President Jacob Zuma says we have to create 500 000 jobs by year-end. As a nation of dedicated whingers, we look at that stat, sit back and say, “We can’t do it”. Actually if we can’t do it then we need to figure out how much financial pain, we the employed, are able to bear in terms of a growing personal tax burden and rampant debt.
Individuals in South Africa are already the most heavily taxed in the world, those in jobs not only pay PAYE and VAT, we carry the can for those who can’t afford or refuse to pay vehicle insurance, hospital bills, traffic fines, school fees, university loans, property rates, electricity, water, sanitation, now a new health tax … the list gets ever longer.
If the fact that our unemployment figures exceeded 40% even before this recession, that 54% of our people live in poverty (Human Sciences Research Council), that 250 000 graduates were unemployed (Stats SA, 2008), that half of our matriculants have failed two years in a row and of those that pass about 7% will not find work, doesn’t bother you — then consider this: how much more tax can you bear?
Those already paying tax are going to be taxed more. The burden of a 30% electricity tariff hike will be carried by the small percentage already paying for electricity, not the majority that use it illegally. Road traffic fine collections at present, as an example, through websites and banks rely primarily on those with credit cards to pay, as for the rest? Ag suga, as a friend used to say — go whistle for it.
But wait a minute, so far what I have written gives more fuel to the whingers, to the self-pitying honourable (who probably largely form the 80% of South Africans prepared to pay (bribe) an official to get what they want — Morality survey, Sunday Times, June 2009).
There should be only one reason why we find work for 500 000 people before the end of this year and a million by the end of next year: because the economy demands it. Because if we are to get beyond economist lies about us “doing better” than other countries through this economic crisis (with the figures in paragraph three, we are doing well?) we have to get innovation and hard work back into gear.
Cosatu is right, big bonuses and ridiculously expensive cars as part of executive packages have to go — it’s happening elsewhere in the world, why not in this land of profound inequity?
You have to be really stupid or terminally ignorant not to see how fast and how badly this economy is sliding and to realise that we will not be out of this mess early next year, as some economists now say, we will be lucky to start lifting our head above water by 2013.
Take a look at this graph for South Africa’s GDP:
Source: Dr Azar Jammine, Econometrix June 2009
Still not scary enough for you? Try this and since this graph was published a month ago, Absa revealed this week that house prices have dropped a further 3.6%.
So your tax rate is going through the ceiling and your investments are collapsing through the floor. It doesn’t take huge leaps of awareness to understand that this economy has to grow; it simply has to, if this country is to have any chance of remaining a strong investment locale for foreign and domestic investors.
We don’t have enough strong reliable underpinnings in the economy of the 21st century to have the same whining approach of the late 20th century — mining, which built this country, is now a weaker sector than agriculture and our agricultural fortunes have been collapsing for at least two decades.
We are no longer a major grain exporter, many of our beef farms are now game farms and production generally is less than impressive.
So how is the rest of the economy doing? Economic data from the SA Reserve Bank show that debt summonses soared 14.4% in February and personal bankruptcies rose after hitting 40.4% in January. Wholesale trade dipped 8.9%, retail sales plunged 4.5% — a record drop.
In early April the National Treasury announced a programme to co-ordinate its borrowing with that of the six major state-owned entities. The Treasury will borrow R70.5 billion, the SA National Road Agency R13.3 billion, electricity utility Eskom R12 billion, Transnet R6.9 billion, the Development Bank of South Africa R6 billion, Airports Company South Africa R3.6 billion and the Trans Caledon Tunnel Authority R1 billion. So we’re all in debt and there is more; the total number of liquidations recorded for the first quarter of 2009 increased by 46.7% (from 687 to 1 008) compared with the first quarter of 2008, statistics released by Statistics South Africa show (April 28).
When comparing the first quarter of 2009 with the first quarter of 2008, there were increases of 58.7% in company liquidations (from 312 to 495) and 36.8% in close corporation liquidations (from 375 to 513). Labour lawyer Celeste Allen who runs the labour law course for AstroTech says that since November last year she has done little else but retrenchments, “with some companies into their third round of retrenchments”.
Is creating 500 000 jobs a pipe dream? We should have been committed to it years ago when economic growth was booming, instead those who should have been fuelling job creation were investing in holiday homes and bigger cars and even a stable of vehicles, a car for work, a vehicle for the weekend, another for game drives …
Zuma’s vision is that the 500 000 jobs should be via an expanded public works programme, certainly our streets could be cleaner — especially filthy Durban; we have a zillion potholes that need filling on a collapsing national road infrastructure (try the road between Johannesburg and Kimberley sometime for a terrifying experience) our public hospitals and schools could be considerably cleaner, they need repairing and walls painted.
Trevor Manuel, Minister of Planning in the President’s Office, has defended plans for this large-scale job creation saying the intention was not to create permanent jobs, but an emergency measure to stand between poor families and absolute starvation. Already social grants are swallowing an ever growing part of the budget, we need to put those people to work instead of creating, as we are, those who rely on social grants.
But we need to go beyond relying on government to create jobs, we know what its track record on delivery is — we need to create jobs and if you can’t employ one more person, then ensure instead of retrenching two more that you send them for training, Keep skilling your workforce let them know you are doing this instead of retrenching them, motivate them to produce more and better, it’s the path some of the world’s greater organisations are already taking — they intend being in business for generations more to come.
Toyota, which is experiencing its worst sales and profits ever, is not shedding jobs, it is continuing to pay workers and using downtime to train workers or use them on public service projects. Public service projects as a way of seconding employees rather than laying off staff is gaining ground.
New York-based law firm Simpson Thacher & Bartlett offers associates a year off to work on a public service project and get paid $60 000 plus benefits — less than half their normal pay but a lot better than being retrenched. FedEx has imposed graduated pay cuts, less for front-line workers and more for managers.
And on July 18, Mandela Day, take 67 minutes off work for you and your staff and get out there to make a difference in the lives of those who are really struggling in this economy. Barack Obama has called for something similar in the US, where he has called for a greater “service” ethos — a greater idea than writing cheques to charities for tax breaks.
There is more to life than buying a new car, getting a bigger house, if you intend remaining here, if you want to still be in business by this time next year, then you are simply going to have to work harder, with more imagination and greater empathy for those around you and that applies as much for South Africans as it does for Americans, Europeans … the world is in trouble, it requires something extra from the ordinary to get us out of it.
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