Patel: State won't regulate salaries

2010-12-03 11:28

Johannesburg - Economic Development Minister Ebrahim Patel on Friday defended proposals in the government's new growth path document, saying that the state would not regulate salaries or set maximum limits.

Patel was writing in Business Day newspaper.

The new growth path calls for "moderation" in wage increases, he wrote.

"It puts forward proposals for commitments by stakeholders to accept moderation in wage increases as part of a deal on price restraint, concrete jobs commitments and measures to address income inequality."

He said the proposals did not entail pay cuts, set maximum salaries, or rely on state regulation.

Rather, they sought a consensus with business and labour on remuneration increases in the future.

"They cover employees earning more than R3 000 a month and they propose a modest but above-inflation wage increase at the lower end (R3 000 to R20 000 a month) ranging to a freeze or below-inflation increase (the so-called salary caps) for the highest paid, who earn more than R45 000 a month."

Patel acknowledged that "no one ordinarily volunteered for this kind of sacrifice".

"But we cannot hope to sustain a common purpose in a society marked by extreme inequality without promoting wider cohesion.

"To secure commitments on partnership and productivity improvements in a divided workplace is difficult, unless senior staff also show solidarity."

Patel said the official Incomes and Expenditure Survey for 2005 to 2006 had found that the richest 10% of the population received 51% of all household income, while the poorest 50% got just 10%.

"If we do not start to deal with this problem now, when will we?".

Discussions on wages had in the past polarised society, he said.

"Some have argued for more wage flexibility and moderation at the bottom end, while others have called for restraint on high- end salaries and bonuses. We need to take the debate beyond strident comments and move both parties to new ground."

Patel said the new growth path made proposals to provoke a discussion that could build a new consensus on wages and earnings.

"We made them specific, because anything less is unlikely to get South Africans talking."

He also said that the growth path provided a fair balance between what the state must do and what businesses are best equipped to do.

"This is where social partnership is critical," he said.

"The engagement with some of SA's largest companies and business associations will help to spell out the roles each can play."



  • THE MAN - 2010-12-03 12:21

    yes communism is the only way we can be equal which will stop jealousy which will bring down crime.... we can not have pockets of stinking rich thugs who want to alianate themselves from society and live in a dream world

  • Richard - 2010-12-03 12:30


  • Clive - 2010-12-03 12:42

    I fully agree we need to close the salary gap & also increase consummer based economic activity. The route to reduce the salary gap is around supply & demand. The fewer people chasing jobs the more salaries go up. Fundemental needs in my view: 1. Increase the number of employment opportunities at the lowest skill level. Understand right now that is probably in the R1500 ~ R3000 bracket & would fall into the dirty jobs catagory. 2. Educate, educate, educate ~ increase the number of skilled people. 10000 artisan apprenticeship, 3000 technicians, 1000 engineers per year becoming qualified

  • Big Cheese - 2010-12-03 13:02

    Sorry Patel old chap - as long as you and your cronies piddle out our hard earned tax monies you aint gettin no commitments from me .

  • Tony - 2010-12-03 13:14

    And I suppose that they will start with parliamentarians, to set a good example of course. I'd like to see those fat cats accepting nothing as an increase.

  • Sue - 2010-12-03 13:22

    For any plan of this magnatude to work government will have to be the first to make sacrifices. Corruption has to be eradicated completely. Then only will the private sector consider implementing it. Basically the house must be cleaned from the top down not only sweeping the floors.

  • P - 2010-12-03 16:01

    It is also the richest 10% who are paying the taxes that provide free housing, water and electricity to the poorest 50%

  • MG - 2010-12-03 17:15

    I like the way Mr. Patel suddenly back tracks on his very own words quoted in the the article to now say they dont want to regulate salaries. Me thinks he needs to grow some real Communinst balls like Stalin!!

  • Tazz - 2010-12-03 17:34

    Patel, all the people who agree with you are the ignorant bottom feeders and ANC cadres who want everything for nothing. As usual.

  • Clive - 2010-12-04 11:13

    Increase VAT to 20%, Zero PAYE for those families or individuals earning less than R35 000.00 per month. Increase skills levy to 4% of payroll, national drive for comprehension of English for business and effective worker development purpose. Effective career advice for all and school pupils.Focus on SMME owners: education, marketing, advice on HR issues, business law, long term vision and purpose of your business etc etc For those who advocate Communism and this non-sense of all being equal, please bring evidence of Communism that has worked and what is this equal issue that you have - Ps explain!

  • Khaya - 2010-12-08 11:58

    It absolutely amazes me how the rich, black and white, will stick together when ANYBODY threatens their extravagant lifestyles. We, the poor, would never hope to be equal to you. But if this country carries on in the manner that it has, then expect the poor to become more vociforous in their outcry. As soon as ANYBODY proposes anything that purports to bridge the gap between the haves and have nots, then the "Sandton Army" run to their laptops and label them a communist. Go forward Patel, this country is for ALL who live in it, not just those who can afford an overseas vacation every year!!!

  • TM - 2010-12-13 20:45

    I really agree with Clive: we need to look at the ecomomic fundamentals of supply and demand. The issue of closing the inequality gap is important but I think more pressing is the issue of ensuring that the nation is not below the line of survival.We have to concentrate on the production of quality in the areas of education and public and private serves so that skills and quality are no longer luxurious resources to our nation.

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