While most of the opposition parties viewed President Jacob Zuma’s State of the Nation speech as a damp squib, the ruling movement’s alliance partner Cosatu believed he was not nearly as radical as he could have been. It was like the curate’s egg: good in parts.
The president was clearly not an “action man” said the DA, Cope, IFP, UDM, ACDP, the Freedom Front Plus (FF+), UCDP and Azapo, in a joint statement.
It was all old news – “rehashed old plans” – on infrastructure. He was “misleading” on the mining sector and provided nothing new on how to grow the economy, they chanted in unison.
Cosatu’s national spokesman Patrick Craven was less critical. He believed it was jolly good news the president had announced that R860 billion would have been spent on infrastructure between 2009 and the end of next month. “Many do not appreciate that spending these amounts of money on infrastructure at a time when many governments are resorting to stringent austerity measures… is a very progressive development for South Africa.”
But on the concept of “decent work” – a theme of the 2009 ANC’s election manifesto – Craven was less flattering. What the president had said “was not impressive”. The country could not escape the fact that it had lost over 1 million jobs in the recent economic crisis.
The trade union federation was also not happy that the National Development Plan had been “increasingly elevated to the status of the freedom charter”. It appeared that every government policy including the New Growth Path – which sees a huge role for the state to expand jobs – had been “subordinated” to it.
Agriculture, Forestry and Fisheries Deputy Minister Pieter Mulder said he was concerned that the government had opened the doors to great uncertainty by suggesting that land claims could go back to before 1913, the year the Native Land Act was passed.
Another issue of uncertainty was Rural Development and Land Affairs Minister Gugile Nkwinti’s remark last week that the government was reviewing the right of ownership by foreigners of South African land.
“All people who are foreign nationals will not own land, but will lease land on a long-term basis,” he told Sapa.
Mulder, who is leader of the FF+, said he understood that it was the government’s intention to prevent future foreign land ownership even of urban land. “This represents about 1 percent of South Africa’s land, if you include (the Cape Town beachfront area of) Clifton,” he said.
“If you have a problem with a mouse, you don’t shoot it with a cannon,” Mulder said.
On the plus side, the president announced the incentivising of commercial farmers’ mentorship of new black farmers. Although this programme would be driven by the Department of Trade and Industry, it was not able to comment on the details of this on Friday.
Mulder said there was also no detail on how youth employment would be resolved.
Cosatu said the government, labour and business negotiating chamber or Nedlac agreement – which apparently still needs to be signed – did not include references to a youth wage subsidy. The union federation has long argued that this will rob existing workers of employment.
Mulder believes, however, that Zuma will ultimately defy Cosatu’s opposition to the youth wage subsidy.
Cosatu, however, declared it was “thrilled” at the progressive introduction of the National Health Insurance plan. “We are happy that the president gave us further assurance that the government is determined to introduce this historic intervention, with the setting up of the National Health Insurance fund by 2014,” it said.
The union also welcomed the first group of 600 private medical practitioners who would be contracted to provide medical services at 533 clinics within villages and townships.
Yet the president had failed to put into action his words “that where the state intervenes strong and consistently, it can turn key industries around”.
There had been no “unapologetic moves” to shift the country towards “a more radical transformation of the economy to ensure that our freedom does not only mean that around our necks there will be political medals while the economic jewellery resides with a small minority of capitalists”.
Annabel Bishop, Investec’s chief economist, noted the president had reported that Finance Minister Pravin Gordhan would commission a study of the current tax policies “to make sure that we have an appropriate revenue base to support public spending”.
But Bishop warned that full employment would not be achieved by increasing the size of the tax take through the higher taxation of the private sector. This would likely slow economic growth.
“Crowding out investment in the private sector by taking more of the private sector’s profits when these profits could have been reinvested… to create more jobs will reduce economic growth and productivity.”
National Education Health and Allied Workers Union general secretary Fikile Majola welcomed the tax study. “We expect no less than the directive outlined by the ANC in its January 8 message where it said the state must capture an equitable share of mineral resource rents through the tax system.”