Shared sacrifice
2011-08-17 12:30
Clem Sunter
"My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice." So wrote Warren Buffet, the founder of Berkshire Hathaway and billionaire himself, in a column in the New York Times on Monday. Coincidentally, I have been saying the same for some time that Barack Obama should be leading from the front by taking a pay cut himself. He should insist that members of Congress do the same, particularly those from the Republican Tea Party.
Buffet's statement has been lauded in many quarters already and has even been picked up by Obama in his current roadshow to get himself re-elected. Of course, it conflicts totally with Republican fiscal policy that the only way to cure the current budget deficit is through reducing expenditure. Any rise in taxes should be stoutly resisted, the conservative wing maintains.
In contrast, the reaction of our media and many informed observers to our own icon Desmond Tutu's call for a similar degree of shared sacrifice in South Africa - a country with a higher degree of inequality than America - has been extremely hostile. Admittedly, he should have couched his request in different terms and referred to the super-rich generally as opposed to whites in particular; but the point he makes about achieving a greater sense of justice and moral probity in our society is as valid here as it is in America.
Moreover, rather than linking any form of redress to the evils of apartheid, I would have preferred Tutu to have made his plea in the current context of the economic hard times we are experiencing. The riots last week in London and in other British cities could easily be repeated here if the poor get the feeling that they are disproportionately bearing the brunt of the downturn. Shared sacrifice means something different to what happened when the Titanic sunk and virtually all the seats in the available lifeboats were taken by first-class passengers. It means creating the feeling that rich and poor alike are in the same boat and must share the hardship.
I would propose two initiatives in South Africa to turn the principle of shared sacrifice into reality. Both initiatives would apply to people earning more than R1m a year, in other words to the upper income group alone regardless of race:
1. A compulsory annual contribution to an NGO of the individual's choice which carries out essential work in fields such as education, health, welfare, legal representation and enterprise development in either urban or rural areas. Such a move would offset the serious financial pinch that many of our best NGOs find themselves in as a consequence of declining corporate and international contributions. Obviously, like income tax, the contribution percentage could rise as you head into the heavens of millions of rands of income but it would start at an income of one million.
2. A one-off compulsory investment into a venture capital fund of the individual's choice which is devoted to creating a new entrepreneurial class in South Africa, the objective being to create one million new businesses in the economy by 2020. This will lead to the government's target of five million jobs by the same date. The size of the investment could be related to either a person's wealth or income but with the proviso that he or she is earning at least R1m a year.
Like Warren Buffet and Desmond Tutu say, the time has come for the super-rich to come to the party. The only modification I have made with my proposals compared to those put forward by Buffet is that, bearing in mind the difference in personal wealth between the USA and South Africa, the threshold for action should be millionaires not billionaires.
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