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By Gerhard Papenfus





2 July 2018


In his SONA-address on 16 February 2018, the State President emphasised the importance of SMMEs in establishing sustained growth in the South African economy, in job creation and consequently the alleviation of unemployment and poverty.


In addressing the unemployment crisis, the President pointed to the decline in South Africa’s manufacturing capacity and endeavours to re-industrialise at an accelerated pace ‘in order to draw millions of jobseekers into the economy’.


On the basis of the importance of SMMEs, the President committed government to work with its social partners to build a small business support eco-system that assists, nourishes and promotes entrepreneurship. He also committed government to reduce the red tape hampering small business.


The Departments of Trade and Industry (the dti) and Labour (DOL), among others, are responsible for executing this vision, at least in respect of the areas mentioned in this opinion piece. However, it is in exactly these areas that both these Departments are undermining the President’s agenda.


Since 2011 the Department of Labour has unlawfully extended unaffordable collective bargaining (wage) agreements in the Steel Industry to non-parties (mainly SMMEs). On each occasion the nature of the irregularities was pointed out to the DOL – in great detail. On each occasion the DOL stubbornly persisted with its cover-up and misrepresentations to the Minister of Labour, who continued with these extensions. Each extension or attempted extension was followed by court action – 7 court cases over a 6-year period. The DOL lost all of them. Millions of rand of hard earned monies were spent – both by NEASA, on behalf of SMMEs and tax money, paying for the DOL’s recklessness.


The President’s call in his SONA-address, obviously had no impact on the DOL. Since SMMEs in the Steel Industry have organised themselves into a position where they can prevent these hostile agreements being forced upon them, notwithstanding the LRA’s blatant anti-SMME provisions (also read – collective bargaining: the indefensibility of the one size fits all approach), the Department has recently introduced legislation aimed at completely eliminating the voting power of SMMEs – in all industries (also read – extension of agreements by decree).


This is notwithstanding the fact that this proposed legislation is probably unconstitutional and in breach of at least three conventions of the International Labour Organisation (ILO).


The President’s call for re-industrialisation obviously also does not have any impact on the dti. Notwithstanding the devastating impact of the 22 percent customs – and safeguard duties, protecting AMSA only (to the detriment of each and every role player below AMSA), the dti persists with these Steel Downstream hostile measures (also read – Steel Industry: the dti is not helping the Steel Downstream).


This leaves one with the question: why do these Departments persist with these SMME hostile policies, notwithstanding the fact that it will ensure that:


• the devastating trend of de-industrialisation will continue;

• unemployment will stubbornly increase; and

• poverty and inequality will deepen?


Is this as a result of:


• hard core ideological misconception;

• mere socio-economic naivety;

• blatant stubbornness;

• being oblivious to the importance of SMMEs if South Africa wants to dig itself out of its proverbial black hole; or is it the very reason why the potential of SMMEs is suppressed;

• the mere lack of political guts;

• their desire to, very subtly, undermine the President’s agenda, notwithstanding the cost; or is there an even more sinister agenda?


Only history will reveal the true intentions. History will also show the devastation caused by these policies, administrative inabilities and political apathy.


This opinion piece is by Gerhard Papenfus, Chief Executive of the National Employers’ Association of South Africa (NEASA).


For more information:

Marietha Thirion


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