Wednesday, May 23, 2012

Government Spending

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Gov_spend_mainExcesses and corruption test watchdog functions

South African taxpayers and international observers alike recently have been horrified by the costly extravagance displayed by the country’s ruling political elite at a time of severe financial hardship for ordinary people. However, if it is any consolation, this feast of self-enrichment and excesses has shown – somewhat ironically – that the system, flawed as it may be, is working. Being tested is South Africa’s constitutional democracy, with its various institutional checks and balances.



Ever since the Jacob Zuma administration took office after the April general elections, South Africans have been shocked to see how new and old Cabinet ministers and officials have partaken in this extravagance. New official cars to the tune of more than R45 million have been bought, sometimes two at a time, coming with price tags in the vicinity of R1.2m each.

This at the height of a devastating global financial crisis and a recession in South Africa that has cost 500 000 people to lose their jobs, many to lose their homes and many struggling to put decent food on their tables.

What shocked many perhaps even more, was the fact that these were the same politicians who had been promising voters in April that there would be a crack-down on corruption, self-enrichment and other such excesses.

It seemed that, once in office, morally principled stands flew out the window, everyone seemingly sucked into the vortex of a feeding frenzy. Even the 'super-straight' National Planning Minister Trevor Manuel – previously a stern critic of waste and excesses – apparently fell for it, helping himself to a luxury car and thereafter calling it a judgment of error.

With the R45m paid for gadget-filled luxury cars for ministers these past few months, the government could have, for example, built as many as 900 reconstruction & development programme (RDP) homes, giving permanent shelter to more than 4 000 people.

Manuel’s unfortunate acknowledgement had scarcely made newsprint when another extravagance hit the stretched pockets of suffering South Africans. This time it was the outgoing Public Protector Lawrence Mushwana, who was being given a golden handshake at taxpayers’ expense of nearly R7m.

At the same time, South African taxpayers had to endure the revelation that Police Minister Nathi Mthethwa had run up a bill of R500 000 staying in a top hotel in his home town of Durban; how more than 2 000 corrupt civil servants rigged government tenders worth more than R600m; and how poor procurement policies, strategies and systems were shown to be costing both the South African private sector and the government losses amounting to more than R25 billion each year.

Just recently, Finance Minister Pravin Gordhan revealed in Parliament that the government, for example, pays more than private business for everything it purchases – some estimates indicate as much as 10 to 30% more, despite its potential bargaining power. Gordhan gave the example of a loaf of bread costing the government R26 instead of about R7. Of the annual government procurement bill of R100bn, as much as R10bn or more is estimated to be lost or wasted each year.
Someone is getting rich and taxpayers are footing the bill.

How then, can it be said that the system is working?

Firstly, extravagant excesses such as the car-buying orgy would, in a failed state like Zimbabwe, have been the stuff of mere rumours and whispers. That is where things would have remained, being shrugged off.

However, in a working constitutional democracy such as South Africa, a vibrant and free media, its right to free speech protected by the Constitution, has been able to name and shame the ministers involved.

Despite a recent potentially dangerous legislative move by the government to gain greater leverage over the media, the latter remains basically free and protected, able to report on such atrociousness.

Going hand in hand with that is the existence of a multiparty political system, in which dynamic opposition parties such as the Democratic Alliance (DA), Congress of the People (Cope), Independent Democrats (ID) and others have used their positions in Parliament to ask, in the first place, the awkward questions that forced members of the government to acknowledge their excesses and bring it into the public domain.

Other constitutionally established, formal independent institutions such as the Auditor-General have played an immense role in uncovering fraud, corruption, waste, mismanagement, extravagance and incompetence. Current Auditor-General Terence Nombembe recently told us in an interview that his office was succeeding in doing its job despite the low quality of financial reporting in many government departments.


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The AG, opposition political parties, and the media collectively have all contributed to show that South Africa’s constitutional checks and balances remain in place and the system is therefore working. That does not necessarily mean it is not flawed or without problems and threats.

Nonetheless, to the credit of the government, it has so far resisted tampering seriously with this system, despite having had for a number of years a sufficient majority in Parliament to do just that – and could probably still do so if it wished.

These various checks and balances also caused Minister Gordhan to raise the issue in Parliament, promising action. The level of corruption that was revealed also moved President Zuma to promise a crackdown on the rot.

Most importantly, the revelation of the extravagant car shopping spree  prompted Parliament and the government to take action. Richard Baloyi, Minister of Public Service and Administration, has been ordered to review the rules in the Ministerial Handbook. His target date to save taxpayers some money is March next year.

His colleague, Geoff Doidge, Minister of Public Works, has been tasked to review the rules concerning accommodation for ministers following Mthethwa’s embarrassing hotel bill.

Finance Minister Gordhan has promised a major improvement in the way in which state procurement and tenders are controlled and managed.

It has also moved South Africa’s principle trade union federation and ANC-alliance partner, the Congress of South African Trade Unions, among others to launch a campaign to root out the corruption, the self-enrichment by elected representatives and appointed officials, and the extravagance of ministers showing gross insensitivity towards the financial plight of millions of ordinary South Africans.

It might have been an expensive exercise so far, but at least it proved that South Africa’s constitutional system, with its various institutions, checks and balances and independent support systems, is working.

 

Comments (5)
  • Dave  - Corruption and greed
    But will the money be recovered or will the hardpressed taxpayer foot the bill?

    Ethics are sadely lacking in our leaders,what an example to set to the poor!!!!!
  • Ishmael  - It's a collective effort
    The Zuma administration has so far proved to be the govt. that the people wanted since the dawn of democracy is RSA. it allows for critisism on system and has political leaders who acknowledge their mistakes hence as South African we need to come out help the team to govern properly. it's apitty that many still have the soiled mentatility of just expressing blame than looking at what the new team has inherited that include systems such as the handbook that is always refer to as the parliamentary bible of extravagancy....
  • gloria  - Shame
    Iresspective of whoever is in the
    "Big House", it is sad that money is used so carelessly. What about the poverty sticken children? Do they care?
  • Robin Hayes  - Sickened
    It seems a new scandle is exposed every day and no one is accountable! So far Pretoria, our nation's capital, has had to borrow R1,2-bn this year to stay afloat, and the mayor is still in office! This moral degeneration goes on and on, but its no good wingeing - the people must realise that they deserve the government that they voted for. Sexwale announced yesterday that corrupt practices and poor management control in the RDP housing sector has resulted in R800-m having to be spent on fixing up shoddy contuction and that 3000 'homes'in two provinces were beyond fixing & have to be destroyed and rebuilt. That little excercise alone will cost another R150-m. Ho hum, another R1-bn down the drain. Who cares?
  • ROSELINE NHLAPO  - Ms
    Goverment must put tombstones for all people who died during apartheid era.

    It is painfull for families to watch those graves helplessly all times
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