Wednesday, August 18, 2010

A Striking Dilemma

While public servants go on strike today in rejection of governments wage offer increase of 7% (Unions are demanding 8.6%), it is no secret that government is finding it increasingly difficult to make ends meet.

Do the maths:
  • The are 5 million taxpayers in SA
  • There are 13.8 million grant recipients
  • There are 12.8 million people who work
  • The population is 50 million
With less people working than those receiving grants and only 10% of the population contributing towards the tax pool, one has to question how government is going to sustain itself going forward.

I am currently at our Pietermaritzburg office where a bunch of particularly noisy strikers are marching about in the street outside. Our offices are in the same road as several government buildings and the Department of Education is just a couple of buildings down from us.

It’s been a year wherein it seems that every man and his dog has embarked upon strike action. The timing is always palpable and just as Eskom workers used the World Cup as leverage; the SA Democratic Teachers’ Union (Sadtu) are using the upcoming metric exams to evoke swift action from government. Essentially for the sake of extra an 1.6%, educators have deserted learners at a time when they are needed most.

Looking at the numbers one wonders if the abundance of strike action we have seen throughout 2010, with various departments having pushed for an extra percent here and a extra percent there, what the long term ramifications are going to be.

If government does arrive at a point where it can no longer sustain itself from the taxation kitty, they may well be forced into a position where they are going to have to do the unthinkable, embark upon mass retrenchment.

Ernest Roper

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