Launching the discussion of a minimum wage with a proposal of R3,500 a month has certainly set tongues wagging. What the government might ask itself is what that does for municipalities. As things stand, to qualify for a full housing subsidy an applicant must have an income of less than R3,500 per month. To be eligible, they will have to declare themselves unemployed. After getting a house, the beneficiary has no money for services, yet the Constitution obliges delivery of at least basic services. It seems like a sure-fire recipe for municipal failure in the long run. And since there is no money in the household for maintenance or enhancements, the lowest third of all housing properties will go into terminal devaluation, pushing out all forms of domestic and corporate investment. And since no credit can be drawn into this form of state spending, there is absolutely no compounding effect. J KuhnCape Town
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