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The Federation of Unions of South Africa (FEDUSA) recognizes and acknowledges the socio-economic inequalities and challenges that face our communities, and the disparities that persist due to poverty and subsequent social ills.

It is in this view that the FEDUSA in conjunction with its Affiliate, the Health and Other Service Personnel Trade Union of South Africa (HOSPERSA) are working together in remembrance and continuation of celebrating the life of the late Former President, Nelson Mandela. HOSPERSA and FEDUSA will be at the Kalafong Hospital in Atteridgeville, Pretoria on 18 July 2014 to distribute soup packs to those families that are in dire need and without anything warm to eat or drink this winter.

Though this will not make a world of difference considering the population of our country in terms of poverty and unemployment, we are hoping that this gesture is warmly received.

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FEDUSA is the largest politically non-aligned trade union federation in South Africa and represents a diverse membership from a variety of sectors in industry.  See www.fedusa.org.za for more information.

For more information:

Ruby Oliver (Acting General Secretary) 084 250 0269



The Federation of Unions of South Africa (FEDUSA) calls upon the Minister of Finance Nhlanhla Nene to consider the recommendations of the tax review committee headed by Judge Dennis Davis – to ban transfer pricing – through the introduction of dedicated legislation in the Medium Term Budget Policy Statement (MTBPS) as a measure to protect the South African tax base.

The South African economy has faced serious headwinds of low economic growth, high unemployment, unstable labour relations, inflationary pressures and deteriorating fiscal and current account deficits said FEDUSA General Secretary Dennis George.

The research of the Organisation for Economic Co-operation and Development (OECD) shows that multinationals transfer billions of Rands from high-tax to low-tax jurisdictions to avoid paying their fair share of taxes. National Treasury was shocked to discover that corporate tax revenue in South Africa declined from 7.2 per cent of GDP in 2008/2009 to 5.5 per cent in 2009/2010 and 4.9 per cent in 2010/2011. This decline in corporate tax revenue was a major concern for government. This ratio recovered marginally in 2011/2012 to 5.1 per cent, but has deteriorated again to 4.9 per cent in 2012/2013. Furthermore, the National Treasury claims that corporate tax revenues fell suddenly from an average of 23.4 per cent in the 1980s to 14 per cent between 1990/1991 and 1999/2000 concluded George.

Transfer pricing occurs when it is used as a tax-avoidance measure to shift profits offshore to tax havens with low-tax jurisdictions, therefore South Africa is estimated to lose tens of billions of rand annually from the abuse of transfer pricing by multinational groups. It is therefore imperative for government to introduce new legislation and to collaborate with the OECD on Base Erosion and Profit Shifting (BEPS) as mandated by the G20 to ensure that this evil practice is eradicated from the international tax jurisprudence in order to bring about international social justice. Transfer pricing is open for abuse by local companies who sell their goods or services within a multinational group to an offshore associate in a low-tax jurisdiction, or sells them at a marked discount.

FEDUSA calls on the Minister of Finance to use the MTBPS as a real opportunity to present government’s plans to restore our national finances to sound health over the next three years. It is therefore critical for the Minister to shape his approach on problem solving tactics as presented by President Zuma to build a sustainable mining, manufacturing and transport and all other economic sectors as well as the work the Deputy President Ramaphosa in the National Economic Development and Labour Council (NEDLAC) as they are working towards establishing a deeper social partner agreement with organised labour and business.

FEDUSA is of the view that Minister Nene is knowledgeable and should build on the post 1994 experience where the budget deficit of 4.8% of GDP in 1994 was reduced to 0.5% in 2005 and the surplus on the budget that followed provided fiscal space to increase expenditure without having to increase borrowing. It is however essential for government to use social dialogue as a method to achieve social and economic goals as well as listen to voices of social partners in societies and workplaces to accomplish inclusive economic growth for all, indicated George.

FEDUSA supported the counter-cyclical stance of government to invest in infrastructure, education and health, combined with growing local procurement as critical drivers to stimulate inclusive economic growth to bring about more equitable outcomes. The counter-cyclical stance involves wisely increasing spending in times of economic contraction in order to support growth and employment creation, and to avoid unwise massive spending increases while the economy is expanding. FEDUSA wants to impress upon all South Africans to realise that deep inequalities and unemployment remain from apartheid and it is only through addressing the structural realities in the economy, and that it is possible to create a more communally comprehensive society. The Federation is not too concerned about the higher budget deficit since the 2008 global economic financial crisis, as the current debt levels remain sustainable with ongoing measures to ensure that the debt-to-GDP ratio of the country remains economically stable, stated George.

Fair compensation for public servants is imperative to support inclusive economic growth. However, it is critical to maintain a realistic and sustainable balance concerning the percentage of non-interest expenditure as it could result in a reduction of scarce financial resources available for social spending, infrastructure and other important priorities of the country to restore higher inclusive economic growth. FEDUSA is of the view that it is important to conclude a realistic and practical wage agreement with trade unions in the public sector that could translate into a sustainable approach over the medium to long term – without having to reduce essential spending on the core and critical skills needs for quality public service delivery, postulated George. It is also critical for the social partners to develop a modern approach to collective bargaining to ensure more sustainable outcomes for workers and enterprises, expanded George.

Pertaining to monetary policy, it is critical to follow a flexible approach to maintain price stability to ultimately ensure balanced and sustainable inclusive economic growth. It is equally important for the Monetary Policy Committee (MPC) to consider the origins of oil and food price increases as well as the administrative prices to keep inflation as public enemy number in place. The Rand exchange rate is a further risk to the economy and government should address structural inefficiencies, while the MPC should follow a more accommodating and flexible approach that takes into consideration that inflation could be imported and beyond control of policy instruments, maintained George.

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For interviews:

Dennis George (FEDUSA General Secretary)  084 805 1529



The Federation of Unions of South Africa (FEDUSA) is concerned over the 12.69% average electricity tariff increase proposed for the 2015 / 2016 financial year – which was announced on Friday 3 October 2014 by the National Energy Regulator of South Africa (NERSA). This above-inflation electricity tariff increase would have a negative impact on working people, the business sector and would put a further dampener on future inclusive economic growth which will make South Africa a less competitive global player, said FEDUSA President Koos Bezuidenhout.

 

NERSA has approved Eskom’s plans to recuperate losses after it had under-recovered money during the second multiyear price determination (MYPD) control period between 2010 and 2013. The regulator approved the implementation plan of the Regulatory Clearing Account (RCA) balance of R7 818 million for Eskom in July 2014 and will be a once-off recovery from the standard tariff customers and other Eskom customer categories. Consumers will, in essence, pay an additional 4% over and above the 8% increase approved in February 2013.

 

FEDUSA President Mr Koos Bezuidenhout said that it is imperative to stabilise electricity production and supply, as it remains a critical key driver of economic growth, which, if not responsibly managed, could lead to disinvestment in / and ultimately contraction of the South African economy and concomitant job losses. It is important to recognize that society is paying an extraordinarily high price for the lack of proper coordination and planning on the side of government who failed to provide responsible leadership concerning infrastructure investment and proper implementation, concluded Bezuidenhout. Dependent on the reaction of NERSA, FEDUSA will keep its options open and will be ready to engage in order to secure a more favourable situation for the poor and working people in our country.

 

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FEDUSA is the largest politically non-aligned trade union federation in South Africa and represents a diverse membership from a variety of sectors in industry.  See www.fedusa.org.za for more information.

 

For interviews:

 

Koos Bezuidenhout (FEDUSA President) 082 372 0020

 

Dennis George (FEDUSA General Secretary) 084 805 1529

 

The FEDUSA President will be busy in meetings today and our media colleagues are welcome to also contact the General Secretary



The Federation of Unions of South Africa (FEDUSA) is concerned over the further raising of interest rates and the effects this will have on the economy.  Rising inflation is putting upward pressure on interest rates – with interest rate increases eating into the circular flow of money and spending – thereby slowing consumer and economic activity.

The South African Reserve Bank (SARB) Monetary Policy Committee (MPC) announced yesterday afternoon that it will raise the repurchase rate by 0.25 basis points to 5.75 per cent per annum, as of 18 July 2014.

We are a little disappointed with this decision, said FEDUSA Acting General Secretary Ruby Oliver.  With a considerable weakening of the rand over the last 3 years, coupled with rising food and energy costs, the majority of South Africans are finding it increasingly difficult to make ends meet – and these interest rate increases are simply not sustainable, she added.

Low inflation is in the interests of all sectors of society, especially the poor. Given the impact of high interest rates on access to capital and therefore economic growth and job creation – and it is for these reasons that we believe high interest rates create barriers to inclusive economic growth, explained Oliver.

Policies influencing macroeconomic indicators must prioritise the need for higher growth levels, employment creation and general socio-economic well-being, concluded Oliver.

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FEDUSA is the largest politically non-aligned trade union federation in South Africa and represents a diverse membership from a variety of sectors in industry.  See www.fedusa.org.za for more information.

For more information:

Ruby Oliver (Acting General Secretary) 084 250 0269



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