ANC slams West Rand municipality over R77 million in VBS

The ANC has said that the West Rand municipality was already struggling when it invested R77 million in VBS mutual bank according to EWN.

The municipality recently hit the news when it didn’t pay its workers on time. The workers proceeded to take the municipality’s officials hostage, until they were paid what they were owed.

ENCA reports that R77 million would have come in handy, as Farouk Bhayat, the city’s finance MMC, revealed that it needed about R30 million to cover salaries and various benefits like medical aids and pensions that hadn’t been paid over the past few months.

According to The Citizen, Gauteng Cooperative Governance and Traditional Affairs MEC Dikgang Uhuru Moiloa revealed that the municipality has actually already spent its budget for the year, and has run out of money.

And the municipality cannot be bailed out by the province because that falls foul of section 125 of the Municipal Systems Act.

This is not the only issue affecting the West Rand municipality. Its licensing department was raided in October for re-registering stolen cars according to IOL.

While the ANC has harshly criticised the municipality, it is important to note that it is in fact an ANC municipality.

My Take

This serves to illustrate something I think a lot of people didn’t quite realise with the VBS scandal – the focus was always on how it hurt the people who banked with VBS, how their savings were looted.

And that is a fine focus, but not a complete one. We can see with the mess the West Rand is in now – that it was also part of why we struggle to deliver services in South Africa.

Now I fully sympathise with the workers in the West Rand – their salaries were paid late, and by the sounds of it the municipality was taking money off of them for medical aid and then not paying the medical aid for months.

That is wage theft.

Now I couldn’t find figures for South Africa, but consider in the US according to robberies, burglaries, larcenies, and motor vehicle thefts amount to about $14 billion per anum.

Wage theft meanwhile accounts for $50 billion per anum.

I wouldn’t be surprised to find a similar problem in South Africa, when you consider how common this issue of not paying workers on time really is. Consider Thandi Modise’s pig farm – the story goes that the workers weren’t paid, so they didn’t show up to work, resulting in the animals suffering.

Wage theft is so rife – that even the higher ups in the ruling party are implicated.

There are few things I find more despicable than a wage thief. Sure there are more evil criminals out there, but there is something special about someone who in lieu of covering their salaries bill will invest R77 million in a bank that was so dodgy it was bribing people to buy into it.

Within government, UASA last year raised the alarm with regards to Denel – and how their 13th paychecks were withheld. This was not a bonus, as UASA explained it was actually an arrangement with workers.

“The so-called “13th cheque” is, in fact, a self-funded savings initiative from Denel employees, which they use as a bonus in December of each year during annual shutdown,” UASA explained in a statement.

IOL reported in October that the SABC warned that it may struggle to pay salaries. Business LIVE had a similar report about SAA last year in August.

Now you can say that these SOEs are suffering, but if you cannot pay for something you don’t buy it. A salary is paying for somebody’s time and labour, if you cannot afford that time or labour you shouldn’t be hiring that person. Otherwise you’re stealing.

My first job was as an audit clerk. The partners in that firm had a policy – they got their salaries after the staff, why?

Because if ever there was a cashflow problem, they wanted their checks to be the ones that bounced, not the workers’. That to me is how one should think as an employer – before anyone else gets paid, your workers get paid.

With the ANC what we have seen in their management of our government is all too often sadly not that. This is one of the issues I hold against Cosatu, how can you ally with a political party that doesn’t pay workers on time if you’re a labour union?

Where you have dodgy investments coming before workers’ salaries? How can you stand by that?

Numsa have recently registered their own socialist political party. I wouldn’t vote for it, in part because I’m a neo-Keynesian and I find it strange how in the debate over our economy we’ll go the extremes of Marxism before we’ll ever consider standard Keynsian interventions.

We will expropriate without compensation long before we even consider simply redistributing more of the profit from our businesses. Our debate seems to be between all or nothing, and there is a lot of ground between those two poles.

But I have to respect Numsa for cutting its ties to the ANC – because I don’t see how a union could support what has been going on for years in our government and still claim to stand for its members.

Sure the salaries are high – but that’s only good for the workers if they’re actually getting paid, and paid on time. It doesn’t do me much good if my August salary is very good, but it gets paid in December, and my bills fell due at the end of August.

This is part of the cost of corruption, because for those of us who don’t work for government, this translates into public sector strikes, which result in what’s on paper higher wages, but they’re not getting paid anyway so onto the next strike and the services don’t get delivered.

Maybe I’m weird in my way of looking at this, but this is part of why I don’t view our unions as one of our major growth bottlenecks in South Africa – so much as the fact that our government cannot seem to get the very basics right.


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