National Employers' Association of South Africa Comments on the 2013/4 Budget

Thursday, 7 March, 2013 - 12:07

As far as the budget is concerned, Minister Gordhan can only distribute what he has to his disposal. To do that within the context of South Africa's complex, diverse, opposite and competing demands must be a tremendous challenge which requires supernatural wisdom. He can also only spell out his vision and that of the government; back it up with resources, but he cannot execute it himself. That is the duty of all South Africans.

The failure by other institutions of government to implement the ideals expressed in the Minister's speech, must be a source of huge frustration to him and his department. The minister cannot be blamed for the lack of execution in other institutions of state, nor for the general lack of urgency to address the fundamental challenges facing our society.

An area of concern to many is South Africa's approach towards addressing poverty, unemployment and inequality. Only the extreme ignorant will not recognise that these realities stand out as our generation's most compelling priorities. Deep inside we all know that if we do not address these challenges appropriately within the next few years, we will face a very turbulent future.

According to Gordhan, there was a threefold increase in the number of people receiving social grants over the last decade. Although the need for assistance of the unemployed and the poor cannot be disputed, we need to acknowledge that this cannot be a long term solution. The danger with this kind of assistance is that those on the receiving end get dependent on it. They therefore lose confidence in themselves and their ability to earn an income.

The minister agrees that unemployment, poverty and inequality are the greatest challenge facing South Africa. We all know that this problem cannot be eradicated overnight. However, by making people dependent on assistance from the state is not a solution to these problems. To say that no form of social assistance can address unemployment is stating to obvious, but no 'grant' can sufficiently address poverty and inequality. To say the least, its long-term effect will be the complete opposite.

It is now a common trend in South African society that some children grow up in households where they will never see parents go to work. These children, deprived of role models, lacking skills and confidence, will become permanently dependent on a system which, in the long run, will not be able to sustain that support. Who do they rely on for assistance if that happens? What is the danger it will pose to society when that happens?

The economy is currently growing at a slower rate. The minister predicts that economic growth will improve. I don't necessarily share his optimism, but even if he is right, the timid growth that he predicts will be no match for the demand on the state's social benefits, unless we find and implement an alternative for the fast growing number of unemployed people, especially amongst the youth.

It amazes me why the political leadership is prepared to allow a person to receive a basic and extremely low amount as a grant to provide for his/her bare basic needs but on the other hand it disapproves and even makes it impossible for the same person to work for a similar amount. How can it be that a person who does a day’s honest work, albeit for a very low wage, but learning a skill, developing self-discipline and preparing for a better occupation is considered being exploited? At the same time it’s not considered exploitation when a person doesn’t work, is being discouraged and dis-empowered and living on a social wage without being able to better his/her circumstances.

The truth is that the person receiving the social assistance is really the one being exploited. Being poor and unemployed is a huge dilemma, but being disempowered and unable to escape from it, is even worse.

The widening gap between the rich and the poor is another national dilemma with potentially huge risks for the country. The current approach which sees the poor and unemployed somehow provided for but not empowered, multiplies the problem and increases the risk.

We all agree that skills development and improved education is a top national priority. But this is a long-term solution and it will not address the immediate need of millions of our citizens to find work. In the short-term we will have to accept that millions, currently without any skills, will have to find a job, sooner rather than later. But no one will employ an unskilled person on an unrealistic prescribed wage, bringing with him/her all the legal protections he/she enjoys and all the statutory requirements which the state requires.

Employing unskilled people with much less risk is not only an immediate solution, it is an inevitable if we wish to address this challenge. If government wants to eradicate unemployment and if they want the private sector to make its vital contribution in this regard, government cannot prescribe unreasonable and unrealistic terms to the employer.

Unless government introduces various reforms to reduce the risks of employing, especially in respect of small and medium enterprises, where the great employment potential lies, any employment drive will not succeed. There is simply no alternative to this; there is no way that we will get around this.

Another issue that needs to be put under the spotlight is the proposed Youth Fund. Why is government prepared to consider some form of a youth fund to address the national crisis of youth unemployment, yet it is unwilling to address the barriers to employment and to introduce legislative changes which will make it much less risky to employ, and in fact more attractive to employ young and inexperienced people?  

It seems as if government is opting for the easier solution by merely throwing money at the problem which will buy short term political favour but in the end not deal with the increasing crisis in our society. We need more political will, a willingness to risk conceding power and determination to ensure long-term benefits.

Government’s current protectionist approach with regard to current labour laws and the outdated collective bargaining dispensation is against our national interest.  

South Africa is at a crossroad, or at least fast nearing one. Perhaps we still have the luxury of options. However, if the ‘economic environment was to deteriorate’, to quote Minister Gordhan, and if we are forced to ‘re-asses (our) revenue and spending plans’, in other words; if our financial resources have dried up and we are no longer able to sustain the current social assistance approach, on that day we would have run out of options. On that day we, as a nation, will regret our indecisiveness and political short-sightedness.

National Employers' Association of South Africa

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