The rich are not the problem

Rabelani Dagada says SA is the only country where being a clever black, being a white male, and being well-off, is a curse

South Africa (SA) is a country full of contradictions and I suppose this make us such a unique nation. We are the only country where being a clever black, being a white male, and being rich, is a curse. Of course, this is mind-boggling. One of the things that have been preoccupying my mind is which of the above is the worst curse? I don’t have an answer, but for the purpose of this opinion piece, I shall focus on the curse of being rich in SA. It is important to note that most rich people are entrepreneurs and employers.

When some politicians and union leaders hurl insults to the rich, you would think being rich in SA is a crime. The Economic Freedom Fighters and its Leader, Julius Malema, are the leaders in hurling insults to the rich. They described Johann Rupert as a “white monopoly capitalist”, Cyril Ramaphosa as “the greediest beneficiary of the BEE; and Bheki Sibiya as “a pawn of white capitalists”. Another leader whose pastime is insulting the rich is Zwelinzima Vavi.

Interestingly, Malema, Vavi and several leaders on the left, have been bankrolled by the rich. It is public knowledge that Malema preaches socialism, but lives an opulent lifestyle. Actually, before he got into trouble with the National Prosecution Authority and the South African Revenue Services, Malema was rich and a thriving capitalist. Vavi wife’s Noluthando meanwhile runs a company, named after the both of them, Zwelothando Minerals and Resources.

In my view, Vavi is a socialist during the day and a capitalist at the night. He lives in an affluent suburb in Sandton, Johannesburg, in the midst of the upper-middle class and the rich. Look at the opulence in Cosatu offices which were procured by Vavi – there is a gym, sauna, upmarket furniture, luxurious conference facilities and advanced technology. But still, Vavi and his peers have made it their mission to insult and drag down the reputations of the rich.

You would think that insulting the rich by some political and union leaders is just rhetoric, but it’s not. If it was just rhetoric, Numsa would not have made ridiculous demands to the National Employers’ Association of SA to increase the wages of their members by an exorbitant 10%. If Numsa had succeeded in its demands, most entrepreneurs in the engineering and metal sector would have closed shop.

The governing party and its alliance partners have already succeeded in pushing the manufacturers and farmers out of business, and millions of jobs have already been lost since 1994. The mining sector is already in its knees and Amplats has already thrown in the towel by selling their Rustenburg and Union mines. Thousands of jobs will be lost in the mining sector in the near future. When the rich are pushed out of business, the actual losers are the working class and the masses who have voted the ANC into power.

The question is - why are the rich under attack? It is because they are the scapegoat of the government that has failed to improve service delivery and the creation of jobs for the past 21 years. The rich are seen as not redistributing their wealth fast enough. The position of the rich in SA is worsened by the fact that their onslaught is advocated from the highest office of our land, The Presidency.

In most of his speeches, President Jacob Zuma insists that employers should upgrade the living facilities of their mining workers. Zuma further indicated that wealth redistribution will be fast-tracked by “sharpening the implementation” of the BEE and Affirmative Action laws. He advocates for the promotion of “employee and community share ownership scheme”.

I don’t have a problem with the promotion of black entrepreneurship, but this should be achieved by creating new wealth instead of by redistribution. While the President puts more responsibilities on the employers, he placed none on the workers.

Whereas Zuma insists that employers should do more for workers, he doesn’t insist that workers should also be more productive to create a give-and-take labour relationship. If this welfare state and redistribution campaign continues, the R600 million investment in vehicle assembly production plant, which was launched by the President in Coega, Port Elizabeth, in July 2014, is doomed to fail.

SA should start to appreciate the contribution of the rich, both socially and economically. The Financial Mail (24 October 2010) has done this by publishing an essay entitled: “Nation of givers – South Africa’s wealthy are the now among the most generous”. Some of the rich in SA have given two-thirds of their fortune to the needy.

The most givers include Jay Naidoo, Donald Gordon, Cyril Ramaphosa, Wendy Appelbaum, Raymond Ackerman, Patrice Motsepe, and Nick Oppenheimer. Other than creating employment and participating actively in philanthropy, the South African rich pay huge taxes and this enables the government to deliver social and infrastructure services.

Since the publication of “Capital in the Twenty-first Century”, and the visit of its author, Thomas Piketty, to our land, the demands for a wealth tax have increased in some quarters and the Treasury is considering this. People who make these demands forget that philanthropy contributions by the rich South Africans surpass what would have been the wealth tax by far.

Politicians and union leaders should realise that it is in the best interest of the country for the rich to thrive. The rich are not a problem, but part of the solution.

Rabelani Dagada is a Policy Fellow at the South African Institute of Race Relations. He is on Twitter: @Rabelani_Dagada

Another version of this opinion piece was published by the SA Breaking News.