Business Day
*Social pacts on wages 'will not be achieved in one big bang'* *Linda Ensor, Business Day, Johannesburg, 24 November 2010*THE social pacts envisaged in the New Growth Path strategy would not be achieved in one "big bang" but would be built up in one area after another over time, Economic Development Minister Ebrahim Patel said yesterday.
He conceded that securing a pact between the government, business and labour on wages, prices, savings, executive pay and bonuses would be a challenge, but said this would be addressed gradually . A series of pacts on different issues was possible and compromises would be required from all sides, he said. "We don't have the luxury of tying ourselves up in one year of discussions. We have to begin to do something early in the new year," he said.
The response by business and labour to the pact proposal has been cool. Business Unity SA said yesterday that such an agreement would be hard to achieve, but it would consider any sincere proposals from its partners.
Congress of South African Trade Unions general secretary Zwelinzima Vavi has rejected all talk of a pact on wage increases.
The aim of the broad development pact on wages, prices and executive bonuses would be to retain the benefits of the competitive exchange rate, support the macro-stance promoted by the strategy and foster job creation.
"Not all of the steps required to secure the necessary employment and growth outcomes can be done by government.
"Social partners have a key role to play and a major contribution to make," the growth path document states. "Ensuring the benefits and sacrifices for the new growth path are equally shared requires extensive social dialogue. Commitments from stakeholders will shape the final package."
The document proposes that labour moderates its wage demands against a commitment by employers to save jobs, create new jobs and address inequality.
Employees earning between R3000 and R20000 a month should agree to modest, inflation- related increases, the document suggested. Pay rises for those earning between R20000 and R45000 would peg inflation and those taking home over R45000 a month would have increases capped or below inflation.
Pay and bonuses for senior managers and executives earning over R550000 a year would be capped. The document argued this would address the problem of excessive pay differentials and display solidarity across society.
For its part, the government would commit to maintaining the real value of social grants and improve the social wage, the provision of housing, healthcare and education. It would reduce wage inequalities by improving the pay, conditions and organisation of vulnerable workers and ensure increases in industrial financing created large-scale employment.
The state would introduce a comprehensive social security system and promote personal savings through changes to the regulation of retirement funds, including affordable compulsory membership for all employees.
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