Statement on the Cabinet meeting of 18 August 2010, Cape Town

19 Aug 2010

Cabinet held its ordinary meeting in Cape Town yesterday, 18 August 2010.

Cabinet is disappointed with the public sector unions' rejection of the state's offer of a 7% annual increase and the R700.00 a month housing allowance for public servants. The offer is already way above the inflation rate of 4.5 %. The state's final offer represented a move from the original offer of 5.2 % and a R500.00 a month housing allowance. This is a clear demonstration that Government was negotiating in good faith in an attempt to meet the demands of our employees.

While Government fully understands and appreciates the plight of all the public servants regarding low wages, it has to be mindful of its responsibilities to all South Africans as the final offer already places a huge burden on the fiscus. We had to make a choice between increasing the salary bill to unaffordable levels by meeting the union demands and cutting other urgently needed services.It's a choice between improving the wages of state employees and continuing to address the service delivery needs of poor communities and the unemployed.

Although the R700 a month housing allowance is what is affordable at this stage, Cabinet acknowledges that this amount does not necessarily respond adequately to economic realities experienced by our employees. However, we appeal to the unions to appreciate that this is what is affordable at this stage.Cabinet noted that there is a need to explore other sustainable approaches to assist South African workers in general who cannot access housing loans from the banks due to low wages. Government is willing to discuss this challenge with the unions after the resolution of the current impasse.

It must be noted that the final offer will have a carry-through effect of a further R2.7 billion in the 2011/2012 financial year. The 8.6 % demand is simply not affordable as every additional cent spent on salaries means less money for other essential services to the public. Increasing personnel expenditure means that there will be less money for education, learning materials, healthcare and health facilities, medicines, roads, economic infrastructure and other essential services that are part of the Government's electoral mandate. It also means we cannot employ more teachers and nurses.Government is of the view that it would be unwise to borrow money to finance current expenditure, as this would continue to place an untold debt burden on future generations.

It is not true that government is insensitive to the plight of public servants who promote essential services such as teachers, nurses, doctors.The Occupation Specific Dispensation was introduced in the public service to ensure that professionals are remunerated according to skill and expertise.Government will continue to strive for the improvement of the working conditions of our employees within reasonable bounds.

Government is of the view that future salary negotiations must take into account other important policy considerations such as the need to link wage growth to productivity, assessment of unit costs of government labour in relation to trends in the rest of the economy and most importantly, the impact of a high wage bill on employment policy.Such a discussion must also address the income gap in the public and private sectors.

Cabinet condemns unreservedly the violence, intimidation and the acts bordering on thuggery and criminality that has characterised the strike in parts of the country. While the majority of public servants have protested peacefully, the disruption of classes and health facilities is totally unacceptable and will not be tolerated. Those who break the laws must not expect any sympathy from the law enforcement agencies.Government respects the workers' rights to withdraw their labour. However, this must be done peacefully within the framework of the law. In exercising the right to strike, the workers must understand that they still have an obligation to society to ensure that they protest peacefully and that they should respect the rights of other citizens.

The defence force will be on stand-by to provide assistance in emergency and life threatening situations such as providing urgently needed medical care.

Cabinet is particularly disappointed by teacher union leaders who continue to make threats to disrupt schools and encouraging their members to embark on illegal activities.

Cabinet is also concerned about the talk of an indefinite strike, especially in the education sector, at the expense of our young learners who are just about to sit for the year-end examinations. Government calls for sanity and common sense to prevail.

Measures are already underway to reduce expenditure in government departments in order to fund the final offer. The Ministerial Committee on reducing wastage is in the process of finalising its proposals on cost-cutting measures.

In this regard, Cabinet welcomed the measures that have been put in place by government departments. The steps taken by the KwaZulu-Natal government received particular mention for taking firm decisions to reduce expenditure. Measures taken by the province include the following:freezing of all vacant posts; a moratorium on purchasing of furniture; rationalisation of overseas trips; cancelling performance bonuses for the 2010/11 financial year; using government facilities for meetings (instead of hotels); no team-building exercises and Christmas parties; reduction of cell phone expenditures; and limiting business class travel to members of the executive council (MECs) and heads of department (HODs) only. Other departments and provinces are expected to follow this example by adopting austerity measures with immediate effect.

The Ministers' Committee on the Budget (MinComBud) will finalise expenditure guidelines for the next financial year with a view to regularising austerity measures across the state departments in all spheres.

Cabinet is concerned about the reports of acid water drainage in the provinces of Gauteng, Mpumalanga, Northwest and the Free State. The reports suggest that this drainage is a result of mining activities and could result in serious health and economic risks for the provinces and the country. The Minister of Water Affairs, Ms Bulelwa Sonjica, was mandated to urgently convene a special task team to investigate and to develop a clear and coordinated strategy to deal with the matter. The task team will include the Ministers of Mineral Resources, Environmental Affairs, Cooperative Governance and Traditional Affairs, Minister in the Presidency responsible for the Planning Commission and the relevant MECs from the affected provinces. The task team will report back to Cabinet on the way forward.

Cabinet re-affirmed its commitment to meet with the South African Editors' Forum (SANEF) to discuss the perception that Government is bent on muzzling the media. At that meeting, Government will confirm the fact that there is neither a plan nor an intention on its part to limit media freedom because muzzling the media would be contrary to the principle of Freedom of Speech that is enshrined in the Constitution.This meeting is expected to take place as soon as a mutually convenient date is found. Contact has already been made with SANEF to try and find a suitable date. Part of what that meeting must achieve is the creation of an environment for rational and less emotional debate on media freedom.

The meeting noted that President Jacob Zuma will lead a South African delegation to China on a State Visit from 23 - 25 August 2010. The visit will focus on strengthening political, economic and trade relations between the two countries through the signing of a Comprehensive Strategic Partnership Agreement, the first of such an agreement between China and another country. This agreement is expected to deal with the trade imbalance between the two countries and with the fact that South Africa still exports raw materials to China while importing finished products into our market.

The following bill was approved:

·Science and Technology Laws Amendment Bill, 2010

The Bill aims to effect technical corrections to definitions and other references to clarify and strengthen institutional oversight and governance of the public entities that report to the Department of Science and Technology.The amendments eliminate possible confusion in certain definitions (correcting the title of the Chief Executive Officer of some public entities and the designation of the portfolio of the Minister), and to effect other consequential changes necessitated by the reorganisation of government structures.

The following appointments were approved

• Mr S Duma was appointed Chief Executive Officer (CEO) of the Technology Innovation Agency (TIA) for a period of five years with effect from 1 September 2010.
• Mrs TNF Mpumlwana (Chairperson); Ms S Skeepers (Deputy Chairperson); Mr RG Nicholls; Mr AP Mukoma; Mr S Ndaba; Mr M Dithlake; Ms LU Rataemane; Adv L Nevondwe and Adv MJ Molapo were appointed members of the Council to the Film and Publication Board.

Statement issued by Government Communications (GCIS), Aug 19 2010

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