20 February, 2012 10:59
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Prof Piet Naudé

Columnist

SA Budget or corruption Budget?

The Budget that is presented this week must be seen from the perspective of the implicit contract between the state and its subjects. The state is the creation of people who agree that it is better for all if some matters of public concern are dealt with impartially by the state.

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It makes theoretical and practical sense that the task of defending our land (army), entering into agreements with other states (foreign affairs), good learning for all (education), protecting our currency (economic and monetary policy), caring for the sick (health), the really poor and the old (social grants and pensions) and building public infrastructure (roads, streets, pipelines, internet connections) rather be dealt with collectively than privately.

The citizens understand that these collective efforts cost money. Their side of the contract is to pay taxes of all sorts: petroleum tax, toll roads, income tax, import tax, value added tax and many more. The citizens also know that tax is a fine balancing act: if we pay too little tax, the good collective things cannot happen. If we pay too much tax, it may destroy risk taking and entrepreneurship or lead to disinvestment.

How do the citizens transfer this power unto the state? In a democracy, we participate in elections to put a specific government in place that is then entrusted for a period of five years to do the job on our behalf. The government creates people whose full time jobs it is to administer public funds and make sure the state's side of the contract is effectively executed.

These people are called a beautiful and honourable name: public servants. They are appointed at three tiers of government: national, provincial and local so that all aspects of policy and implementation are cared for right down to street lights and garbage collection.

A core assumption of the system is that political appointees will be limited to political offices like those of the president, premiers and Cabinet. This is fine, as these offices represent the will of the majority in terms of policy and direction. But all other appointments - specifically directors-general and divisional managers - must be made on the basis of technical knowledge to ensure a stable state apparatus irrespective of the politics of the day.

If not, the whole system becomes politicised and what should be a fairly straightforward matter of doing the job, is marred and entangled in all sorts of considerations that stifle delivery of public service.   

So if we as South Africans look and listen to Pravin Gordhan, we hear how our taxes have been collected and we hear the promises of how they will now be distributed to the various arms of the state so that we as a collective can draw the benefits of our money in a responsible manner.

After 18 years of this specific government, many of us will listen with ambiguous feelings. This government has indeed built up a double reputation: it is very effective in the collection of taxes and creating a fairly stable macro-economic policy environment. But on the other hand, they have repeatedly broken their side of the public contract in a variety of ways:

Budgets in crucial areas of public concern like health and housing are not spent. Provinces and metros fall apart at the seams of governance and finance. We hear year on year of wasteful expenditure so that we pay far more for a project than we should (from soccer stadiums to office space for the police). If projects are set out for tender, we hear too often how servants of the public become thieves of the public by not declaring conflicts of interests. Even the president submits his interests nine months later than is stipulated.

And what makes us really cross, is when this very same government tells us that corruption eats away around R30bn of our money. When we then ask the Auditor General, paid by us as independent bookkeeper, to tell us what are in the financial statements, year upon year he shrugs his shoulders. He can actually not tell, so deep is the financial mess. He uses smart words like "qualified audit" or something worse to soften the language of open, public theft.

We, the citizens, have four options to respond to this situation of contract breach: We can change the government via our popular vote; we can support maximum freedom of information that ensures public accountability; we can go the route of peaceful civil disobedience and simply withhold our taxes. And, as a last resort we can leave the dominion of this specific state and emigrate to where we believe our taxes will bring greater collective benefit.

If we have paid our taxes, we have a right to service.

*Prof Piet Naudé is the former head of the Business School and currently Deputy Vice- Chancellor: Academic at the Nelson Mandela Metro University in Port Elizabeth. He writes in his personal capacity. This article is to inform and educate, not to advise.