No handouts, we’re Swiss
A modern-day economic miracle has just happened in Switzerland. Who in their right mind turns down an offer of free cash?
There is something wrong with the people of Switzerland, that little country of beautiful lakes in Western Europe. Its 8m citizens have just declined an opportunity to help themselves to the state’s coffers. An overwhelming two-thirds of them have decided they don’t want the US$2,500/month they could get “free”.
That is a staggering R38,000 every month. Each child would be paid $640/month.
To qualify, you merely need to breathe!
But the people voted against the “free” cash this past Sunday in a “popular initiative system” referendum. Basically anybody can propose a referendum, whose outcome is legally binding, on anything — as long as you can convince 100,000 other people to sign a piece of paper in any given 18-month period.
One of an average three referendums a year, the proposal this time was that government would pay every adult resident — not only citizens — a basic income irrespective of their employment or wealth status. No strings attached: take the cash and do as you please!
This would have been the equivalent of the biblical manna. But 77% of the voters decided they were happy making their own money.
The rest of the world, including SA, is still contemplating a minimum wage, which would be the lowest price for labour.
In SA in the 2014 national election, a million people voted for the Economic Freedom Fighters’ promised “monthly basic minimum wage of R4,500”. But they also voted to be like Zimbabwe — expropriation of land without compensation and nationalisation of the “productive sectors of the economy”.
The Swiss — or whoever dreamt of the $2,500 income scheme — were really streets ahead of even the most ardent of communists or socialists.
Think about this: these smart people who came up with such a novel idea never made a single attempt to answer the question of how it would be funded. All $25bn of it annually.
Here at home, not content with the fact that only some 8m taxpayers are already paying the incomes of 16m social welfare beneficiaries, the EFF promised to double old-age pensions and transfers to the indigent.
Julius Malema must wish he was a politician in Switzerland! Through his friends in Limpopo back in his ANC Youth League days, he’s already shown us what he meant by expropriating resources, except this time he is accused of expropriating cash from the taxpayer for his personal benefit.
His erstwhile comrades — those still in charge — ranging from that famous family in Saxonwold to those in Nkandla and Nelspruit, continue to show us daily what they can do to taxpayers’ money they’re entrusted with. The auditorgeneral said during 2015 alone the SA government lost R25.7bn to irregular, unauthorised and wasteful expenditure.
Had that money been given to those already receiving social grants, each could have banked a one-off R1,625.
But I digress. The Swiss can afford to turn down the “free cash” offer. They have only a 3.5% unemployment rate. They make their own money, with annual gross national income (GNI) per person of $84,720 in 2014, according to the World Bank. Economics forecasting website FocusEconomics put the figure at $81,663 last year.
SA, in comparison, yielded a measly GNI per capita of $5,994 last year and $6,800 in 2014, say FocusEconomics and the World Bank.
But the Swiss also know better. They would never vote to be the next Zimbabwe. They also know that things you get for free today tend to be too expensive in the long term.
Fortunately for their indigent citizens, who no doubt need every bit of leg-up they can get, they will never find out just how expensive “free” grants are.
Just look at the interest bill on SA’s debt in the coming months.