Government

This is how much of your money government has wasted this year

Staff Writer

 ·14 Sep 2016

The South African public has been bombarded with media reports about government projects or branches using up millions, even billions of rands of taxpayers’ money.

These range from irregular and wasteful expenditure at provincial and municipal level, to infrastructure projects which often balloon well beyond their original budgets.

So when broken down, how much do these billions of rands translate to an individual’s direct exposure to them?

In 2015, BusinessTech broke down the costs for a number of scandals, including the widely publicized Nkandla saga, the Prasa Afro 4000 contracts, and e-toll guarantees.

Read: This is how much of your money the government is wasting

Over and above 2015’s list, however, 2016 has added a few more high-profile scandals into the mix, most notably presidential planes and questionable Gupta contracts.

Here are six more cases of public spending or wasteful expenditure where taxpayers are footing the bill – and how much it is costing you.

For the calculations below, we used three groups of individuals: the bulk tax base, who account for almost 93% of all taxes; the SARS registered tax base; and South Africa’s eligible tax base.

Determining the exact number of taxpayers is a tricky affair. In 2015, union Solidarity found that approximately 3.3 million taxpayers paid 93% of all income tax in the country.

SARS has a registered tax base of around 15.4 million people – while the eligible tax base of South Africa (adults between the ages af 15 and 64) is at 33 million.

This is how much – in theory – that individuals paid in some of the more high-profile cases of public spending or wasteful expenditure in South Africa.

Zuma’s new jet 

Defence Minister Nosiviwe Mapisa-Nqakula has confirmed that president Jacob Zuma will get a new jet plane to replace Inkwazi, and that R300 million has been budgeted for the purchase.

Analysts and aerospace experts have said that the purchase is completely unnecessary, and that the president’s plane is nowhere near the end of its lifespan. Regardless, the purchase of a new jet will go ahead, with a R100 million budget for leasing other planes until it arrives.

Eskom-Gupta contracts

In September, Treasury blocked Eskom from extending a coal contract with the Gupta-owned Tegeta Exploration worth R855 million, as it continues an investigation into the power utility’s other contracts.

While this prevented further money being pumped through to Tegeta via Eskom, two previous payments were made to the company to the tune of R586 million and R253 million.

The coal being supplied by Tegeta is not up to required standards, according to experts.

SAA bailout 

After much to-and-fro between SAA and National Treasury over the past two years, SAA has finally been granted a R5 billion guarantee by the state to ensure its fiscal viability.

The airline has made a R6.5 billion loss over the past two financial years, however, and without the bailout from Treasury would likely crash and burn.

The bailout has been criticised by opposition parties, saying that with president Jacob Zuma’s friend, Dudu Myeni still involved at the airline, it’s sending billions of rand into a hole.

Tshwane contracts

DA mayor in Tshwane Solly Msimanga is investigating a number of contracts in the municipality, after he uncovered a contract worth R100 million, where money was paid, but no work was actually done.

Msimanga said that the contracts could amount to over R10 billion as more and more dodgy deals come to light.

Eskom Ingula Hydro plant 

A report by Carte Blanche found that Eskom’s hydro-powered Ingula plant in Kwazulu Natal, is more than R27 billion over budget and will be at least four years late when it finally comes online, in 2017.

The initial budget for the project was R8.9 billion, and has since ballooned to R36 billion.

Irregular, wasteful and unauthorised expenditure 

Auditor-general Kimi Makwetu reported in June 2016 that irregular expenditure among South Africa’s municipalities has more than doubled over the last five years, hitting R14.75 billion in the last financial year.

Fruitless and wasteful expenditure was up to R1.34 billion, while unauthorised expenditure hit R15.32 billion.

These categories don’t necessarily represent illegal activity, but show poor accounting and administration among municipalities, where money can easily bleed out without a trace.

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