Poverty can be re­duced

Business Day - - OPINION -

It is clear that in­come in­equal­ity is an in­tractable prob­lem in SA, but we can do some­thing to al­le­vi­ate the plight of the poor.

The most ob­vi­ous, which can be ac­com­plished with min­i­mum ef­fort, is to re­duce voice and data costs — the poor spend dis­pro­por­tion­ately more of their in­come on com­mu­ni­ca­tions.

Mean­ing­ful and ef­fi­ciently man­aged in­cen­tives should be in­tro­duced to en­cour­age in­vest­ment to re­duce un­em­ploy­ment. This must be done within a tight dead­line, so no “bos­ber­aads” are nec­es­sary.

Make it a re­quire­ment for listed com­pa­nies to dis­close the to­tal com­pen­sa­tion paid to their av­er­age em­ployee ver­sus their ex­ec­u­tives, and name and shame those where the dis­par­ity is egre­gious. This will soon be a re­quire­ment in the UK. Of it­self this won’t do much to al­le­vi­ate the prob­lem, but it will send a pow­er­ful mes­sage.

The for­mer fi­nance min­is­ter said re­cently that R100bn is lost to cor­rup­tion each year, which could have been used to bol­ster so­cial grants. So with clean gover­nance the plight of the poor could be sig­nif­i­cantly im­proved. The so­cial grant sys­tem is a pos­i­tive legacy of the ANC that is be­ing de­stroyed by cor­rup­tion and self-en­rich­ment.

The level of cor­po­rate and in­di­vid­ual tax­a­tion in SA is al­ready too high, so lit­tle can be done there. Any fur­ther in­crease will para­dox­i­cally give rise to even less rev­enue be­ing col­lected due to eva­sion, em­i­gra­tion and re­duced in­vest­ment.

Politi­cians, es­pe­cially the DA and EFF, should not spend so much of their time un­der­min­ing the gov­ern­ment and run­ning to court on ser­vice de­liv­ery is­sues.

Much more should be done to roll out e-learn­ing, which is far less costly and might be a more ef­fec­tive method of learn­ing. Data cen­tres should be set up in ru­ral ar­eas to fa­cil­i­tate ac­cess by dis­ad­van­taged stu­dents. One of the founders of Google said a few years ago that in 15 years only 50% of tra­di­tional brick and mor­tar uni­ver­si­ties will still be in ex­is­tence. Stu­dents should be en­cour­aged not to en­rol for lib­eral arts de­grees. Up to 400,000 grad­u­ates are un­em­ployed in SA, the vast ma­jor­ity from this co­hort of grad­u­ates are lib­eral arts grad­u­ates.

It is es­sen­tial that our cit­i­zens are trained to par­tic­i­pate in the ever-evolv­ing tech­no­log­i­cal econ­omy. Fail­ure to do this will fur­ther ex­ac­er­bate un­em­ploy­ment and un­der­mine our com­pet­i­tive­ness in the world.

Emer­i­tus Prof David Rosen­berg

Via e-mail

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