Minimum wages a two-edged sword

GOVERNMENT’S proposal to introduce a legal minimum wage for domestic workers of R800 a month is by no means unreasonable, but whether or not it is practical remains doubtful.

It raises several questions. For instance, what is to be the minimum skills level? And is it fair to impose this cost on the householder in the case of a rookie domestic worker who will need to be trained from scratch?

The bottom line is that what has always been an informal sector would be regulated by law. But unless the government is prepared to recognise the householder as a new class of formal employer who qualifies for a tax deduction based on wage bill costs, the legislation will be a one-way street.

Many domestic workers have jobs simply because both parties in the home are away at work all day. They are heavily taxed on the wages they earn, but receive no relief on the money they pay as employers.

Something is out of balance here. Wages are a legitimate running cost to any employer, and household wages should be no exception.

As it looks set to intervene on behalf of domestic workers the government now needs to consider tax incentives in this context. That way any burden of extra cost would be lightened and the job market in this sector would probably expand.

Nobody should underestimate the importance of the domestic worker market. Many of these people are bread- winners.

But any one-sided legislation could backfire and put unskilled people out of work as employers weigh their options. All round it’s a prickly conundrum which may not have the desired effect if government is unrealistic.

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Road plan could use defence billions

THE idea of South Africa’s road system tripling during the next ten years holds exciting prospects, especially if previously inaccessible tourist attractions are to be included in the plan formulated by Sanra, the SA National Roads Agency. But let’s wait and see if it happens.

It is clearly a matter of concern that at the current level of expenditure in the national budget only about 40 per cent of the non-toll national roads are being maintained.

In a vision document Sanra says it needs to finance a strategic road network of about 20 000 kilometres, with about 7 000 kilometres toll-controlled.

All of this should be no problem for a country that can lash out R40-billion – eight times the current value of the national roads network – on sophisticated weapons and equipment that it hardly needs.

It’s simply another example of the real needs of the country being subordinated to the idiotic whims of foolish politicians intent on playing grand games.

There are crying needs in health, education, safety and security, justice and virtually everything else one can think of, but we end up pumping the country’s wealth into a lame duck, semi-functional defence force.

So to fund its tenuous plans Sanra has had to come up with some interesting ideas, including public-private partnerships and user-pay principles. Hopefully all of this gets off the ground, but we won’t hold our breath.