LETTER - Income inequality is much talked about in South Africa but its real cause is politically ignored and instead “big business” is blamed. Big business doesn’t even mind - they too are well taken care of. This inequality is clearly the result of the disappearance of the middle class. It leaves only the very rich and the very poor.

Who is benefiting? Obviously, the government and big business are benefiting immensely: the government through the buying of the votes of the ever growing poor, uneducated and unemployed using unsustainable financial grants and promises of still more unsustainable benefits yet to come; big business benefits by lobbying the different levels of state governance for benefits/incentives/tenders and cash injections by the state through joint partnerships.

Who is responsible for this increasing separation of rich/poor inequality? Right across the country the government - both provincial and national, the municipalities and all state-owned enterprises.

How are they doing this? Since 1994, the tripartite alliance, and especially the unions have vociferously opposed small business and still do now by instituting laws that restrict the growth of small and micro business.

As businesses slowly and painfully die out and unemployment rises uncomfortably, what does the government, the municipalities and State Owned Enertprises (SOEs) do about it? They continue to hire political, unskilled, uneducated, unprofessional, people giving them exorbitant salaries and benefits which small and micro businesses cannot compete with. The state becomes even more unproductive and bloated. What is left of the remaining small and micro businesses and working populous are continually milked with ever-increasing taxes and reels of red tape to put off even the most entrepreneurial of “authentic” entrepreneurs.

How do you reverse this situation? For one, you need to be very unpopular. You need to drastically cut the size of government, municipal and SOE structures, reducing the salaries and benefits burden, aligning remuneration with reality of the private sector.

Second, you need to cut the endless unnecessary over-controls, business stifling labour legislation and red tape burdening businesses and let “real” entrepreneurs do their job to build a middle class.

Third, greatly reduce the horrific direct and indirect taxation on the populous and small/micro businesses (ridiculously high PAYE, VAT, exorbitant municipal rates and charges, petrol, diesel, paraffin, etc.) that are drying up financial reserves killing even the thought of entrepreneurship or those wanting to support entrepreneurship i.e the middle class no longer has disposable income. No wonder South Africa’s GDP is stagnant while unemployment is soaring.

Last, combine the Basic and Higher Education Departments with that of Trade and Industry so that matriculants and graduates have a job to go to after graduating.

We have a situation where the only employment experience government, municipality and SOE workers have and can get is working for the state which contributes zero to GDP.

Gerry Nelson

Durban North