The new growth path plan provides a fair balance between what the state must do and what businesses are best equipped to do, Minister of Economic Development Ebrahim Patel said on Friday.
Patel was writing in Business Day newspaper.
“This is where social partnership is critical,” he added. “The engagement with some of South Africa’s largest companies and business associations will help to spell out the roles each can play.
On remuneration, Patel clarified what the new growth path document said. “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 going forward.
“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 added 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 2005/06 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?”
New ground
Discussions on wages had in the past polarised society.
“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.”
Patel asked that the discussion be moved beyond slogans and calls for the retention of the status quo.
“The media can play a constructive role by opening a genuine debate, instead of simply pouring cold water on the new proposals.” — I-Net Bridge