Blade Nzimande, the General Secretary of the South African Communist Party. The SACP campaigned on behalf of the ANC for an electoral victory in the national poll held on April 22, 2009. Nzimande was appointed as minister of higher education.
Originally uploaded by Pan-African News Wire File Photos
11 September 2009, Moyo Restaurant, Spier Estate, Stellenbosch
Good evening ministers, ladies and gentlemen, colleagues, comrades and friends.
Thank you very much for accepting our invitation to the SACP fundraising dinner this evening. And a special word of thanks to my fellow Cabinet colleagues who hosted plenary sessions this afternoon with some of our guests:
Minister of Finance, Pravin Gordhan
Minister of Trade and Industry, Rob Davies,
Minister of Public Works, Geoff Doidge
Minister of Agriculture, Tina Joemat-Pettersson,
Deputy Minister of Local Government, Yunus Carrim
Deputy Minister of Transport, Jeremy Cronin
We are indeed very grateful to all of you for making the time to engage with our guests in the plenary sessions. We have had to find innovative ways of raising Party funds in these hard times, and want to do so in an open and transparent way. I think we will all agree that the plenary sessions were a very useful forum, where we had some lively discussions.
Without wanting to dampen your spirits, it is to dealing with hard times that I now want to turn. The impact of the Global Economic Crisis on South Africa is affecting all of our lives. Dining here tonight at Spier Estate in the beautiful Stellenbosch winelands, it is difficult to imagine that our country is in the grip of the worst economic crisis for 18 years. Not since the dying days of apartheid have South Africans felt the icy hand of recession, faced the massive job losses, the deprivation and consequent social upheaval that we face today.
The SACP`s entry point on this crisis is that it is a crisis of capitalism, a crisis caused by a system based on greed and the exploitation of the majority by a minority. And it should not be the workers and the poor who are made to pay for the crisis.
The Party cautions against any notion that this will be a mere short-term hiccup that will allow an early return to business as usual for global capitalism. We have gone back to the teachings of Karl Marx to understand the nature of the current crisis. Marx taught us what he called the `circuit of capital` - that Capitalism is inherently unable to develop along a path of uninterrupted growth and development. The system periodically confronts crises arising fundamentally from over-production of capital. During such crises, capital in one or other of its various forms, is destroyed, as we have witnessed on a grand international scale in the past two years.
Against this backdrop of global capitalism in crisis, South Africa, like other developing countries which are strongly integrated into the world economy and significantly dependent on its good health, has been affected by the sharp fall in demand for its export products and the fall in prices of export commodities, leaving mining, manufacturing and other sectors in distress.
Government is committed to doing all it can to help companies in these distressed sectors. Financing interventions, designed to help mining, auto, construction, clothing and textile and others sectors to survive, and importantly, to keep workers in jobs - are being implemented.
As the President announced recently, Cabinet has approved a R2,4 billion Training Layoff Scheme, in terms of which workers will be able to attend training courses instead of being retrenched. Initial funding of R1,2 billion will come from the National Skills Fund, with a matching amount from the Unemployment Insurance Fund. Our implementing agencies are the CCMA and the SETAs, which from the beginning of November will fall under my department. We are relying on these agencies to ensure a successful pilot phase, starting this month.
Business and Labour representatives who sit on SETA boards have a vital role to play in ensuring the Scheme succeeds. We cannot allow poor SETA performance to hamper delivery of the Scheme. For thousands of workers, the Training Layoff Scheme will be their only chance of avoiding retrenchment and still being able to put food on their tables. For hundreds of employers, this Scheme will be their only means of keeping their workforce in jobs, even if only in the short-term.
While we should congratulate ourselves as social partners on reaching consensus in how to deal with the negative impact of the economic crisis, there is an unevenness in the manner in which sections of big business are responding to these commitments, and this is a matter which should concern us all.
We need to note, obviously with benefit of hindsight, that in the Framework Agreement shaping our response as a nation to the crisis, which was adopted by the social partners in February, we did not give sufficient attention to processes of focusing on sectoral response plans, especially with regard to the role of the private financial sector in mitigating the impact of the crisis.
The SACP is concerned that the banks in particular are not effectively responding to cushioning the impact of the crisis on consumers in general and more especially on workers in distressed sectors of the economy.
Since adopting the Framework Agreement, South Africa has formally moved into recession for the first time since 1992, and government revenue will be up to R100 billion lower than expected. Realising our commitments to providing decent work, healthcare, education and to promoting rural development, will be an even greater challenge than we had anticipated.
Much as the current capitalist crisis is now engulfing the entire global economy, its most immediate origins were in the financial sector. The international credit crisis has meant that funds have become scarce and expensive and that portfolio investors are wary of emerging markets, including South Africa.
Worryingly, we hear that the most vulnerable workers are taking retrenchment packages because it is the only hope they have of keeping their homes and paying off at least some of their debts. This last resort is being taken by workers in sectors which have been on short-time for a while, such as the auto sector, where workers have for most of the past year been working maybe three days a week, and taking home three-fifths of an already low wage.
Efforts like the Training Layoffs Scheme could come to nothing if workers are being hounded by banks to pay off debts and are being threatened with repossession of their goods. The reality is that a wage packet of R500 a week may be enough for a family to get by, but when it shrinks to R300, the breadwinner cannot make ends meet. Taking a retrenchment package seems like a viable, if short-term, solution.
* Banks are responsible for 90% of the total R1,1 trillion in consumer credit in our economy.
Numbers of borrowers who can`t keep up with their debt repayments are exploding, with loans totalling R20 billion affected by defaults. And R12 billion of this is mortgages.
The National Credit Regulator has received over 100 000 applications for debt counselling and they continue to flood in at a rate of 10 000 a month.
Sixty per cent of these include debts for mortgage bonds, meaning some R16 billion in mortgages is affected by debt counselling.
At the same time, there has been a dramatic decline in credit granted since the start of the crisis. In the last quarter of 2007, R102 billion was granted in credit but the total had plummeted to R52 billion in the first three months of this year.
Banks profess not to be in the repossession business, claiming they would rather leave assets like houses and cars in the hands of borrowers. Yet in the past year, we have seen banks repossessing up to 6 000 vehicles and up to 4 000 houses a month. What are the banks doing to ensure that workers who lose their jobs do not also lose their homes?
Why can`t we negotiate a moratorium on bank repossessions of houses of workers affected by the global crisis? After all, the banks were responsible for getting us into this mess in then first place. Many people are in trouble because of credit that was extended during the wave of reckless lending by banks immediately before the National Credit Act came fully into effect in 2007.
At the same time as factories and mines are slowing down or even closing, credit blacklisting is one of our few growth industries. Credit bureaus report they are adding 50 000 people a month to the list of bad credit records - oblivious to the plight of retrenched workers and the families and communities into which they have to be reabsorbed.
Should we not be discussing a national agreement on bailing out distressed and vulnerable workers, as well as rescuing the distressed sectors in which they work? We need a national plan to make sure that workers who lose their jobs do not also lose their houses. As well as protecting industries and companies, we must protect workers and households.
As we say in the SACP, Asikhulume!
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