Western Cape Business News

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LABOUR: Set Business Free


Recent Western Cape Business News

THE Cape Chamber of Commerce says it welcomes union attempts to speed up job creation but warns that without real economic growth the new jobs will not be sustainable.

We can create a lot more jobs if we use labour intensive methods in commerce and industry, but the result will be higher costs and that will not make us more competitive,” said Mr Michael Bagraim, president of the Chamber.

It was essential to understand that it was business that created the jobs and not unions. “Unions are not employers and they can only exist when business has created the jobs for their members. If we want more jobs business has to grow.”

To achieve this, the government should talk to business and design policies to encourage growth. This was sometimes a lot easier and a lot cheaper than many economists believed.

The first thing we have to do is remove some of the restrictions that are inhibiting growth. Sometimes it is as simple as getting out of the way and allowing private enterprise to get on with what it does best.”

Municipalities should ease the way for architects and builders who created jobs and government should relax labour legislation to encourage business to employ more people.

Sometime all government has to do is stand back and collect the taxes. Instead government insists on becoming involved and trying to exert more control, often in areas where it lacks expertise.”

An example was the mining industry where extensive changes in legislation had created policy uncertainties and this had made companies reluctant to invest in new projects. “We missed a huge commodity boom because we were tinkering with the law,” Mr Bagraim said. “I wonder how much that cost the State in tax revenue.”

Another example was the desperate need for independent power producers to cope with the growing demand for electricity, but the IPP’s were being frustrated by bureaucratic requirements of NERSA and the failure of Eskom to conclude any agreements for the purchase of power.

All the government has to do is get out of the way and allow the big municipalities, the main distributors of electrity, to buy directly from the IPP’s.”

The oil industry was subject to excessive government control and this had forced up petrol and diesel prices. Pick ‘n Pay had been barred from selling petrol at discount prices and the lack of competition had caused stagnation in the industry. “Now we have shortages of LPG and bitumen and the aging refineries are breaking down. All the government has to do is get out of the way and market forces will see that we have enough petrol, gas and tar for the roads.”


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