There’s no doubt that Patrice Motsepe has set a new standard for conspicuous consumption. And what a relief. There may now be some escape from those tedious stories about pointlessly fast cars, champagne, naked women and sushi.
Not that pointlessly fast cars, champagne, naked women and sushi don’t have a role to play in the greater scheme of things; not least of which is to remind the struggling masses that wealth is like youth in that it is often wasted on the wealthy.
A week has passed since Motsepe’s historic announcement and we’re all still waiting to see who is going to follow suit and become the second person in Africa to sign up to the “Giving Pledge”.
In terms of that pledge, Motsepe has undertaken to give half of the income generated annually by his assets to the Motsepe Foundation, where it will be used to support worthy causes. He would not be drawn on precisely how much money was involved in this remarkably generous initiative, but a rough back-of-envelope calculation indicates it will be considerably less than is being suggested by commentators.
The assumption he is worth about R25 billion appears to be based on the belief that he and his family own 100 percent of unlisted African Rainbow Minerals & Exploration Investments, which in turn owns 41 percent of listed African Rainbow Minerals. It is far more likely that Motsepe owns about half of this, which is still a huge amount of money.
Wouldn’t it be great if Motsepe’s move helped to make philanthropy the sexy new thing for the excessively wealthy to get involved in? Not that South African’s aren’t already giving, we are. But judging by SA Revenue Services (Sars) data, we’re not giving very much. We look particularly un-philanthropic compared with the Americans. That could be because of the lack of generosity on the part of Sars, which does not offer anything like the sort of tax breaks that are offered in the US.
In the US, philanthropy is a thriving industry and like most thriving industries in the US, it is dominated by fund managers, tax experts, accountants and lawyers, all of whom help to advise the super wealthy how best to manage their tax affairs.
Having paid little tax, the super wealthy are left with huge amounts of money and not enough ways to spend it. So, why not try and save the world or at least the parts of it you are particularly fond of. Unlike the ordinary tax-paying public the super-wealthy can ensure their money is not spent on frivolous stuff like welfare payments, street-lighting and police but goes to big projects such as hospitals and universities emblazoned with their names.
Imagine what would happen in a country where there was extreme inequality if the tax authorities accommodated the US-style privatisation of tax payments through philanthropy.
Well we’d probably all want to avoid funding the Nkandla security system and those in the wealthy suburbs might not really see the benefits of paying for the lights and closed-in toilets in the townships.
And after a few years some might begin to suspect that the development of a decent democratic society needs an effective, credible and well-resourced tax authority to address the inevitable inequalities of a whimsical capitalist system more than it needs industrialised philanthropy.
As he announced his generous proposal last week, one got the impression that Motsepe, who will not enjoy any generous tax breaks, realises not only that he is a major beneficiary of that system, but that it is a system characterised as much by good fortune as by vast fortune.