As far as the economy is concerned, the warning lights have long since stopped flickering – now they’re on full time. We are in deep trouble and the only way out, according to experts, is for the ANC government to bite the highly unpopular bullet of reducing expenditure on a bloated civil service.
Economist Dawie Roodt told us government should stop ignoring the “elephant in the room”, which is the fact that “we simply have too many civil servants”.
Roodt says the civil service will have to be slashed and those who do remain should have their salaries cut … because it is the only way of addressing the ever-widening gap between government expenditure and revenue.
We agree with his suggestions that the Cabinet be drastically trimmed. Costs will be cut … so will the hot air. Roodt believes we need only the ministries of health, education, police, correctional services, infrastructure, local government, finance and a deputy president in charge of government business.
The problem for government is that the goose that has been laying the golden eggs for it – the long-suffering individual taxpayer – is in danger of having its throat slit by the ever-increasing tax burden. South Africa’s tax to gross domestic product ratio increased from 22.4% in 2000 to 29% in 2015. The African average went from 14.1% to 19.1% in the same period.
Yet, despite the high tax burden, very little real security is offered to taxpayers. Financial expert Ferdie Schneider attributes this to administrative incompetence, misappropriation, overspending, corruption and fraud in government ranks.
Apart from crippling any recovery attempt, high taxes and ineffective use thereof will accelerate a brain drain as experienced people go elsewhere. Tax compliance will be lower, resulting in less revenue.
Our financial health is dire. The medicine is bitter, but necessary.