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Policy responsible for ‘retrenchment bloodbath’

Publish date: 22 January 2020
Issue Number: 319
Diary: Legalbrief Workplace
Category: Economy

Government's economic policy was responsible for the ‘retrenchment bloodbath’ in the manufacturing sector, trade union Solidarity says. The union's deputy general secretary for mining and engineering, Willie Venter, is quoted in a Polity report as saying that government needed to urgently re-evaluate its existing economic policies that suppressed the manufacturing industry, in order to avert job losses. ‘The government makes it impossible for companies to compete internationally because of its role in increased productions costs, the erratic electricity supply and increases in electricity tariffs, which are the main reasons for the retrenchments,’ said Venter. Solidarity would assist its members during the retrenchment process, he said. ‘The government must take note of the umpteenth indicator that the contraction of the manufacturing industry is continuing, and that an urgent re-evaluation of the existing economic policy is needed to prevent further job losses,’ Venter warned.

Full Polity report

The SA labour force is set to lose a pile of jobs. And, says a Daily Maverick report, the World Bank has cut its economic growth forecast for SA to below 1% for 2020 due to electricity supply concerns. It now expects the economy to expand by 0.9% in 2020. The report says President Cyril Ramaphosa’s jobs summit, convened in 2018, forecast the creation of 275 000 jobs a year. But the country’s prospects have not been helped by the President reportedly acknowledging that contrary to the jobs summit forecast, SA would not be able to reach the goal of reducing the unemployment rate to 6% by 2030, as outlined in the National Development Plan.

Full Daily Maverick report

Finance Minister Tito Mboweni says, meanwhile, that the ‘never-ending demands’ of state-owned enterprises (SOEs), the public sector wage bill and corruption and general mismanagement are the major threats to SA’s fiscal sustainability. Business Day reports that Mboweni was speaking ahead of the departure of SA’s delegation of business and government leaders to the World Economic Forum in Davos, Switzerland. ‘The major threats to fiscal stability in SA are clear,’ said Mboweni, starting with the demands from SOEs. The growing public sector wage bill, though ‘difficult to talk about’, is another ‘huge threat to our fiscus’, Mboweni said. ‘And this has to be approached responsibly in trying to find a solution, before the February budget,’ he said.

Full Business Day report