NGP well worth a discussion

S'Thembiso Msomi: I do realise that some of what I am about to say below could count against me the next time I sit down with my boss to argue for a pay rise.

But such is the hazard of being a newspaper columnist. You have to speak your mind even if the views you express may seriously diminish your bargaining power with your employer.

I am utterly disappointed by the generally negative - and even hostile - public reaction to the New Growth Path tabled before parliament by Economic Development Minister Ebrahim Patel last week.

Like many others, I do believe that the document in its current form has many flaws and that the state has no capacity to implement some of the major proposals contained in it.

But let us not throw out the baby with the bath water. We should not lose sight of the fact that this is not a policy document yet, but a framework for further discussion between government, business, organised labour and other social partners about the country's new economic plan.

In other words, the document provides us with an opportunity to engage in sober dialogue about a variety of policy alternatives that could rescue the country from the current high unemployment crisis and reduce poverty levels.

So far we have failed to do so.

Instead of seriously engaging with the document, sections of organised business and labour have resorted to regurgitating their ideological propaganda. Yet everybody agrees that there is an urgent need for a new social compact if we are to achieve sustainable growth and the equitable distribution of wealth.

Much of the document's rejection, especially within the private sector and the middle class, stems from a suggestion to put a cap on pay and bonuses for executives and senior managers earning above R550000 a year.

The cabinet - for this is no longer just a Patel document - shot itself in the foot by putting down these figures and did a major disservice to a much-needed debate about how to curb the growing income disparities.

On the same day that Patel issued the document, a management consultancy - P-E Corporate Services - revealed that the living standard and net disposable income of South African executives was higher than those of their peers in the US, Australia and Europe.

"Our research shows that in 2010, SA executives are now streets ahead of their international counterparts in Germany, the US, Australia, Belgium, France.," Business Day quoted the consultancy's Martin Westcott as saying.

So not only have we become the most unequal society in the world, our executives have more purchasing power than their peers in much wealthier countries!

Add to that recent revelations that the top 20 directors in JSE-listed companies earn 1728 times the average of a worker.

And then you wonder why we are so prone to labour strikes?

Wage and salary caps are not a solution, but big business and the middle class cannot condemn blue collar workers and civil servants for demanding wage increases that are way above inflation while they apply different rules for themselves.

While there is a real danger that imposing the kind of caps proposed in the document may result in the flight of critical skills, the NGP does provide the basis for serious engagement between government, the private sector and trade unions on how to reduce the income gap and promote wage moderation across the board.

All that is required is a high level of maturity on the side of the government and society.