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ONCE again, with the public sector unions demanding a 15% across-the-board increase, the labour movement is being labelled irresponsible and greedy. Government employees, it is widely said, are overpaid - and grossly so.
But neither of these comments is true. In the first place, the lowest-paid state employees barely earn the accepted “living wage” of R4 500 a month. In the second place, the 15% demand is the opening gambit in what has become an annual game of bid and counter bid that may end in double digits, but is just as likely not to.
A 15% pay rise would, at most, add R675 to the monthly pay packet of the lowest paid. But for the employee earning R30 000 it would be an increase equivalent to the monthly pay at the bottom of the scale. It was for this reason that two of the biggest public sector unions proposed a “sliding scale” in an attempt to close this widening wage gap.
The independent PSA (formerly Public Servants’ Association) and the Cosatu-affiliated National Education, Health and Allied Workers’ Union wanted a cash increase, based on the lowest paid, to be awarded across the board. This would mean perhaps 15% (R675) to those earning R4 500. For those earning R30 000, the R675 would amount to little more than 2%.
The proposal went before the combined union caucus and was defeated, with the Democratic Teachers’ Union leading the objections. This was a display both of the level of debate within the unions and of the democratic decision-making that often takes place and is seldom reflected in media reports.
There are also complaints from the unions that little publicity is ever given to the policies put forward by various unions and federations. Proposals ranging from labour intensive programmes to import substitution and ways to beneficiate minerals tend to be downplayed.
However, it is true that no comprehensive macro-economic policy has emerged from the labour movement since the Social Equity and Job Creation document of 1996. But grumbling about the “trickle down” basis of current economic policies has not stopped the unions putting forward suggestions that might ameliorate the present worrying national economic situation. One of these is the Tobin, or so-called Robin Hood tax.
Deterrent to gambling
More than 40 years ago, American economist and Nobel laureate James Tobin introduced the idea of a 0.1% tax on all cross border transactions and on speculative currency trading. He saw this as a way to discourage short-term gambling with currencies.
Such speculation causes the rand and other currencies to see-saw in value, often creating severe problems for national financial planners and governments. It is gambling pure and simple, wholly unproductive and ultimately harmful to people.
With the rapid march of computerisation, the labour movement extended Tobin’s idea, putting it forward as an alternative to “unfair taxation”. In 2010 the British Trade Union Congress adopted “Tobin” as a minimal tax - perhaps 0.5%or even 0.05% - on all financial transactions.
Since then, others around the world have followed suit. It has been pointed out that in a country such as South Africa, a 0.05% - 5 cents for every R100 - transaction tax would bring in more revenue than income and value added tax (VAT) combined.
As matters now stand, 14% VAT is levied on many goods in South Africa, from certain foodstuffs to books, and this is paid by rich and poor alike. The rich, who tend to be more involved in financial transactions, also benefit in terms of income tax: individuals earning R56 000 a month, for example, are in the same 40% tax bracket as someone paid R1m a month.
It’s not really the Robin Hood idea of robbing the rich to pay the poor. “It’s taxing unproductive currency dealing and having the rich pay a fairer share,” says Cosatu spokesperson, Patrick Craven.
- Fin24
