Dear friends and fellow South Africans,
Speaking in Congo Brazzaville on Tuesday, President Zuma declared that it is up to the middle class to find solutions to South Africa’s problems. This reminded me of headlines around the e-toll saga: “Middle class likely to foot the bill”, and headlines following last year’s budget speech: “Middle class lose out the most”.
South Africa places enormous pressure on its middle class. The “middle class” is defined as anyone over the age of 16 living in a household where the combined monthly income is between R16 000 and R50 000. These are households in which one or more family members are employed. In other words, the middle class are predominantly taxpayers.
In South Africa, we expect our taxpayers to finance development, governance, administration and infrastructure, as well as the vast social grant system.
Beyond funding the laudable and the necessary, a great deal of taxpayers’ money is lost to mismanagement and wastage. Each year R21,4 billion is lost to corruption.
We have asked taxpayers to finance Eskom’s build programme. We asked taxpayers to spend over R200 million to upgrade the President’s home in Nkandla. We asked taxpayers to foot the R100 million bill for the NYDA’s “kissing festival”. We had taxpayers pay another R100 million for the infamous ICT Indaba.
Year after year, we ask taxpayers to bail out state-owned enterprises, like South African Airways and Denel, which consistently fail to turn a profit.
It is estimated that there are 2,3 million taxpayers in South Africa, out of a population of 52 million. In comparison, 15 million South Africans rely on a social grant, which is financed through taxes. While the number of social grant recipients is increasing, the number of employed South Africans is decreasing.
The latest research shows that for every four jobs created in 2012, the number of unemployed South Africans increased by 12. This is, quite clearly, a recipe for disaster.
Moreover, within many middle class households, there is a rapid slide towards financial distress. The debt-to-income ratio is increasing as households battle against inflation to maintain their standard of living. Servicing debt takes up a large proportion of the household income.
While growth in the white middle class stagnated almost a decade ago, the black middle class is growing. This is the statistic that President Zuma latched onto when he announced that the middle class must solve all our problems. But we must look at the health of the middle class, both financial and otherwise.
There is a high level of stress involved in servicing debt and trying to keep the house and the car, and the children in good schools, once those benefits have been achieved. Between keeping the job that brings in the income, and trying to make the income stretch, how much free head space does the middle class really have to think about solutions to unemployment, crime, inequality and corruption?
In addition, within the black middle class there is often an extended family that the employed family member is responsible for helping. So that income of R16 000 may make the household middle class, but once bills are paid, debt is serviced and family responsibilities are taken care of, what is left to plough back into our economy?
The growth of the middle class relies on the country’s economic growth. Thus, as economic growth consistently falls short of targets, the middle class may very well be taxed out of existence in the years to come.
Hearing President Zuma task the middle class with finding solutions to South Africa’s problems, the cynic might point out that we elect leaders to find solutions. The leaders of South Africa certainly do not constitute the middle class.
South Africa’s leaders are elected to find solutions in partnership with the people they serve. This is democracy; which means that everyone has a voice and can make a contribution, and everyone’s contribution should be valued.
I disagree that someone can only make a contribution when they become part of the middle class. I also disagree that the middle class should bear the responsibility for doing what a high earning, high flying elite – that has a mandate to find solutions – is failing to do.
Every South African can be part of the solution, but finding solutions must be driven by the country’s leadership. Leaders cannot abdicate that responsibility to a middle class, inciting enmity between the vast population living in poverty, and the relatively small population desperately trying to maintain a foothold in financial solvency.
South Africa’s leaders need to step up to the plate.
Yours in the service of our nation,
Prince Mangosuthu Buthelezi MP