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Academic: Transfer wealth

Oct 18 2012 19:46 Sapa

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Johannesburg - Basic wealth needs to be transferred, Wits academic Chris Malekane said on Thursday.

"Unless the basic wealth is transferred to the people as a whole, as outlined in the Freedom Charter, South Africa will not know peace," he said.

"The root of the income inequalities that afflict South Africa is that our people have been robbed of their due in the country's wealth and the current democratic government sustains this robbery on a daily basis by not tackling it directly."

Malekane said inequalities were obscene and the Congress of SA Trade Unions had put forward proposals that were brushed aside.

On Wednesday, President Jacob Zuma announced the outcome of his second meeting with business, labour, and community representatives, aimed at addressing the country's economic difficulties.

The meeting called on CEOs and executive directors in the private sector, and executives in the public sector to suspend increases in salaries and bonuses over the next 12 months, to signal their commitment to build an equitable economy.

They also called for a national conversation on income inequalities.

A committee would be set up to consider the local and international experience in addressing income inequalities and develop further proposals within the next six months.

Malekane said the inequalities did not exist without a root cause.

"The president knows the truth about this and he needs to act accordingly. What the president and the leaders seek to achieve will not happen. Indeed strikes may die down, but the crisis of colonialism in our country will worsen.

"The crisis in our country will not be resolved through 'voluntarism'. It requires a strong, revolutionary leadership that is unafraid to implement what the people want -- which is the Freedom Charter."

Earlier, chief economist at Econometrix Azar Jammine said the government could lose R5 billion in tax revenue if it implemented the call to suspend increases.

"Assuming that the executive directors and CEOs received an increase of seven to eight percent, South Africa would lose R5bn in tax revenue in 12 months," he said.

Jammine and other analysts warned that freezing salary hikes would deal with the symptoms of inequality, instead of the cause.

Nedbank economist Isaac Matshego said: "It's an appropriate gesture in the current environment. Whether it will lead to any fundamental change in improving relations between workers and employers, that is not known."

Scenario planner Clem Sunter said Zuma had to lead the way by telling the nation he would not take a salary increase and bonus.

"He must be the first to tell us that he is willing to freeze his increase for the benefit of the poor."

Sunter commended the move to freeze salary hikes and bonuses in the public and private sectors.
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