Changing attitudes to state funds
National budget
IN the days preceding the annual budget by the minister of finance all news media carry predictions and wish lists. In the day or two after the delivery of the speech the media abound with analyses, ranging from technical analyses of taxation proposals to political approvals and disapprovals.
One of the disapprovals that cannot go unchallenged is the one that claimed that the minister, his deputy minister and the staff of the National Treasury stand in the way of radical economic transformation.
Those comments can only mean that the budget should have provided for greater state expenditure.
Is the government’s overspending of R149-billion not enough of a burden placed on present and future generations?
This year The Herald carried two sensible analyses one week after the budget speech. On Wednesday March 1 we could read Kazeka Kuse’s account of real and inspiring statesmanship as personified and displayed by Finance Minister Pravin Gordhan in his delivery of the speech (“Gordhan’s leadership and dignity commands our respect”).
On Thursday March 2 it was Xhanti Payi’s opportunity to enlighten us on what meaningful land reform means and requires (“Radical change in South Africa must be rooted in the soil”).
Gordhan’s quote of Pope Francis, “Reforming the social structures which perpetuate poverty and the exclusion of the poor first requires a conversion of mind and heart”, represents a fundamental point of departure which may not be overlooked (my emphasis).
It gives meaning to what sounded like a threat in the state of the nation’s address when President Jacob Zuma read about radical economic transformation.
The minister listed four “serious faultlines and uncertainties”. It is notable that “citizens’ lack of trust in elites” tops the list of four above “growing inequality”.
The statesmanship comes, not only from listing faultlines, but from stating categorically how the transformation is not to be achieved: “through conquest, conflict or extortion”.
Instead, “it is a transformation that must unite, not divide South Africans”.
How should we and how does the minister, seemingly, interpret Pope Francis’s reference to “a conversion of mind and heart?” Whose mind and heart must be converted from what to what?
The minister presented a budget that contains strong elements of redistribution and of pro-poor policies. In a redistribution policy we have givers and recipients, but also officials who link these two parties.
The hearts and minds of the givers, those who are going to pay higher income tax, are not the only givers, all taxpayers are.
Ideally the givers must give up without any regrets.
That is what tax morality means.
The givers must at all times be convinced that what they are giving up in a pro-poor budget is done in the spirit of what the American philosopher John Rawls calls the difference principle.
Their sacrifices will make a difference to the position of the worst-off member of society. However, once they made a willing sacrifice, they entrust their hard-earned money to their agents, the politicians and bureaucrats who manage this tax revenue.
Here we have the second set of hearts and minds that must act like persons who have been converted. They are the trustees of persons who trust that state revenue will be spent strictly in accordance with the authorisation obtained through a transparent parliamentary process and governed by legislation each giver stands free to read.
They are the persons whose minds and hearts must be so converted that the auditor-general will find no reason to report irregular, fruitless, wasteful and unauthorised expenditures, something the auditor-general too often finds ample reasons to report.
A true conversion of mind and heart is not displayed when a minister and the director-general of a government department, to whom the taxpayer entrusted pro-poor money, ignored a decision by the Constitutional Court for four years.
At the last moment a special cabinet meeting is needed to rescue payments to the recipients of state grants while these beneficiaries suffer great anxiety.
When we read and hear news reports on the president saying the National Treasury, obviously personified by the minister and deputy minister of finance, stands in the way of economic transformation we are back to the days of P W Botha in that a president does not support his minister of finance.
When Botha was asked where the money would come from, his answer was that it was for the minister of finance to sort out.
Before any government can spend any money that money must first be collected – an efficient and trustworthy revenue service is required. The revenue service is a special branch of the electorate’s agents that need to have their hearts and minds in the right place.
At the other end of the redistribution chain are the recipients of state benefits. What about their hearts and minds? Are they in an entitlement or appreciative mode?
Do they see the benefits received as an opportunity to uplift themselves wherever this is possible?
Among the recipients I include each and every student at our higher education institutions, not only those to whom extra NSFAS benefits are assigned.
Are their minds and hearts in an appreciative mode?
The commission of inquiry into higher education and training and the inter-ministerial committee on higher education will report in the course of the year. My hope is that they will instil a sense of responsibility and appreciation in the future recipients of whatever financing model they may recommend: to complete a qualification in the minimum prescribed time can be one condition built in.
Charles Wait, Overbaakens, Port Elizabeth