South Africa was facing a “ticking time bomb” due to high employment, racialised economic disparities, massive income inequality and a failure by the state to redistribute wealth effectively.
Zwelinzima Vavi, Cosatu general secretary, who addressed finance portfolio and select committees of parliament on Wednesday, also questioned whether Economic Development Minister Ebrahim Patel's new growth path - which focused on creating millions of jobs in the next 10 years - was integrated into all aspects of governance including monetary and fiscal policies.
He nevertheless said that Cosatu's job creation trust had about R120 million available for job creation.
It had created about 40 000 jobs with seed capital of R90 million some years ago, but the fund had been poorly managed for a spell. He believed it now could make a contribution to the jobs drive in the country.
Questioned about Cosatu's opposition to inflation targeting by MPs, he said Cosatu proposed an alternative monetary policy. “We are saying in rejecting inflation targeting, we are saying the government must adopt employment targeting monetary policy.”
All monetary policies should be designed to recognize the need to address “the crisis of unemployment”.
Policies of exchange control should support domestic industrialization, he said. “Exchange rate management should be one of the pillars of the policy framework and … must be aligned to our developmental mandate.”
Vavi pointed to China's stable currency which was not allowed to fluctuate uncontrollably, making planning for industrialists more effective.
Questioning South Africa's relatively low budget deficit compared to countries in Europe, Vavi argued that South Africa always tried to be “the good boys”, obeying international rules of engagement which did not necessary suit the challenge on the ground. South Africa, unlike most countries in Europe, had an unemployment rate of near 40 percent and an even higher level for young South Africans.
While he did not spell it out, he was suggesting that a bigger budget deficit should finance developmental spending to create jobs even if this meant that the state had to borrow more to finance this initiative.
Urged by the World Trade Organisation to liberalise trade tariffs, SA had over compensated by lowering them even further than required, he argued.
Much had been said about SA's policies being “business unusual” but he said the budget was the normal conservative one of the past. “The budget is business as usual,” he said.
Consecutive budget since 1994 - when the ANC came to power - had failed to redistribute the nation's wealth effectively. The share of employees of the GDP “has been declining consistently… we have not started to redistribute wealth from the rich to the poor and inequalities have grown”.
The inequitable VAT (value added tax) hit the poor the hardest. Everyone knows that the poor spend most of their limited income on food, which was taxed. It was immoral, he argued, to fund the proposed national health insurance system through such a regressive tax. - Donwald Pressly
very interesting comments but is Vavi not part of the alliance who in turn forms the Government and therefore supports (Vavi) the Government policies?? I warned Vavi that totally socialistic methods cant work with the current ratio of workers and unemploed.
Vavi pointed to China's stable currency which was not allowed to fluctuate uncontrollably, making planning for industrialists more effective Yes but what about China's spiralling inflation, censorship of internet, dissapearence of protestors. Hardly a country to hold up as an example of how things should be done.
I think you mean high unemployment?
Africa for Africans indeed, the evil forces are out to play. The ANc has been subtly pushing this race card far and wide, and pushed it to the point where us minorities would NEVER want to EVER vote for them again. Unbelievable that one man in three days can lose the ANC sooooo many seats in Parliament. But there's a bigger force at play here. White Nationalism so comfortably readapted to play out as Black Nationalism, where those considered Black enough during Apartheid are now out of the economic eating frenzy the ANC so candidly encouraged. What's to take place y friends is that the world will be made to question their faith in a Rainbow Nation and race relations globally will be questioned as the thousands of Black African migrants a week arrive to Europe in search of a job. The ANc played with fire and now Malema will as usual Malema blow this race race race issue go sky high. I prya nort for a civilo war but for Cape Independence where free thinkers can live in the true Rainbow Nation, away from the last vestiges of Nationalism in South Africa. Remember the Indian stateless Ugandans and Kenyans who Britain never wanted 40 years ago, I can just see the whole thing blowing and the ANC being shown for who they are - utter racists
He is right it is a ticking time bomb with cosatu and the ANC in power. Take from the rich and give to the poor - hmmm lets see it didnt work in Poland, east Germany, Lithuanian, Bosnia, Russia, china etc etc yet these arrogant "know alls" want to talk the talk, ok vavi you are also rich, sell your mansion, along with malema and the rest of you CROOKS (because thats all you are) you hide behind apartheid, you hide behind the word racist when questioned to enrich yourself, and you hide behind half truths fed to you by the likes of gedafi and the soviet union. The bomb will go off when mandela dies, until then we have to year these idiot clocks ticking. The only reason the ANC, The Anc youthlegue and Cosatu exist is to employ them. If it wasnt for their organizations who would employ these fools? They use political power to grow richer and richer. They are all losers who need to get out.
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