From this standpoint we argued that this decade - the second decade of freedom and democracy - should be a workers’ and the poor’s decade, in which our country should reverse the established trend where, in economic terms, the real benefits accrued to the tiny minority of mainly white males who continue to dominate the economy in every respect.

Further COSATU has for the past twelve years been campaign for a new developmental path that will move our economy away from the capital intensive industries such as mining, metals, heavy chemicals and the auto sector towards labour intensive sectors that will help create jobs on a large scale, whilst meeting the basic needs of the working class. In this regard we have repeatedly called for the introduction of an active industrial strategy that will be underpinned by an active state to drive this process.

We have pointed out that South Africa, like many other African countries after liberation, faces the danger of tinkering at the margins of the apartheid economy without setting itself to fundamentally restructure it and move it into a new growth path.

We have rejected the current macro-economic policies and pointed out that they are too conservative and have elements of neo liberalism and therefore not appropriate for the economic challenges we face.

This is a good starting point from which to assess the President’s address. Does it accept that this is a fundamental problem and what does it propose to tackle it?

From this framework we can say the President’s speech falls short of announcing a comprehensive and coherent development strategy that will address the inherited structural deficiencies of the economy. As the consequence of this failure South Africa will take a lot more time to address its unemployment, poverty, inequalities and the social ills related to this, such as HIV and AIDS, moral degeneration and crime.

Having stated so, COSATU however acknowledges that this President speech was for the first time business like. The framework of industrial policy was announced. A spirit of acknowledging the challenges we face and failures of government and a range of intervention measurers were announced. This heralds a new hope that we are en route to a real new age of consensus building.

COSATU is however concerned at the unresolved contradiction between a commitment to a state-driven developmental industrial policy and its highly conservative, market-driven macro-economic and fiscal strategy. Thus for example, the President’s commitment to produce capital goods domestically is contradicted by high interest rates, overvaluation of the rand, and cheap imports. Likewise budget surpluses are in sharp contrast to the need for massive injection of resources into poor communities, including through a BIG.

We need an engagement on inflation targeting, exchange rates and fiscal policy. The current mix of policies will ultimately undermine government’s intentions in the long run. Moreover the current growth rate rests on very shaky ground and more needs to be done to change the structure of growth away from volatile commodities. We call for a serious, more structured engagement on these challenges within the structures of the Tripartite Alliance.

Having said this we wish to comment on the following key working class priorities:

1. Unemployment and Job Creation

Unemployment, poverty and growing inequalities are by far the biggest concerns and priorities of the working class and the poor. COSATU’s Ninth National Congress decided "to make the jobs and poverty campaign the centrepiece of our programme in the coming period".

On unemployment, the President quoted the figure of 1.5 million news jobs being created over the past three years. While any new jobs are to be welcomed, the speech overlooked three important problems with this figure.

The first is that the jobs created are, even before we consider other matters, not enough to help us achieve the country’s modest target to halve unemployment by 2015. Job creation has on average been increasing by 1%. With population growing at about 2.8%, the country need to create far a greater number of jobs than we have managed this far. Of serious concern to COSATU is the fact the growth of job seekers whilst we seemingly make snail’s pace progress in cutting unemployment.

Secondly, and regrettably, most of the jobs created are low-quality jobs - casual and unsustainable forms of employment, concentrated in some of the most vulnerable sectors of the economy - wholesale and retail, construction and agriculture. This means we are not addressing the challenge of poverty eradication and income inequalities that are so rife in South Africa.

Thirdly unemployment affects our people differently. It discriminates more against young people, women and black people in general, in particular Africans. Government statistics show that of all unemployed people 80% are aged between 15 and 34 years. Using the narrow definition of the unemployed that cuts out those too discouraged to search for employment, females make just under 30% compared to 21% of the males unemployed. The overwhelming majority of the unemployed remain the blacks in general and Africans in particular.

The political implication of this to our revolution is huge. It is in this context that we asked a serious question last year "has democracy failed workers and the poor?"

The commitment to ’ratchet upwards’ the Expanded Public Works Programme is welcome, but the key to resolving this massive crisis of unemployment is a new industrial strategy, which the government has been developing for four years. We welcome the President’s assurance that this is now shortly to be finalised but there is not yet enough information to indicate whether this will lead to more job-creating economic growth.

We note with concern the vague reference to reducing the costs of doing business, and need to know what this will involve, but welcome the fact that this year there was no mention of ’reforming’ the labour laws, to deal with alleged ’inflexibility’. We hope that this issue has been laid to rest and that we can focus on how to implement these laws more effectively.

We are however totally opposed to the whole idea of a partial ’wage subsidy for low-wage employees’, which will reward employers who underpay their workers and encourage them to get rid of these young workers as soon as the subsidy expires, or be used to displace older workers whilst doing very little to create quality jobs that will help the country eradicate poverty.

If the government wants to implement an across the board wage subsidy, as opposed to this proposal, they would need to engage on the details of such an idea.

COSATU welcomes the fact that fluctuating exchange rates are recognised as an impediment to growth, as we have been arguing for years, and we hope that this will lead to an end to the unjustifiable increases in interest rates.

Overall the economic policies outlined in the speech are too vague and limited. They will leave the existing, skewed distribution of wealth intact and will not lead to the second decade of democracy belonging to the workers and the poor.

2. Eradication of Poverty

On poverty, we note the many references to a more comprehensive social security system and in particular the idea of ’a social security tax to finance basic retirement savings, death, disability and unemployment benefits’. We have in principle supported the introduction of retirement savings but we believe that the devil is going to be in the detail.

40% of all workers in the formal sector shamefully earn less than R2500 a month. Tax and administrative costs must not combine to mean that workers’ take home pay in the context of this extra ordinary levels of low wages, tax and other administrative costs associated with the retirement funds must not combine to push workers deeper to the poverty line. We hope that government does not see this as a back door to side step its constitutional responsibility to provide pensions to the aged. We call for negotiations to avoid unilateralism that will have the effect of snatching defeat from the jaws of victory.

We regret that the government is still failing to clearly respond to the demand for a Basic Income Grant, which remains the best short-term measure to relieve poverty and promote the economies of poorer communities. COSATU will continue to campaign for the introduction of the Basic Income Grant and hope that the ANC, which in its congress called for an open debate on this, will finally honour its mandate and engage its alliance partners on this important question.

COSATU is pleased at the pledge to increase the number and pay of nurses, teachers and police but we shall be checking that the budget speech on 21 February actually makes adequate provision for this. Our affiliates will also be monitoring very carefully to check that this actually happens.

COSATU welcomes the ideological shift in government approach to the role of the public service. In particular we welcome the appreciation of the need to increase the public service in critical areas of service delivery and to ensure that public servants are adequately remunerated.

3. Restructuring of the Public Service

On restructuring the public service, we insist that this must not be imposed unilaterally but must be negotiated with the public sector trade unions. We welcome the ideological shift over the past three years. We are clearly moving away from the ideological dogma of cutting public sector workers’ numbers to satisfy text book formulae, to the recognition of the critical role the public sector plays in the economic development. We call for the referral of the current Public Service amendment Bill to Nedlac.

4. On HIV and AIDS

On HIV/AIDS, we note and welcome the President’s commitment ’to intensify the campaign against HIV and AIDS’ but feel that this is still not given the priority it deserves. It is a huge national crisis, but was not included in the President’s list of features of South African life that are ’ugly and repulsive’ and is given far less space in the speech than crime.

Workers list HIV and AIDS second only to employment creation as a priority for the country. In the context of a situation where it is estimated that between 800 to 1000 people die of AIDS everyday in South Africa, we would have expected the President to give more space to this challenge than he did to the problem of crime.

We welcome the unity that was achieved last year on this important front. We are working with the government to ensure that SANAC is restructured and made more representative and to ensure that a new strategy is released by March, etc. This is indeed a very welcome change to previous years. We hope no one will undermine this progress. The commitments made last year between government and civil society require a consistent and coherent message on dealing with the pandemic and we feel that the President should have been even bolder in addressing this pandemic.

5. On land and agrarian reform

The snail’s pace of land redistribution is undoubtedly one of the sources of tension in rural areas. While COSATU welcomes the President’s pledge to speed up land redistribution we still insist that far more radical steps must be taken if we are to meet the targets. There is no coherent agrarian reform in South African. Poverty afflicts rural communities more forcing migration to cities and compounding the housing problem of the country.

Generally we share the President’s concern at the lack of capacity in all spheres of government. We are simply tired of hearing over and over again the problem of rollovers. This further delays genuine freedom to millions of our people. We urge the President to use more his prerogative to employ and fire Minister to ensure that he in the most unfactionalist fashion deal with non performers from Cabinet level down to wherever he has an influence as the head of state. In reality there are non-performing Ministers who are not being dealt with.

6. Crime and restructuring of the judiciary

COSATU supports the President fully when he states that ’the overwhelming majority of violent crimes against the person occur in the most socio-economically deprived areas of our country’. COSATU fully supports the measures to deal with this serious social problem. We however wish to make very clear that our priority number one is the extraordinarily high levels of unemployment and poverty, followed by the HIV and AIDS epidemic. The only way to root out crime is when the country addresses those two principal tasks.

We welcome the President’s statements on the security guards’ strike and the commitment to ensure more regulation of the industry as part of a coherent strategy to fight high levels of crime.

We are disappointed that the President did not endorse the remarks of his Minister of Agriculture and Land Affairs, Lulu Xingwana, about the "inhumane treatment and abuse of farm workers". As far as we are concerned this is a ticking bomb. The estimated 1 million farm workers will one day rise up against their daily abuse by the majority of the racist white farmers. When this happens COSATU shall stand firmly on the side of those whose abuse is not prioritised enough by the society.

In the light of recent outrageously lenient sentences imposed on, for example the farmer who shot a child he claimed to mistook for a dog, COSATU reiterates its demand for the total transformation of the judiciary. We urge government to be bolder in its assertion and determination to achieve the transformation of the judiciary.

Whilst crime is of course a major concern, the government is right to oppose the hysterical exaggeration of crime by right-wing politicians and the media, and to emphasise the fight to eradicate the underlying causes of crime.

7. Public Transport

COSATU felt that the section of the address on public transport failed to begin to grasp the depth of the problem. Taxi capitalisation, the Gautrain and one or two other rail ’corridors’ will do nothing to alleviate the daily misery, and high cost endured by commuters every day.