SONA: Economy, labour unrest and unemployment take centre stage

President Jacob Zuma’s seventh State of the Nation Address (SONA) last night focused on the economy and job creation, and labour relations, in particular in the mining sector and addressing challenges in local government.

Early on in his speech, Zuma stated, “As we enter the second phase of our transition from apartheid to a national democratic society, we have to embark on radical socio-economic transformation to push back the triple challenges [of poverty, inequality and unemployment].”

However after the Address, EFF leader Julius Malema told a group of journalists, “He says radical economic transformation… what is that? He says we will continue to do this, we will continue to do this… he doesn’t say we are going to change to that… they will continue with the same policies.”

In his address Zuma mentioned that “radical socio-economic transformation” would manifest in the implementation of the Industrial Policy Action Plan.

“We will promote local procurement and increase domestic production by having the state buy 75% of goods and services from South African producers. We will utilise the renewable energy sector, the manufacturing of buses, Transnet’s R50 billion locomotive contracts and PRASA’s passenger rail projects, among others, to promote local content and boost growth… We will continue to support through incentives, the competitiveness of the auto, clothing, leather, footwear and textile industries, which are labour intensive.” Zuma said.

However Cosatu’s Zwelinzima Vavi doesn’t think this goes far enough.

“The National Development Plan must be realigned to the concept of radical economic transformation. A new mandate must be given to the National Planning Commission, to the Treasury, to the Reserve Bank, to the state owned enterprises that they ensure South Africa industrialises and builds its manufacturing sector,” he said.

Vavi added that infrastructure development needs to be less focused on mining and mineral extraction and more on people’s needs such as the building of schools, dams, roads and bridges because “that is what industrialisation is all about”.

Reflecting generally on the President’s speech, the DA’s new Parliamentary Leader Mmusi Maimane said, “Some of these things have been called for, for so many years, that the President's response was in some way a bit too late…. I’m concerned that President Zuma is living in one space while South Africans are living in [another] very difficult space.”

He added that the president missed the opportunity to take some necessary “bold steps” in his speech and Maimane was also critical of the fact that Zuma failed to directly address South Africa’s recent credit rating downgrade.

IFP’s Mangosuthu Buthelezi said that after listening to Zuma he felt “very pessimistic” because without growth we would not get the jobs we needed. The Expanded Public Works Programme’s job creation was also “hardly a drop in the ocean” and not a permanent solution.

“I don’t leave the Assembly confident that something is going to happen that is going to take our country forward,” Buthelezi said.

Following on from the protracted mining strikes in the platinum belt, it is not surprising that President Zuma discussed the mining sector in detail. He said that Deputy President Cyril Ramaphosa will “convene social partners dialogue” to address “untenable labour relations” and to “deliberate on wage inequality” and that the Framework Agreement for a Sustainable Mining Industry brokered by former Deputy President Kgalema Motlanthe will now become the responsibility of the President himself.

Zuma added, “To further promote improved living conditions for mine workers, government is monitoring the compliance of mining companies… relating to improving the living conditions of workers. Companies are expected to convert or upgrade hostels into family units, attain the occupancy rate of one person per room and also facilitate home ownership options for mine workers.”

Malema hit back that Zuma quoted the mining charter without making reference to it. “The charter commits the mining sector to certain things including housing. I was shocked when [MPs] were clapping hands as if he was saying something new. We should be told today how many mines have been closed down and [those that are] not complying with the charter… There is no commitment to end the strike. There is no commitment to increase the salaries of the workers to R12 500,” Malema said.

With regards to addressing the challenges in local government, Zuma said that the government would be developing 100 new projects, primarily water and sanitation provision with the aim is to have them completed in the next twelve months. He also announced that an Inter Ministerial Task Team on Service Delivery would be set up and led by Minister Pravin Gordhan.

In response to this, Vavi said that COSATU was “very happy” that steps were being taken to address what everyone regards “as a crisis of a lack of proper governance and delivery at the local government level”.

Malema on the other hand said that addressing local government problems was “blowing hot air” - a way to curry favour before the local elections in 2016 and that Zuma had failed to deliver on the promises of basic services such as water.

Maimane agreed, saying the Makhaza toilets should have been covered in 2011 but that still has not been done, “so there is a lot talk and very limited action”.

In his address the President explained, “Youth empowerment will be prioritised in our economic transformation programme”. This would include expanding the number of internship positions in the public sector as well as expanding the employment tax incentive. Presumably the youth would also benefit from the Expanded Public Works Programme and the one million work opportunities Zuma promised would materialise through the Community Work Programme by 2019.

Zuma added that twelve training and vocational educational colleges “will be built to expand the technical skills mix in the country”.

After the speech, Buthelezi told People’s Assembly that he was concerned the internship project may be yet another empty promise made by the President. He wanted to know when and how it would be happening and said that the President had not provided enough details.

Looking at the Youth Empowerment intervention proposed by Zuma more generally, Maimane told People’s Assembly that he was generally supportive of the interventions but they didn’t go far enough.

“All of that is critical and vital to make sure young people get working and that is a very important thing, but youth interventions need to take a broader look and more must be done to make sure young people end up working.....he didn’t speak at length about small businesses being owned by young people which is a key stimulus that will help young people get permanent and decent jobs,” Maimane said.