Blaming the government for everything is becoming an increasingly loud whinge of the ineffectual and shrinking middle class of South Africa. The tax burden is set to increase in coming years as the shining welfare state the ANC has planned to secure its political hegemony "until Jesus returns" is going to cost money, and that money is going to be raised from South Africa’s approx. 5 million tax payers. That in a country with close to 44 million citizens and millions more in foreign ‘invitees’.
A narrative alternative to an ever widening social net is developing in the minds of taxpayers it would seem – taxes will be raised, programmes begun (NHI anyone?) so that another tender fuelled graft-o-thon can take place, in which the coffers of the State are further raped by greedy tenderpreneurs and government officials. You’d think that government is only corrupt in South Africa the way people see it!
But this concern, hyperbolic at times, is grounded on a dangerous and evolving new reality – that has more to do with South African business and its ethical or unethical behaviour than it does with the weak civil service which has been repeatedly undermined by the system of patronage and incompetence that is cadre deployment.
Corruption does steal from the State, and thus from the people. This is a terrible crime and should be investigated and punished far more deeply. Unfortunately South Africa seems to be moving toward less government oversight of corruption.
Corruption in South Africa is unique in that the majority of citizens do not pay taxes beyond the VAT they are occasionally charged as end consumers. Outside of this tax, the burden of tax is as unequal as the spread of wealth. Abstractly, I agree with this principal – those who have the most in society and therefore gain the most by society’s stability should bear the greatest burden – however, there is a risk in a democracy such as ours, that with the burden of the purse not being borne by even remotely a majority of the citizens (I think you’ll find the DA’s % of the vote tallies quite neatly to the majority of tax payers… hrm… something to ponder), the majority of the citizens will not PUNISH the party in Government (often misunderstood as the government: just the way they like it…) for thieving from the public purse because the link has never been made that the money was theirs (the people’s) in the first place.
Perhaps tax payers, instead of worrying about keeping taxes in place, should rather be spending some money educating the poor and untaxed that once taxes are paid over to the state IT BELONG TO ALL OF US! That tax revenue is common property for ALL CITIZENS to be managed and stewarded by the government on ALL CITIZENS behalf – and therefore when government officials steal they are stealing from ALL of us.
Of course, that tax revenue belongs to all, raises difficult questions about money spent on mowing grass lawns, or protecting the rich from marauding troops of monkeys on their mountainside villas, when so many South Africans remain without humane living opportunities.
But we should all start thinking about our taxes as belonging to us all, through the State. That is, if you boil it down, the frustration that lies beneath so many taxpayers rage. There is an acceptance, in so many taxpayers I know, that our taxes must be used to develop the country, uplift and support the poor, and create opportunities for all citizens. The upset and anger comes when the majority do not punish the party in Government, the ANC, for facilitating and often directly engaging in the theft of the monies paid over to help the poor and the needy and to develop the state by tax payers.
Of course there is corruption in other countries: we are not as unique as we think. However the corruption that endures in our society has a flipside. It is not only the government, riddled with cadres, that engages in corruption. It is also those who corrupt public officials who must be brought to book – and those will almost without exception be found in the private sector. For every Zuma there is a Schaik.
The business community in South Africa has turned a blind eye to their own complicity in the corruption of the state. This is unacceptable. If South Africa slides into ruin and misery due to corruption, business will have to shoulder a far larger share of the blame than is widely publicised. Besides the usual procedural corruption that business engages in to grease compliance and tax issues, there is a far more insidious side to the corruption that presently befalls us all.
Businesses which profit from ill-gotten tenders are uncompetitive and they bring the economy down. They suggest to men and women who are well connected politically, and who have little to no real business skill, that they are in fact real business people. Being a business person is not to receive a lavish tender and then to live in an expensive house, drive expensive cars, throw lavish parties. I understand that from the outside looking in at the rich white business people during Apartheid this may have seemed that all a business person does. But these are the spoils of war – the real definition of a successful capitalist is someone who allocates capital and human resources to create more value than was started with. Companies forged on tenders DO NOT DO THIS – they simply move the same money around the money supply, except with small amounts of capital outflows in the form of profits gained by Western capitalists running companies like Breitling, Range Rover et al.
If South African business is going to become stratified into a struggling and tax burdened small business sector, a historically entrenched big business sector, and a politico-tenderpreneur economy then we are pretty much economically doomed. Already our manufacturing sector is collapsing – as many countries in the world are similarly experiencing – as the world now manufactures in the East. This is a fact – fighting it may well be a losing game. Therefore South African business needs to look itself in the mirror and decide what it can do to bring in flows of capital from outside the country, employ a LOT more people, bring them into the tax loop so that they can align their interests against the current ruling party and save the country.
The government can’t save business. If anything, government handing out tenders on the scale it does now corrupts business, and makes businesses less competitive since good businesses suffer under adverse trading conditions whilst AWFUL businesses (Aurora?) continue to operate because of their political backers largesse.
How can this be fixed by policy? The treasury claims that it is going to enforce tighter procurement policies and work more closely with SARS to ensure that tenders are only granted to companies that pay their taxes properly. It is shocking that this is not already the case – but this too, while necessary, is not enough. It still amounts to robbing Peter to pay Paul, because all the treasury is really saying here is that they want to ensure than some of the profits generated from tenders returns to the state in form of corporate tax.
This can be fixed by a policy of ensuring that any company which wishes to receive a tender above a certain threshold can show that they make revenues exceeding the annual value of the tender already from other business. WHAT? Yes, I am saying that should a business bid for a 20 million rand project over 4 years to rebuild CIPROs database then that company will have to present audited financial statements showing non-government business with revenues exceeding 5 million rand a year.
Why? Because this way South African enterprises that have a proven track record of delivery and value OUTSIDE of supplying to government will be rewarded. It means that businesses must first prove themselves in the real economy before receiving the benefit of lucrative government contracts. This also will allow for those ‘aspirants’ that Mr. Malema et al. say should not be denied what ‘whites’ have – everyone can be free, with the appropriate BEE credentials based on existing procurement policies, to bid for the business of government if they already do similar work in the private economy.
The threshold can be for tenders of 500k or more. This means that companies can boot strap themselves from a start up phase on purely government work – but to really go into the stratosphere of government opportunity a business (and therefore its leaders) must have shown themselves to already be doing work in the real economy and thus expanding and strengthening our industry.
Then, when aspirants and others who have arrived at their goals, throw lavish multi-million rand parties, the common citizen – happy, healthy, safe and employed – can laugh at the gaudiness of the rich, but be pleased that that citizen too has contributed properly to the country, and not simply to the party to steal the resources of the majority through the vehicle of the Party-State.
Filed under: Africa, BEE, Business, Commentary, Corruption, Economy, ethics, Finance, Government, Ideas, Law, Malema, Policy, Politics, Society, Zuma by Andrew la Grange
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