Public Waste Firm's Labor Crisis Exposes South Africa's Outsourcing Cost Problem

JOHANNESBURG’S INSOURCING DEBATE: ACTIONSA STAKES CLAIM ON STATE CAPACITY AND WORKER DIGNITY

More than 300 casual workers at Pikitup, Johannesburg’s waste management entity, walked off the job in July 2026 demanding permanent employment. Their protest crystallised a debate that ActionSA has made central to its governing philosophy: when public money flows through contractor layers before reaching the worker doing the actual job, who really benefits?

The economics of outsourcing reveal a pattern ActionSA argues demands scrutiny. When a municipality pays a contractor to employ workers for permanent functions, multiple cost layers accumulate before money reaches the worker performing the service. Tenderpreneurs extract management fees and profit margins. Intermediaries stand between government and its workforce. The taxpayer bears all costs, yet the worker remains insecure and poorly compensated. ActionSA contends this structure represents not empowerment but exploitation, particularly when government knows it will require the same service year after year, decade after decade.

Refuse collection is not temporary work. Cities require it continuously, yet the system treats workers as temporary. ActionSA views this contradiction as the core problem.

During his tenure as Mayor of Johannesburg, ActionSA’s leader moved beyond rhetoric to implementation. The administration directly absorbed thousands of security guards and cleaners into permanent city employment, removing the intermediary layer entirely. Workers previously vulnerable to labour brokers received direct employment, proper conditions and dignity. The principle was straightforward: if a function is permanent and government requires it permanently, the workers performing it should hold permanent employment.

The party’s position extends beyond municipal administration into questions of state capacity and institutional development. ActionSA argues that South Africa must develop internal expertise, institutional knowledge and skilled professionals within public institutions. Government departments and municipalities should train artisans, engineers, technicians, electricians, plumbers, mechanics, environmental specialists, project managers and administrators. The goal is a capable state that can perform its own functions rather than one dependent on contractors for basic responsibilities.

This approach draws lessons from international examples. China demonstrates that a capable state cannot permanently outsource its institutional competence. ActionSA emphasises this is not a call to copy China’s political system, but rather to recognise that state dependency is not state capacity. A government that cannot fix, maintain, manage or operate anything without hiring outside companies becomes structurally vulnerable.

By contrast, Tshwane’s current administration offers a model ActionSA endorses. Executive Mayor Dr Nasiphi Moya has pursued insourcing initiatives while strengthening internal capacity through filling critical vacancies and investing in skills development and artisan training. Rather than asking only “Who can we give this tender to?”, municipalities should first ask whether they can perform the function themselves, whether they possess the necessary skills, and if not, why they cannot train South Africans to do so.

The party acknowledges that private-sector expertise has legitimate roles. ActionSA does not advocate an ideological ban on outsourcing. Where government genuinely lacks capacity, where there is a clear business case, and where outsourcing delivers better value for citizens, private-sector participation should be considered. Creating unnecessary intermediaries when government can build and maintain capacity itself, however, represents poor governance and wasteful public spending.

This position contrasts with other political voices in Johannesburg. Helen Zille has campaigned on a platform emphasising private-sector partnership to rebuild infrastructure and services. ActionSA respects this position but fundamentally disagrees with the underlying philosophy when outsourcing becomes a substitute for government developing its own capacity. The private sector has legitimate responsibility to pursue return on investment. Government does not have that luxury. Government’s primary obligation is protecting the public interest and delivering services efficiently, sustainably and equitably.

ActionSA’s consistency on this issue spans years. In 2022, the party called for legislation requiring municipalities to conduct feasibility and financial-impact assessments before outsourcing core functions. That push has continued. The position reflects a broader vision of social justice that extends beyond slogans: genuine economic participation for disadvantaged South Africans, dignity in work, skills development, permanent employment where work is permanent, and government procurement that does not enrich a small politically connected class.

The party’s full argument is articulated at https://www.actionsa.org.za/i-will-not-apologise-for-believing-government-must-build-its-own-capacity/, where ActionSA leadership has outlined the philosophical and practical foundations of this approach. ActionSA commits to this direction wherever it governs, viewing capable government and dignified work as inseparable from effective public service delivery.

Whether other coalition partners in Johannesburg and beyond can be persuaded to adopt similar feasibility requirements before awarding outsourcing contracts remains the open question that will define how far this philosophy travels.