Last week’s postponement of the budget speech has raised eyebrows about the stability of the government of national unity. Let’s not forget that the DA had already threatened to use the budget as leverage in response to disagreements over the Expropriation Act — an act that has weakened the rand against most currencies in recent times.
This was a classic case of airing dirty GNU linen in public. The postponement of the budget, on the surface, can only add salt to the wound, further eroding confidence in our economic governance. But more pointedly, it demonstrates a failure of the so-called clearing house — which if it was in place would have ensured that such an embarrassing episode of failure for a meeting of minds at least did not play out in such a spectacular fashion.
I wish this was the only thing we, as ordinary citizens, had to worry about — until it was revealed what the deadlock was about. You may not like the DA, but on the issue of increasing taxes on ordinary people, you must agree with them and whoever else within the GNU who objected to this abomination of a suggestion — to just resort to taxing the already over-taxed citizens further.
The suggestion to increase tax in this sweeping manner is reckless, to say the very least, and demonstrates a lack of creativity in solving fiscal challenges. It also underlies a complacency in the ruling party despite the electoral decline they suffered last year. Put simply, with what it has failed to manage properly, this government has no moral authority to impose such a further burden on taxpayers who are still waiting for a demonstration of upright stewardship of their finances.
Let’s examine the financial conduct of the government at all levels. For the past five years, the Auditor-General has lamented the scourge of wasteful expenditure, which amounts to between R30bn and R50bn annually. This money is lost due to malpractice in procurement — a system routinely manipulated to misuse taxpayers’ money.
Previous National Treasury efforts to clamp down on these practices have failed. A few years ago, in response to this crisis, Treasury appointed a chief procurement officer. Lately, no-one even refers to that position and the floodgates of wasteful expenditure remain wide open if various AG reports are anything to go by. The number of municipalities and government entities receiving clean audits continues to be woefully low.
Quite frankly, it is not an exaggeration to suggest that there is a feeding frenzy of wasteful spending, enabled by a lack of accountability. The AG is yet to exercise the powers given to her to cause anyone involved in this waste to be prosecuted. If this happened it is highly ineffective as the trend seems to be getting worse not better.
As if this is not enough, last year several government entities — including the entire North West provincial government — rolled over billions of rand in unspent funds. This unforgivable incompetence signals a failure to plan and, therefore, a failure to spend money that has already been allocated for dire needs in a province whose people are breaking down under poverty. This alone tells us that the issue is not a lack of money but a lack of ideas and skills to put the money to good use. That is a serious problem that speaks to governance inefficiency.
But what’s even worse is that in both cases — wasteful expenditure and failure to spend — there is no consequence management. No-one has been held accountable. No-one has gone to prison for it.
The fact that not a single high-profile official has faced real consequences for this outright mismanagement should come as no surprise. After spending R1bn investigating state capture, there has been a complete failure to prosecute those identified as culprits in the grand-scale theft of public funds. Some of these individuals are now in the same cabinet that wants to punish citizens with more taxes — before even accounting for the money they have allegedly squandered. If justice were truly served, at the very least, we would see proper legal action against these individuals. Instead, they remain untouched.
Resorting to taxation is an abomination — an insult to the people who have entrusted their resources to the ruling elite, only to see that trust abused time and time again
Given these blind spots, it seems that raising taxes is simply the lazy and easy way out of a sticky situation. The government has not yet demonstrated that it has tightened its own belt. We have one of the largest cabinets in the world — entirely out of sync with what we can afford as a nation. Yet, even the DA, which opposes the VAT hike, has not suggested cutting the patronage-infested, bloated cabinet. Why? Because they, too, are on the gravy train. That’s why such a suggestion will never see the light of day.
Cutting the cabinet by even a quarter would result in massive savings. The private sector has also been let off the hook through a low tax base and tax evasion. Investigating the 6,000 disused mines and holding companies accountable for neglecting social and labour plans could unlock huge resources to uplift mining communities — without making bread and milk unaffordable. There are countless other sources of funding that remain ignored simply because they do not serve the interests of those in power.
Another overlooked source of capital is unclaimed pension funds, which benefit the private sector at the expense of the rightful owners. This is absurd. A government that successfully pays social grants to millions of people every month suddenly claims it is incapable of finding the rightful owners of billions in unclaimed pensions. That is simply not believable, and raises serious concerns about whether there is political will to fix these problems.
With all this in mind, resorting to taxation is an abomination — an insult to the people who have entrusted their resources to the ruling elite, only to see that trust abused time and time again.
If ever there was a time for citizens to rebel, this is it.
• Prof JJ Tabane is Editor of Leadership Magazine, Adjunct Professor of Media Studies at the University of Botswana and a sessional lecturer at Wits University. He writes here in his personal capacity
For opinion and analysis consideration, email Opinions@timeslive.co.za
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