CAN SA AFFORD THE ANC?  Cont'd

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It will impose punishing new costs on business, thereby inhibiting future investment and reducing the prospects of meeting Gear targets even more. To ensure that SA companies, regardless of the markets they serve, strive for a workforce that is 70% Black, 50% female and 5% handicapped, will require a massive policing system. So instead of the already cumbersome Labour Department shrinking, the probability is that it is in for massive expansion.

A recent DP document stated that SA is being "re-racialised," that the notion of a "rainbow nation" is dead. Mboweni’s Employment Equity Bill proves that up to the hilt. It is difficult to believe that this Minister, and others like him, have any understanding whatsoever of GEAR or why it was introduced. Significantly here: the Reserve Bank points out that SA now has the same number of jobs in the employment sector it had in 1982. But since then the population, on official figures, has increased from 31 mn to 41 mn people.

SA’s Stalinist union leaders bear much of the responsibility for the rand-reflected investor loss of interest in this economy. Because the giant umbrella union, COSATU, and the ANC are part of the same ruling alliance, and because the ANC believes it is reliant on COSATU’s 1,85 mn members turning out in its support in the 1999 election, the ruling party is prepared to go along with plans to destroy jobs, not create them.

As Finance Week recently pointed out, SA is one of only 20 countries currently experiencing increased union membership. Where union membership here increased by 131% in the decade since 1985, it decreased 43% in the Argentine, 30% in Australia, 37% in France, 18% in Germany, 17% in Japan, 21% in the US and 28% in Britain. Indeed, America is predicted to have only 7% of its private sector workforce unionised in 2000. In few other countries in the world do you still have such worker control of the economy as in SA today.

The results of that union grip are reflected in SA’s poor export showing. The World Economic Forum’s Global Competitiveness Report 1998 showed SA to be 42nd out of 53 exporting nations, or the 12th least competitive industrial nation in the world, only slightly ahead of Zimbabwe, Russia and the Ukraine. SA came last out of 53 on effectiveness of policing, average years of schooling and maths and science education. It rated second worst in the world on organised crime, industrial relations, primary and secondary education, collective bargaining, gross domestic investment and public sector competence.

Foreign investors complain about the undue delays in privatisation, which properly enforced could go far towards retiring the crippling national debt. According to the London Times, the delay in privatisations appears to have been caused by the minister concerned requiring a Black empowerment aspect to be part of the deal. When Standard & Poor recently reduced

SA’s international rating, it quoted as reason delays in promised privatisation; SA’s affirmative action labour laws; the chronically weak currency; insufficient labour market deregulation; low employment growth; the budget deficit and high public debt. All legitimate concerns, and to that could have been added punitive taxation.

The maximum marginal rate in 1997 on a taxable income of R100 000 was 45%. VAT was at 14%, the tax on petrol at 76 cents a litre, as well as government taxes on bank transmissions and service charges. Many upper and middle income taxpayers spend money on health and education, which should be provided out of taxes. Similarly with expenditures on security. There is a tax on interest earned over R2 000.  There has been a marked increase in indirect taxation. Within the year the government had exceeded its long term overall tax target of 25% of the GDP to which it is committed under GEAR. Electricity, telephone and postal charges showed marked increases. Levies were posted on job training, health, fuel, liquor and capital transfers. Municipal rates increased, in major municipalities sometimes many fold.

As Finance Week has remarked, while governments usually have to operate with a wary instinct for the feelings of taxpayers, not even this constraint applies in SA, the world’s one country where the majority of income tax contributors not only do not support the party in power, but have no chance of seeing the parties they do support come to power. Nor, dispossessed and without any form of effective and direct representation, do they have any hope of kicking the rascals out. And, let it be said, we have scarcely touched on the many aspects of the "New SA" which drive entrepreneurs and their skills from the country, while at the same time dissuading investors, especially industrialists, from pumping their money into this economy.

No 1 factor dissuading much industrial investment is that crime here has risen to horrific and totally unacceptable levels, marked by the quite incredible numbers and ferocity of murders. Days before this was written two Black Neanderthals broke into a White home in this city, murdered the mother and father in cold blood, then raped the 16-year old daughter right there, later going to a nightclub to celebrate their contribution to ethnic cleansing. So routine have such murders become that the event did not even rate front page treatment.

Effectively, so great is the murder rate, plus the gang wars on the Cape Flats, the taxi wars, the epidemic of killings of White farmers, that it has now reached the status of a low-level civil war. So inadequate are the State security forces that police personnel are now outnumbered 2,4 by private security personnel.

Social security is another national disaster. While the proportion of the budget dedicated to social services rose from 45% in 1994 to 46,9% last year, the SA Institute of Race Relations calculates that for every R1 the government spends on social transfers, it spends R4,27 on salaries in that department.

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