Two stark sets of statistics released this week should give all South Africans pause. They collectively encapsulate the deep crisis that our country is in.
The first set, from the Institute of Race Relations, looks at social grants, the most important mechanism whereby the African National Congress government has brought relief to the poorest of the poor. The grants, to the aged and disabled, and for children, are also critical in order for the ANC to retain its grassroots voter support.
Last year was something of a tipping point for SA, the IRR analysis shows. For the first time the number of people on welfare exceeded the number of people who have jobs.
In 2016 there were just over 17m people getting social grants. Those grants are funded, through taxation, by the approximately 15.5m people who had jobs.
With the economic downturn – more jobs lost and more people in need of government support as the country moved into recession – that picture undoubtedly will have worsened in the past six months.
IRR analyst Gerbrandt van Heerden is blunt: “The numbers are a recipe for social and political chaos … The government will have to cut other areas of expenditure in order to meet popular demands for more and higher grants. We predict that this will lead to much higher levels of violent protest action.”
It is over a 15-year period that this grim trajectory is best viewed. In 2001 there were a fraction under 4m people receiving grants, with 12.5m working. While employment by 2016 had in absolute numbers increased by 24%, those receiving grants had rocketed by 328%.
This is clearly unsustainable. As the IRR points out, there is enormous political pressure not only to continue expanding the rollout, but also to increase the value of existing grants. But that is well nigh impossible, which means that living standards for the most vulnerable people in our society will stagnate and then decline.
“The consequences for social cohesion will be severe as inequality increases. The pending grants crisis will trigger much suffering and desperation in already poor communities.”
It is a dire situation that is further exacerbated by the nature of President Jacob Zuma’s administration, a de facto kleptocracy. Not only is there less to steal, because of this weakening tax base, but also the levels of larceny are increasing.
State capture by Zuma-favoured elites is no longer a possibility but a reality. Resources that should be going to growing the economy are being systematically looted at every level of government.
The second set of statistics comes from the Auditor-General Kimi Makwetu’s report on 2015-16 audit outcomes at local government level – the level at which the state can most readily and most rapidly intervene to improve the lives of the disadvantaged.
Makwetu notes a “marginal improvement” in the levels of mismanagement, in that expenditure in the “fruitless and wasteful” category was down by 21% and in the “unauthorised” category remained much the same, at R12.8bn. However, “irregular” expenditure, in which financial controls were flouted, was up on the previous year by a whopping 50%, to R16.8bn.
That latter figure is a conservative estimate. It is likely much higher, for in a third of the municipalities the financial controls are so poor that no one has a clue of the exact amount spent irregularly.
Only 49 out of 263 municipalities managed clean audits. And, according to the auditor-general, 27% of SA’s municipalities are simply not sustainable.
But the problem here is not one of incompetence. It is one of political will.
In the Democratic Alliance-governed Western Cape, 80% of municipalities received clean audits. The next best province was the ANC-run KwaZulu-Natal, with a pathetic 16% clean audit.
In Gauteng, only the DA-run Midvaal metro got a clean audit, for the third year in a row. In contrast, the three metros that the DA won in last year’s local government elections – Johannesburg, Nelson Mandela Bay and Tshwane – all racked up staggering levels of misspending, while under ANC control, of R726m, R1.3bn and R2.7bn respectively.
This is only at a local government level. The situation is no less alarming at provincial and national government levels. KPMG has calculated that by just curbing the R49bn misspent by the national government each year, SA could pay every social grant recipient an extra R233 a month.
So when it comes to “radical economic transformation”, the left should worry less about that imaginary bogey-man, White Monopoly Capital. The real issue to be grappled with – clearly something of a challengingly radical concept to the comrades – is that the ANC should stop picking the pockets of waifs and orphans, the disabled and aged.
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