Small is beautiful in this economy

It might still be on a micro level, but privatisation is picking up speed — and therein lies hope for our future

It wasn’t a good week for a provisional taxpayer. My bank account had been gouged by the South African Revenue Service’s demand for a provisional tax payment. In the past I’ve inclined to the view that I’m lucky to have a tax liability. Not so much this year. The surging cost of living seems to have overtaken my earning capacity. And then there’s all the little Eskom-related stuff — the power banks, the dongles, the surge protection plugs, the vrot food.

But off I went to parliament to cover the budget. And amid the screeds of information provided by what is still a topclass National Treasury team, it was difficult not to wonder what the point of this precise balancing of revenue and expenditure was.

The state-owned entities (SOEs) are just huge black holes into which the government keeps pumping dollops of cash that it has gouged from private and corporate citizens. The amount of money it hoovered up from us all — through personal income tax, VAT, corporate income tax and fuel levies boosted by generator use — was remarkable for a country supposedly on the brink of economic mayhem.

But wouldn’t it be great if all this hard-earned money was going into even reasonably efficient SOEs. Or if more of it was going into a well-functioning education system that would better prepare the country’s children for a decent life with employment. Or into a less fragile health service. Improving social grants would also be a great idea. Yes, this is one of the government’s largest spending areas, but it is overwhelmingly money well spent. It goes to people who know the value of every rand in their pocket. Unlike the people running our SOEs.

Despite the slick efforts of the Treasury team it was hard not to get the feeling that the focus of the national budget is now all about feeding our feral and largely incompetent SOEs. And so, for the first time in 12 years, covering the budget was a bit of a downer. Not helped by the once beautiful National Assembly building that dominates the parliamentary precinct still wearing the ugly crown of cinders from a fire more than a year ago. How bizarre that noone in authority has the wit, the self-respect or energy to clean it up. Instead, we have Nelson Mandela’s statute standing proudly in front of a burnt-out shell. The metaphor is just too corny.

Anyway, things were about to get worse.

Back home I made the mistake of watching the eNCA interview with André de Ruyter.

There was some scary stuff. The scariest was finding out that all the money sucked out of my bank account would not have bought even one set of knee guards for which Eskom buyers happily pay R80,000.

Back in 2012, when I was covering protests in the Cape farmlands, I recall getting a text from the revenue service, thanking me for my tax payment and assuring me it was helping to provide social grants for well-deserving citizens. I was meeting a lot of them around De Doorns at the time and it felt like the system was working.

This year I expect to get a snotty text telling me my hardearned payment wasn’t even enough for a set of knee guards.

The good news is that the Treasury appears keen to get as many people as possible off the Eskom grid.

It seems to be hoping for not so much privatisation by stealth as microprivatisation. Huge numbers of homes and businesses are essentially privatising their electricity supply in a way that the government will never be able to reverse, if, say, there ever happened to be a change in government or in government thinking in the years ahead.

If transmission problems are ever sorted out, increasing numbers of larger businesses will be able to make the move. This will protect us from the business-threatening ineptitude of a government-controlled entity and will significantly reduce the ANC’s patronage capacity, which in turn reduces the scope for corruption.

It doesn’t begin and end with Eskom. Microprivatisation is well under way on a number of other fronts, such as Telkom and the Post Office. It is what will eventually save the country.

What the ANC government must do urgently is persuade the municipalities and unions that they face a truly grim future if the SOEs are allowed to continue to throttle the economy — the goose that lays the golden egg. Jobs will be lost and citizens will move from Eskom-ravaged municipalities to municipalities (the Western Cape) where alternatives to Eskom are allowed to flourish.

And as we wait for next year’s budget we can check out just how successful the Treasury is in getting Eskom to implement the conditions attached to its huge bailout.