If President Jacob Zuma seems a little confused over who would be in charge after the May 7 elections, Minister of Finance Pravin Gordhan had absolutely no doubt as he set sail away from the politics of the left for the first time since Polokwane 2007. The latter’s 2014/15 fiscal budget speech was ordinary by any measure; no drama, no significant electioneering, nothing. However, at the political level, there was a subtle but discernible movement away from the politics of state welfare to the politics of enablement. Make no mistake: there is and will remain for some time far too much state involvement in South Africa’s underperforming economy, and too little creation of an enabling environment to allow for significant growth and job creation. But the shift away from welfare to infrastructure development (and other elements designed to boost growth) is encouraging, and that has not been the case for some years now.
Those who believe this was an ‘election budget’ are off the mark, and perhaps some reading of old budgets by Owen Horwood (finance minister in 1975-1984), Barend du Plessis (1984-1992), and even Derek Keys (1992-94) would provide some insight into an ‘election budget’. The significance of the 2014/15 budget and its fractional shifts in emphasis need to be seen in the broader context of shifts in the power relationships within the African National Congress (ANC), the Congress of South African Trade Unions (COSATU), and the consistent failure of the economy to grow at any meaningful rate. (Meaningful is not even 5% p.a., it should be about 7% p.a.) We wrote at the time of the Polokwane Consultative Conference (December 2007) that the ANC had opened a “Polokwane Box” of left-wing policy potential that, while intended to assist “workers and the poor,” would have exactly the opposite effect. The winds of change are now blowing and power structures are shifting.
While it would be presumptuous to suggest that the days of shifting left are over we can say they are numbered, and the specific dates at which we can expect the beginning of significant change in policy direction is likely to be around September 2015 and then in December 2017. The rise of the centre in the ANC – characterised by the broad movement in support of people such as ANC Deputy President Cyril Ramaphosa and former South African Reserve Bank (SARB) Governor Tito Mboweni, among other lesser known lights who hold similar views – and the wider endorsement of the National Development Plan (NDP) are indications of early movement to gain control of key ANC policy-making structures. The operationalisation of the youth subsidy, the budget announcements of greater tax incentives and special economic zones (SEZs, where labour laws would be significantly relaxed) add credibility to the belief that fundamental shifts in policy thinking are underway. These shifts and policy developments are possible because the once all-powerful labour union movement is in crisis.
COSATU, its internal leadership squabbles, as well as the recklessness of the National Union of Metalworkers of South Africa (NUMSA) and a few others have mortally wounded the labour movement, and its power is going to be very difficult (if not impossible) to restore. Karl Marx warned a long time ago that the only real power available to workers was unity – “workers of the world unite”. COSATU, NUMSA and others have not only diluted this power in the South African context, they may have destroyed it. It now does not matter to the broader future political environment whether COSASTU remains one federation or it splits into several, since the latter will all but destroy union power or at best weaken it significantly – and the former is papering over cracks.
Either way, there are now those in the ANC who think the time is right to take back control of the movement and of its policies, and that organised labour is too weak and too fractured to prevent it. The current leadership of the ANC is in lame duck territory and will not pose any real problem. In September 2015 the ANC will hold it’s between-conference deliberations and discuss issues and new leadership ahead of the December 2017 Consultative Conference. And over this period we can expect significant change and developments inside the ANC. The undercurrents are pulling; change is now inevitable.
WHY DO WE CARE? The 2014/15 fiscal budget was not politically significant in itself, but it was significant in what it heralded for the future political environment and the shape of economic policy towards 2020. While we still face the danger of an ANC overreaction to electoral support that dips below 60% at the May 2014 poll, the future shape and direction of the party is changing. And while not yet blindingly obvious, the left wing experiment may well be over. Union weakness, infighting, the threat of some form of split (it will be small but will hurt beyond its size), as well as shifting power relationships inside the ANC, make such change possible.
Analyst: Gary van Staden