Human Settlements Minister Tokyo Sexwale is providing a new boost to flagging bank profits by promising a R1 billion fund to guarantee against defaults by low-wage earners. This is the view of growing numbers of trade unionists following the announcement of this latest flagship scheme by the government.
Sexwale, a billionaire businessman with a wine farm in Franschhoek, a private jet and a mansion in Johannesburg - reportedly bought for R56 million, said the government fund would guarantee against home loan defaults by borrowers in the R3 500 to R9 000 a month income bracket.
These are the working people whose income is above the "ceiling" imposed for the government's reconstruction and development housing subsidy and below the "floor" established by the banks for those requiring home loan finance. But the unions point out that the banks have established a "floor", because the National Credit Act forbids them to extend credit to those unable to service loans.
By guaranteeing against default, the government is seen not only to be encouraging more reckless lending but, primarily, to be bolstering the profits of banks rather than benefiting poor homeseekers.
Workers in the targeted wage bracket would, in any event, probably not want one of the concrete block boxes that pose as houses in the townships.
Many unionists, supporting the contention that government policies are "pro-business" rather than "pro-poor", are quick to point out that Sexwale only resigned from the board of Absa when he resumed in earnest his political career in 2008. As such, the portrayal of the loan guarantee scheme as an aid to the poorly housed and homeless tends to be seen as a sop to dampen rising anger about recent price rises. These threaten the living standards of the employed and seem certain to drive into greater destitution the already marginalised.
There seems to be growing consensus in the local labour movement that the government plans to push through these cost of living increases behind a smokescreen of World Cup hype.
"It would appear that these huge price hikes are being implemented in 2010 with the hope that workers will not strike against them because of the World Cup," said Cosatu Western Cape regional secretary Tony Ehrenreich.
He was repeating a comment made last week, in which he added: "We will strike to stop these huge, uncoordinated price hikes, even during the World Cup, because we have no alternative as the burdens on communities are just way too high."
Although he was referring specifically to the DA-governed Western Cape, the price rises affect every corner of the country. The increase in the liquid fuel tax, the estimated 30 percent rise in transport costs, and the near 25 percent increase in electricity charges, will all have knock-on effects across the board.
In Cape Town there is also a 27 percent increase in household rates that will cost more for home owners and push up rents.
Given that average wage earners, often carrying large debt burdens, provide an unofficial social security net, each supporting an estimated eight to 10 dependents, this throws into sharper relief the double-digit wage demands being made by workers in many sectors. Rank and file resentment also accounts for the chilly reception for the loan guarantee scheme and the tougher stance adopted by union leaders.
Confederation of South African Workers Unions general secretary Khulile Nkushubana says: "Many politicians have links to the banks. And government housing policy as it exists, is ad-hoc, with policies that benefit banks and those who win the tenders to build houses."
Cosatu spokesperson Patrick Craven and Federation of Unions of SA general secretary Dennis George are more diplomatic, but agree that government policies in vital areas, such as housing and unemployment, have been piecemeal, often illconsidered and ad hoc. "There has also been accompanying looting," says Craven.
In another reflection of rising general resentment, National Council of Trade Unions general secretary Manene Samela maintains that the problem lies "with people who still think in a capitalist way".
Housing and youth unemployment policies fit this bill. "In both cases, they benefit business," said Samela. He noted that all four labour federations had condemned the proposal to provide wage subsidies to employers for giving jobs to young workers.
"It's another example of good intentions with negative consequences," says George. According to Cosatu, any subsidy scheme would introduce a third tier of "super-super exploited workers" in what is already a two-tier labour market, where constant pressure exists to drive down wages and conditions. Wage subsidies are seen as handouts to business that contribute toward a "race to the bottom".
A number of unions have complained, for example, that the current learnership scheme of subsidised employment training is being used to create a "rotating door" of cheap, casual labour. According to unions, what is needed is a coherent and comprehensive set of policies that will provide more jobs, alleviate poverty and help towards building an integrated society.
Samela said: "On the housing front, what we need is a massive programme of state-house construction."
George agrees and proposes that the National Economic Development and Labour Council, the tripartite negotiating forum, discuss a policy of providing state-rental housing, "where rents would not exceed 30 percent of a worker's wage".
Ironically, in 1993, a "decent housing" proposal, supported by the National Union of Metalworkers, was shot down by then Cosatu general secretary Jay Naidoo. It was suggested the unions use their pension and provident funds to buy up blocks of flats for sale and rental, at preferential rates, to union members. "Too capitalistic," said Naidoo - today a leading capitalist.
Unionists are now looking to this example and to other international lessons as they prepare to fight for a change of economic policy direction that will benefit the community as a whole. Bread for all beyond the lauded circus of the World Cup seems a reasonable demand.
Sexwale, a billionaire businessman with a wine farm in Franschhoek, a private jet and a mansion in Johannesburg - reportedly bought for R56 million, said the government fund would guarantee against home loan defaults by borrowers in the R3 500 to R9 000 a month income bracket.
These are the working people whose income is above the "ceiling" imposed for the government's reconstruction and development housing subsidy and below the "floor" established by the banks for those requiring home loan finance. But the unions point out that the banks have established a "floor", because the National Credit Act forbids them to extend credit to those unable to service loans.
By guaranteeing against default, the government is seen not only to be encouraging more reckless lending but, primarily, to be bolstering the profits of banks rather than benefiting poor homeseekers.
Workers in the targeted wage bracket would, in any event, probably not want one of the concrete block boxes that pose as houses in the townships.
Many unionists, supporting the contention that government policies are "pro-business" rather than "pro-poor", are quick to point out that Sexwale only resigned from the board of Absa when he resumed in earnest his political career in 2008. As such, the portrayal of the loan guarantee scheme as an aid to the poorly housed and homeless tends to be seen as a sop to dampen rising anger about recent price rises. These threaten the living standards of the employed and seem certain to drive into greater destitution the already marginalised.
There seems to be growing consensus in the local labour movement that the government plans to push through these cost of living increases behind a smokescreen of World Cup hype.
"It would appear that these huge price hikes are being implemented in 2010 with the hope that workers will not strike against them because of the World Cup," said Cosatu Western Cape regional secretary Tony Ehrenreich.
He was repeating a comment made last week, in which he added: "We will strike to stop these huge, uncoordinated price hikes, even during the World Cup, because we have no alternative as the burdens on communities are just way too high."
Although he was referring specifically to the DA-governed Western Cape, the price rises affect every corner of the country. The increase in the liquid fuel tax, the estimated 30 percent rise in transport costs, and the near 25 percent increase in electricity charges, will all have knock-on effects across the board.
In Cape Town there is also a 27 percent increase in household rates that will cost more for home owners and push up rents.
Given that average wage earners, often carrying large debt burdens, provide an unofficial social security net, each supporting an estimated eight to 10 dependents, this throws into sharper relief the double-digit wage demands being made by workers in many sectors. Rank and file resentment also accounts for the chilly reception for the loan guarantee scheme and the tougher stance adopted by union leaders.
Confederation of South African Workers Unions general secretary Khulile Nkushubana says: "Many politicians have links to the banks. And government housing policy as it exists, is ad-hoc, with policies that benefit banks and those who win the tenders to build houses."
Cosatu spokesperson Patrick Craven and Federation of Unions of SA general secretary Dennis George are more diplomatic, but agree that government policies in vital areas, such as housing and unemployment, have been piecemeal, often illconsidered and ad hoc. "There has also been accompanying looting," says Craven.
In another reflection of rising general resentment, National Council of Trade Unions general secretary Manene Samela maintains that the problem lies "with people who still think in a capitalist way".
Housing and youth unemployment policies fit this bill. "In both cases, they benefit business," said Samela. He noted that all four labour federations had condemned the proposal to provide wage subsidies to employers for giving jobs to young workers.
"It's another example of good intentions with negative consequences," says George. According to Cosatu, any subsidy scheme would introduce a third tier of "super-super exploited workers" in what is already a two-tier labour market, where constant pressure exists to drive down wages and conditions. Wage subsidies are seen as handouts to business that contribute toward a "race to the bottom".
A number of unions have complained, for example, that the current learnership scheme of subsidised employment training is being used to create a "rotating door" of cheap, casual labour. According to unions, what is needed is a coherent and comprehensive set of policies that will provide more jobs, alleviate poverty and help towards building an integrated society.
Samela said: "On the housing front, what we need is a massive programme of state-house construction."
George agrees and proposes that the National Economic Development and Labour Council, the tripartite negotiating forum, discuss a policy of providing state-rental housing, "where rents would not exceed 30 percent of a worker's wage".
Ironically, in 1993, a "decent housing" proposal, supported by the National Union of Metalworkers, was shot down by then Cosatu general secretary Jay Naidoo. It was suggested the unions use their pension and provident funds to buy up blocks of flats for sale and rental, at preferential rates, to union members. "Too capitalistic," said Naidoo - today a leading capitalist.
Unionists are now looking to this example and to other international lessons as they prepare to fight for a change of economic policy direction that will benefit the community as a whole. Bread for all beyond the lauded circus of the World Cup seems a reasonable demand.
- Business Report
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