, with it being the biggest contributor to job losses in 2016.

Statistics SA’s quarterly financial statistics show that the government has managed to lower real employment cost growth by more than 28% year on year from its peak in the second quarter of 2015. This equates to about R8.5bn in employee cost-related savings in the first half of 2016 compared with a year ago.

"This is a significant achievement given the higher inflation environment," says BNP Paribas Securities economist Jeffrey Schultz. "Though we had expressed scepticism at how the Treasury [would] reduce its wage bill, the results over the past 12 months are ... encouraging."

Schultz’s sentiments chime with the assurances given to Parliament earlier in October by Public Service and Administration Minister Ngoako Ramatlhodi that the government was on track to meet its target of cutting R25bn from state expenditure, including its wage bill, over three years. The target was set by Finance Minister Pravin Gordhan in the February national budget to maintain the pace of fiscal consolidation in the face of SA’s disappointing growth performance.

In successive budgets, the Treasury has identified pressures emanating from public sector wages as one of the main risks to the country’s fiscal outlook. However, its promises to rein in the wage bill, which accounts for about 40% of noninterest government spending, have always been taken with a heavy pinch of salt. After all, the Treasury was powerless to prevent the signing of a three-year public sector

wage deal in 2015, which cost R64bn more than was initially budgeted for and wiped out nearly all of SA’s contingency reserves.

In the 2016-17 budget, the Treasury took bold steps to rein in public sector compensation, announcing that a virtual electronic lock was being put on the payroll system to block appointments to noncritical vacant posts until new trimmed-down human resource plans had been approved. This was a step up from previous budgets, which had threatened a hiring freeze but had not physically barred new appointments.

The Treasury estimated that 25,000 noncritical posts could be culled across the public service over the next three years in this way, aided by outright retrenchments, voluntary severance packages and early retirement.

Responding last week to a parliamentary question from DA MP Andricus van der Westhuizen, Ramatlhodi said that although public servants’ earnings rose in the first four months of 2016-17, departments had managed to reduce headcounts by 0.6% over this period. This amounted to R2.8bn in projected savings for the whole financial year, he said. These estimates now look to be exceeded.

According to Stats SA’s Quarterly Labour Force Survey, the government has been one of the largest contributors to job losses this year. The survey, which includes both formal and informal or temporary jobs in the public sector, as well as employment in the public sector works programmes, shows that a cumulative 81,000 jobs were shed by the community, social and personal services sector (a proxy for the government) in the first half of the year.

While there is still much work to be done in aligning unit labour cost growth with productivity across the economy as a whole, the credit ratings agencies are likely to draw some comfort from the latest public sector employment trends.

http://www.bdlive.co.za/economy/2016/10/10/state-job-cuts-lower-wage-bill-growth-28

Student protests

#FeesMustFall leader Mcebo Dlamini vows to ensure Wits will remain closed

Mail & Guardian/News24, 10 Oct 2016

Mcebo Dlamini – leading the vanguard of the #FeesMustFall movement at the University of the Witwatersrand – has vowed to ensure that the institution remains closed.

This after Wits released a statement on Saturday declaring that the academic programme would continue on Monday.

The student leader, speaking to News24, described the position of the university as “shocking and unreasonable”.

“It says to us as students that we must continue with our fight because they have shown their true colours,” Dlamini said.

“They have shown that apartheid still exists in this country. The evil system has reared its head and we will continue the fight to restore the dignity of a black child,” he said on Sunday.

He said that the statement read like one that would have been issued by the apartheid state.

“There is no way they will open. On Friday we asked to engage and we are still waiting for them and up until today they have not met with anyone. We are willing to negotiate and they are operating in bad faith.

“We cannot find a solution when the university says come and let’s talk but they are already waving an axe at us but saying they come in peace,” he said.

The statement said that the resumption of the academic programme would be for the benefit of all students.

“This is for the benefit of all students – undergraduate and postgraduate, local and international, full-time and part-time and all staff – academic, professional, administrative and international,” the university’s council said in a statement released late on Saturday night.

Wits said it had taken the decision to ensure that learning, teaching, research and administrative activities continued at the institution. It also wanted to ensure the successful completion of each student’s academic year.

A revised calendar for the rest of the 2016 academic had been approved by the Senate as well as a contingency plan to ensure that examinations were written.

http://mg.co.za/article/2016-10-10-feesmustfall-leader-mcebo-dlamini-vows-to-ensure-wits-will-remain-closed

The Big Read: Tactical retreat is not defeat

Justice Malala, The Times, 10 October, 2016

On a clear day in September 1989 the police invaded the University of Cape Town. On the Jameson Steps, members and supporters of the Black Students' Society (the SA National Students' Congress had been banned, so BSS was quickly born in its place) were calling for an end to racial segregation on beaches, buses, trains and other public spaces.

The police arrived, demanded that the students disperse, set off teargas canisters, shot rubber bullets and caused pandemonium. After a while the students regrouped, leaders gave more fiery speeches, and the police set off more teargas. Again the students dispersed, threw some canisters back at the police, and later regrouped. And so it went.

Later that day a student leader (if my memory serves me well it was a history major called Eddy Maloka) stood up and said it was time for us to go to our residences.

"This is not a surrender. This is a tactical retreat. We are going to reflect, recharge and come back with better and superior ways of engagement with these apartheid police," said Maloka.

He reminded the students that the struggle was not new. It had been waged over decades and centuries.

"This was a skirmish, not even a battle, in the greater struggle. The war continues," he said.

The key words in that speech were that stepping back did not mean one had lost the war. It meant taking time to refine one's strategy and tactics.

This is what has been missing in the turmoil that has roiled our institutions of higher learning for these past few weeks and, indeed, the past two years. It is leadership, from top to bottom, that fails to recognise that a skirmish is not the war. Retreating from a battle does not mean losing the war. It is possible to retreat from one battle but still win the war.

Lack of leadership started with President Jacob Zuma, who last year caved in to student demands without a long-term game plan about how the issue would be resolved and, crucially, communicated to the various constituencies in higher education.

Did he really think the students would be satisfied with the crumbs of a zero-percent fee increase for last year only? Did he think the issue would not be repeated again this year? For a man who many say is a master strategist and tactician, he displayed none of these gifts on this issue.

This year he has been even more wanting. As the universities burned, he arrived on Monday at the Fees Forum organised by Higher Education Minister Blade Nzimande, read a statement and left. No argument has ever been won by a leader talking down to his constituency. Anyway, expecting leadership from Zuma is naïve. So let's look at the rest of society.

Nzimande knows that at the end of the day the question of a fee-free education, now or in future, is one that the government has to decide on and, indeed, lead on.

Yet, faced with the task of saying to society that "the buck stops with me and my fellow cabinet ministers", he kicked the ball down the chute to the university principals. They today face the wrath of students and the country. This is called abrogation of duty.

Neither Wits vice-chancellor Adam Habib nor any of his counterparts can give the students a free education. It is not their decision to make.

Nzimande needs to lance the boil of anger and hate against Habib and other vice-chancellors by making it clear that ultimately the responsibility is his. He needs to be a leader today and say so. The students should march to his office, and that of the ANC and the president, not to Wits University.

The sight of police at Wits picking up rocks thrown at them by students and throwing them back says something fundamental about our society: we do not know why we do what we do. Those policemen do not realise that they demonstrated that they do not know why they were on that campus.

If there is any evidence that the 34 Marikana workers were murdered, it could be that scene at Wits. It showed the ugliness, the thoughtlessness, the violence, embedded in our post-2009 policing stance.

A great failure of leadership - but not the greatest - is among the minority of students who continue to lead violent protests. Wits University, in particular, has accepted the principle of free education. So have many other students and stakeholders. History is on the side of the students and civil society.

Real student leaders - and not Mcebo Dlamini, might I add - need to realise that the war (as it were) for a free education will be won. It is time to retreat, regroup, write examinations, return with a fresh strategy and new tactics. No one wins from failure to read this situation correctly. Go back to the drawing board. Write exams.

Retreat is not defeat. Leaders know that.

http://www.timeslive.co.za/thetimes/2016/10/10/The-Big-Read-Tactical-retreat-is-not-defeat

South Africa

Khwezi was ‘getting her life together after 10 difficult years’

Jeff Wicks, News24, 9 Oct 2016

Durban - Former intelligence minister and apartheid stalwart Ronnie Kasrils lamented the hardship and torment Jacob Zuma’s rape accuser Fezekile Ntsukela Kuzwayo had endured over the last ten years.

Kuzwayo, also known as Khwezi, died on Saturday.

Her death was announced by her family on Sunday in a terse statement.

The family said: “It is with our deepest sorrow that the Kuzwayo family announces the passing of our daughter Fezekile Ntsukela Kuzwayo.”

The family said she was a “loving soul”.

Khwezi accused Zuma of rape in 2005.

Blood clot resulted in death

During the trial, Zuma admitted to having unprotected sex with her, whom he knew to be HIV positive.

He said that he’d taken a shower afterward to mitigate the risk of contracting the virus.

His claim was widely condemned by the judge, health experts, Aids activists and the public in general.

Zuma was acquitted, with the court finding that the sexual engagement was consensual.

Kasrils described her death as an “extremely sad and tragic occurrence”.

He said that he understood she had died as a result of a blood clot and had not been well of late.

“She was getting her life together after 10 very difficult years. She had a close knit group of friends who rallied by her and helped support her over the years as she tried her best to support her ailing mother,” he said, speaking to News24.

Kasrils said that he and others who were in opposition to the apartheid regime, including Zuma, had found a refuge at Khwezi’s family home in Swaziland.

Honey trap claim ‘disgraceful’

“My knowledge of her goes back to days in Swaziland when Jacob Zuma and I, and others, worked with her father Judson Kuzwayo. Their house was a refuge for us and it is there that I got to know this bright, sunny, lovely school girl who was absolutely adorable,” he said.

“Much later in 2005 she came to visit me and we know what then occurred in the absolutely disgraceful allegations which were made and how that sullied her name. The idea that she would engage in some kind of honey trap as described by her detractors to cast aspersions against her is disgraceful,” Kasrils added.

“Those who castigated and hounded her need to hang their heads in shame,” he said.

“That was a dreadful period of her life. I met her recently when I went to meet her and her mother about the case. I will see that the funds that would have gone to her will go to her mother,” Kasrils said.

“I feel this tragedy very, very deeply and it is very sad indeed. This country needs to know and understand the life of this young woman and the tragedy that affected her,” he said.

In August, Kasrils instituted a R1m defamation claim against Deputy Defence Minister Kebby Maphatsoe and the MK Veterans Association (MKMVA).

The claim was later settled for R500 000.

At the time that the charges were laid against Zuma, Maphatsoe and other ANC officials maintained Zuma was the victim of a “honey trap” - and that the woman was sent to seduce Zuma.

http://www.news24.com/SouthAfrica/News/khwezi-was-getting-her-life-together-after-10-difficult-years-20161009

SACP will form new revolutionary front if ANC captured‚ Nzimande warns

TimesLive, 9 October 2016

If the ANC gets captured the South African Communist Party will be left with no other option but to build a new people’s national democratic revolutionary front and proceed with the objective of advancing the second radical phase of its democratic transition‚ says SACP general secretary Blade Nzimande.

But the reality at present was that it was impossible for the whole of the ANC to be captured‚ he said at the launch of the SACP’s Red October campaign in eThekwini on Sunday.

“There are still many progressive comrades and revolutionaries who are not necessarily communists‚ but as well as communists in their own right all as ANC members‚” he added.

But he said the SACP would not go into an alliance with factions.

“We are not going to be in an alliance with the parasitic bourgeoisie or their collaborators.”

http://www.timeslive.co.za/politics/2016/10/09/SACP-will-form-new-revolutionary-front-if-ANC-captured%E2%80%9A-Nzimande-warns

ANC changes tune on Nkandla, Thuli

Thabo Mokone & Babalo Ndenze, Sunday Times, 9 Oct 2016

he ANC in parliament has made a dramatic U-turn on its decision to approve a report absolving President Jacob Zuma of liability for renovations at his Nkandla home, with the party's chief whip telling MPs the move was a "spectacular own goal".

In his prepared report to the caucus lekgotla, Jackson Mthembu told MPs that they needed to "interrogate" how they "voted [for] and passed" the Nkandla report, which absolved Zuma of liability after more than R246-million of public money was spent on renovating his home.

"The midterm lekgotla needs to interrogate how we as the ANC component in parliament voted and passed a report on the security upgrades in the president's homestead that the Constitutional Court declared invalid and unconstitutional, which brought our credibility into question," the chief whip's report said.

The Nkandla report, which was compiled by an ANC-dominated ad hoc committee, was declared invalid and unconstitutional by the Constitutional Court, and Zuma was ordered to pay R7.8-million back to the state.

Mthembu's remarks are the strongest indication yet that Zuma's grip on the party's parliamentary caucus is loosening as the ANC's succession debate is starting to hot up.

His stance is also a serious departure from the party's previous position in parliament of defending Zuma at all costs.

The party's approach to the Nkandla debacle has been identified as one of the major factors that led to the ANC's worst electoral performance yet, in the August local government elections which saw it lose control of three major metros.

Mthembu's utterances are part of a strategy by an anti-Zuma faction that is going all out to distance itself from the current administration in a bid to regain public trust.

This was evident when the ANC in parliament made changes to its portfolio committee on communications by removing three MPs who were seen as soft on Hlaudi Motsoeneng and the SABC board.

On Mthembu's instructions, the new appointees to the committee came down hard on the pro-Zuma board, rubbished their reappointment of Motsoeneng and called for their resignations.

In another sign that more leaders are turning against Zuma, ANC secretary-general Gwede Mantashe praised outgoing public protector Thuli Madonsela at her farewell gala dinner in Midrand this week.

Mantashe said Madonsela had "saved us from ourselves" and that "you leave the ANC wiser as you go".

This is in stark contrast to the criticism Mantashe had expressed against Madonsela after she released her Nkandla report.

We must stop doing wrong things in parliament, otherwise we can't as the ANC continue calling ourselves the leader of society

Mthembu told ANC MPs on Friday that their credibility had been called into question after they bulldozed their Nkandla report through parliament despite resistance from opposition parties. "The question the lekgotla needs to answer is how in spite of and despite the forces arraigned against us, in spite of and despite spectacular own goals we have scored, how do we restore our credibility here in parliament," he told MPs.

Mthembu told the Sunday Times that, for the ANC caucus to regain credibility, it needed to start by admitting its mistakes.

"We must stop doing wrong things in parliament, otherwise we can't as the ANC continue calling ourselves the leader of society," he said.

"We should find a way of stopping such spectacular own goals and give the status of the defenders of the constitution to the opposition."

In the same chief whip report, Mthembu commended ANC MPs for having led a credible public process to find a suitable successor to Madonsela. He also applauded his MPs for tackling troubled state-owned enterprises such as the SABC and SAA.

Outgoing public protector Thuli Mdonsela was criticised by the ANC after she released the Nkandla report. Image: Simphiwe Nkwali

The new communications committee members are former Ekurhuleni mayor Mondli Gungubele, ANC national executive committee member Sisisi Tolashe and Mandisa Matshoba. They pushed for an inquiry into the SABC's board fitness.

They replaced Maesela Kekana, Mogotle Nkadimeng and Nokuzola Ndongeni, who had been part of a committee that shielded Motsoeneng and the SABC board.

Mthembu said the three MPs had been removed because the ANC was unimpressed with their previous performance.

ANC spokesman Zizi Kodwa, who made a rare appearance at the portfolio committee meeting, said he was there to make sure MPs toed the party line as both cabinet and the NEC were critical of Motsoeneng's reappointment.

http://www.timeslive.co.za/sundaytimes/stnews/2016/10/09/ANC-changes-tune-on-Nkandla-Thuli

SA given opportunity to put best foot forward at Investor Conference

Sherwin Bryce-Pease, SABC, 6 October 2016

The just concluded South Africa Tomorrow Investor Conference in New York was an opportunity to talk about the country’s story and for government, business and labour to jointly put their best foot forward.

That’s the view of Goldman Sachs Managing Director and the Co-chair of the Youth Employment Task Team, that aims to give one million young people hands on job experience over the next three years.

Colin Coleman was part of the South Africa delegation that attended the Conference in New York.

It was an oversubscribed conference covering a broad-range of topics related to South Africa’s economy – the statistics on trade, production and expenditure, unemployment, the growth trajectory and perceptions - real or imagined - on political interference.

“I think we’ve turned the corner in terms of trying to agree on where we’re going and we’re accelerating our road to achieve it. I think certainly the SME Fund, the Youth Employment Service Initiative that attempts to bring greater stability to the labour arena and attempts to remove obstacles to investment is certainly all part of this effort. We can do more, we can do better, we just need to get the basics right. This is a 3% growth economy, if we do really well, we should be at 5% growth, so we are way under our capacity at 0-1% growth this year and 1 to 2% in the following two years, we should really try to get to the 3% growth,” adds Coleman.

The second and last day of the conference saw one on one meeting with Foreign Direct investors that have interests in South Africa’s Film Industry, pharmaceuticals, banking and energy among others.

One such company was Solar Reserve that is on the verge of signing a 20 year power purchase agreement with Eskom that was recently delayed.

National Council of Trade Unions (Nactu) president Joseph Maqhekeni who was in that meeting says, “One of the projects in particular on solar electricity, solar reserve, that company if the agreement is signed by Eskom which has delayed to sign that agreement of the project [it] would create during the process of construction about 4000 jobs. It would create over 1000 permanent jobs when that project is there. What we are urging Eskom, because we’ve met with this investor, that on the 28th of October, that project needed to be signed because everything is ready. And the other investors are ready to climb at that back of Solar Reserve so in our view that’s job creation at a maximum scale,” adds Maqhekeni.

Maqhekeni also says the question of political interference in the Treasury and political stability was a constant feature in their discussions with investors.

“When that issue come up as labour, is that you don’t need interference by government, in particular to the Treasury, or to the economy. Because indeed if political interference comes, it will scare investors, it will drive away jobs that we fear.”

“Indeed that is coming up those questions, in and out of a number of meetings, the economic stability, [and] the political stability, that as South Africans if we want to grow the economy, there should be no political interference in the economy - yes that has come up big time.”

The consensus that appears to be emerging is that South Africans are likely to see some tangible results from these two days of engagement.

Fedusa General Secretary Dennis George says, “Today’s sessions were dedicated to individual investors where they have obstacles that must be addressed, where they have challenges to get their deals off the ground as quickly as possible. And today the social partners met with a number of companies, for instance companies that deal with electric generation, more clean air generation and also in the pharmaceutical sectors where companies are looking to manufacture in SA as a head office into the African market. So we have really achieved some of our objectives. We’ve also met with rating agencies, the discussions that we had; were very positive, we thinking more of an upgrade.”

The Finance Minister and the Reserve Bank Governor and their teams now travel on to Washington for the autumn meetings of the International Monetary Fund and the World Bank to continue the conversation of global growth and how that relates to South Africa.

http://www.sabc.co.za/news/a/8ebcea804e7f234286c8ffef356c78d4/SA-given-opportunity-to-put-best-foot-forward-at-Investor-Conference-20161006

International

Ethiopia declares six months state of emergency

eNCA/Reuters, 10 October 2016

ADDIS ABABA – Ethiopia's Prime Minister Hailemariam Desalegn declared a six-month nationwide state of emergency on Sunday, saying months of unrest threatened the nation's stability.

Rights groups say more than 500 people have been killed in protests in the Oromiya region since last year, when anger over a development scheme for the capital turned into broader anti-government demonstrations over politics and human rights abuses.

The government says the death toll is inflated.

"A state of emergency has been declared because the situation posed a threat against the people of the country," Hailemariam said on state-run television.

"Vital infrastructure, businesses, health and education centres, as well as government offices, and courts have been destroyed," he said.

He also repeated earlier promises of reform and plans for dialogue with the opposition.

The state of emergency was effective from October 8.

The violence in Oromiya, Ethiopia's largest and most populous region which surrounds the capital Addis Ababa, and to a lesser extent in the Amhara province, has put a shadow over a nation where a state-led industrial drive has created one of Africa's fastest growing economies.

But the government also faces rising international criticism and popular opposition to its authoritarian approach to development.

The unrest has included attacks on businesses, many of them foreign-owned, including farms growing flowers for export.

Attorney General Getachew Ambaye said the decree would permit authorities to stop and search and also detain suspects without court authorisation, as well as carry out house searches.

It also bars the "preparation, distribution and exhibition of material that could incite chaos", he said in an official announcement.

The measures did not contain curfews, but Getachew said the command post set up to oversee the implementation of the legislation and chaired by Hailemariam would determine where and when to impose curfews "should the need arise".

"Failure to observe the measures would lead to imprisonment for a period of five years," he said.

Mulatu Gemechu, deputy chairperson of the opposition Oromo Federalist Congress, told Reuters that the unrest could worsen if security forces were to be granted more powers and expand their presence in Oromiya.

"These are peaceful protesters who have been demanding that soldiers are pulled out. This could intensify anger," he said.

Last Sunday, scores of people were killed in a stampede triggered when police used teargas and shot in the air to disperse anti-government protesters at a religious festival in the town of Bishoftu.

A US researcher was killed on Tuesday when her car was attacked by stone-throwers near Addis Ababa.

http://www.enca.com/africa/ethiopia-declares-six-months-state-of-emergency

Comment and opinion

The crisis in our universities is a symptom of a wider social crisis

Vashna Jagarnath, Daily Maverick, 6 Oct 2016

The social tensions that have manifested in our universities are not just a result of problems in the universities. They are also expressions of the wider problems that pervade our society and have deep roots in the racial capitalism that has shaped our country.

One part of this toxic legacy is that the bulk of the education system was not designed and developed to cultivate independent thought for democratic citizenship. Over the years, both students and academics developed important ruptures within the logic of domination. However, the system as a whole was designed as a tool to discipline the working classes, peasants, not just in the colonised spaces but also within the metropole. Where it was designed for elites it was often developed to train a colonial elite to manage a rapaciously racist system.

Effective reform of the education system inherited from colonialism and apartheid requires political will and significant social investment. However, after apartheid that political will was often lacking in our universities, and the ANC, following the model of a structural adjustment programme, seriously underfunded universities. In Cuba, 4.47% of the GDP is invested in higher education. In South Africa the figure is just 0.71%.

But while the ANC must be held to account for its failure to invest in universities, we must acknowledge that the crisis of universities is also international.

As capital has increasingly escaped control of the nation-state, the social democratic mechanisms for redistribution and social investment via taxation have been weakened. One result of the increasing power of capital over nation states is that public education, with its democratic possibilities, has declined and private education, often orientated around servicing the market, has expanded.

The debate and struggles around access to university education are far from unique to South Africa. There have been similar struggles across Africa – often resulting in long shutdowns, sometimes for years at a time. In light of the experiences elsewhere on the continent, Gwede Mantashe’s recent utterances are highly disturbing. In recent years student protest around the question of fees and access have also arrived in countries like England and the United States, as well as India and Chile. In all of these countries there has been serious police repression of student struggles.

We are all aware that there is a deepening social crisis in South Africa. Generally its morbid symptoms, like xenophobic pogroms, the emergence of charismatic demagogues or looting from the parastatals, garner more media attention than the crisis itself. However, it is important that we examine the disease as well as its symptoms.

Mass unemployment has become a systemic feature of our society as capital abandons manufacturing and mining in favour of finance and debt-driven consumption, or exits the country altogether. In our cities, apartheid spatial planning has not been overcome and millions remain in shanty towns. In rural areas the corporatisation of agriculture and the neo-apartheid return to traditional authority has produced mass impoverishment and domination. Public schooling is in an atrocious state.

This social crisis has always been present in historically black universities, which are also universities for the working class and the poor. In these universities there have been struggles over the question of access since the end of apartheid. But now that these struggles have entered the elite and formerly white universities, they have become a major national issue. The way that this crisis was largely ignored when it was contained to black working-class institutions is itself a collective indictment on our society.

It is understandable that some students have prioritised the university as a terrain of struggle, as it is accessible to them. However, when students have placed the primary pressure for access on university managers rather than the state, they have made a serious error. The ruling party, and the capitalist class of all races whose interests it protects, needs to be called to account. There is a real risk that the demonisation of individual vice-chancellors could result in their replacement by the kind of ANC functionaries that have done so much damage to the parastatals and the SABC.

But to the great credit of the student struggle there is now a general consensus that a new funding model needs to be developed. The debate is between those who take the view that fees should not be part of the new model and those that argue that the rich should continue to contribute to the system in the form of fees. Proponents of the first position take the view that increased tax on the super-rich, as well as mechanisms to stop illicit capital flows out of the country, can enable free education. Others have noted that stopping corruption and wastage – and unwise spending like the trillion-rand nuclear deal – could free up money for social investment.

Proponents of the second position argue that middle-class and rich students have greater access to university as they have better access to quality school education in a situation in which public schooling is largely dysfunctional. They argue that this means that free education across the board would, in fact, be a subsidy for the rich. Some who take this view have also argued that the super-rich, and corporates, are good at evading tax and that the damage that Zuma has done to the credibility of the state, and to the integrity of its institutions, place limits on the ability of the state effectively to raise more revenue and to invest it in social projects.

However, any attempt to resolve the crisis that is now manifesting itself in the elite universities without resolving the wider socio-economic and political crisis – the crisis of continuing capitalist and imperialist exploitation of South Africa (both phenomena that are intensely racialised) – is destined to run into serious limits. Universities cannot flourish amid an unfolding social catastrophe, nor can they somehow compensate for that catastrophe.

We need a new economic order and a new rural and urban order. We need to radically restructure the economy, the cities and the countryside – to overcome poverty, unemployment and inequalities. We need to ensure that there is decent work or a decent income, as well as decent education – from school onwards – for all.

If we are going to have any chance of achieving a socialist resolution of the crisis the often valiant struggles against different dimensions of our crisis need to be brought together. University struggles need to build solidarity with the struggles of the working class and the poor to build a mass movement for fundamental social and

political change. We must also acknowledge that the international power of capital and imperialism means that this is not a project that can be successfully undertaken in isolation.

In order for this project to have any possibility of succeeding we need to be clear-sighted about the social forces that have emerged out of the crisis. There are progressive and democratic forces on and off campuses. But there are also forces that have taken the form of authoritarian populism, that have expressed themselves in demagogic ways and that have been complicit with xenophobia, homophobia, sexism and anti-Semitism.

On some campuses, large democratic movements in which women were at the forefront have been replaced by smaller, more authoritarian and masculinist forms of politics. The kind of political opportunism that finds it expedient to overlook the dangerous political content of reactionary populism will very soon run into serious trouble.

http://www.dailymaverick.co.za/article/2016-10-06-op-ed-the-crisis-in-our-universities-is-a-symptom-of-a-wider-social-crisis/#.V_qPeE3lrIV

SA must fix its dangerously wide wealth gap

Anna Orthofer, Business Report/The Conversation, 10 October 2016

South Africa’s wealth gap is even wider than its income gap

South Africa is known for its extreme income inequality, which is one of the highest in the world.

Ten percent of the population earn around 55-60% of all income, compared to only 20-35% in the advanced economies.

But while the top income share is high in its own right, it pales in comparison to those for wealth; such as real estate, pension funds and shares of listed companies. New tax and survey data suggest that 10% of the South African population owns at least 90–95% of all assets. This share is much higher than in the advanced economies, where the richest 10% own “only” around 50-75% of all assets.

Why does wealth matter? First, the level and distribution of wealth in a country are important indicators of its citizens’ long-term welfare. Whereas income and consumption tell us something about a household’s current living standards, information on wealth is important in assessing whether the household can sustain these living standards during spells of unemployment or throughout retirement.

But wealth is also of particular concern for long-term inequality. This is because wealth can generate its own income (such as interest, dividends, rents, and capital gains), and can be passed on between generations. Over time, small differences in assets can therefore grow larger and larger. As Thomas Piketty argues in his influential book on wealth and inequality (Capital In The 21st Century), this tendency has been one of the biggest drivers of growing inequality in both advanced and developing countries.

A growing number of studies have suggested that high inequality can have unfavourable political and economic consequences, which is why South African policymakers are increasingly concerned about it. Currently, most initiatives focus on inequality of income and consumption, since these variables are closely linked to poverty and exclusion.

But based on my own research I argue that narrowing the wealth gap also deserves close attention.

Why wealth is difficult to measure

We know that South Africa’s wealth distribution is highly unequal. It is, however, very hard to measure precisely how unequal it is. This is because our usual tools are well suited to measuring income and consumption, but not very good at measuring wealth.

The most widely used data on living standards come from household surveys. Their main limitation when it comes to measuring wealth is that participation is voluntary and that richer households tend to be less likely than others to participate. In addition, many people are not aware of the current value of their assets or feel uncomfortable talking about wealth.

Because of these limitations, researchers have started to use data from tax records. Since tax filings are mandatory, tax data do not run the risk of under-representing individuals at the top of the distribution.

Nevertheless, tax data have their own limitations. First, they tell us nothing about the population whose income is too low to require income tax filing. In South Africa this group comprises more than 80% of the population. Secondly, they do not allow us to measure wealth directly since only investment incomes are taxed in South Africa.

While this approximation introduces an element of uncertainty, it is currently the only way to get data on the top of the wealth distribution.

Extreme wealth inequality

In my research I combine tax and survey data. Three main findings stand out:

• The wealthiest 10% of the population own at least 90–95% of all wealth, whereas the highest-earning 10% receive “only” 55–60% of income.

• The next 40% of the population - the group that is often considered to be the middle class - earn about 30-35% of all income, but only own 5-10% of all wealth.

• The poorest 50% of the population, who still earn about 10% of all income, own no measurable wealth at all.

The fact that the bottom half has very little wealth is not unique to South Africa. What is striking, however, is the small wealth share of the middle of the distribution. Income- or consumption-based studies find that around 20% to 30% of South Africans belong to the middle class.

But my analysis suggests that a “propertied middle class” is largely nonexistent. This differentiates South Africa from the advanced economies, where a much larger share of the population owns significant financial and non-financial wealth.

The data also show that race plays a role in inequality, as average wealth still differs strongly between groups. Nevertheless, they suggest that wealth inequality within the majority black population far exceeds overall inequality. This is consistent with the findings of a study on income inequality, which shows that the income distribution is increasingly shaped by growing inequality within race groups rather than inequality between race groups.

Implications for policymakers

In theory, the extreme concentration of wealth in the hands of a few can be addressed from two sides: redistributing wealth held at the top or building wealth at the bottom.

In reality, however, these two approaches should be balanced by combining taxation of top wealth holders with policies to encourage middle-class wealth formation. This is because South Africa has a relatively low level of private wealth and should not risk reducing overall private saving and investment.

The most common tools for redistributing wealth are taxes on investment incomes and inheritances. Currently these taxes constitute only a tiny share of total tax revenue. Taxes on investment income makes up about 1% of total tax revenue while inheritance tax makes up 0.1%. The current proposals of the Davis Tax Committee aim to increase these shares by closing loopholes in the estate duty.

More effective inheritance taxes can be very effective to counter the tendency of growing wealth concentration. But there are practical challenges when it comes to taxing the wealthy effectively. Wealth can easily be shifted between asset classes, ownership structures and tax jurisdictions to avoid being subject to taxation.

The Panama Papers showed the extent to which the efficacy of wealth taxes is limited by the fact that large fortunes are moved out of the reach of national tax authorities.

Helping lower- and middle-class households build wealth may therefore be a more effective way to promote a more equitable wealth structure. Since pension assets are the single most important form of wealth in South Africa, a more comprehensive pension system would be particularly effective in reducing wealth inequality. The current proposals by the National Treasury, which aim to increase the coverage of occupational pension systems and reduce pre-retirement withdrawals, are promising.

The new figures on the extreme extent of wealth inequality should provide some tailwind to these proposals, which could jointly lead to a more equitable wealth structure in South Africa.

* Anna Orthofer is an economics PhD candidate at Stellenbosch University.

http://www.iol.co.za/business/opinion/sa-must-fix-its-dangerously-wide-wealth-gap-2077383