Should the retirement age be raised to 70?

Business Live looks at whether the retirement should be extended to 70 years of age, based on a number of factors. South Africa’s population is ageing, with 8% of the total aged 60 or older. This percentage has been rising, and will continue to do so as life expectancy increases. Although the provincial life expectancy rates vary, the overall country life expectancy rates have been climbing steadily again, and now stand at 59.7 years for males and 65.1 years for females.

While the country is seeing a rising number of retiring people the taxpaying base is not growing and unemployment numbers remain stubbornly high, and the rising retirees numbers will also have a negative impact on economic activity. Organisations could create a type of mentorship programme where older workers could transfer much needed skills and experience to a younger generation. This wouldn’‘t only address the country’s high unemployment rate, but also the mass of unskilled, young individuals. Thus, the country should look at raising the retirement age to, say, 70.

by Lee-Ann Steenkamp

Tax the rich, allocate more to education

Tomorrow, all eyes will again be channeled on the South African Parliament. This time on Pravin Gordhan, the Finance Minister, is scheduled to give his budget speech at 2pm. This will be Gordhan’s second budget speech since his return as the political head of South Africa’s treasury. What insiders were able to confirm about the budget speech was that less brawls, heckling and F-bombs were expected in the event of Gordhan’s address. Earlier this year Gordhan asked for public input on what the people wanted to see in the budget, in particular, he wanted ideas on funding of free education for tertiary students, how South Africa could achieve inclusive economic growth and how the country could use its resources to ensure efficiency.

As the minister finalizes how national funds are going to be distributed for the 2017/2018 financial year and who will get what, various stakeholders within South African society have indicated what they would like Gordhan to prioritise. Union federation, Congress of South African Trade Unions or COSATU, asked Gordhan, in a statement, to take cue from President Jacob Zuma’s 2017 State of the Nation (SONA) address and prioritise “radical economic transformation”.

“As the federation, we expect the Minister to allocate more resources towards government programmes that are meant to create jobs and adopt policy positions that will kick start economic growth. The main priorities and the overall focus of the budget should be about addressing the triple challenges of the high levels of unemployment, deepening poverty and growing inequality” said Sizwe Pamla, national spokesperson of COSATU. “The budget should help start to unpack the President’s ‘Radical Economic Transformation theme’, as announced in the State of the Nation Address last week. Most of the economic transformation raised issues in the SONA focused on BEE and the already empowered but presented no coherent job creation plan and targets by government.”

COSATU also said they wanted Gordhan to increase the taxes to be paid by the rich. The union wanted to see an introduction of investment tax credits to encourage local procurement of machinery and equipment as well as an increase in tax on financial transactions, including capital gains tax above a certain minimum threshold to limit short-term capital flows and to encourage productive investment. COSATU reiterated the call that had been made by Deputy President, Cyril Ramaphosa, that there should be lifestyle audits on public representatives so as to deal with tax evasion.

On energy, COSATU said it expects to get clarity on the unpopular and unaffordable nuclear energy procurement plan and about the expansion and acceleration of the renewable energy sector. Alan Mukoki, CEO of South African Chamber of Commerce and Industry, said with the announcement by  Stats SA labour 2016 fourth quarter survey indicated that employment grew by 235 000 jobs mostly in the  services industries, transport and manufacturing. “SACCI would like to see how the Budget Speech addresses the decline of employment in the mining and construction industries and how growing sectors can be assisted to create more jobs,” Muloki said.

SACCI is hoping that the Minister will not be increasing corporate income tax as well as personal income tax as SACCI believes this will be regressive steps as they can only serve to increase costs and discourage expansion through capital investment in productive capacity. “This inevitably will lead to a rise in inflation as corporate would increase prices to ameliorate the additional tax burden,” he said. SACCI added it would like Gordhan to address SMMEs and how the Treasury will be gearing finances directly to the development of SMMEs, especially in mass job absorbing cooperative initiatives.

Treatment Action Campaign (TAC), which is an NGO based in the health sector bemoaned South Africa’s public healthcare system. TAC Advocacy Campaign Manager, Lotti Rutter, said the public health care is an ailing system which was at best, under-resourced and at worst, severely dysfunctional. “The Finance Minister should announce investment into the establishment of formally employed, properly trained and supervised community healthcare workforce. While this would require large upfront investment, it would have major savings in terms of the number of people who are averted from getting TB or drug resistant TB, the number of people who adhere better to first line HIV treatment and do not need more expensive second or third line treatments, as well as ensuring early detection of other health issues that are prevented from worsening” said Rutter.

“The Finance Minister should also announce that additional revenue will go towards the urgent implementation of universal health coverage and the restoration of primary healthcare in districts through the National Health Insurance Fund. Only through this can we move towards an equitable healthcare system in which everyone enjoys the highest possible standard of care” continued Rutter. Human Rights NGO, Right2Know (R2K) said they were hoping that the minister shows commitment in bridging the digital divide in South Africa by putting more money in the ICT infrastructure. “We cannot stress enough the importance of ICT infrastructure when it comes to addressing the issue of costs of communications in this country. If the cost of communications is so high then most people can’t afford to use the internet or call each other, meaning the freedom of expression is a luxury that only rich people can enjoy. We need to ensure more just access to the internet” said R2K spokesperson, Busi Mtabane.

“A study commissioned by R2K and conducted by the LINK Centre at the University of the Witwatersrand has found that poor South Africans are spending more than a fifth (22%) of their monthly income on communications. If we were to lower the costs of communications then people will not be forced to cut back on basic necessities in order to access their right to communicate” remarked Mtabane.” The Young Communist League of South Africa (YCLSA) said Gordhan must expand expenditure on public services such as health and education. “We would like to see the the diversification of the economy as well as push industrialization. On education, we would like the minister to allocate more funding in the ministry of Higher Education and Training so as to counter the challenges faced by the tertiary education sector,” said Molaodi Wa Sekake, YCLSA spokesperson.

by Nkosikhona Duma
Ref: Africadaily

National Minimum Wage agreement

The recently concluded National Minimum Wage agreement at Nedlac represents a partial victory for the workers and also signifies the first step towards the attainment of a living wage. The NMW is a product of an arduous and ongoing struggle for a living wage by workers and their federation COSATU, since the 1980’s. The workers in this country have waited long enough for the national minimum wage. Sixty years ago the Freedom Charter called for a National Minimum Wage (NMW) as one of its key demands. The Freedom Charter stated that there shall be a: forty-hour working week, national minimum wage, paid annual leave and sick leave for all workers, and maternity leave on full pay for all working mothers.

Workers have managed to defeat the fear mongering, untruths and outright propaganda by a well funded lobby group that did everything to mislead the people, and blackmail government into abandoning the idea of a minimum wage. This once again reinforces our perspective that unless the working class raises itself to a hegemonic position in key sites of power, and strengthens its capacity to mobilise and fight, the envisaged economic transformation will never happen. The struggle for a Living Wage is a long and difficult one, which includes the struggle for affordable basic services, transport and food, and decent wages and working conditions and will only be achieved through the collective power of workers.

The most recent developments in the country have reinforced the importance of a meaningful National Minimum Wage. The recently released Labour Market Dynamics, published by Stats SA, reveal that 50% of workers in South Africa earned below R3100 in 2015. This reinforces the findings of the Wits National Minimum Wage Research Initiative that over 50% of full time workers (or 5.5 million workers) earn wages, which are too low to bring them and their dependants out of poverty. This is what has motivated the federation to fight for the National Minimum Wage needs to be pitched at a level, where it is able to address this disgrace of working poverty, and the unacceptably high levels of wage inequality in our country.

While the figure of R20 and hour still falls short of the federation’s proposed figure of R4 500 a month and does not address the minimum living standards of an average South African household; it offers workers a decent starting salary base. This will give workers building blocks to put together a solid foundation towards a living wage and will have a material impact on improving the wages of half of South African workers, or 6 million of our brutally exploited workers. Many workers like farm workers under FAWU, petrol attendants under Numsa, security Guards under SATAWU, Textile Workers under SACTWU, Retail Workers under SACCAWU and other non unionised vulnerable workers will benefit immensely from this deal.

It is totally obvious that a NMW is not a silver bullet by itself but needs to be combined with developmental labour market and economic policies, which tackle the cheap labour basis of our. A meaningful National Minimum Wage to be effective needs to be accompanied by a new wage policy, which begins to recognise the dignity of every worker in our society, and overcomes the legacy of apartheid wage structures. We also need to ensure that the NMW is linked to a plan to extend comprehensive social security. It is indisputable that, we inherited a legacy of an apartheid wage structure that was never addressed and that our economic system is not fully transformed and still has features of colonial and racial capitalism.The ANC 2014 Manifesto proposed comprehensive collective bargaining, state incentives, employment equity, and the national minimum wage as a package of mechanisms to transform the apartheid economy wage structure to promote decent wages and decent work.

There have been some pessimistic voices that have argued that a legislated national minimum wage will be bad for employers. But most studies have shown that adopting a minimum wage and paying workers better salaries in general makes businesses to operate more efficiently and employees to work a lot harder than usual. Higher and decent wages lead to more content employees, who stay with the business a little longer, and reduce staff turnover and training costs that go with hiring new employees.

Some have vehemently argued that a minimum wage will cost the economy jobs and raise the levels of unemployment. This is not supported by any hard evidence at all. In the US, a study that was done by banking giant Goldman Sachs of the 13 states, which have raised their minimum wage found that “the states where the minimum wage went up had faster employment growth than the states where the minimum wage remained at its 2013 level.”

Detailed research has been done by progressive researchers on the prospects for a NMW in South Africa, and labour in alliance with community has placed detailed proposals on the table based both on extensive analysis of the international experience, as well as detailed consideration of the South African wage structure and the conditions facing workers. COSATU is proud of its the work done by labour, communities and other progressive NGO’s to move both government and big business away from the ridiculously low level of R1258 per month that they had previously proposed. Credible institutions like Wits have produced a research that disproves the propaganda that the introduction of a R3500 minimum wage will have major negative effects on the economy. The idea behind the minimum wage is that it should make an effective contribution to a wage policy, which tackles the obscene levels of wage inequality still prevalent in our wage structure. Labour will ensure that this minimum wage will afford all workers a basic level of dignity and in its design and legislative formulation; we shall ensure that it supports and reinforces collective bargaining.

The huge task is to ensure that it counters potential abuse by employers, and legislate against the downward variation of existing agreements, which are higher than the National Minimum Wage. COSATU is adamant that the National Minimum Wage should be used as a springboard for a Living Wage Campaign in all sectors. The International Labour Organisation is very clear that the objective of the minimum wage is to reduce poverty by establishing a generally applicable lower limit under which wages are not permitted to fall. The fixing of such a general minimum wages normally is associated with the view that all workers, as a matter of right, ought to receive protection against unacceptably low wages.

COSATU will remain vigilant and shall continuously push to ensure that this starting figure is combined with a firmly agreed medium term target and that here are decent above inflation annual increases to progressively achieve this target. There has to be some compliance mechanisms and effective sanctions in place to ensure that this NMW benefits the workers, otherwise it will be a meaningless exercise.

by Bheki Ntshalintshali – General secretary of COSATU

Work stress costs SA R40bn

IOl News reports that work-related stress and major depression, burnout and anxiety disorders are costing SA’s economy an estimated R40.6 billion a year – equivalent to 2.2 percent of gross domestic product. This is according to Dr Renata Schoeman, board member of the Psychiatry Management Group (PsychMG), who was commenting ahead of World Mental Health Day on Monday.

Schoeman urges companies to realise the significance their company structure, expectations of employees and management style have, not only on the company’s annual turn-over and overall productivity, but in the risk of employees developing health problems that could prevent them temporarily or permanently reentering the workforce.

“Mental health awareness in the work place will ensure early identification and treatment of disorders, prevent recurrence and long-term complications. By implementing employee assistance programmes, the quality of life of employees and the longevity of the company will see a lesser loss to the country’s gross domestic product and prevent disorders turning into permanent disability.”

The Worker’s Museum

The Worker’s Museum was once a place of poor living standards and racial segregation. The building, which is now known as the Worker’s Museum, was a cleansing and sanitary compound in 1913, when it was opened by the City Council. It was built to house the migrant workers who were employed by the department of sanitation and at a nearby power station, but according to the workers who once lived there, conditions were less than comfortable with 13 men sometimes sharing one small room with no electricity.

According to the Newtown Heritage Trail, black workers from across Africa left their families to pursue their careers in Johannesburg and were made to sleep side-by-side on concrete bunks, with no privacy and living under the control of the compound manager, while the white workers were deemed more skilled and lived in houses on the north side of the compound. In the years that followed, the Newtown compound was inhabited by a number of different working groups including electricians and general municipal workers who were employed in the quickly developing Johannesburg area. It was in the 80s that the compound was converted for use as a storage facility, but shortly after this the Newtown Workers’ Compound was declared a national monument in 1996.  The venue is open to the public and is available as a meeting and event venue, and is also a library.

Extracted from the Northern Eastern Tribune
– by Racine Edwardes

The rich derail good healthcare

The frequent shooting massacres that have become an almost daily occurrence in the United States of America have something to teach us in South Africa. They represent a classic case of dangers of allowing business financed lobby groups to influence and dictate policy formulation.

The National Rifle Association {the American gun lobby group} has become a powerful stumbling block for the American government to regulate the firearms industry. They are a strong and well-financed lobby group with the institutional imperative to keep lobbying no matter how many people die due to gun violence. In South Africa , we have seen the emergence of organizations like the Free Market Foundation {FMF }and the South African Institute of Race Relations {SAIRR }that are vociferously opposed to almost all progressive policies of the ANC led government ,especially the NHI.


Average salaries growing just above inflation?

Fin24 reports that the average South African salary grew just above the estimated rate of inflation, according to the BankservAfrica Disposable Salary (BDSI) data released on Wednesday. According to the index the average disposable salary grew 6.7% year-on-year, compared with the 7.3% y/y growth recorded for April 2016. BankservAfrica’s data shows that the average take-home salary in May was R13 142, which is slightly above April’s average of R12 877.

“The higher monthly average trend is likely to continue, in line with the anticipated public sector wage increases,” said Mike Schüssler, chief economist at Economists dotcoza. The data reveals that individuals receiving between R10 001 and R25 000 into their bank accounts make up 38% of the broad take-home pay category. There was also a significant decrease in the group of individuals in the income category of  R4 000 to R10 000. According to Schussler higher taxes took much from the higher pay cheques as tax collections increased by 57.8%, averaging out at a 48% average increase. “Medical insurance also went up by about 38%. As these are two of the big three deductions that employees have before money is paid into their bank accounts, it is therefore likely that both median and average gross salaries increased above the rate of inflation,” added Schussler.

The ins and outs of medical aid cover

It is crucial to understand your medical aid scheme’s prescribed minimum benefits to avoid any surprises in terms of
co-payments. To provide lower-cost medical cover, most medical schemes offer plan options where co-payments apply for certain procedures. These procedures tend to be elective surgeries such as a colonoscopy or joint replacement and are clearly defined in the medical schemes brochure. There is, however, some confusion surrounding when co-payments may apply for prescribed minimum benefits (PMBs). A court ruling in 2011 found that medical schemes must pay for PMBs in full and
co-payments may not apply.


Dismissing Universal NHI? A big No!

Our health care system – both private and public – despite notable achievements since 1994, is indeed in crisis. Yet this is a system that commands huge resources, an extensive network of public and private hospitals and clinics, research facilities, a 200,000 health workforce. But we are unable to provide good healths care to all our people. One important reason why every resident in South Africa should expect good quality care is the fact that we spend more on health care than many “developing” countries. Our spending is even comparable with other “developed” countries, currently standing at 8.2% of the GDP, the highest being 8.7% in 2002. In 2007, public sector spending was R1,423 per person and R8,321 per person in private medical schemes.


UFS-Afrikaans case: Language, segregation and the Constitution

The removal of Afrikaans as a medium of instruction at the University of Free State was a violation of the Constitution, the Bloemfontein High Court heard yesterday. “Afrikaans has a right to survive. This matter is about the supremacy of the Constitution,” Johan du Toit SC, representing AfriForum, told a full bench of judges. In March, the university reached a unanimous decision to make English the primary medium of instruction from 2017. In March, the university reached a unanimous decision to make English the primary medium of instruction from 2017. The university’s council said English would be the primary medium of instruction at undergraduate and postgraduate level on the three campuses situated in Bloemfontein and QwaQwa. It also added that the primary formal language of the university administration would be English, but with sufficient flexibility of multilingualism across the university.

However, soon after the decision was taken, AfriForum approached the high court for an interdict against the university. Advocate Greta Engelbrecht, also representing AfriForum, argued that the language-policy decision taken by the university was unconstitutional. “They [university] wish to shackle Afrikaans in its historical notion of oppression.” However, Jeremy Gauntlett SC, representing the university, said language had become a surrogate for colour segregation in classes. Gauntlett also argued that there was a high demand for English and that, through the implementation of the policy, there would be no job losses at the university. Judgment was reserved in the matter.

by Jeanette Chabalala – News24