SONA reaction mixed

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President Jacob Zuma’s State of the Nation Address has elicited a mixed response from business, unions, politicians and the commentariat with the first two largely positive, the opposition largely negative and the commentators divided.

The South African Chamber of Commerce and Industry (SACCI) and Business Unity SA (BUSA) said Zuma’s message was encouraging.
“The tone of the President’s address, supported by the promise of improved economic activity and growth, is encouraging to business and should promote business confidence at a time when business confidence is constrained,” SACCI said in a statement.

But while the business body welcomed government’s commitment to a year of action, it was concerned at the lack of detail in commitments, other than in five priority areas: education, health, rural development and land reform, creating decent work, and fighting crime.
“We anticipate that the delivery and implementation of the strategies outlined would be as sound as the promises and commitments made in the address,” the business body said. In his address, Zuma said that an independent system operator other than Eskom was to be established – a move which the business chamber also welcomed. SACCI also welcomed government’s plan to address youth unemployment. “We look forward to engaging with government on these proposals.”

Government’s placing priority on education and skills development in its policies along with the infrastructure spending increase to R846 billion will create a sound base for stronger economic development was also well received.

SACCI said undertakings to address crime were long overdue. “SACCI seeks measurable improvements in the reduction of crime at all levels and to improved efficiencies in the judicial system, particularly as it impacts reputational risks relating to the hosting of the soccer world cup.”

The business body said it would have liked to see the creation of more jobs although it applauded the creation of 480 000 new non-mainstream jobs as announced by the President.

BUSA largely agreed, saying it agreed “that it is now crucial to focus on economic recovery, growth and employment in the aftermath of the global economic crisis.” It added the “current realities require equal partnerships amongst all sectors of society in responding to the necessary call for action.

The business lobby said the overall “theme of improving government performance through the introduction of clear performance measurement instruments can only enhance public sector efficiency. Business will make further submissions on the role of the private sector in improving service delivery and outcomes.
“We are pleased to hear of the renewed emphasis on human capital investment which should underpin long-term competitiveness and productivity gains. The infrastructure programme is also expected to further stimulate domestic demand and its implementation can be facilitated through increased use of public private sector partnerships. BUSA believes it would have been appropriate to address some of the underlying competitiveness issues which continue to negate long term prosperity and job creation.
“The deregulation of the electricity market, through the establishment of Independent System Operator will increase private sector participation in the electricity sector and is most supported. “This measure combined with the development of an Integrated Resource Plan under the guidance of the Inter-Ministerial Committee on Energy should improve security of energy supply in South Africa. We eagerly expect details around the regulatory changes which are necessary to ensure progress on this issue,” BUSA added.
“Business renews its commitment to partnerships with other social partners, in not only wanting to better outcomes for all South Africans; but we remain committed to Madiba’s [Nelson Mandela’s] ideals of reconciliation and nation building.

Peter Attard Montalto, an emerging markets economist at Japanese bank Nomura was less impressed. “Overall, I think the speech was pretty unsurprising and there was little new policy on the economic front with still no real consensus about the need for fundamental economic change in the country and upside risks to budget. We must await the new industrial policy to see what that can deliver.”

Trade unions

Trade unions were also upbeat. The general secretary of the Southern African Clothing and Textile Workers Union (SACTWU) welcomed the broad policy direction outlined by the President. “We now look forward to the details and call for increased resources to be allocated for industrial policy implementation measures to build labour absorbing industries, such as clothing and textiles by the various responsible ministries, in particular by the minister of finance in his budget speech next week,” said Andre Kriel.

The Solidarity trade union was less sanguine. Spokesman Jaco Kleynhans said taxpayers’ money should not only be used for redistribution to the unemployed, but government should create a climate where economic growth makes job creation in the private sector possible. “Unfortunately not much was said about how the private sector will be supported.”

Solidarity also welcomed the increased spending on infrastructure. “Over the past few years government, especially on municipal level, allowed the infrastructure to deteriorate badly. However, part of the problem is the scarcity of workers who have the right skills. Over the past few years affirmative action led to large skills losses on all levels of government. The president did not touch on this topic.”
“We welcome the President’s announcement that government will protect the poor against rising electricity prices. But what about protecting the middle class against high power rates? What about small businesses that are some of the foremost job creators in our country? If the middle class and businesses are not protected against high electricity prices it will only lead to larger unemployment.”
“Government should stop talking about access for private electricity suppliers and start creating opportunities for private companies to get involved in this sector,” said Kleynhans. Solidarity is happy to hear that the performance of state departments will be monitored better. “However, we would like to see how and when this will happen.”

The mostly-white union said it is especially concerned about the increase in violent crimes in South Africa. “It’s a pity the president didn’t say anything about the farm murders. The increase in police members as well as the president’s commitment to community policing are welcomed. How government will support communities to safeguard themselves better remains to be seen.”
“The president’s speech was full of promises about education, health and other topical issues. However, Solidarity is disappointed that the president did not make any mention of the negative effect of affirmative action and the protection of minority rights,” Kleynhans concluded.

SACTWU’s parent federation, the Congress of SA Trade Unions (COSATU),a somewhat restive government ally, also welcomed Zuma’s announcement that government was looking at subsidising the cost of hiring younger workers to encourage firms to take on inexperienced staff. “We are very pleased to hear this commitment because we believe it will go a long way to speed up the creation of work opportunities we have been talking about,” said federation president Sdumo Dlamini. He said Cosatu had always called for stronger intervention to assist unskilled young people to penetrate the job market.

But COSATU general secretary Zwelinzima Vavi had a different view: “Overall (on) the issue of jobs, poverty and inequalities, I’m quite disappointed. I would have thought that the president would acknowledge that South Africa was in a crisis, even before the recession. I’m more disappointed that he didn’t speak about the labour brokering in the country, that he didn’t say specifically that the ANC has made a commitment to prohibit all the extremely exploitative measures associated with the labour brokering industry.
“He didn’t engage with the issue of the macroeconomic strategy. I like the de-emphasising of the macroeconomic strategy because I think that over the past 15 years South Africa overly emphasised and focused on the macroeconomic policies to the exclusion of a growth path and industrial strategy.”

Political response

Zuma’s address was met with mixed response from leaders of various political parties. “The president is in line with the priorities that we have outlined for ourselves and those priorities when you speak about them you speak about the youth because we are a youthful country, a country full of young people who are in the majority are unemployed,” said ANC Youth League President Julius Malema.

He said the league would carefully monitor the job opportunities created by Zuma’s administration as to whether these were sustainable opportunities which also benefited youth.

SACP deputy secretary general Jeremy Cronin – and transport deputy minister – welcomed Zuma’s speech: “I think at the heart of the speech was an emphasis on the key priorities facing the majority of South Africans: jobs, crime, corruption, health and rural development”.

He commended the proposal by government to consider subsidizing the wages of youths. “There is something like 2.5 million young people that are neither in school or in education and training who are potentially a lost generation, so that’s a massive long-term and medium-term crisis for our country and we really need to deploy all the resources we can to address this issue, so one looks forward to seeing the further details,” said Cronin.

Democratic Alliance leader Helen Zille and parliamentary leader Athol Trollip as well as other opposition leaders largely criticised Zuma’s speech. Trollip commended the President on the proposal to subsidise the wages of youth workers, pointing out that this was in fact a DA policy. Trollip said Zuma’s speech was disappointing, saying the president had not created enough jobs and said he and presidents before him should have already had a performance system in place.

Zille said Zuma’s address was insubstantial. “It was full of promises, rather vague and certainly insubstantial as to how he plans to do all the things he says he is going to do,” she said. “He said he is going to do some things, like for example wage subsidies for young people. That is straight out of DA policy. Now the big challenge is to implement them and make then work. But, there was a precious lack of detail. Again, assertions about we will do this and we’re committed to that, but frankly, none of the how.”

Freedom Front Plus leader Pieter Mulder said there was still a lack of specific details on how government planned to improve teacher training and quality of education especially at primary level. “But also to be positive there are specific achievements that the president has highlighted especially on stamping out corruption in the public service,” said Mulder. Mulder is deputy agriculture minister.

Inkatha Freedom Party leader Mangosuthu Buthelezi said the 480 000 work opportunities that Zuma mentioned in his speech was “misleading” as these were only temporary jobs.

Congress of the People parliamentary leader Mvume Dandala described the speech as “one of the most disappointing speeches one has heard. “Firstly it was lacking in vision. At this point what you need is a galvanising speech to galvanise the people.” The speech lacked compassion, notably for crime victims. “I was thinking the president would at least recognise that damage,” Dandala said.

African Christian Democratic Party leader Kenneth Meshoe was blunt, calling Zuma’s speech “shallow”. It did not have depth and “we are disappointed that fighting corruption is not one of the five priorities of government,” he said.

The United Democratic Movement said it was an “unimpressive” speech laden with “planning”. “How much more longer do we need to hear about ‘planning’ without actual delivery taking place?” party leader Bantu Holomisa said. The uncertain and hesitant delivery of the speech reflected “uncertain and stuttering attempts” by the government to deliver on its basic obligations.

It was “broad brush strokes with no particular detail,” Independent Democrats leader Patricia de Lille said.

Independent political analyst Nic Borain said the speech contained some “excellent stuff about accountability of government, concrete stuff about independent power producers and first-time youth workers … increased policing (so) all of that is good. A lot more in this state of the nation than one has come to expect from such addresses. “I was quite surprised with the claim of job creation … it just doesn’t work with me. It sounds like a massaging of figures.”



University of SA law professor and commentator said the speech “was not inspiring. It was more of a regurgitation of policies, rather than really dealing with what has happened in one year since the last state of the nation, and to that extent it was disappointing. He really tried to avoid areas which are controversial because of his ongoing personal life controversies, like HIV/Aids, government policy and what the message is.
“And I think that is to be expected of course because he is a human being but he grossly tried to downplay that which was one of the defining differences between his administration and that of the former administration. But because of his personal conduct and behaviour, he couldn’t mention it robustly. So I think he has done a lot of damage to that in practice.” With Reuters and BuaNews