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Don't ban R10-billion labour broking industry: DA  Comments
November 11, 2009


The R10 billion in tax revenue generated by labour broking last year is another reason why government would err to ban the practice, the Democratic Alliance said on Wednesday.

"This is yet another clear case for why the banning of labour brokers would negatively impact the economy in a huge way," DA spokesman Pierre Rabie said in a statement.

"With South Africa already facing a budget deficit well into the billions of rands, it would only create an additional burden on the fiscus, and the taxpayer would have to fill this widened gap."

In response to a parliamentary question by the DA, the National Treasury revealed that labour brokers generated R10 billion in tax in the 2008/09 financial year, and R15 billion for 2007/08, the party said.

Parliamentary questions by the DA also revealed that government departments spent more than R140 million on labour brokers in the past financial year.


"Cosatu needs to consider this -- are they honestly suggesting that their salaried members should pay more tax because of their fixation on banning labour brokers?

"Or does the Minister of Labour, Membathisi Mdadlana, want to restrict government expenditure on job creation programmes?" the DA said.

Negotiations between the labour department, the temporary employment sector and unions at the National Economic Development and Labour Council (Nedlac) ended late October.

The Department of Labour earlier indicated a preference to ban labour broking completely, but now seems to favour regulation instead.

Unions, however, are still calling for a complete banning of a practice they have termed "human trafficking" and "slavery". New legislation will be tabled early in 2010. - Sapa
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Showing page 1 of 1 comment pages, 9 total comments
12 Weeks ago Ed wrote :
All that labour brokeing will be replaced with is more placement agencies, and then employers are going to make sure that they enter into the shortest limited term contracts with those individuals instead. This will result in large staff turnover, uncertainty and a lack in skills development. I suppport regulation (but then we all konw that most laws passed are badly implemented and policed)
12 Weeks ago peterw wrote :
I have worked through labour brokers since 1996, I have found them professional. They have assisted me with tax issues as well as finding other positions when my contracts have ended. I dont understand why they should be banned. Maybe a small minority have been unprofessional but thats not a reason to chuck the baby out with the bath water
12 Weeks ago Anonymous wrote :
Oh, and to add to my previous comment, the R10Bn figure is not the DA's figure: that was the figure given to them by National Treasury, so let's not have a lot of childish DA-bashing...these are government's own numbers...
12 Weeks ago Anonymous wrote :
Melusi, no, your argument about the middle men is flawed for several reasons. Firstly because employment (and taxation revenue) will decline because it will be more difficult for workers to find the jobs they want. Secondly because the middle men themselves, who will be out of business, contribute the R10Bn the DA is talking about. And thirdly because if the middlemen don't do the job of matching workers with jobs, someone else will have to do it. And that will either be government, at horrific inefficiency and great taxpayer expense in addition to the loss of revenue, or it will be companies themselves, at great cost and hence reduction of corporate profits, and thus reduction in tax paid. I reckon you can double the figure the DA quotes if you want to see the real impact.
12 Weeks ago Anonymous wrote :
Melusi you are unfortunately so wrong!! Do you for one second think companies are going to employ permanent workers in the place of the contract workers - no they wont!!! Maybe 1 in 10. So 9 contract workers will be without employment. Now do your sums on the loss to tax revenue. DA is clever hey!!! Doesnt appear if the ANC thought of that!!
12 Weeks ago Anonymous wrote :
Cosatu is fighting labour brokers in order to enlarge its potential membership in organised, permanent labour. Cosatu does absolutely nothing for the millions of unemployed. In fact, because of constant strikes at the drop of a hat, and the cost of damage caused by strikers, employers are loath to employ more labour, rather opting for mechanisation wherever possible. In the end that is the economical option.
12 Weeks ago Melusi wrote :
It seems tot the DA are not the cleverest lot. The logic behind removing labour broking, as the term suggests, means there is a middle man between employer and employee which makes the entire employment process more expensive.The work that has to be done will be done by business regardless.All this additional layer has tried to do is remove the responsibility of the employer to itself so that if there is exploitation, employers can still protect their brands.Because work will be carried out for which salaries will be paid, the tax net is not affected. Not rocket science DA.Need I say more???
12 Weeks ago Anonymous wrote :
viva ban it.labour broker the whole cake at end of month
12 Weeks ago Anonymous wrote :
This argument is fundamentally flawed. Just because government is raking in huge taxes doesn't mean that the exploitation of workers by brokers should continue like it has up to now. That tax contribution is blood money! If regulated more closely, I'm sure that the taxes paid in by labour brokers will decline sharply, because they will be making lesser money. I'm not necessarily saying labour brokeraging should be banned completely, but I am saying that the DA's argument of how much taxes the industry is contributing is flawed!
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