Trevor Manuel's promise of smarter taxation is interesting coming on the heels of union recommendations of a 55% tax rate for the rich...
IF you accept the idea that taxation is fair, then there's nothing wrong with high tax rates. Denmark, for example, has a 70% tax rate, but offers one of the highest standards of living in the world.
There are many of us who would gladly pay out that much in exchange for comprehensive free modern medical facilities, affordable housing, superb public transportation, low crime rates, 99% literacy, etc. etc. etc.
But the Danes are scrupulous with their use of public funds (as Allan Boesak found to his chagrin). There is little chance of pressure groups garnering a lion's share of the profits to the detriment of the rest of society.
In the new South Africa, we have many such pressure groups, which steer dangerously close to crossing the fine line between protecting their own interest and harming society.
There are two types of people in a modern workforce; those who can negotiate their own pay packages, and those who cannot. If you fall into the second category, you belong in a trade union.
Unions have been good for this country. Laws such as influx control and job reservation created a captive labour pool that was open to exploitation. This was especially evident in mining, where conditions were horrendous until Cyril Ramaphosa's National Union of Mineworkers built itself into a force to be reckoned with.
But the rules were different then.
In a polarised society, outside the world economy, unions existed in isolation from the rest of the country and were right to extract every cent to be had in pay increases.
In a free South Africa, concepts such as national interest suddenly become morally valid. In a country with 32% unemployment and 11% underemployment, trade unions cannot claim to represent society at large.
Trade unions are now just another pressure group with self-interest as a priority, not very different from the corporate giants who employ their members.
There is nothing wrong with any of this. But what needs to be questioned is whether pay increases for the already employed should take precedence over job creation for the unemployed.
We have 300 000 people entering our workforce every year. Only 5% of those find jobs. As organised labour asserts its bargaining power, the amount of capital available for job creation diminishes.
These issues are probably on the mind of the ANC as well, not out of disloyalty to organised labour, but from the stark political reality that the unemployed pose more of a threat to future prosperity than any number of strikes.
As a voting bloc, the unemployed are numerically one of the largest groups in the country. A charismatic leader like the former Mrs Mandela would have little difficulty rallying them into toppling the government, come the next election.
The ANC has been playing the game well.
Trevor Manuel's opposition to import tariffs may offend union sensibilities, but the increased competition does result in lower prices, which directly benefit the unemployed and underemployed.
The losses local companies suffer as a result will be short term at any rate. With the inevitable scrapping of exchange control, the rand will fall further, discouraging imports and making our exports more competitive.
Unions need to learn the new rules of the game too. If short term pay increases are traded for job creation, union ranks will swell, assuring, in time, of real power.