Robin Hood and his skewed notions

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Read Paddy Hartedegen’s thoughts on this matter.

For hundreds of years the Robin Hood notion has been considered quite noble, justified and honourable when, in fact, it’s the very opposite: it is disruptive, undermining and economically fateful.  Its simple crookery.

Robin Hood, robbed the rich to give to the poor and this legendary fellow suggested it was fine to rob the rich to enrich a feudal society where the titled few held everything while the poor masses had nothing.

robin hood

Many lessons were learned using that mantra as rallying cry:  “We the workers”,  “Rise up against the capitalists” and so on and so forth across societies in every part of the world.  They had one thing in common:  to take from the haves and give to the have-nots.

Much greater writers, thinkers and commentators than me have echoed the follies of this approach down paths of time. They point out that robbing the rich simply makes everyone poorer and does little or nothing to create or spread the wealth.

In a strange way, it is exactly these sorts of ideas that seem to permeate much of South Africa’s society but it does so without necessarily disempowering or stealing from those of different race groups at all.

One of the richest ‘organsations’ in the country is the government itself and it is the government’s own employees who keep stealing from it.  A government that is not rich and not able to waste money left, right and centre if it wants to deliver the services that empower and improve the lots of the impoverished masses.

Take the case in Port Elizabeth reported recently:  The troubled Nelson Mandela Bay metro is spending more on salaries each year and less and less on delivering essential services such as the repair and maintenance of infrastructure.

Staff costs – all part of an empowerment plan – are now costing 31% more than they did three years ago.  The outcome is the the taxpayers are paying rates and taxes into the Nelson Mandela Bay coffers making it appear ‘rich’ when in reality it is verging on bankruptcy.  Then the ‘rich’ council with a healthy bank balance uses its money to distribute among the poorer ‘staff’ employed at all levels.

The city gets poorer, the people get poorer and the community becomes impoverished while the staff get richer and richer.  And this principle applies to all the metropolitan areas in South Africa according to a report entitled the State of Finances of SA’s Metropolitan Municipalities 2013.

The report outlines how above-inflation salary increases had put a drain on the country’s major municipalities and even the hikes in electricity tariffs – which have an impact on boosting municipal cash resources – were unable to stem the tides of cash coming into councils.

The report, compiled by the South African Cities Network – a local government association that monitors trends in big cities – examined the financial trends in metropolitan administration between 2009 and 2011.

Here are some of the facts:  The rate of staff costs in the 2010/11 financial year in seven metros was, on average, 20 percentage points above inflation. The breakdown shows increases in salaries bills for:

  • Nelson Mandela Bay – 20% above inflation;
  • Cape Town – 19%;
  • Johannesburg – 16%;
  • Ekurhuleni – 14 %;
  • eThekwini – 13%;
  • Buffalo City – 12%
  • Tshwane – 11%
  • Mangaung – 11%

Inflation at the time was around 6 percent anyway, so add at least another 6% onto those figures.

Each of the municipalities increased their bulk purchases of electricity and water and passed part of the higher costs onto the residents on the basis that the infrastructure needed to be repaired and maintained.  Most of that money went to paying salaries.

And the report found that the bulk purchase of electricity and the higher salary costs meant that operational expenditure (needed to deliver essential services to the very people who are generating the cash through taxes, rates and fees) fell from just 22% of the total budget in 2009 to 18% in 2011.

This says that 82% of the council money is spent on paying people (either employed by the metro or independent consultants) while service delivery and maintenance steadily declined.

And it declined because – as we so often hear – ‘there is no money’.

The two most pressing problems facing councils – urbanisation new residents flooding into South African cities and the cost of hiring new staff or filling vacant posts – have eroded the cash resources.

Sithole Mbanga, the man who heads the South African Cities Network says that “things are improving” but admitted that there are enormous pressure on all councils to deliver services and contain costs.

He said that this aspect of local government needed “serious improvement” and he’s dead right.

I wonder what a productivity study and a systems analysis of the individual councils would show?  Anecdotal evidence suggests there has been a clear drop in productivity and, alongside this drop, a the fall in efficiency of services.

As I have said many times before, if something is done ‘on the cheap’ and not done properly in the first place it ends up costing more and more to rectify.  The result?  Wasted and fruitless expenditure – the common denominator of recent audit reports on most councils and municipalities in South Africa.

Cape Town’s deputy mayor Ian Nielson said the rate of salary increases “significantly outstripped” other areas of expenditure, impoverishing the councils themselves.

And that’s exactly where the Robin Hood principle becomes farcical.  If you rob the rich and pay the poor, everyone gets poorer.

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Crown Publications, one of South Africa’s largest business-to-business publishing houses, came into existence in 1986. Since then, the company has grown from producing a single magazine, Electricity SA (renamed Electricity+Control), to publishing six monthly magazines, three quarterlies, and a number of engineering handbooks.