Money is needed to fix poverty, unemployment and inequality

MANDLA RADEBE of Norkem Park writes:

Let’s face it, SA is not a boring country. The last three weeks hit us with “earthquakes” of protests by university students, an Economic Freedom Fighters (EFF) march and resolutions from the African National Congress’ (ANC) National General Council (NGC).

The latter is a conference held by ANC branch delegates to review and formulate policy. One thing was common in these three events, though expressed in different ways; economic transformation.

Some want it done radically, some want it done structurally. Economic problems of SA exist in three forms; poverty, unemployment and inequality.

First, the ANC NGC resolved to address these by imposing, among others, what they call a wealth tax. The other resolution addressing this issue was to implement land reform which will force farmers to give 50 per cent of their productive land to farm workers.

Second, university students feel that due to the excessively high and rising cost of education, they must get free education to address inequality and poverty.

Lastly, the EFF want a minimum wage law of R4 500, below which it will be illegal to pay or hire labour, companies to give employees 51 per cent of the company shares, no banking fees for people earning R4 500 and below, mining companies to compensate, support and educate families and children of Marikana victims and all JSE listed companies to adopt a student and foot their university education bills. That is the tale of the three gatherings in a nutshell.

All this means one thing; money is needed to fix poverty, unemployment and inequality. Big question is; where is it going to come from? First impression is, from you, the taxpayer but the bigger question is, is the government suggesting the right tool for the right problem?

Well, try this logic. The government gets money by taxing individuals and companies earning an income and making profits. Therefore the higher the number of people working, the higher the tax collected. Similarly, bigger profits the companies make (ie growth in production), increase revenue. So where exactly is the problem?

In economic growth, we are simply not growing. What slows our growth? Different things, one is policy; the other is global economic meltdown. So which is it for SA? Mainly policy.

We have a National Development Plan (NDP), which is gathering dust because the ANC alliance partners are labelling it pro-capital, anti-labour and counter-revolutionary and the ANC lacks courage and leadership to implement it.

In the absence of a concrete policy there is a vacuum (uncertainty) and no one wants to invest in uncertainty. Consequently growth suffers. Instead of implanting the NDP, a lot of radical economic transformation talk is being tossed around, most of which is socialism. Can’t we learn from history, which prosperous country practices socialism?

Regarding taxing the wealthy to fund free education and other problems, we need to ask one question; is lack of funding for anything caused by an inadequate amount of money in this country? My answer is NO.

According to the auditor general’s report 2013/4, there’s excessive use of consultants while the state has employees (R386-million), high and unacceptable amounts of unauthorised/irregular expenditure (R65.3-billion). We see a lot of golden handshakes, too much money paid in legal fees and the big one is the bailouts of chronically loss making and finance-bleeding parastatals.

I wonder when was the last time the SABC, Eskom and SAA reported a profit. Money management is our problem, not money shortage. The extra money we want to collect from the wealthy will never help if we don’t sort out the money management problem. Prioritise!