Johannesburg — THE Congress of South African Trade Unions (Cosatu) has called for a number of radical policy interventions to ensure that SA's working class is not used as "cannon fodder" as the economy recovers.

Cosatu says that in order to halt job losses and create employment, it wants tax incentives to encourage companies to reinvest profits, as well as a set ratio linking profits to workers' wages.

The federation, which is holding its 10th congress next week, has also repeated its calls that the government make the rand's exchange rate more competitive and inflation targeting be abandoned to allow interest rates to fall further, saying that the working class will have to escalate its struggle in this regard.

The demands are made in an organisational report to be presented to the congress.

Although there has been a change in the country's administration, the federation believes that workers are still bearing the brunt of large profits and, now, the recession.

The Ministry of Finance and the Reserve Bank have also made it clear that SA's basic economic policy will not change despite renewed efforts to eradicate poverty and unemployment.

"SA's macro policy is constrained to a large extent by finance capital. This stranglehold, through the policy of high interest rates, and a strong exchange rate, ensures that money capital continues to accumulate at the expense of real capital accumulation, thereby limiting the ability of the state to deliver on basic services," the document reads.

It says the primary objective of macro policy should be job creation, which needs to find expression in all government institutions and departments, including the Reserve Bank.

"Part of ensuring that this primary objective is met is to consider a number of incentives to encourage real, productive capital accumulation. These incentives can be built into the tax system and should consider the extent to which firms reinvest profits, maintain a certain pre-determined ratio of profits to workers' wages, and the extent to which new investments are labour-absorbing and retaining.

"Together with targeted procurement policies, these measures will go a long way to ensure a shift away from the accumulation path imposed by the minerals-energy-finance complex."

Cosatu warns that the economy will not recover easily from the recession as long as the purchasing power of workers continues to shrink. The document speaks of a "puzzle of profits" which it says relates to profits rising even during an economic crisis, implying that there has been a drastic increase in the rate of exploitation of labour.

The report also says there is a need to give momentum and direction to the nationalisation debate. It says this is important because given the socioeconomic challenges SA faces, no amount of feasible tax collections can generate enough revenue to finance the required development.