Deputy President Kgalema Motlanthe visited the Soshanguve Technical High School. Picture: Etienne Creux

Johannesburg - Cosatu on Thursday expressed disappointment at Deputy President Kgalema Motlanthe for welcoming the Walmart-Massmart merger.

“This flatly contradicts the view of his three cabinet colleagues,” said Congress of South African Trade Unions (Cosatu) spokesperson Patrick Craven, after Motlanthe reportedly told parliament on Wednesday that the government was “happy” that the giant US retailer had chosen South Africa as an investment destination.

“They have done a very thorough assessment, they have been through the Competition Tribunal and they were given the thumbs-up,” Motlanthe was quoted in the Business Day.

“What Walmart are saying is that all investors must come to South Africa. We agree with them and are very happy this is what they have done.”

The question posed to Motlanthe was reportedly from Congress of the People MP Juli Kilian, who asked about the 70-percent decline in foreign direct investment in South Africa from 2009 to 2010; and what Motlanthe thought of the fact that Angola consumed 20-percent of all foreign investment into Africa.

“Cosatu is deeply disappointed with [his] stance,” said Craven, adding that Motlanthe was going against the wind as his own cabinet ministers were “quite rightly” worried about a loss of jobs in both retail and manufacturing sectors, as a result of the merger.

Economic Development Minister Ebrahim Patel, Trade and Industry Minister Rob Davies and Agriculture, Fisheries and Forestry Minister Tina Joemat-Pettersson have jointly applied to the Competition Appeals Court, supported by trade unions, to have the approval for the Walmart-Massmart deal reviewed.

They also want stronger conditions to be imposed.

“So while his government comrades are courageously battling to represent the best interests of the majority of South Africans ...the deputy president assures DA Parliamentary leader, Lindiwe Mazibuko, a hardcore class enemy to the ANC's constituency - the working class, that Walmart is welcome!,” said Craven.

Cosatu and the South African Commercial, Catering and Allied Workers Union have expressed similar concerns to those of the three ministers, based on the evidence from around the world that Walmart's entry into the retail market leads to the closure of rival retail stores.

Craven said Walmart's entry into South Africa would mean the procurement of goods from the cheapest source with no regard to the wages and conditions of the workers producing them, and the creation of a monopoly.

“This could lead to a drastic further weakening of the South African manufacturing industry, as more and more cheap imports start to fill Massmart stores' shelves,” he said.

Craven further spoke against Motlanthe's stance on the youth wage subsidy - a policy which the ANC national general council rejected in 2005 - saying Motlanthe was “grossly misrepresenting the unions' arguments”.

According to Business Day, Mazibuko said in parliament that government continued to stall on introducing the much needed youth wage subsidy.

Motlanthe reportedly replied that the matter was still being discussed at Nedlac and that it was important for the subsidy not to be resisted by unions, “which believed it would casualise labour”.

“ It's that fear of competition by employed workers, and we believe that through that discussion in Nedlac consensus will emerge.”

However, Craven said the unions' arguments had nothing to do with a “fear of competition”.

“They are based on a conviction that employers will use the subsidy as an excuse to retrench older workers on the present pay levels and replace them with workers for whom they can claim the subsidy, and thus create a two-tier wage structure,” he said.

Craven said Motlanthe was reinforcing Treasury efforts to bring this “discredited policy” through the back door.

He said Motlanthe's parliamentary answers were giving mixed signals to South Africans. He said they were bound to lead to “policy paralysis confusion” in society.

“Cosatu demands that the deputy president defends ANC and government policies like the disciplined cadre we have known him to be.” - Sapa