Max du Preez

Radical economic transformation of State only way to eradicate inequality

2018-06-26 08:55
Workers gathered protesting for a higher minimum wage in Johannesburg. (Amanda Khoza, News24)

Workers gathered protesting for a higher minimum wage in Johannesburg. (Amanda Khoza, News24)

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There is no question about it, inequality along racial lines is the source of most anger and frustration in South African society and the primary threat to our stability.

What political parties are fighting about, is how to achieve a more egalitarian society. All policies and slogans and manifestos revolve around this question.

The majority view seems broadly to want to tax earners and owners more heavily; to take away from some so others can have more.

It’s easy to convince people that this is the quickest, actually the only way. White South Africans benefited greatly from colonialism and apartheid and this "unearned white privilege" still continues, so there’s very little sympathy when they complain that they are taxed to death and feel threatened by steps that would minimise their slice of the cake.

My thoughts on this issue were stimulated by events and developments just in the last week or so. Let me refer to some of them.

The Great Kei municipality is bankrupt after years of maladministration and corruption. The council hasn’t paid its workers, almost all of them black, in two months, we were told a few days ago.

But the elected councillors of Great Kei made sure that they received their full salaries plus benefits. The council is completely dominated by the ANC, who got 71% of the votes in the last municipal elections.

The SAA has now asked government for R21,7bn to fund its latest turnaround strategy. My guess would be that 90% or more of the population have never made use of the state airline.

In contrast, Ethiopian Airlines, that transports 6,9 million passengers annually compared to SAA’s 7,1 million made a R4bn profit in the previous financial year.

Landlessness is the driver of black poverty, says the ANC. And yet its government spent more on a scheme to establish a small number of new black industrialists in recent times than on land reform – and many of the beneficiaries, it was reported on Sunday, are ANC insiders. In fact, opposition politicians claim that government spends more on VIP security than on land.

The issue of land expropriation without compensation that has sent ripples of nervousness through the markets is regarded as being of extreme urgency. Yet, the state has been sitting on nearly four thousand commercial farms for a long time now, unable to establish new farmers on them.

A little more trivial: Minister Nomvula Mokonyane had a car worth R1,1m bought for her six months ago. On the weekend it was reported that the car is stationary in a state garage and has never been used.

A study of the World Health Organisation has just found that South Africa’s health system is close to the worst in the world – we came in at 175 out of 190 countries. Most state hospitals are now places where patients’ dignity is stripped and where many go to die.

But instead of launching an aggressive turnaround strategy for public health, the minister is pushing through a plan that most analysts in the industry say is unworkable and will cost the taxpayer upwards of R500bn annually.

President Cyril Ramaphosa said on the weekend that the National Health Insurance plan will definitely be implemented, whether people like it or not. He did not talk about the state of public health right now.

Just last week the Special Investigating Unit divulged that it was investigating twelve civil servants and a senior ANC politician for involvement in corruption worth R1,2bn in the Gauteng department of health.

We were reminded recently that our so-called old Model C schools in the cities and suburbs still offer world-class education. But schools in townships and deep rural areas are among the worst in the world, not only in terms of quality of education, but also in terms of facilities such as toilets, electricity supply, libraries and laboratories.

This means white youngsters and others in the middle classes get a huge advantage over the poor black youngsters, an advantage that in most cases will endure for the rest of their lives.

Primary and secondary education is simply the assembly line of inequality along racial lines. No expropriation of property or other punitive measures applied to the middle classes will change that.

And then there is Eskom that has now confirmed that it has a debt burden of R376bn, and that's after this state-owned enterprise was virtually debt-free just a decade ago. As a result, electricity tariffs will again go up next week. You and I may not feel the extra R200 per month, but this amount will mean almost no food during the last week of the month for many families.

R376bn is a staggering amount of money in our economy. And remember, Pravin Gordhan said recently that he estimates that something like R100bn could have been stolen or blatantly wasted over the last decade.

If one takes R100bn here, R376bn there, add it to the many billions lost by Prasa, Transnet, Denel, the SABC, Water Affairs, provinces like Free State, North West and the Eastern Cape and many municipalities, we should not be surprised if the total amount stolen or completely wasted the last two decades tops the R1tn mark.

That is a hell of a lot more than the wealth tax proposed by Professor Sampie Terreblanche in 1996 to redress imbalances in the economy would have delivered, a proposal that I publicly supported and one that was praised by the ANC, the SACP and Cosatu – who, of course, did nothing about it.

As you read this, be assured that there are dozens of "service delivery protests", local revolts, taking place in many parts of the country. There is a lot of anger and hopelessness out there and a great potential for a lot of violence.

While some politicians are angry that not a lot of Indian South Africans apparently want to marry black Africans and the ANC tears itself apart, ordinary poor people are suffering greatly because their local governments have abandoned them.

My conclusion is that the surest and quickest way to ameliorate inequality and diminish poverty is radical economic transformation – if by that one means that the three levels of government, the entire bureaucracy and the state-owned companies should be radically transformed so it would spend every single available cent of taxpayer money on development and upliftment; that state organs’ efficiency and productivity are increased radically; and that corruption is eradicated.

But that doesn’t make for a catchy slogan for next year’s general election.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

Read more on:    department of health  |  anc  |  pravin gordhan  |  cyril rama­phosa  |  inequality  |  state owned enterprises  |  education  |  corruption  |  poverty

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