Political blunders and nationalization prospects

by May 29, 2012All Articles

If the government was a person, it would be barely able to stand today, having shot itself in both feet over the past week. Timing the introduction of the controversial and bitterly resisted e-tolling system to start the day before a fuel price rise to record levels was a case of self-inflicted political wounds fired simultaneously through two barrels.
The wounds were made more serious by comments such as those by finance minister Pravin Gordhan who referred, in an interview in London, to those opposing the e-toll system as a “strange alliance” of apparent malcontents that included “freight operators”. But he, and other members of the government, should have realised that what the protests amounted to were, in the words of one commentator, a “low-level tax revolt” led, to a large degree, by the government’s trade union partner, Cosatu.
And tax revolts, as many in the labour movement are aware, have played a major role throughout history in disrupting or toppling regimes and even empires. When the overwhelming majority of any population feels that it is being equally and unfairly taxed, massive anger can result. And such anger does, indeed, bring together not strange, but wide-ranging alliances that often include groups that would normally be at daggers drawn. So it is this time, but with some uniquely South African features.
Because, within the cabinet that approved the e-tolling in Gauteng are not only members of Cosatu, but also of the SA Communist Party (SACP). The same cabinet also approved the recent increase in fuel taxes and gave the nod to this week’s further surge in fuel prices.
Faced with vociferous opposition to e-tolling, Jeremy Cronin, who continues to double as deputy transport minister and deputy general secretary of the SACP, noted last month that the system had been a mistake, but one that the country was, unfortunately, stuck with. However, as May Day dawned, along with the realisation of the sheer magnitude of the resistance to e-tolling, there was an apparent change of tack.
SACP general secretary, Blade Nzimande, who also doubles as higher education minister, joined Cosatu on a May Day march against e-tolling. At the same time, the SACP issued a statement maintaining that unity of the ANC-led alliance was essential “otherwise we will abandon this issue to the DA (Democratic Alliance), AfriForum, the Automobile Association and other essentially right-wing, middle-class interest groups”.
In other words, the ANC-led alliance is opposed to the toll road system imposed by the ANC-led government. Not for the first time, the contradictions inherent in this “broad church” alliance rose to the surface.
And, again not for the first time, there were hurried attempts to paper over apparent schisms and to shift the blame, this time only partially to the media. According to the SACP, the prime culprits for the e-tolling debacle are those ANC politicians in Gauteng (read: Mbhazima Shilowa) who broke away after the 2007 ANC Polokwane conference and went on to form the Congress of the People (Cope). It was they who had initiated the whole scheme of road widening to the benefit of “tenderpreneurs”.
This statement raised a number of questions within the labour movement because Cosatu’s investment company, Kopano Ke Matla, was profitably involved in the road improvements. However, the federation maintains that this was at a time when it was unaware that the improved roads would be subject to tolls; that the toll road concept only arose later. In other words, after the departure of those who left to form Cope.
Increasingly, however, these quibbles and apparent attempts at face-saving are being seen as irrelevant. There is broad agreement now that the probable lengthy delay in the introduction of e-tolling — courtesy in particular of last week’s court ruling that the matter still needs to be adequately discussed — should provide time to debate how best to proceed with the whole question of transport policy.
This has raised again the long-time demand by Cosatu that the extremely profitable fuel-from-coal producer, Sasol be taken back into public ownership. Established in 1955 as the state-owned Suid Afrikaanse Steenkool en Olie (SA Coal and Oil), Sasol is now estimated to provide up to 38 percent of South Africa’s liquid fuel requirements. And it does so at a fraction of the cost of oil-based product in a country with plentiful coal and few oil resources.
However, with the agreement of the government, Sasol sells its fuels and the polymers it produces for use in plastics manufacture, at import parity prices, making the company — listed in 2003 on the New York Stock Exchange — extremely profitable. The unions claim that much of that profit flows abroad since perhaps 30 per cent of Sasol shares are held by investors in the United States alone. But the massive capital outlay to build plants and to develop and make more cost effective a process that had kept the Nazi war machine going for much of World War II, was borne by South African taxpayers. Throughout more than two decades of cheap oil prices, Sasol was subsidised, mainly on the backs of an exploited workforce.
When, by 1979, the world oil price had clearly outstripped the cost of Sasol product, the apartheid government privatised Sasol. In the wake of the Truth and Reconciliation Commission, this background prompted Archbishop Desmond Tutu to propose a “windfall” tax on companies that had profited hugely from apartheid. The windfall tax idea got no official backing. Pleas for nationalisation may fare better, especially since the issue has been given added impetus by the actions over the past fortnight of those two controversial icons of large sections of the Left: Hugo
Chavez of Venezuela and Evo Morales of Bolivia.
The nationalisation of oil and electricity companies in those countries may yet play a role in getting the nationalisation question back near the top of the South African trade union — and ANC alliance — agenda.
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