South Africa's bloated government costs the taxpayer billions that could be better spent elsewhere. Picture: Moneyweb
SA is over-governed. We have 35 ministers, 37 if you count the president and his deputy. There are also 37 deputy ministers, and 9 provinces with a combined 100 MECs (members of the executive council) and administrations. Then there are the 263 municipalities, operating another layer of bureaucracy.
And in case you think this is all well and good, consider that just 49 of the country’s municipalities achieved clean audits in the 2015/16 financial year, according to the Auditor General, Kimi Makwetu.
The AG also reported that irregular expenditure in municipalities increased by over 50% to R16.81 billion, though the figure could be substantially more as a third indicated that the full extent of mis-spending was unknown.
Narius Moloto, president of the Pan African Congress, calls the nine provinces “mini bantustans” and wants to see them scrapped, with the money spent on duplicated administrations redirected to job creation and uplifting the poor. “We need to eliminate provincial government, which does not represent anything. We should rather strengthen local government and appoint commissioners to ensure implementation of services at that level.”
The 9 provinces have a combined 430 members of the legislature to look after, not counting their entourages and hangers-on.
The Democratic Alliance (DA) also thinks it’s time to scale back on the blue light brigade. “This cabinet is by far one of the biggest in the world with 35 ministers; far bigger than the United States at 15 ministers, Kenya with 18 ministers, and the United Kingdom with 21 ministers,” according to DA spokeswoman Desiree van der Walt.
This year alone, the 35 ministers and 37 deputy ministers are expected to earn R163.5 million, with their ministerial staff (limited to 10 for minister and 6 for deputy ministers) costing a further R1 billion.
Is this value for money? The DA has done some decent homework on this subject and concludes that government should set a good example by cutting back on the number of ministers. It proposes scaling back the number of ministries from 35 to 15 and saving R4.7 billion in the process.
What do we need a sports minister for, other than to cheer on our soccer team and complain about race quotas not being met? What does our science and technology minister hope to achieve that the private sector cannot? Then we’ve got higher education and basic education: why two ministries (both rather miserable in their academic achievements)?
Economic authors Andreas Bergh and Magnus Henrekson, in a study of the relationship between the size of government and economic growth, found that big government is not necessarily opposed to growth. It depends on how government spends its money. Spending on education of decent quality is pro-growth in the longer term. Spending on big administration for its own sake is unproductive.
Another study by World Bank econometric researcher Blanca Moreno-Dodson found that public spending on education was the primary engine of economic growth in developing countries. Other pro-growth areas of spending are general public services, health, education, housing, transportation, energy, fuel and communications. When governments spend outside these core areas, this has little impact on growth, and can even affect it negatively.
Another key determinant of growth is good governance, an area where SA has failed miserably in recent years as a consequence of state capture by the Gupta’s and other freeloaders.
“Instead of establishing simple rules for peaceful interactions between citizens, politicians tend to try and micro-manage people’s lives at great and unwarranted cost,” says Free Market Foundation director Eustace Davie.
In SA, public spending swallows more than 30% of GDP, up from 25% in the last 15 years. There is a danger of crowding out the private sector as higher government budget deficits chase up interest rates, making it more costly for the private sector to borrow and invest.
The cost of bureaucracy involves more than just salaries, cars and offices. Public Works doled out R188 million on 33 properties in Pretoria and Cape Town for the ministers and deputies, a princely R5.7 million per property. Another R48 million is to be spent in the current fiscal year for six more properties – a cost of R8 million per property. The R236 million spent on ministerial properties could have built 2000 RDP houses, says the DA.
Then there’s the travel and entertainment budgets coming in at a shade under R300 million this year. But the real shocker is the VIP protection services, costing R1.5 billion in the current fiscal year, and close to R5 billion over the next three years. Businesslive reported that the Presidential Protection Unit comprised 1382 officers costing taxpayers R693 millio in 2017-18.
The DA says part of the problem lies in the ministerial handbook, which provides rather generous staffing and expense limits on ministers and their deputies.
Previous presidents had smaller cabinets. Nelson Mandela – total cabinet size 50 (28 ministers); Thabo Mbeki – total cabinet size 50 (28 ministers); Kgalema Motlanthe – total cabinet size: 47 (28 ministers); Jacob Zuma/Cyril Ramaphosa – total cabinet size 73 (35 ministers).
Says van der Walt: “If the president is serious about helping National Treasury rein in the runaway budget deficit he will have to cut executive spending by finalising a stricter and more frugal ministerial handbook, as well as cutting the overall size of the cabinet.”
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