Dear friends and fellow South Africans,

As the electricity price hikes for municipal customers come into effect this
month, a report by economist Mike Schussler for the trade union, United
Association of South Africa (UASA), makes for disturbing reading.

According to the report, the average employee at Eskom now earns close to
R40 000 a month.

Take a moment to digest that figure. One cannot help but automatically
compare it to the salary your own family lives on. Then think of the workers
at Aurora Mines who are performing tough physical labour, in dangerous
conditions, for no pay - in the hope that they might receive some sort of
compensation.

When UASA began investigating employment trends in 2005, it was found that
mine workers earned on average around R6000 a month. The work they do to
delve into South Africa's earth and extract her natural riches is vital to
our country's economy, yet they live in often inhuman conditions with little
hope of working their way to a better tomorrow.

This makes mine workers fertile ground for the socialist rantings of the ANC
Youth League as it calls for the nationalization of mines. I have warned in
previous newsletters of the historical consequences for countries that
followed the nationalization path. The point here is that the plight of the
downtrodden is being used to increase the influence, status and power of a
few.

I am appalled to see the same pattern at Ithala Bank, which I founded as the
Chief Minister and Minister for Economic Affairs of the erstwhile KwaZulu
Government. Since commercial banks were reluctant to give loans to people
who could give no security for the loan, the poorest of our people were
barred from accessing the funds to start up small businesses and become
entrepreneurs. Ithala was designed to help the poor to help themselves to
create a better future.

But Ithala is now embroiled in scandal and allegations of corruption. Most
recently, a R169-million contract was awarded without tender and there
appears to be some link between the beneficiary and the Head of the Bank.

Ithala is being pillaged by an elite few in the KwaZulu Natal Government. In
what amounts to daylight robbery, the rich and the privileged are
benefitting while the poorest of the poor still suffer. Such is the greed of
politicians.

Another point of concern in the UASA report is the burgeoning of the civil
service, which now employs 20% of the workforce, with Government wages
absorbing 12% of our Gross Domestic Product. Wage increases within
government are also much higher than in the private sector and those small
and medium sized businesses that employ more than half our workforce, are
struggling to keep up.

How can a small business attract skilled workers when they cannot offer
nearly what government can? Perhaps this is why more and more South Africans
are opting out of the workforce and choosing not to contribute to our
country's productivity.

As it stands, we have more South Africans receiving social grants than South
Africans who are working, as per any definition of the term "work". The
ratio of taxpayers to people needing to be supported by taxpayers' money is
deeply concerning, and we are likely to have to borrow money internationally
which will be repaid with the taxes of our children and our grandchildren.

This is not how one creates a better life for tomorrow's generation.

I recall when I was the Minister of Home Affairs, the Africa Institute of
South Africa and the Southern African Migration Project jointly conducted a
survey that considered the perceptions of skilled South Africans of the
quality of life in South Africa as compared to popular overseas
destinations. It interested me that blacks in particular believed they would
be better able to find the house they wanted overseas.

Today, according to UASA, South Africa's house ownership is the highest in
the world. We have constructed some 4 million houses as we poured money into
social infrastructure. But if we look at the squalor so many of our people
are still living in, we must ask whether a house is more than just four
walls. Surely a family's sense of dignity is affected by the size and
condition of its home.

When the IFP's representative in the Gauteng Legislature, Mr Bonginkosi
Dhlamini, approached the Minister of Housing to seek assistance for hostel
dwellers, the Minister admitted that there is a serious crisis.
Historically, hostels were established to house mine workers, who were
separated from their families and plunged into desperate living conditions.

The closeness of the living space, the harsh conditions, poor pay and lack
of family life created hotbeds of aggression, that became veritable
tinderboxes as the sparks of a low intensity civil war began to fly in the
late eighties. Many hostels in KwaZulu Natal bear the memory of pain and
loss. It is high time to transform them.

The IFP believes hostels should be converted from dormitory style
accommodation into self-contained units that can accommodate single people
or families. These units must be affordable, have basic services and be
integrated into the broader community.

Raising the living standards of our people will go some way to raising their
self-esteem - which is one of the key ingredients to being a persistent job
seeker, a good candidate for employment and a contributing member of
society. The other keys, such as education, deserve more of our attention
too. As Mr Schussler puts it, in the long term, the real remedy is
education.

During apartheid, the ANC called for liberation now, education later. The
ill-conceived Outcomes Based Education system seemed to call for tolerance
and teamwork now, education later. If we are serious about creating a future
that is better than what we have right now, we must have the courage to say
education now. Education always.

Yours in the service of the nation,