Slow paying government

[Dave A]

Pravin Gordhan wants his taxes paid on time, but he's not nearly as keen to discuss the other side of the coin.

I've been meaning to make this post for some time, especially after watching Pravin on GMSA the day after his medium term budget speech. After the opening salvo about fiscal strain and constraints on budget income, Vuyo tried to draw Pravin on the expense side of the budget. You might recall ministerial car costs were making the headlines at the time.

Pravin would not be drawn and went on a tirade about unpaid taxes (particularly VAT). At the time I had two government departments at 90 days overdue and was about to pull the plug on the contracts. No thanks to those jokers taking their sweet time I was taking some pain paying my VAT, thank you very much.

They've paid since but the thought remained - this is a two way street.

What jogged me into raising it now was this story:

South Africa's Land Claims Commission owes over R10 billion rand to beneficiaries and landowners for land it bought to give to blacks, the Business Day newspaper reported on Wednesday.

The commission, tasked with restoring to blacks land that was taken from them during apartheid, could not afford to pay about R8.8 billion in grants for post-settlement support to beneficiaries of the land restitution programme, the paper said.

The commission was also unable to pay R1.19 billion for land it bought because of a shortage of funds, while some land owners had gone to court to get the commission to pay R380 million for land it purchased from them, the Business Day said citing the commission's legal head, Thami Mdlalose.
full story from Business Report here

Some poor bastard who owes me money (small stuff fortunately) signed off on his land claim nearly 3 years ago - still hasn't got his money and (surprise) is too broke to pay his bills.

Is this heading towards a vicious cycle?

[wynn]

There are two things to consider when a 'Gubmint' department is slow to pay.
1) The admin in the department is tardy and as a result documents are not submitted timeously.
2) The relavant department has blown its budget and has to wait for further financing, this is the worst as usually it means waiting for the next financial year.

But of course I agree, they demand immediate payment, and 'Woe Betide You' if for some reason you are tardy.
They will slap a judgement on you which is like saying, 'We want that fruit from the top of the tree, but we need to tie your hands behind your back before you climb up'

[Dave A]

In both my instances it was the most incredibly inept administration. At least it wasn't an "out of budget" situation which, may I point out, really shouldn't arise with proper administration in the first place!

It's all very well jacking up tax collection - in fact I'm a fan. Let everyone pay their fair share rather than just the honest suckers being saddled with the load.

But for crying out loud, government needs to bring its end too. That admin incompetence tied up working capital which could have been used adding value and producing profits, which (I'd like to remind Pravin & co) is ultimately where a large chunk of taxes come from in the first place.

There's a tipping point here and half-baked government administration is helping to move it the wrong way.