Tax the super-rich – Vavi

2010-09-05 08:38

Labour federation Cosatu has mooted radical ­economic transformation plans which include a redistributive tax on the country’s “super-rich” to help combat growing social ­inequalities.

The federation – which is currently taking on President Jacob Zuma and the ANC over the collapse of relations in the ­tripartite alliance – also wants a “solidarity tax” to be imposed on those who earn the top 10% of South Africa’s national income, in order to “cap” the growth of their earnings and push up the income of society’s bottom 10%.

The proposals are contained in Cosatu’s economic transformation document, titled A Growth Path Towards Full Employment, which will be unveiled by the federation during a public launch at the University of Johannesburg next Tuesday.

It is not clear who qualifies as “super-rich” or how the top 10% of income earners will be ­measured.

However, Rudi Dicks, who heads Cosatu’s research arm, Naledi, said Stats SA’s 2005/06 income and expenditure survey showed that the top-tenth decile of income earners made an average of R405 646 a year, while the bottom-tenth rung earned an average R4?314 in the same period.

“The persistence of these fault lines points to a need for a shift in class relations in order to lay an appropriate political context for ... South African society.

“The past 16 years have shown that the ballot box, though ­necessary, is not a sufficient path to power,” it reads.

Even though the document was drawn up in July and ­discussed at last month’s meeting of Cosatu’s central executive committee, Cosatu is releasing it on the eve of the ANC’s national general council (NGC), in an ­attempt to influence economic policy debates within the ruling party.

Cosatu boss Zwelinzima Vavi is clearly throwing down the gauntlet to the ANC and the ­Zuma administration, which has so far not addressed some of the issues labour has strongly championed, such as the ban on ­labour brokers and the need to introduce a comprehensive national health insurance system.

Last week Vavi said that Cosatu would embark on living wage campaigns in 2011 “on an ­unprecedented scale”.

“The shape and structure of ­income, wages and inequality must look completely different to that contained in the growth path statistics once this campaign has taken effect,” he said.

Cosatu president S’dumo Dlamini said the proposals would feed into the ongoing discussions in the ANC about economic transformation, ahead of the ruling party’s NGC which is scheduled to be held in Durban later this month.

The conference will be used to conduct a mid-term review of the ANC’s performance since the leadership was elected in Polokwane.

A Cosatu insider said that ­releasing the document before the NGC would help advance labour’s social and economic policy proposals, as there was a feeling that the ANC economic transformation discussion document – which will guide discussions by ANC delegates in Durban – did not go far enough in providing policy ­solutions to the economic ills besetting the country.

“The role of the state is flagged (in the ANC document), but they only say it is limited to state-owned enterprises and departments.

“It does not say the state must directly employ people to build houses, roads, irrigation systems in rural areas etc.

“On economic issues it (the ANC document) raises a lot of questions but it provides no ­answers.

“For example, it is afraid of saying ‘let us do away with ­inflation targeting’,” said the ­insider.

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