Lessons and Direction for our Labour Market; Workplaces and Society in General.
Written by Glen Cormack, the Fairness Institute.
Health care, retail, education and learning, business services are facing accelerated on-line usage due to Covid-19, resulting in the 4th Industrial Revolution affecting our labour market 4 – 5 years before original expectation. This translates into more job losses before employees are retrained to take up these new functions/jobs.
Going Forward into the Future:
So, what should stakeholders do as we re-open our businesses, formal and informal, and restart our economy? My analysis suggests this should be addressed in three phases, viz; the immediate; the short term (1-2 years); and the longer term.
The immediate term should address the immense difficulties poverty and unemployment are having on millions of people. The risks from not taking cognisance of this factor include increasing lawlessness and chaos as people are driven into survival mode – whilst watching the elite and privileged driving their upmarket cars to and from their comparative mansions, showing off their wealth. And only the State can address this level of desperation!
However, the State functions on the mandate and funding of its citizens. The ability of the State to fund food security; health care; and other socio-economic pressures arising from massive unemployment and poverty are dependent on the twin “devils” of income and expenditure. It is no secret that the treasury is depleted for new, costly initiatives. It has made massive funding available to current relief schemes, despite tax income showing significant reductions as businesses closed during the lockdown. Its debt is reaching alarming levels, its global ‘junk’ status adding to the cost of borrowings.
There is no more direct and visible way of demonstrating that “we are in this together” other than taxpayers that can afford it. Consideration needs to be given to a 5% increase in individual income tax payments for three years for those earning above R500, 000 p.a. I remember the tax rates closer to 40% in the ’80s and early ‘90’s to fund apartheid without protests from taxpayers. There should be an immediate robust effort made to minimise or eliminate tax evasion and avoidance by businesses and individuals. Numerous research articles have alluded to the billions of Rands lost to the fiscus through these activities. The issue of confidentiality of taxpayer contributions could benefit from greater transparency to address perceptions of undue benefits flowing to the elite or chosen few.
Likewise, urgent and transparent efforts must be made to ensure corruption does not pay and the risk of being caught is high. One shudders to think of the billions being lost currently to corruption as the stories start trickling in of Covid-19 related relief schemes, PPE and other infrastructure resources being looted. No State will succeed in increasing tax incomes if it is widely believed that these funds will be syphoned off to officials and chosen beneficiaries. A way of joint stakeholder approval of expenditure and tender allocations needs to be introduced.
Perhaps NEDLAC sub-structures could have a role to play in this function. Leaving it to auditors to uncover after the monies have been looted has been shown not to work. Unfortunately, in too many cases the auditors themselves, both internal and external, have been implicated in these criminal activities. Investment in prescribed government assets, again for a possible three-year period, should be introduced during this national recovery effort. Again, safeguards that these investments are not poured into SOE bailouts must be introduced.
Amongst the first government-funded initiatives must be a meaningful basic income grant to those citizens economically active but not employed, in training or education. These citizens or persons lawfully in the country should be allowed to exist with a degree of dignity as endorsed in our Constitution. And let it be recognised that this will not be achieved on R350/month.
Joint social partner governed public works schemes addressing our infrastructure shortcomings, including mass housing; water and sanitation; and rural development schemes must be the order of the day, training and employing millions of youth.