Latest news with #BLSA
IOL News
3 days ago
- Business
- IOL News
Business Leadership SA slams Transnet's new wage agreement as leadership failure
Business Leadership South Africa (BLSA) has criticised Transnet's new wage agreement with unions Image: Leon Lestrade/ Independent Newspapers Business Leadership South Africa (BLSA) has criticised Transnet's new wage agreement with unions, calling it a failure of leadership and warning that it undermines the country's economic recovery. Last week IOL reported that Transnet concluded a three-year wage agreement with its recognised unions, SATAWU and UNTU, securing a 6% annual salary increase for workers over the next three years. The deal also includes increases to key benefits such as pension contributions, medical aid, housing allowances, and the 13th cheque. According to the state-owned freight and rail company, the deal came after the "conclusion of a conciliation process led by the Commission for Conciliation, Mediation, and Arbitration (CCMA)". BLSA President Busiswe Mavuso criticised Transnet's decision to provide an above-inflation increase to workers, saying that the agreement overlooks the country's weak economic growth, rising debt, and Transnet's poor performance record. "I was astounded to see the news last week of Transnet's capitulation to union strike threats, agreeing to give workers 6% pay rises in each of the next three years. This agreement represents a failure of leadership on both sides – militant unions holding the country hostage with strike threats, and management caving to their demands without a fight," Mavuso said. She added that the increases come at a time when inflation is running at 2.7%, and the economy is expected to grow by only 1.4% this year. 'While South African businesses slash costs and workers face retrenchments, Transnet workers will get pay rises that are double the inflation rate, funded by taxpayers already struggling to make ends meet.' Mavuso also pointed to Transnet's operational inefficiencies, citing an estimate from Professor Jan Havenga of Stellenbosch University that poor logistics performance is costing the South African economy R1 billion per da. In a letter following the wage agreement reached last week, SATAWU defended the agreement by emphasising that it accepted the CCMA's proposal for a 0.5% increase in the third year, which would raise the final year's increase to 6%. 'Our correspondence dated 21 May 2025 stated that the union was prepared to accept the additional 0.5% increase,' the union said. SATAWU also argued that the final agreement reflected existing provisions and legal frameworks already in place between Transnet and organised labour. "When comparing the original retrenchment clause and the one contained in the final wage offer, it is evident that there is no significant difference, but only a reformulation of existing provisions. The only notable amendment in the final collective agreement is the additional 0.5% increase in Year 3".
IOL News
3 days ago
- Business
- IOL News
Business Leadership SA slams Transnet's new wage agreement as leadership failure
Business Leadership South Africa (BLSA) has criticised Transnet's new wage agreement with unions Image: Leon Lestrade/ Independent Newspapers Business Leadership South Africa (BLSA) has criticised Transnet's new wage agreement with unions, calling it a failure of leadership and warning that it undermines the country's economic recovery. Last week IOL reported that Transnet concluded a three-year wage agreement with its recognised unions, SATAWU and UNTU, securing a 6% annual salary increase for workers over the next three years. The deal also includes increases to key benefits such as pension contributions, medical aid, housing allowances, and the 13th cheque. According to the state-owned freight and rail company, the deal came after the "conclusion of a conciliation process led by the Commission for Conciliation, Mediation, and Arbitration (CCMA)". BLSA President Busiswe Mavuso criticised Transnet's decision to provide an above-inflation increase to workers, saying that the agreement overlooks the country's weak economic growth, rising debt, and Transnet's poor performance record. "I was astounded to see the news last week of Transnet's capitulation to union strike threats, agreeing to give workers 6% pay rises in each of the next three years. This agreement represents a failure of leadership on both sides – militant unions holding the country hostage with strike threats, and management caving to their demands without a fight," Mavuso said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ She added that the increases come at a time when inflation is running at 2.7%, and the economy is expected to grow by only 1.4% this year. 'While South African businesses slash costs and workers face retrenchments, Transnet workers will get pay rises that are double the inflation rate, funded by taxpayers already struggling to make ends meet.' Mavuso also pointed to Transnet's operational inefficiencies, citing an estimate from Professor Jan Havenga of Stellenbosch University that poor logistics performance is costing the South African economy R1 billion per da. In a letter following the wage agreement reached last week, SATAWU defended the agreement by emphasising that it accepted the CCMA's proposal for a 0.5% increase in the third year, which would raise the final year's increase to 6%. 'Our correspondence dated 21 May 2025 stated that the union was prepared to accept the additional 0.5% increase,' the union said. SATAWU also argued that the final agreement reflected existing provisions and legal frameworks already in place between Transnet and organised labour. "When comparing the original retrenchment clause and the one contained in the final wage offer, it is evident that there is no significant difference, but only a reformulation of existing provisions. The only notable amendment in the final collective agreement is the additional 0.5% increase in Year 3".
Mail & Guardian
4 days ago
- Business
- Mail & Guardian
Transformation Fund draft document lacks clear, outcome-driven goals, BLSA says
Business Leadership South Africa has criticised the recently launched Transformation Fund as being flawed because it was structured around input-based targets instead of clear, outcome-driven goals..(John McCann/M&G) Business Leadership South Africa (BLSA) has criticised the recently launched Transformation Fund as being flawed because it was structured around input-based targets instead of clear, outcome-driven goals. It said effective efforts should be anchored in measurable objectives that justified the financial commitment required. According to a In 'The fund should use an outcome-based approach by specifying the expected transformation impact in tangible terms, such as the number of businesses it aims to grow, employment targets, or improvements in SME (small and medium enterprises) survival rates,' it said. 'For example, a goal of supporting 5 000 black-owned businesses with a 30% annual growth rate over five years would provide a more practical framework for assessing effectiveness.' Trade and Industry Minister Parks Tau published the fund's concept document — which envisages raising R20 billion annually for black enterprise development — in March, with a 28 May deadline for comments. Scrutiny of the draft comes amid tension over the government's Communications and Digital Technologies Minister Solly Malatsi, a DA cabinet member, recently President Cyril Ramaphosa has BLSA acknowledged the importance of redressing the structural economic imbalances created by apartheid, and commended the government for establishing the Transformation Fund, but bemoaned the lack of analysis about why previous state-led initiatives such as the National Empowerment Fund and the Small Business Fund had underperformed. 'The paper does not provide a comprehensive overview of these existing funding mechanisms, nor does it justify why a new R100 billion structure is necessary instead of enhancing existing models,' it said in its submission. It also expressed concern about institutional inflation, where new entities are created for the same purpose instead of supporting ongoing programmes, adding that access to funding alone would not resolve the systemic challenges and insufficient mentorship capacity had hampered black empowerment initiatives. 'Without targeted investment in mentorship infrastructure even significant financial allocations may fail to yield desired development outcomes,' it said. Labour union Solidarity and the Free Market Foundation estimate that black empowerment laws have incurred R145 billion to R290 billion in compliance costs since their inception, equivalent to between 2% and 4% of GDP. A report by the two organisations on the cost of broad-based black economic empowerment says the programme has imposed a substantial economic burden on high-intensity sectors such as mining and finance, attributing low employment numbers to racially motivated policies. 'While B-BBEE may have contributed to an increase in black ownership and supported some skills and SME development, those gains are overshadowed by elite capture, limited grassroots impact and persistent inequality,' the report said. BLSA said transformation efforts would improve with more private sector participation in the fund's financial disbursement and oversight. It argued that transformation is already happening in companies' enterprise and supplier development programmes, which have proved to be commercially viable in integrating small businesses. A joint fund management team between government and the private sector would allow businesses to share and 'codify lessons and best practices for the fund's design', the organisation added. 'We recommend that the Transformation Fund be designed with sufficient flexibility to align with existing industry master plans and accommodate the requirements of the fast-growing priority sectors,' it submitted.
The Citizen
02-06-2025
- Business
- The Citizen
Decisive intervention needed for municipal performance — BLSA
The state of financial management in municipalities is mirrored in the level of basic service delivery all over the country. The Auditor General's report on municipalities shows that decisive intervention is needed to improve the performance of local government performance is needed. Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), writes in her weekly newsletter that the financial state of our municipalities is shocking and a serious constraint on economic growth. 'Only one of the eight metros, Cape Town, received a clean audit, with Buffalo City, Tshwane, Mangaung and Nelson Mandela Bay getting qualified audits indicating material failures in their financial management. 'Johannesburg, eThekwini and Ekurhuleni received unqualified audits but with findings, indicating that the accounts are reliable but that some matters need attention. The worst opinion of an auditor, a disclaimer, means the auditor has not been able to form an opinion on the financial statements at all. Sixteen municipalities were seriously censure with a disclaimer.' ALSO READ: 'Same story year after year': MPs unhappy as Auditor-General reveals local government audit outcomes She says our metros are the economic hubs of our country, and it is completely unacceptable that most of them cannot get basic financial management right. 'They have budgets in the billions, such as Johannesburg, that will spend almost R90 billion this year but cannot manage that money adequately. Public must vote to make their voice hear about municipal performance 'If management in private companies is unable to produce reliable accounts that auditors are content to sign off, shareholders would revolt. In the case of our local government, the shareholders are the public who must exercise their votes.' Mavuso says what makes it even more galling is that the state of financial management mirrors the level of basic service delivery. She points out that Johannesburg, which most of our biggest companies call home, has been in a state of gradual decline for many years. 'Traffic lights seem to have been abandoned, local roads left to decay into unpassable tracks. President Cyril Ramaphosa, two months ago, decried the state of the city, which is meant to serve as host of the G20 later this year, promising an intervention from national government. 'Intervention is sorely needed. As the Auditor General makes clear in her report for the 2023/2024 year, the challenges are driven by a lack of financial management skills and vacancies. There simply are not enough qualified people working in local government to ensure the accounts are done properly, despite the billions at stake.' ALSO READ: Hlabisa questions abilities of local government leaders as AG report shows no improvement in municipalities There has been some improvement in municipal performance with less disclaimers Mavuso says there has been evidence of improvement in some areas. The number of municipalities getting a disclaimer has fallen to 14 from 28 in the 2020-21 year, when local government elections saw new councils elected. That improvement, the Auditor General says, can be attributed to good support from provincial treasuries to assist municipalities' financial function. However, she says that cannot be said of the metros, which the Auditor General says continued to regress since 2020-21, with three downgraded in the last year. She singled out Johannesburg and Tshwane for not budgeting adequately for infrastructure maintenance. She also bemoaned the culture of municipalities approving unfunded budgets, expenditures that cannot be covered out of the revenue the municipalities receive. Mavuso says it should concern all South Africans that elected councillors can willingly approve spending plans for which there simply is no money. 'That is not budgeting – it is reckless spending. 'Controls over expenditure are also problematic. Johannesburg tops the list in terms of unauthorised expenditure, with R2.76 billion. Tshwane is not far behind at R2.15 billion. Beyond the numbers, the Auditor General also reviews municipalities' performance reports, which municipalities are legally required to produce to show how they are doing against their own targets. 'She says there has been no improvement since 2020-21, with only 26% meeting the Auditor General's quality standards on submission. Thanks to corrections made after submission, 52% ended up meeting standards, but that means almost half still fail to.' ALSO READ: Questions about municipal manager's qualifications after R927 000 spent on 22 laptops – report Auditor General's report highlights failure in municipal performance The Auditor General's report is a very helpful spotlight on one of the drivers of service delivery failure in local government, Mavuso says. 'This is now a national priority and one of the biggest constraints on economic growth. Service delivery failure often means businesses cannot function. 'It has been given national prominence through Operation Vulindlela 2.0, the new phase of the successful unit led by the presidency that has been decisive in tackling the electricity crisis and the logistics crisis, among other reforms. 'The need for decisive intervention in municipal performance is very clear. We have to get people into municipalities who are capable of delivering on action plans that will improve the financial function.' The Auditor General also pointed out that weak information technology, again driven by a lack of skills and controls, is a key reason for the municipal crisis and helps paint the picture of what Operation Vulindlela must contend with. Mavuso says an army of highly capable finance professionals is going to be needed. 'There is also a much-needed review underway of the 1998 white paper on local government that has the potential to overhaul policy and find new ways of supporting local government, ensuring better coordination between local, provincial and national. 'The white paper should elevate the importance of consequence management, especially where there is a lack of performance and continuous service delivery issues.' ALSO READ: Ineffective governance at centre of municipal dysfunction – IoDSA Investec report shows what South Africa could have been Mavuso says she was also struck by a report from Investec last week showing how different the country would be today if we had stuck to the 4.5% growth rate we regularly achieved until 2008. 'In 2024, the economy would have been 40% bigger than it was. 'Government revenue would have been R800 billion higher than it is. Just think about that number and the huge arguments we just had about increasing VAT to raise R75 billion over the next three years. Had our economy maintained its trajectory, the government would have little debt, and there would be ample room to grow spending on public services. 'Unemployment would also be sharply lower, with a third fewer people out of work. It was a helpful reminder of how much we lost through poor policy and poor performance. Of course, there were other factors that played a role, including weaker commodity prices and Covid. 'But other countries managed to recover their growth rates with global growth averaging around 3%, while we have been stuck at 1% or less.' Mavuso says when we think of the cost of poor municipal performance and other structural constraints on our growth, it helps to imagine how different things could be. 'Our people are condemned to live poorer lives, with many more out of jobs. Reports like the Auditor General's show us what must be done. We must be serious about doing it.'
The Citizen
26-05-2025
- Business
- The Citizen
Three budgets later, infrastructure investment amount still the same
Balancing the books in the budget was difficult, but in the end no money was taken away from infrastructure investment. While three budgets in a year are unprecedented, the political mechanisms of the government of national unity have brought South Africa to a positive place, while the amount for infrastructure investment remained the same throughout. Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), says in her weekly letter that a lot happened last week, from the third budget being tabled to the meeting of President Cyril Ramaphosa with his United States counterpart. 'With everything going on, little comment was made on one element of the budget that will be very important to our future: the amount to be spent on infrastructure investment. Despite important efforts to contain expenditure, infrastructure is expected to see R1 trillion of investment over the three-year medium-term expenditure framework. 'That figure was protected throughout the budget revisions, despite National Treasury having to cut some expenditure lines to accommodate lower growth and constrained tax revenue. Maintaining infrastructure spending is critical to the key challenge of getting economic growth going, which will lead to sustainable job creation. 'Without that, we cannot generate the revenue that would enable government to increase spending in other areas.' ALSO READ: Budget 3.0 was not a chainsaw budget, economists say Budget provides for infrastructure spending on transport, electricity and water She points out that the budget includes spending on electricity, rail, water and other transport infrastructure. 'A large part of that is about fixing our logistics system, which is currently constraining economic activity significantly and deterring both local and foreign investment. 'Economists have estimated that Transnet costs the country R1 billion per day in economic activity due to its inefficiencies. Our mines and factories cannot get their output efficiently to ports and from there to markets in the rest of the world. Although there have been improvements recently, South Africa still has among the most expensive ports in the world.' Mavuso says that, as president, Ramaphosa's visit to the US made clear, we need dependable and stable trading relationships with major world markets. 'Through its tariff moves, the Trump administration has severely disrupted a global trading system based on equal treatment and rules of conduct. 'South Africa has to deal with this reality. I hope our negotiators can make headway in forming agreements with the US, but like the rest of the world, we must be prepared for a future that sees significantly reduced trade with America.' ALSO READ: Sensible or underwhelming? Economists react to Godongwana's Budget 3.0 Will trade swing from West to East? Many commentators are arguing that trade will swing from West to East due to US isolationism, which means increased trade with China, India and other emerging markets, including across Africa, although Europe will remain a critical market for our output too, she says. 'In that scenario, the global trading system is going to be more competitive, with a smaller market available for our outputs. It will be more important than ever that we are efficient. Currently, our goods are more expensive just because it costs so much to get them from where they are produced to where we need to sell them. 'Countries like China put a great deal of focus into making sure their ports are very efficient, and it is critical to their economy's performance.' One area where Mavuso hopes to see much more infrastructure investment is in local government by crowding in private sector spending through public/private partnerships (PPPs). 'Finalising revisions to PPP regulations last year should enable that, but it will take concerted effort and political will from municipalities to actually use the space that is created. ALSO READ: Budget 3.0: not austerity budget, but a redistributive budget Municipal performance also targeted in budget 'The Operation Vulindlela 2.0 process will include a special effort for municipal performance. PPPs are a potentially important mechanism to get new infrastructure to happen in a sustainable and cost-effective way.' Mavuso says she was also pleased to see several plans in the budget to rein in expenditure that is not productive. 'With the tax options limited, government has to find ways to contain expenditure. Spending reviews already done by National Treasury identified tens of billions of rands in potential savings from poorly performing or inefficient programmes. 'As it noted in the Budget Review, if government acts on its recommendations of these reviews, it may mitigate the need for additional taxes in the 2026 budget. I hope this year's budget experience has made the trade-offs between tax and spending that much clearer to everyone.' She says we allowed spending to grow for too long and never did the hard work of looking at whether that spending is delivering value for money to our people. 'The budget process must, in future, look at underperforming government programmes and shut them down.' ALSO READ: Godongwana cuts government spending to offset VAT shortfall Also positive progress in budget on SRD grant Mavuso points out that another area where Treasury made positive progress is the social relief from distress (SRD) grant introduced during Covid-19 to support people during lockdowns, when economic activity was sharply curtailed. 'It was a lifeline for people who simply could not find economic opportunities, but it was never meant to be permanent welfare support and has become a large item in the budget, costing R35 billion this year, more than three times the revenue the proposed half percentage point VAT increase would have raised. 'Treasury will now investigate replacing the SRD grant with a job seekers' allowance. This makes a lot of sense. We should be supporting people, specifically our youth, to access the job market. A carefully designed support programme that enables people to access potential jobs would be far more sustainable than the SRD grant.' She says it is also highly positive that this budget appears to have the political support to pass all the parliamentary processes ahead of it. 'While the process of three budgets in a year is unprecedented, the political mechanisms have worked to bring us to a place that is positive for the country. 'That will be good for investor sentiment, which is another important part of the effort to get economic growth going.'
