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Dear Minister,
Having listened to aspects of your MTBPS yesterday, and having read some of the analyses, it is clear that next year's budget speech proper is going to see a hike in personal taxes.
Economists have pointed out that imposing an additional tax on the super wealthy, will only realise about 15% of the additional funding required. Conversely, you are on record as saying that your budget measures would protect the poor.
That leaves the rest, the central blob on the bell curve, the middle class. Already overworked, e-tolled and taxed to death, you will attempt to draw the proverbial blood from a stone. Please don't do it, Minister!
The Cause of the Problem
The Zuma administration has had more than its fair share of problems. But above them all, was the Fat Zulu's promise to create millions of jobs. With no organic growth in the economy, he did what any good ineptocrat would do - created jobs in the civil service and parastatals.
South Africa's civil servants make up 20% of the workforce. The highest in the world.
Take a company like Eskom, 28,000 employees in its leanest, meanest days. Today, 44,000. One would think that with a massive capital programme, Eskom would need the additional manpower. Except that most of the work is being done by contractors, on a turnkey basis.
For every job being done, expect three or four Eskom employees to be standing around with their clipboards, marking off that the contractor's reflective vest is of the right type, and that a risk assessment was done, prior to the start of the day's work. If you think I'm joking, I challenge you to go to one of Eskom's sites, and see for yourself.
A similar situation exists at SAA. The workforce has swelled from 8,500 to more than 10,000 in the last five years. And let us not forget, this is an organisation that has not made a profit for years, is on its eleventh turnaround strategy since the early 2000s, and is begging government for another bailout as I write.
In short, much of our civil service is only drawing a salary, and making the Emperor of Nkandla look good. Their contribution to organic growth and enhanced efficiency is, well, nil. And anybody who has had the misfortune of having to make use of government services, knows this.
So What's the Solution?
Minister, you're on the right track. You have identified government spending as the biggest issue. But simply freezing the numbers is not good enough. You need to be actively trimming the numbers. If someone turns their toes up, resigns, or goes on pension, don't replace them. Draw the successor from existing ranks.
Next, sir, you need to do something about corruption. The handful of government functionaries fired for theft is not good enough. The DPW admits it is losing R30-billion every year, due to corruption. That's your funding shortfall and the capital cost of the GFIP, and more, sorted out right there. The day government takes corruption, theft and nepotism seriously, not just paying lip service to it, everything comes right. Fire some people. Make them pay back the money, press charges.
I can see civil servants everywhere, throwing a tantrum that I want you to cut their jobs. Because they (shortsightedly) see that they have nowhere else to go. And therein lies the real solution.
Create an enabling environment that encourages organic growth. At the moment, it is nigh on impossible to grow a business. Commissioner Ludin's completely inept CIPC makes it almost impossible to start a company, or to change details for an existing one.
The labour laws make it impossible to hire anybody on a short term basis for a project, thus the project gets shelved. The unions and their lapdogs at the CCMA are all-powerful, hammering employers for the slightest indiscretion, real or perceived. The post office is on strike, the municipalities are incompetent, Telkom cannot provide a telephone or ADSL line, and SARS is surly and unhelpful.
These things need to change. The day you make it possible for business to do what businesses do best, be agile, is the day you stimulate real growth. And when you have this growth in the private sector, job creation in that sector will outstrip the false economy of creating employment in the state environment.
Contrary to popular belief, business does not exist to exploit workers, or the ubiquitous poor. It exists to create wealth, symbiotically. If the workforce contributes to the creation of wealth, it will be rewarded.
Go on, Minister, be brave! Mr Zuma, his family and his mates, gorging themselves at the trough, may not like it, but the country will thank you for it.
Having listened to aspects of your MTBPS yesterday, and having read some of the analyses, it is clear that next year's budget speech proper is going to see a hike in personal taxes.
Economists have pointed out that imposing an additional tax on the super wealthy, will only realise about 15% of the additional funding required. Conversely, you are on record as saying that your budget measures would protect the poor.
That leaves the rest, the central blob on the bell curve, the middle class. Already overworked, e-tolled and taxed to death, you will attempt to draw the proverbial blood from a stone. Please don't do it, Minister!
The Cause of the Problem
The Zuma administration has had more than its fair share of problems. But above them all, was the Fat Zulu's promise to create millions of jobs. With no organic growth in the economy, he did what any good ineptocrat would do - created jobs in the civil service and parastatals.
South Africa's civil servants make up 20% of the workforce. The highest in the world.
Take a company like Eskom, 28,000 employees in its leanest, meanest days. Today, 44,000. One would think that with a massive capital programme, Eskom would need the additional manpower. Except that most of the work is being done by contractors, on a turnkey basis.
For every job being done, expect three or four Eskom employees to be standing around with their clipboards, marking off that the contractor's reflective vest is of the right type, and that a risk assessment was done, prior to the start of the day's work. If you think I'm joking, I challenge you to go to one of Eskom's sites, and see for yourself.
A similar situation exists at SAA. The workforce has swelled from 8,500 to more than 10,000 in the last five years. And let us not forget, this is an organisation that has not made a profit for years, is on its eleventh turnaround strategy since the early 2000s, and is begging government for another bailout as I write.
In short, much of our civil service is only drawing a salary, and making the Emperor of Nkandla look good. Their contribution to organic growth and enhanced efficiency is, well, nil. And anybody who has had the misfortune of having to make use of government services, knows this.
So What's the Solution?
Minister, you're on the right track. You have identified government spending as the biggest issue. But simply freezing the numbers is not good enough. You need to be actively trimming the numbers. If someone turns their toes up, resigns, or goes on pension, don't replace them. Draw the successor from existing ranks.
Next, sir, you need to do something about corruption. The handful of government functionaries fired for theft is not good enough. The DPW admits it is losing R30-billion every year, due to corruption. That's your funding shortfall and the capital cost of the GFIP, and more, sorted out right there. The day government takes corruption, theft and nepotism seriously, not just paying lip service to it, everything comes right. Fire some people. Make them pay back the money, press charges.
I can see civil servants everywhere, throwing a tantrum that I want you to cut their jobs. Because they (shortsightedly) see that they have nowhere else to go. And therein lies the real solution.
Create an enabling environment that encourages organic growth. At the moment, it is nigh on impossible to grow a business. Commissioner Ludin's completely inept CIPC makes it almost impossible to start a company, or to change details for an existing one.
The labour laws make it impossible to hire anybody on a short term basis for a project, thus the project gets shelved. The unions and their lapdogs at the CCMA are all-powerful, hammering employers for the slightest indiscretion, real or perceived. The post office is on strike, the municipalities are incompetent, Telkom cannot provide a telephone or ADSL line, and SARS is surly and unhelpful.
These things need to change. The day you make it possible for business to do what businesses do best, be agile, is the day you stimulate real growth. And when you have this growth in the private sector, job creation in that sector will outstrip the false economy of creating employment in the state environment.
Contrary to popular belief, business does not exist to exploit workers, or the ubiquitous poor. It exists to create wealth, symbiotically. If the workforce contributes to the creation of wealth, it will be rewarded.
Go on, Minister, be brave! Mr Zuma, his family and his mates, gorging themselves at the trough, may not like it, but the country will thank you for it.
