DA Shadow Minister on Labour Budget: We need to address the real problems in this department

SPEECH BY ANDREW LOUW MP DA SHADOW MINISTER OF LABOUR 13 APRIL 2010

Unemployment: Honorable Speaker, unemployment has no race, it sees no colour but it affects all, irrespective of your background in society. In his Budget Speech, the Honorable Minister of Finance highlighted the key spending priorities of government to create a better life for all. One of the main focus areas raised by the Minister is job creation. The Minister quite correctly said that one in four adults seeking work is unemployed and almost half our young people have not found work.

The Democratic Alliance agrees with the minister that job creation is of the utmost importance because not only will people with jobs be able to look after themselves and their families financially, but these people will be afforded the opportunity to contribute to tax revenue, create wealth in the economy, look forward to better schooling opportunities for their children, as well as building a sense of self esteem.

Proposed allocations of R52 billion over the next three years for the Expanded Public Works Programme are therefore disconcerting. Although the aim is to create 4.5 million job opportunities, the jobs are unfortunately of a short term nature and as a result no, or very little, skills transfer takes place. The DA is of the opinion that the funds provided for the EPWP programme should rather be used to extend the youth unemployment programme and to grant more assistance to small and medium enterprises.

The DA has said it in the past and we will say it again. The SETAs don’t work: instead, we need a system that incentivizes on-the-job training and apprenticeships. The DA therefore urges the government of the day to reopen all nursing colleges, teaching colleges and apprenticeship training centers to create an environment for our young people to become self sufficient and to restore pride to all our people. By doing this, our skills shortage will automatically be addressed.

The fact that 267 000 South Africans lost their jobs in the first and second quarter of 2009 according to data released in Stats SA’s Quarterly Labour Force survey, was a clear signal that the ANC’s stance on labour policy is misguided and ultimately destructive to employment creation. Meanwhile, the increase in unemployment to 31.1% in the third quarter was a clear and urgent signal to the ANC government that the status quo on labour regulation is not workable, nor sustainable. The results for the fourth quarter of 2009 further demonstrated that President Zuma failed dismally in his promise to create 500 000 new job opportunities by the end of last year. Instead under the Zuma administration, about half a million jobs have been lost, and during the whole of 2009, the South African economy shed 870 000 jobs.

The creation of real jobs and the eradication of poverty is one of the primary challenges facing South Africa. The solution to this problem lies in embracing the market, relinquishing control over certain key aspects of the economy and establishing an environment in which investment is encouraged, entrepreneurship awarded and small and medium sized business supported and allowed to grow.

Unfortunately this government is moving in the opposite direction. Under the auspices of the ‘developmental state’ it is seeking to maintain its control and, indeed, if the new industrial policy is anything to go by, increase it. This is wrong. Central to arresting this approach is the realization that the market is best placed to generate prosperity and wealth and not the state.

Compensation fund: The Compensation Fund needs to urgently get its house in order and deliver on its mandate of compensating injured workers, instead of allowing fraud and corruption to run rife. Chairperson, last year the Compensation Fund received a disclaimer of opinion from the Auditor General, however, this year it seems that the fund is not making any progress by taking heed of processing claims.

Instead the Department of Labour has admitted before the Standing Committee on Public Accounts (SCOPA) that the fund has been defrauded to the tune of R24.6 million in false claims. The Compensation Commissioner told members of parliament that medical doctors colluded with staff to create these false claims and that 11 of the staff have been arrested and prosecuted in this regard. However, R57 million remains unaccounted for in their financial statements, yet millions of prospective beneficiaries in South Africa are going without food on a daily basis due to the frustration created by the Compensation Fund.

In fact, in response to a parliamentary question posed by the DA, it has been revealed by the Minister of Health, Dr Aaron Motsoaledi, that the Commissioner for Occupational Injuries and Diseases has processed less than 17% of all claims it received in 2009 – and that this has been the pattern over most of the past five years.

The Commission is supposed to provide cover for medical expenses for workers injured on duty, and all employers contribute to the fund. This reply is therefore a serious indictment of a government institution mandated to protect workers. There is no defence for this level of neglect of such a vulnerable group. These applications have been injured while contributing to society. The excuse that literacy levels are to blame is invalid – there are multiple ways to contact an injured worker, and the Commission should be using creativity and initiative to do so instead of simply accepting the problems as fact. This is its job, after all.

The response just goes to show that actual service delivery is nowhere on the priority list of the Commissioner. The Minister of Labour should help those who can’t help themselves by transforming the currently inaccessible system of the compensation fund into a system characterised by a caring environment in which claims are processed in a quick and user friendly manner.

Labour brokers: It is clear that Cosatu is only interested in one thing: increasing their influence in the labour market and securing monthly membership fees. The real concerns of the unemployed and those who do suffer at the hands of rogue labour brokers are not a priority at all to Cosatu.

It is now clear that the Minister of Labour, Membathisi Mdladlana, has been forced by the weight of evidence to rethink on his promise to ban labour brokers. In response to a series of parliamentary questions posed by the DA, nine government departments have admitted to making use of labour brokers, at a cost of R123 million.

This is no surprise but the reasons given supply overwhelming evidence as to the necessity of labour brokers. The figures also show that they are necessary for the efficient running of government – which poses further questions as to why certain government departments flatly deny making use of their services.

It seems as if the appeasement of Cosatu does have its logical limits – one cannot blindly reject the solid facts and reasonable arguments that show that labour brokers do have a role to play in the labour market.

The Minister of Labour, Membathisi Mdladlana, has never uttered a single word of concrete policy suggestions – only threats to ban labour brokers. The empty rhetoric and rabid threats by the Hon. Mdladlana have now been exposed for precisely what they are – a cheap trick to shore up support with Cosatu members ahead of the 2009 National Election even while knowing that his threats would never materialize.

If the Hon. Mdladlana had been serious about the abuse taking place on the periphery, then there would have been a clear and level headed debate. Instead, the abuse of workers has been used to promote the ANC, rather than address the real issues. The DA has proposed a comprehensive plan on the problem of workers abuse in the fringe of the labour broker industry. The DA urges all parties, especially the backbenchers in the ANC, to give proper consideration on the DA’s proposals, which are based on best practice.

MEDIA ENQUIRIES: Andrew Louw MP – 082 383 6914

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