R/€ = 15.36Change: -0.04
R/$ = 14.45Change: -0.02
Au 1069.96 $/ozChange: 3.81
Pt 840.50 $/ozChange: 2.00
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?

And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters About Us
RSS Feed
Article   Comments   Other News   Research   Magazine  
Oct 18, 2012

Salary increase freeze to cost SA R5bn in lost tax revenue

Agriculture|Africa|Econometrix|Innovation|Mining|System|Tourism|transport|Africa|Europe|South Africa|United States|Manufacturing|Product|Services|Azar Jammine|Infrastructure|Jacob Zuma
© Reuse this

Freezing salary increases at executive management level for a year would cost the country R5-billion in lost income-tax revenue, Econometrix chief economist Azar Jammine said on Thursday.

Jammine, who was speaking at a Decision Process International business breakfast, was commenting on President Jacob Zuma’s call for salary increase freezes in both the public and private sectors.

Zuma stated that CEOs and executive directors in the private sector and senior executives in the public sector should freeze salary increases and bonuses over the next 12 months, as a signal of a commitment to build an equitable economy.

Meanwhile, Jammine said that the lack of progress in educating the South African workforce, compared with the rest of Africa, was stunting economic development.

He also noted that the rest of Africa’s governments had increasingly improved governance of their countries, as well as macroeconomic improvements and stability, while South Africa seemed to be going in the opposite direction.

“We are lacking leadership and we need governmental intervention in the interest of reducing inequality,” Jammine said.

South Africa had the potential to exploit the opportunities for growth in the rest of the continent; however, the country’s strong links with advanced countries in Europe and the US would act as a drag on overall economic growth over the next five years.

“The structure of the South African economy (with significant exports and very little manufacturing) is one that is moving in a very unfortunate direction in terms of employment. Mining and agriculture have consistently lagged behind the national economic growth rate, and unfortunately those are the very sectors that can employ, gainfully, people without skills,” Jammine added.

Further, skilled sectors such as telecommunications, transport, financial services, retail and tourism were now taking the forefront in the economy. “We have an abundance of unskilled workers, but a declining unskilled sector to employ them into, which is problematic, as inequality is increasing” he said.

Jammine further said the solution to mitigate these problems had already been drafted in the form of the National Development Plan, which has now been officially endorsed by Cabinet.

“The plan is to spend about R845-billion over the next three years on infrastructure development, with the bulk, about 35% in electricity. Further, it aims to raise exports, increase the size and effectiveness of the innovation system, improve the functioning of the labour market and support small business.

“However, because Cosatu doesn’t support it, and the Presidential election is coming up, which means that certain parties would not want to upset its tripartite alliance, the plan is kept hush-hush,” he said.

Jammine concluded that the South African economy was growing, but  at a very slow rate. “Two per cent gross domestic product growth a year is boring, but it has been one of the most stable growth rates in the world over the last 20 to 30 years. If you keep growing 2% to 4% each year, the size of the economy is expanding and you would need more infrastructure as it grows,” he said.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
Other Economy News
Corruption Watch executive director David Lewis
The latest Transparency International report paints a bleak picture on corruption in Africa, with more than half of those surveyed perceiving corruption to be on the rise – and South Africa emerging as one of the worst performers. The African edition of the Global...
Sasol Inzalo chairperson Khungeka Njobe
Following hot on the heels of the listing of MTN Zakhele earlier this month, petrochemicals company Sasol’s broad-based black economic-empowerment (BBBEE) fund Sasol Inzalo Public, followed suit on Tuesday – the second company to list on the Empowerment Segment of...
Public Enterprises Minister Lynne Brown
Public Enterprises Minister Lynne Brown reported on Tuesday that far-reaching interMinisterial committee (IMC) discussions were advancing on how best to reform South Africa’s State-owned companies (SoCs), many of which were currently underperforming. There are around...
Latest News
Construction company Murray & Roberts (M&R) on Tuesday said board members Mahlape Sello and Royden Vice would be excluded from any discussion and documents relating to the investigation of the October collapse of a support structure of a pedestrian bridge being built...
The Nuclear Industry Association of South Africa (Niasa) is not sitting by idly while National Treasury and the Department of Energy mull over the various options for the country’s controversial 9 600 MW nuclear build programme. While Energy Minister Tina...
While a resurgence in manufacturing in Africa has been popularly touted as the silver bullet that will accelerate the continent’s economic growth prospects, The Economist management editor and columnist Adrian Wooldridge has suggested that Africa’s industrial...
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
NICK CHRISTODOULOU As about 58% of data stored by organisations is dark, they must identify this dark data to expose risks and valuable information
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
BRIAN VERWEY Effective management, review and administration of non-core elements can improve business operations and increase revenue and decrease unforeseen risks
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...
Alert Close
Embed Code Close
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96