State wastefulness ignores the poor

inlsa

Andrew Layman, CEO of the Durban Chamber of Commerce and Industry.

People’s notions of wastefulness differ markedly. Certain expenditure, considered essential by some, is wasteful to others.

The ordering of financial priorities, therefore, is of paramount importance to government and its management of public money. People forget that this is collected from us through a variety of taxes and distributed by government in various ways, which, in reality, ensure that, one way or another, a large quantum of the money returns to us.

The distribution is ordered by political priorities and the recipients at the end of the chain are not necessarily those from whom collection was done in the beginning. The government is quick to claim largesse.

The amount of money spent for the benefit of the citizenry is often paraded as proof of a caring and benevolent government, as if it has earned the money itself from some other source.

It is taxpayers’ money that is being redistributed. I have no complaint about this because it is the way things have to happen and if we want a peaceful and prosperous country, resources have to be distributed in such a way as to promote these objectives.

Unfortunately, a good deal of government expenditure is directed to other objectives, many of which are more about the government itself than the people expecting to be served. This is not unique to this country by any means; everywhere the preservation of power is regarded as a legitimate state expense.

The system gives people the right to question how the money is spent, and whether due value has been achieved. But this right is not taken very seriously because all expenditure seems to be justified by some authority, some handbook or some procedural laager.

Outcries about the cost of the so-called “kissing conference” dissipated eventually and, despite the law, no one was held accountable, as far as I know, for what was an exemplary case of “wasteful and fruitless expenditure”.

The auditor-general reported that in the financial year 2010/11, wasteful and fruitless expenditure by government departments amounted to R427.4 million; an escalation by 1 600 percent from the previous year. This excluded four departments whose annual reports missed the deadline and so their expenditure could not be taken into account.

This wanton profligacy, complemented by administrative inefficiency, is a situation that our country, particularly, can ill afford.

Is wastefulness confined to public sector spending, I wonder. In the private sector, of course, margins of profit are inclined to be protected more vigorously than prices to consumers. Thus, when input prices rise, prices to consumers increase concomitantly. And, if companies engage in wasteful expenditure, it could be reasoned that consumers have paid for this.

I do not know exactly what the cost was a head for the top business breakfast held in the city last week. Considering the status of the hotel where it was held, it was not inexpensive. Of the 290 people who booked to attend – they were not expected to pay, due to a generous sponsorship – as many as 80 failed to pitch.

I reckon that represented at least R16 000 in wasted expenditure on the part of the organisers. It also represented 80 breakfasts for which there was no further use, for hotels are not permitted to reuse food that has been prepared.

It is really very easy to waste other people’s money.

It seems to me that it would be a meaningful first step towards poverty alleviation, or at least towards greater respectfulness for the plight of those who are poor, if we consciously avoided wastefulness. We should also avoid extravagance, perhaps, but this is not quite so urgent, nor is it the point of this article.

The purchase of new cars for city leaders may be questioned in terms of extravagance (though sauces for geese and ganders are seldom the same), but is not a matter of wastefulness, and certainly not something that the public protector’s time should be taken up with.

If expenditure yields a lesser-than-expected value return, there has been an error of judgement; but if there was never going to be any return at all, that is pure profligacy and in the SA context in 2012, anathema.

* Andrew Layman is the CEO of the Durban Chamber of Commerce and Industry.