In our Wednesday morning roundup, see
summaries of our selection of recent South
African labour-related reports.
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Unions, lobby groups rally against possible cuts in Budget 2025 on Wednesday News24 reports that on the eve of Finance Minister Enoch Godongwana's Budget speech on Wednesday, several trade unions and lobby groups cautioned against further spending cuts. Supporters filled the St George's Cathedral for the "People's Budget" on Tuesday evening in an effort to convince Godongwana to keep health, education, and unemployed youth at the forefront. Those in attendance included trade union federations Cosatu and Saftu, the SACP and lobby groups such as Equal Education, Treatment Action Campaign, Youth Capital, and the People's Health Movement. Concerns among trade unions have been mounting over the past few days that Godongwana may slash critical funding in key departments such as education and health. The unions intend to march to Parliament on Wednesday with the over 100,000 objections collected against any cuts. Saftu’s Zwelinzima Vavi sent out a stern message, saying they rejected austerity and privatisation. "We reject that privatisation puts profits over people. We demand a society where resources are allocated to ensure housing, education, healthcare, and dignifying documents for all. Together, we proclaim people before profits. Down with austerity, down," he said. Abeeda Adams of the General Industries Workers Union of SA added: “The people are gatvol. We are tired of surviving while the rich thrive. It is time for bold, immediate action.” Read the full original of the report in the above regard by Marvin Charles at News24 (subscription or trial registration required) Economists forecast increase in VAT or income tax to balance budget as ‘something has to give’ TimesLIVE reports that all indications point to greater pressures on the National Treasury to increase various taxes in the upcoming budget. This is the outlook by economists Avias Ngwenya and Marylla Govender ahead of Finance Minister Enoch Godongwana's tabling of the 2025 budget on Wednesday. In their view, the economy can be described as facing the perfect storm, with high levels of unemployment and low levels of economic growth. SA’s economy is facing extremely high levels of youth unemployment, coupled with very low economic growth prospects, making new employment opportunities almost non-existent. The increased burden of poor performing state-owned entities has also placed the Treasury in an unenviable position "Overall, something has to give as the existing budget is not sustainable," Ngwenya and Marylla Govender pointed out. The economists said in the coming year, it was anticipated SA would need to increase its borrowings even more significantly to balance the national budget. After a recent Pretoria High Court judgment that found that regulations limiting the access to the R370 per month social relief of distress (SRD) grant to only those who earned less than R625 per month was unconstitutional, they expected the social grant strain on the national fiscus would increase. They also noted that the looming water crisis in Gauteng and KwaZulu-Natal was expected to have dire consequences for economic growth. Read the full original of the report in the above regard by Ernest Mabuza at TimesLIVE Basket of tax-exempt essential food items expected to be expanded to shield poor from probable VAT hike BL Premium reports that the Treasury is likely to increase social grants by above inflation, freeze the fuel levy and increase the basket of zero-rated goods to shield the poor from a probable VAT hike. A decision by Treasury to hike VAT was apparently taken after weighing different options, including doing away with the social relief of distress (SRD) grant and taking on more debt. Both options were considered less favourable due to several reasons, including keeping ratings agencies at bay. The money expected to be collected from the VAT increase is expected to plug holes in the education, social wage and education budgets. The last time the Treasury hiked the VAT rate was in the 2018/19 budget, when it was increased from 14% to 15%. President Cyril Ramaphosa indicated last year that the government of national unity would be looking to expand the basket of essential food items exempt from VAT and undertake a comprehensive review of administered prices. Deloitte, in a budget preview, said that while expanding the VAT-free food basket might exhibit a quick-to-action response, this administrative approach might not effectively address the root causes of food insecurity. “If the National Treasury decides to expand the VAT-free essential foods list, it must carefully mitigate potential unintended consequences. Past experiences demonstrate that while the VAT-free food list might seem straightforward, its practical application can be complex. Consequently, it is crucial for the Treasury to precisely define which food items would be zero-rated and establish clear boundaries for their inclusion,” Deloitte said. It added: “The Treasury must also recognise the inherent challenges of modifying such a list. Once food items are added, there will likely be significant political and social pressure to retain them and removing items will prove difficult.” Read the full original of the report in the above regard by Kabelo Khumalo at BusinessLive (subscriber access only). Read too, ANC top brass said to support Godongwana’s plans to increase VAT, at TimesLIVE Premium (subscriber access only) Motshekga admits that austerity measures have severely impacted SANDF capabilities EWN reports that according to Defence Minister Angie Motshekga, austerity measures have put her department in the predicament of being poorly capacitated to deliver on its mandate. Motshekga laid bare the myriad problems of her department before Parliament's Standing Committee on Public Accounts (Scopa) on Tuesday, after several weeks of backlash over the deaths of soldiers deployed in the Democratic Republic of Congo (DRC). Besides overspending by R3 billion on its staffing budget in the last financial year, Motshekga said annual budget cuts meant that the department was struggling to service its equipment. Scopa has been probing years of repeated qualified audit opinions in respect of the defence department, prompted by the high irregular, fruitless, and wasteful expenditure. "Upfront I have to say, there have been major problems, not only in defence, but in government in terms of austerity measures. Defunding has affected us badly. It places us in a very difficult situation," Motshekga lamented. She said the department was in dire straits ranging from its grounded equipment and high wage bill to dysfunctional military hospitals and irregular tenders. She also told MPs that unfunded operations, including the continued deployment of soldiers to the DRC as part of a joint United Nations and regional peacekeeping mission since December 2023, increased the pressure on an already strained budget. "The decision to extend SAMIDRC for instance, was taken in December. It's not part of our plan. It's not in our budget. It will only come in the next financial year,” Motshekga reported. Read the full original of the report in the above regard by Lindsay Dentlinger at EWN Other internet posting(s) in this news category
Unemployment rate slightly down to 31.9%, but SA still needs almost 8 million jobs The Citizen reports that although Statistics SA’s Quarterly Labour Force Survey (QLFS) for the fourth quarter of 2024 showed an improvement in the unemployment rate, SA still needs to create almost 8 million jobs. According to the household-based employment survey, there was an increase in total employment during the fourth quarter of 131,669 jobs compared to the third quarter, when there was an increase of 293,840 jobs. The faster increase in employment compared to unemployment resulted in the official unemployment rate falling by 0.2 percentage points to 31.9%. The absorption rate also increased by 0.2 percentage points to 41.1%, the highest level since the 42.1% recorded in the first quarter of 2020, suggesting a steady improvement in the economy’s ability to create jobs and absorb workers. The expanded unemployment rate in the period under review remained unchanged at 41.9% compared with the third quarter of 2024. Thanda Sithole, senior economist at FNB, noted that youth unemployment remained critically high, with the jobless rate for the age group 15 to 24 falling to 59.6% from 60.2%, while it declined to 39.4% from 40.4% for the age group 25 to 34. Sithole said this data underscored the urgent need to accelerate pro-growth structural reforms to drive sustainable and inclusive economic expansion. Economists at the Nedbank Group Economic Unit expect the labour market outlook to continue to improve modestly as structural constraints ease and cyclical forces become more favourable. But, they warn that looming labour disputes and retrenchment in specific industries, particularly manufacturing and mining, could also undermine the effort to reduce unemployment. Read the full original of the report in the above regard by Ina Opperman at The Citizen. Read too, Unemployment rate falls further in fourth quarter of 2024, at BusinessLive. And also, Unemployment rate eases to 31.9% as four industries add jobs, at Mail & Guardian Other internet posting(s) in this news category
Solidarity warns that AGOA on the brink of collapse because of ANC’s anti-US policy Maroela Media reports that according to trade union Solidarity, warnings about the consequences for SA of anti-US policy are looming more and more as a reality. A letter in which members of the US Congress have requested President Donald Trump to terminate SA’s access to benefits under the African Growth and Opportunity Act (AGOA) is currently being widely circulated. In the letter it is contended that it is necessary to remind SA of what would happens when US interests were being disregarded. For some time, Solidarity has been pointing out how damaging the loss of AGOA benefits could be for ordinary South Africans as well as for various industries. An AGOA report, drafted by the Solidarity Research Institute (SRI) and highlighting the benefits of the trade agreement for SA, was submitted to the South African government. However, no reaction to the report was received. Eventually, Solidarity brought this report to the attention of US government departments and other interest groups in the US. According to Theuns du Buisson, who compiled the AGOA report and who is an economic researcher at the SRI, officials in the US were grateful for the report as their pleas to the SA government for similar figures had fallen on deaf ears. Meanwhile, the SRI has drafted an updated AGOA report that highlights the positive impact of AGOA on the SA economy. The report indicates that SA’s total exports to the US stand at R156,8 billion, with about half (48%) of that coming from sectors that directly benefit from AGOA. Du Buisson emphasized that Solidarity does not want SA to be kicked out of AGOA “as the ordinary workers and the people who want to protect the interests of the USA will actually be the people who will suffer as a result.” Read the full report in the above regard in Afrikaans and access the updated AGOA report at Maroela Media
City Power suspends services in Alexandra after technician attacked by angry mob The Citizen reports that Joburg’s City Power has suspended services in Alexandra after one of its technicians was assaulted inside the Alexandra Service Delivery Centre (SDC) on Tuesday. The employee was responding to a power outage affecting customers along 2nd and 7th Avenue on Tuesday when he was attacked. “An angry mob stormed our gates, damaging vehicles and beating up the technician who was in the office at the time. City Power will be providing psychosocial support to the technician and other colleagues who are still traumatized by the events. Most of the colleagues at the Alexandra SDC have expressed serious concerns for their safety,” City Power spokesperson Isaac Mangena said. He went on to advise: “Effective immediately, we are suspending all services in Alexandra until further notice. No employees will be dispatched to work around Alexandra until law and order are restored and workers safety can be guaranteed.” Mangena said their technicians have been working tirelessly to address the disruptions caused by adverse weather conditions, which has delayed responses. Read the full original of the report in the above regard by Faizel Patel at The Citizen Frightened staff at clinic in Soweto refuse to let patients in after early morning robbery SowetanLive reports that staff at Chiawelo clinic in Soweto on Tuesday morning barred patients from getting in, saying they feared for their lives after a robbery at the facility. A resident said that some 10 men, posing as crime prevention wardens, stormed the clinic at about 1am and beat up and robbed a doctor of R1,000. Emergency personnel were also robbed. A security guard, who was off duty, said: “The guards who were on duty last night said they did not suspect anything when the suspects came into the clinic as they were used to having patrollers coming in.” Staff then closed the entrance, refusing to allow patients in. “They told us that they will not assist us because they fear for their lives because their staff members were robbed at gunpoint. They said the robbers took cellphones, wallets and one doctor was assaulted,” said patient Nompi Maziya. The clinic was reopened just after 10am after a staff meeting. Read the full original of the report in the above regard by Nandi Ntini at SowetanLive Other internet posting(s) in this news category
MPs to visit SA Post Office HQ next week for update on business rescue process EWN reports that members of Parliament's communications and digital technologies committee will visit the headquarters of the SA Post Office (Sapo) in Johannesburg next week for a first-hand update on the business rescue process. Chairperson Khusela Diko said that the future of employees was the paramount concern. But she also welcomed an announcement by Minister Solly Malatsi that strategic partners should be found that could help save the beleaguered state-owned company. Despite a day zero warning by its CEO Fathima Gany last October, Sapo continues to limp on. Diko said that MPs want to see a turnaround plan for Sapo, which the business rescue practitioners have not yet shared with Parliament. "Obviously, our biggest worry is around the workers at the post office and we are hoping that differences with the business rescue practitioners will be resolved to at least cover the operational expenses of the post office," Diko indicated. Finance Minister Enoch Godongwana has up until now rejected a request for a R3.8 billion bailout for Sapo and he is likely to hold that line when he tables the national budget on Wednesday. Last week, the Communications Workers Union warned that it did not foresee Sapo operating beyond the end of February. Read the full original of the short report in the above regard by Lindsay Dentlinger at EWN
Early retirement plan for state workers in the works Bloomberg reports that SA’s government has drafted an early retirement offer for civil servants as part of an effort to reduce its wage bill. According to knowledgeable sources, state workers aged between 55 and 60 could be offered two weeks’ pay for every year they have worked up to a maximum of 20 years, and one week’s pay for every year they have been employed after that. Any penalties usually incurred by those taking early retirement would likely be waived. The National Treasury is in a closed period until after the presentation of the annual budget on Wednesday and so did not respond to questions. If adopted, the early retirement plan would be available over the next two years and about 30,000 people could take up the packages. Priority will be given to applications from staff at government departments confronting more severe budgetary pressures. Any offer would have to be tabled at the Public Sector Bargaining Council Chamber. In October last year, the Treasury said it was setting aside R11 billion to fund early retirement, with more details be released in the budget. The government’s wage bill accounts for more than a third of its total expenditure, crowding out spending on other priorities. Previous early retirement offers had limited take-up. Read the original of the report in the above regard by Loni Prinsloo & Antony Sguazzin at Moneyweb
North West principal placed on special leave for allegedly hitting pupil with stick News24 reports that the North West education department has placed a principal on special leave "pending precautionary suspension" following a complaint against him of having allegedly hit a pupil with a stick. In a video of the incident, Daniel Makhado, the principal of Kgononyane Secondary School in Vryburg, is seen firmly holding the pupil down around the neck with his left hand while using his right hand to seemingly hit him with the stick. He is heard telling the 14-year-old Grade 8 pupil in Setswana that he was "messing up the school". The boy was apparently playing games on his cellphone in class during a social sciences lesson, and the teacher then took him to the principal's office to complain about his behaviour. "We are deeply disappointed in the principal's conduct as corporal punishment is not allowed at school," said Lesego Sione, the chairperson of the school governing body. Corporal punishment was abolished in 1996, and the Basic Education Laws Amendment (Bela) Act now provides for the prohibition of the practice not only at schools but also during school activities and at hostels. President Cyril Ramaphosa officially signed all sections of the act into law in December. A parent, who did not want to be identified, alleged it was not the first time Makhado had administered corporal punishment at the school. Read the full original of the report in the above regard by Prega Govender at News24 (subscription or trial registration required)
Feeder buses in Soweto at the heart Rea Vaya siege, say taxi operators City Press reports that with two fatalities and the destruction of 60 buses and 13 minibus taxis in just over two weeks, the public transport sector is in turmoil, with taxi operators blamed for the violence. Competition for routes is at the heart of the conflict that has left commuters stranded. The City of Johannesburg’s Bus Rapid Transit, Rea Vaya, has been forced to withdraw feeder buses in Soweto due to threats allegedly from taxi operators. Two Rea Vaya feeder bus drivers were shot dead two weeks ago. MMC for transport, Kenny Kunene, condemned the taxi industry for blocking the feeder buses from operating. However, the National Taxi Alliance (NTA) said Kunene had this coming. NTA spokesperson Theo Malele said while the alliance did not condone violence, bringing in the feeder buses into the area angered the local taxi operators, who then pushed back. Malele claimed they were never consulted when the 45 feeder buses were brought in and this has had a devastating impact on their livelihoods. He said the local operators were surprised to find unbranded buses, some with registration numbers of other provinces, picking up passengers along their routes. He explained that each load of these 65-seater buses affected about 198 minibus taxis, which carried 15 passengers. Separately last month, 51 Putco buses were torched in a coordinated attack on three of the bus company’s depots in Mpumalanga. A week after the Putco attack, nine buses were destroyed in a fire at the Northwest Transport Investments (NTI) depot in Moretele village in the North West. Last Sunday, about 20 minibus taxis were torched in an incident at Nyanga Taxi Rank in the Western Cape. Read the full original of the report in the above regard by Sipho Mabena at City Press (subscriber access only)
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