SA could 'do an Egypt', says academic

2011-02-25 17:00

Johannesburg - If South Africa continues to neglect the 15 million people who are either unemployed or economically inactive, the country will "do an Egypt", according to Matthew Lester, lecturer at Rhodes University.

He was taking part in a panel discussion on the 2011-2012 budget held by PricewaterhouseCoopers in Johannesburg on Friday.

Lester was referring to the recent protests in Cairo by the nation's youth against poverty and unemployment.

In SA, statistics show that out of a population of about 50 million, only 13.1 million people are employed and only two out of five people of working age have a job.

Furthermore, 15 million people are on various forms of social welfare.

Lester acknowledged that anyone who earned more than R300 000 a year was now worse off than before the budget was presented by Finance Minister Pravin Gordhan to parliament on Wednesday.

"But we live in a dream world where we are neglecting people.

"We have only 150 000 individuals in the super-tax bracket and they have to pay a bit more now.

"Government can't go over 40% on the individual tax payer - at least not without providing huge social security systems."

Lester said government had put out a message that people had to forget about the lifestyle they had led before the credit crunch - which was simply "not sustainable" - and downsize instead.

At present, the real tax rate for the individual, taking into account stealth taxes, was about 60%, he added.

Joseph Rock from the SA Revenue Service said efforts were being made to broaden the tax base.

"The reality is that if we all accept that we have to pay our fair share, then we will end up paying less and that 60% could come down."

  • Max - 2011-02-25 17:21

    Yes, 60% effective tax sounds about right. Plus cost of security, insurance (against theft specifically), medical aid - it adds up to probably 65%.

  • Dougalan - 2011-02-25 17:22

    The truth is that only about 5% of South Africa's population actually PAY personal income tax. The other 95% do not. And these same people are also hardest hit by all the other many taxes imposed on them. The system of a small minority paying for a massive majority is simply not sustainable. Especially as it's likely that most of the people paying SA's taxes are not supporters of the ANC.

  • Geyser - 2011-02-25 17:33

    SARS should go after the big corporations and high income individuals who escape taxation by various means. There should be an end to all kinds of tax breaks for people earning R300,000+ p.a. Gross salary must be taxed at the maximum possible rate. SARS and treasury must also be held accountable as to how money is spent in various departments, and each every tender and contract must be open for public scrutiny and public discussion. It is after all the taxpayer that is paying for the tenders.

  • Juan - 2011-02-25 17:55

    I would LOVE to see south africans rise up and remove all these corrupt, self-serving presidents and ministers by force!!

  • Iz - 2011-02-25 17:56

    Well, this is exactly what Moeletsi Mbeki said, (he said our Tunisia moment would come in 2020). JZ dismissed Mbeki's prediction, saying that he was an armchair critic and he will not "waste time" about Mbeki's opinion. Also, JZ said it "could never happen here, because Mbeki was comparing guavas with apples" (or some or other fruity story...). Wait until the pawpaw hits the fan, JZ!!!!

  • Wendy - 2011-02-25 17:57

    60% plus the cost of education, medical aid, insurance, security...I would suggest the real cost is around 80%. The government have a choice face off the left now or end up with the Egyptian option. The economy cannot grow and jobs cannot be created in a socialist state. Give the market the freedom to save the economy and the country.

  • Ibo - 2011-02-25 18:00

    I really enjoy reading the claim professionals who knows so much of nothing and exaggerating on everything. The Egypt clash was a mixture of many elements pressured together and then exploited at time and South Africa is not any near to that, and you can see this when you see that the whole region now is in turmoil, people are looking to follow Tunisia & Egypt nor matter jobless is high or low. Here I am not say Jobless is okay in SA, but what I am saying is that Egypt is 90% Muslims and those people had been suppressed by their own governments in various ways for so long; South Africa have nothing like that. In Egypt the puppet President was in power for very long time and did so much bad instead of goods; and South Africa is not like that. In Egypt they have Israel as their neighbour & historic enemy, and the public was forced to compromise everything and be friend of the bitter Enemy; and South Africa have nothing like that. Here I am not saying the South African government is an angel but there is no comparison to Egypt.

  • Interloper - 2011-02-25 18:04

    Yes then the masses will overthrow the government so that there can be democracy and a state elected by the people!!! Errrr... Hang on????

  • mat - 2011-02-25 18:20

    interesting only 150000 are super rich what percentage of that is goverment and parastatels and bee companies so much for the white own everything

  • Magda Palm - 2011-02-25 18:26

    You poor disadvantage!!! The very own government you vote for cannot give you the jobs you all want...what will an Egypt repeat do....none of you will have jobs because you drain the very own government from all its recourses.....time you people THINK for a change!!

  • Michael - 2011-02-25 18:30

    R300k/a is to low for high tax bracket. There is no incentive for people to strive for top positions.

  • Mike - 2011-02-25 18:35

    Government just seems to be on an absolute ridiculous spending spree which we have to fund the whole time, and most of the time it lands up in certain individual's pockets rather where it should be properly spent! Maybe we should do like Egypt, at least the general public out there has more common sense than government to run this country!

  • Blikkies - 2011-02-25 18:38

    Very unlikely to no chance at all... The ANC was elected by almost 70% of the population- so an "Egypt" in SA... not likely- I think our respected Proffessor should stick to teaching accountancy and leave the Political Speculation to those more qualified...PERHAPS Malema

  • Longbow - 2011-02-25 18:40

    The upheaval in North Africa is a warning to all countries about growing inequality in society. Protests could erupt anywhere…South Africa, China, Europe, US, Latin America etc. Inequality has become a global ticking time bomb but countries with elected governments still have one huge advantage over autocratic societies i.e. the ability to change the direction of the country through the ballot box. This acts as a relief valve for people who feel their voices aren’t being heard. There are two sides of the equation that have the Middle East so explosive: mass poverty and autocratic regimes. South Africa is still some way off from an implosion like North Africa but improvements need to start being made in the lives of the poor. However, this is not a unique problem and a lot of countries (one especially thinks of the US where poverty and joblessness is rising dramatically and China, where its rapid growth model is unsustainable because it relies on currency manipulation which is causing massive inflationary problems) have these problems.

  • Smk - 2011-02-25 18:43

    Ibo: Come to Durban and drive through the townships here. What improvements will you see. New roads.... Thats where it stops. I have worked in these townships every day for the last few years and if things were really looking up why do I still see children going to school barefoot? Why are their clothes torn? Why do they tell me they are hungry because they have nothing to eat. I will tell you why. It is because they are not being cared for by the Goverment. They are good for a vote and then they are forgotten till the next election

  • Nasdaq7 - 2011-02-25 19:24

    This ANC government is a socialist disaster. They promised the world. Taxed to death the 5 million taxpayers. AND now there is no money to start new businesses.

  • Paul de Stadler - 2011-02-25 19:35

    The truth in the matter is the present government will never in a 100 years be able to employ all the unemployed as all the money in the country has been spent on lavish parties etc, 17 years down the road and the infrastructure has collapsed so bad, to be honest the present government is losing a battle with regards to unemployment, we are going to go the same way a Egypt and Libya now...

  • Yam - 2011-02-25 19:41

    @ Juan - careful what you wish for... and who do you think they are going to take their anger out on? Like with the Xenophobia attacks it will be misdirected against those they perceive to be the ones holding them back - the whites and the foreigners.

  • romeo - 2011-02-25 21:09

    Dear Matthew, there is absolutely no similarities between Egypt, Tunisia or Lybia and SA. We understand you have applied the philosophy of Descartes: "Doubt of all". It is true that the rule of prevention can lead to such assumption but such declaration can incitate to social crisis as a hungry stomach dont use his brain. But honestly your point of view is like seeing WORMS GROWING FROM THE SALT. Lets instead bring a solution to the rather complex problem of Education and Instruction of Millions of black who were excluded during Apartheid and who now have who needs employment to survive in a well competitive global economy.

  • ChrisW - 2011-02-26 06:32

    The eloquent prof lester is often clueless about subjects outside of this profession. Gadaffi is a dictator, our fellow South Africans have chosen the poor leadership in South Africa.

  • koos - 2011-02-26 08:29

    lets do an egypt and get rid of this non democratic ANC

  • MyPal_Al - 2011-02-26 13:58

    @Ibo let me see if I understand you correctly. You say "Here I am not say Jobless is okay in SA, but what I am saying is that Egypt is 90% Muslims" what has there Religion got to do with this? "and those people had been suppressed by their own governments in various ways for so long" so you saying White, Coloureds and India potulation are not suppressed for the last 16 years. I assume you also mean that the poor population are also not been suppressed with empty promises over the last 16 years. Interesting "South Africa have nothing like that" Are you sure?."In Egypt the puppet President " and our President is not a puppetbPresident. I think you need to look a little deeper! "was in power for very long time and did so much bad instead of goods; and South Africa is not like that." ANC has been in Power for 16 years is this not long enough? "In Egypt they have Israel as their neighbour & historic enemy" and we have Zimbabwe. Same applies, "and the public was forced to compromise everything and be friend of the bitter Enemy; and South Africa have nothing like that" Are you sure? Zim sure fits your description "Here I am not saying the South African government is an angel but there is no comparison to Egypt" Sorry I disagree

  • Fred - 2011-02-26 19:46

    Sadly mass sterilisation is our only hope. And that applies to the entire world population not just in SA. Trust me, when other economies / ecologies collapse under the strain of too many people, it will be pretty irrelevant who is in charge in SA. The poor have to become part of the solution and not grow the problem. There is no government in the known Universe that can help these people if they don't pull their weight too.

  • camelthief - 2011-02-28 08:22

    very unlikely. SA govt is democraticaly elected and there is a mechanism to get rid of it peacefully. This is a very different context. Also Egypt was actually a military coup orchestrated through the people. The would never have achieved what they did unless the military wanted them to. The military now has more power than they did before.

  • Jamo - 2011-02-28 08:54

    Small difference: Here the populace already have the tool to remove the govt- THEIR VOTE! So why would we have a popular uprising against the govt? Wake up! It's more likely we'll have genocide- govt keeps laying the blame for the population's woes on past injustices, big corporation, evil capitalists and previously advantaged. Clearly the majority fall for it or they wouldn't still be voting for these clowns.

  • RS - 2011-02-28 09:40

    I totally agree that S A can do an Egypt Revolt. There are only sweet words but nothing is done for the people at grassroot level I cannot see that the people will forever support the ANC who only care about themselves and their next to kin. And of course, blame Apartheid still for everything. Just wait and see!! It is some time ago that I read that in 2020 the number of Whites will have swindled to a very low number and the income from tax will go the same way!

  • latino - 2011-02-28 10:21

    Why should we pay tax for others. Do'nt get me wrong, I'm not against tax.I'm against paying high tax. I say , take away the income tax and addd tax to those unnecessary expenses...Like Rmillion cars , diamonds and the other luxuries. Not because we earn more than R300k p/a. I think that's a punk move.Geyser...PUNKASS

  • @Geyser - 2011-02-28 13:54

    Yes, go after to goose that lays the golden egg. Believe me R300k pa is not a lot of money, even double that is not rich in this country. One thing people who are in that tax bracket do have is skills and the ability to relocate internationally. Believe me, with the rate we are being taxed to susidise the ANC's socialistic voter buying, I and many qualified and educated professionals in this country are seriously considering leaving. The sad fact is we are not the racists and chicken runners of the past decade, they already left. We are the patriotic, job providers who hoped for a bright future for this country. Sadly the communist ways of the current political "elite" have shown us that this does not exist. Good bye, and to the jobs I used to subsidise and create... so long.

  • Louis III - 2011-02-28 15:11

    Geyser: Can't help but feel that MOST of the R300k plus per annum earners are hard-working professionals or entrepeneurs. So what's the message? Penalise the hard workers so the lazy can have a free lunch?

  • Martin Du Preez - 2011-02-28 17:14

    The South African government is just like these governments being over throne by "their" people. The investments and other money being pumped into SA by the rest of the world is going to the ANC and their families. They also don't just take some money and put the rest back into the communities, so people can bennifit from it, instead they take all of it. The roads have no funding, hospitals look like the 1930's, crime is through the roof, our rivers and coast lines are polluted and over fished, electricity and communications is a constant failure. And the high paying jobs only available to the already rich black people. But come the next election, every one vote ANC. the youth must see now apartheid is not what is causing this harsh economic climate but the current government with their big houses, smart cars and overseas holidays.

  • michael - 2011-03-01 05:50

    geyser, they cooked the goose..

  • michael - 2011-03-01 05:51

    geyser, they cooked the goose..

  • mark - 2011-03-04 13:36

    the problem in tis country is that the populace leave the government to take responsibility for their well being, even their health. the government needs to educate people about health, education , security, etc., but they would rather spend money on parties (ZAR); new cars for Zuma's 4 wives in all 9 provinces, etc... No democracy has a political elite that gets rich off the poor and governance works from the bottom upwards not from the top downwards. People's consciousness need to change and this will take a bloody long time.

  • james4usa - 2011-03-04 21:50

    What differentiates Zim and SA?

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