Chamber comments on new minimum wage decision

DATE: November 7, 2014

The scary thing about the plan for a new minimum wage, is that all the decisions will be made by a government that does not understand how business works, says the Cape Chamber of Commerce and Industry.

Evidence of this could be found in the state-owned businesses such as Eskom, South African Airways, the SABC and the Post Office which would all be bankrupt but for the huge bale-outs financed by taxes.

“The only two government businesses which are really profitable are Transnet’s ports and the Airports company,” said Ms Janine Myburgh, President of the Chamber. But she pointed out that these were both monopoly businesses and the tariffs they charged were among the highest in the world. “If any private company ran the container ports and charged the kind of tariffs our Port Authority does, there would be an outcry from the Government and the unions. The same goes for the Airports,” she said. “Unfortunately there is little comfort in the fact that National Economic Development and Labour Council is to be involved in determining a minimum wage, because the Government has shown that it is quite capable of over-ruling Nedlac recommendations, as it did when agreement was reached at Nedlac for secret ballots before a legal strike could take place.” She said the Government did not seem to understand that business and the whole private sector generated the wealth of the country. Without business there would be no prosperity, no tax revenue to finance the public service and no chance of solving the poverty problem.

The South African economy had been most successful in the early days of our democracy when the old Apartheid legislation had fallen away and the control boards and other restrictive measures were scrapped. That gave the economy the freedom it needed to grow and create jobs. Since then, however, a whole new range of legislation, restrictions and red tape had been imposed on business and one of the unintended consequences was that growth slowed and unemployment increased. Attempts to boost the economy like the Seta system proved to be costly failures and now a skills shortage had become a major impediment to growth. An economy needed freedom to grow but the government had systematically reduced this freedom with every new piece of legislation, regulation and new requirement imposed on business. “What really hurts is that while the Government has been laying down the law for business, it was neglecting the infrastructure it inherited, and now we are faced with an electricity crisis and next it will be a water crisis. The public hospitals are run down and the education system is on its knees. “Massive amounts of money have been thrown at the Eskom problem, but the situation gets worse and not better. Now the failing electricity system is a threat to every new project on the drawing board.” Ms Myburgh said minimum wages would only aggravate the problem. “The Government does not seem to understand that jobs come before wages. What is the point of minimum wages for jobs that don’t exist and are unlikely to exist, given our rigid legislation, the skills shortage and threats like the one to expropriate half of our agricultural land without compensation?”

Full Article: Cape Chamber of Commerce » Chamber Releases – Chamber comments on new minimum wage decision – Monique

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