PATRICK BULGER | Spier of the Nation: debt-ridden state drowns its sorrows on WMC turf

Where better to toast in mourning the looming bankruptcy of our democratic state than at a luxury wine estate in Stellenbosch, offering the shade of a Van der Stel oak under which to gasp in horror and awe at Treasury’s spreadsheets of gloom? And all this within jeering distance of the white monopoly capital mob headquartered nearby.

One might have thought a modest office festooned with the latest departmental organogram next to a portrait of President Cyril Ramaphosa would have been more appropriate for the dissemination of news that comes as a body blow to our prospects as a modern, prosperous and democratic nation that was the promise of 1994. 

In for a penny, in for a pound, they say. If we’re going down, we may as well do so in the style to which our political leaders have become accustomed. And so it was that Ramaphosa and his cabinet team gathered in plush surrounds, with the hard men and women from the Treasury, to hear in painful detail where we are as a country, financially speaking.

And we’re not in a good place, with state revenue slumping and rising expenditure unstoppable.

Through nearly 30 years of democracy, we’ve heard about the “developmental state”, the “capable state”, the “austerity state” and who can forget the “captured state”. Now we must add the “bankrupt state”. While flat broke, our state is neither developmental nor capable, as the capacity of government and state-owned companies has withered under deployed cadres.

Our state has mutated into an extravagant facilitator of largesse to those in the inner-circle (politicians, trade union leaders, top civil servants, the brass of failing state companies and tenderpreneurs). At the same time, it is a virtual soup kitchen for millions for whom the R350 relief of distress grant has become a mainstay. 

The R350 grant is the standard by which the ANC government is measured. The broad thrust of its economic policies favours the connected. BEE, preferential procurement and localisation further enrich the few, all provided by the state at the country’s expense. The grant is the flipside of this medieval guild set-up, a payoff to the poor. 

With elections looming early next year, it is hardly surprising ANC politicians view the grant as critical to achieving a 50% majority. 

That means an Eskom that barely functions, a Transnet that by some measure carries as much freight now as it did during World War 2 and a state apparatus peopled by time-servers. And we ask why there is no growth, which alone can save SA from implosion. 

While the party’s national executive committee and a cottage industry to promote professional entitlement want to further entrench rent-seeking in the economy, their policies and practices doom the country to low growth, high unemployment and rising levels of inequality. The ANC’s professed cynicism towards the free market provides handy cover to hold antiquated yet trendy and unrealistic policy views, which are an ideological luxury and pretext for state involvement in the economy. 

That means an Eskom that barely functions, a Transnet that by some measure carries as much freight now as it did during World War 2 and a state apparatus peopled by time-servers. And we ask why there is no growth, which alone can save SA from implosion. 

To keep the grants, the Stellenbosch soirée heard, one of three things can be done: one is raise VAT, which would raise the cost of living for those who can afford it least. The second option is to cut the public sector headcount, essentially paying people to leave with the promise of a big, one-off payout. The third is to scale back the state and make it a more affordable, value-for-money entity. None of the above will be grasped with much energy as each raises the spectre of a loss of support from potential voters.

Among the government programmes billed for shutdown are many that the public at large will not have been aware of. These include, to name a few, the mine health and safety directorate, whose closure would save R233m, a maritime transport programme costing R379m and “visible policing”, whose demise would save us R52.1m. Invisible policing to become standard now? 

Yet it is an irony that a state that prides itself on its potential for transforming society finds it necessary to delegate so many responsibilities for the minutiae of statehood to corporatised entities, often with their own boards and management. Perhaps it is because each of these provides an opportunity to employ more people in top jobs in the ANC’s web of loyalty, complete with expensive bureaucracies and matching corporate paraphernalia. 

Which raises the question: with so many specialised agencies of government supposedly performing important public tasks, what exactly do government departments do? Or is their “transformation” alone their goal? Which takes priority, transformation or delivery? 

This contradiction is evident in the arguments over the Public Procurement Bill now before parliament.

This week, Transnet evidently saw the light at the end of the tunnel after its recent R5.7bn loss. It argued for a “more flexible” law on procurement. It said Treasury rules had made it less competitive. Localisation requirements “have resulted in Transnet contracting with middlemen that add a high markup resulting in increased acquisition costs”.

On other side, Cosatu feels differently about the bill, as does the Black Business Council, the Association for the Advancement of Black Accountants of Southern Africa and assorted ANC and EFF MPs. They all pushed for transformation to take priority over delivery.

Although we are a democracy with a constitution and elections, we have much in common with a monarchy. Political and family connections count for everything in access to state contracts. Our trade union aristocracy essentially keeps wages relatively high while blocking the path to new entrants. Blue lights clear the way for the nobility. 

The masses are thrown the bone of a R350 grant while the economy is rigged for the anointed. The state is a font of largesse and enablement, living large and claiming to pursue the spectre of transformation. At any cost.

And we wonder why we’re going broke.