No more privatisation! 07 - 04 - 06

No more privatisation!

The Congress of South African Trade Unions is deeply concerned at the decision by Cabinet to approve in principle a strategy for the disposal of non-core properties of state owned enterprises (SOEs).

COSATU has consistently opposed the privatisation of essential services on the grounds that in invariably leads to:

• A deterioration of service, especially to the poorest communities, as the ethos of public service is replaced by pursuit of quick profits;
• Job losses, as the new private owners try to cut their costs and extract as much labour from as few workers as possible;
• Widening the already massive inequality in the distribution of wealth, as the new owners enrich themselves, and bring no benefits to the majority of the people;
• Limiting the ability of government to intervene to achieve social objectives, including job creation, better service delivery and protection of the environment.
  

COSATU rejects the distinction the Cabinet tries to make between 'core' and 'non-core' properties. What is important is the kind of service that these entities provide, not whether or not they are defined as 'core'. 'Non-core' businesses may well provide services which are just as essential to the country as the 'core' ones.

This was an issue during the recent Transnet dispute. The Autopax service for example was presented to the unions as a 'non-core' component of Transnet, when it fact it plays a vital role in providing public transport and clearly comes into the category of essential services.

It is particularly alarming that the government claim that the strategy of selling off 'non-core' functions "forms part of the programmes of Accelerated and Shared Growth Initiative for South Africa (AsgiSA)" and that it will "ensure that government leverages as much of these properties as possible for purposes of promoting urban and light industrial development and other projects in various parts of the country".

AsgiSA is supposed to be an initiative to share out the country's growing wealth more equitably. Selling off public assets will do exactly the opposite. It will enrich a small minority who have the money to buy these assets from the state and deepen the poverty of the people who work for, or rely on the services provided by, these utilities.

Far from ensuring that the government can do more to promote industrial development it will do exactly the opposite, as the new owners seek the way to make the biggest profit, rather than to promote development.

The government has identified unemployment and poverty as priority issues. It should therefore abandon plans for any further privatisation of essential services. As a central plank of its Jobs and Poverty Campaign, COSATU will continue to campaign for a strong development state, which owns and control the country's essential services and uses them to create jobs and improve the lives of the majority of the people.