Unspent budgets ‘very odd, careless and inept’

An analyst at Japanese investment bank Nomura could hardly believe his ears when he was told by the Treasury that government departments had difficulty spending their funds. While South Africans are well aware that the government lacks the capacity to implement its own plans, Peter Attard Montalto said: “This strikes us as very odd, if true.”

Unfortunately, it is only too true.

“It implies a level of carelessness or fundamental inability to muster change [and it] highlights the ongoing inefficiencies particularly below the national level.”

Again, only too true.

Montalto questioned the delay in the publication of a long-term fiscal report announced in the medium-term budget policy statement in October.

Finance Minister Pravin Gordhan said the report was designed “to enhance the policy debate and make explicit the implications of new public finance initiatives for future generations”. Montalto suggested it was being “toned back perhaps given the lack of political buy-in”.

After a field trip to South Africa, Montalto noted that bankers in Johannesburg and policymakers in Pretoria saw the world through different lenses and he found little consensus about, for example, “the nature and impact of mining unrest and strikes”.

While Treasury views the disruption as a one-off event, the mining industry and labour relations experts are seriously concerned that “the past couple of months could lead to a more long-running saga in a similar vein and more widespread”.

He said commentators saw an “ideology conflict in government”, reflected in differences between the National Development Plan of Planning Minister Trevor Manuel and the New Growth Path of Economic Development Minister Ebrahim Patel.

“The view in Pretoria is more of the latter being a hasty and highly political, labour-focused document to satisfy the unions, while the National Development Plan is a more considered and meaningful document that has wider buy-in.”

Farmworkers

Agri SA’s labour committee had held high level discussions with labour representatives to try to resolve the labour unrest on farms in the Western Cape, it reported yesterday. Anton Rabe, Agri SA’s labour committee chairman, acknowledged that there was dissatisfaction over much more than simply minimum wages. “Various social concerns also need to be addressed.”

One of the key problems in the Western Cape winelands and table grape regions, which have seen strike action and violent protests in recent weeks, was that many seasonal workers earned their entire annual income within a few months.

Agri SA agreed that the real wages should “preferably” be higher than the minimum wage, currently R69 a day.

It proposed that applicable wages be negotiated at farm level “because practices and circumstances differ between farms”. Performance bonuses should increasingly be used to supplement income.

Policies should be applied that could enhance agriculture’s profitability “as well as the sector’s ability to provide quality employment opportunities on a broad basis”.

The cost to company of labourers was in the region of R100 or more a day in peak season, “taking into account performance bonuses”. Agri SA argued that while no immediate commitment to “an interim remuneration offer” could be made, a new minimum wage must be the consequence of a process in terms of the Basic Conditions of Employment Act.

Labour Minister Mildred Oliphant has noted that a new determination could only apply from next April, in terms of the law.

Agri SA argued that the bigger picture needed to be seen. The focus should not be on a minimum wage, but understanding the farm labour situation’s complexity.

“A narrow-minded and short-sighted focus on the minimum wage denies the issue’s complexity and holds the potential to destroy job opportunities.”

It appears organised agriculture and organised labour are no closer to a resolution of the impasse than a few weeks ago.

Edited by Peter DeIonno. With contributions from Ethel Hazelhurst and Donwald Pressly.