Thursday, 28 April 2011

1500 more plakkers houses

Posted on behalf of John Oram

Myself  and no doubt thousands of others, including our local blacks and coloureds, must have some real concerns, over this latest stupid, politically motivated decision to build 1500 more plakkers houses, all so that this ANC bunch can stay in power. I just wonder how many people have realised the implications of possibly 6000 new inhabitants plus, filtering into the local environment and the increase in crime this is going to bring. I doubt if anyone will be interested in investing in Jeffreys Bay anymore if this is allowed to happen, and there will a corresponding drop in property prices. I very much doubt there will be a property market anymore because people would have to have rocks in their heads to move to a place where the ruling elite is just out to line their pockets and couldn't care a fig about the people.

I really think this has to be stopped dead in its tracks, otherwise we are all going to regret it. Do the locals, blacks I refer to, know how this is going to affect their jobs or lack of jobs situation, there are going to be even less jobs to go around, and I very much doubt if the building industry will ever get going again. So literally thousands of extra job seekers, walking the streets, with no hope of finding a job. This will definitely result in an increase in crime and we the white ratepayers are going to be the victims of all of this.Not to  mention the xenophobia attacks that are going to take place.

My question  is, how does one get this message out to the wider audience, so that they can be made aware of the implications of this foolish decision?  How does one get the local blacks to vote against the ANC?

John Oram

2 May 2011 – South Africa’s Tax Freedom Day

South Africans pay higher taxes as a percentage of GDP than Australians and Americans. While their Tax Freedom Day (TFD) fell on 6 April and 16 April 2011, respectively, SA’s will fall on 2 May. The citizens of those countries have more economic freedom than we do because they spend less of the year working to pay their taxes.  

Garth Zietsman, the FMF Council Member and honorary statistician who annually calculates TFD says, “This year, South Africans will start working for themselves eight days earlier than last year’s 10 May as a result of the recession. As a percentage of GDP, we will earn less money and pay lower taxes, but, unfortunately, that does not mean that government will spend less. They are going to borrow and spend more, which will mean all South Africans will be faced with higher taxes in future to pay the interest on these borrowings and to repay the loans.”  

How does government get its hands on the finance it needs? Through income tax, VAT, fuel tax and the host of other taxes we all have to pay. To determine the real impact of all these taxes on any one individual is very difficult, but the TFD measure was developed to try and give citizens some idea of how much of the nation’s earnings government takes from them in taxes. In SA’s case, the nation will spend 121 days, or 33.2% of their time, working to pay their taxes and only on 2 May, the 122nd day of the year, will they be able to start working for themselves.  

Of course, taxes are spread throughout the year and a chunk of every day’s earnings goes in taxes. We nevertheless gain a useful perspective on taxes when we calculate an overall average tax burden by converting into days and months the time that a nation spends on earning money with which to pay taxes. It is a sobering thought to know that we have only 244 days or 66.8% of the year left to work to pay all our other expenses and to try and put away money for retirement.  

TFD gives us a macro-economic picture of taxes, taxpayers and the economy. To determine your own personal TFD add up the total taxes you pay in a calendar year (including the hidden taxes that are contained in the purchase prices of most things you buy), divide the number by your total income for the year, multiply by 365 days (366 in a leap-year) and add 1 day.  

Everyone’s earnings are not the same and the tax burden is not spread evenly. The top 1% of American taxpayers, for instance, pays 40% of all US taxes and the top 1% of Australian taxpayers pays 18.5% of Australian taxes. In both cases we would need to know their total incomes in order to calculate their collective TFDs. Similar figures for SA are not readily available but according to SARS 2009 figures, 52,446 taxpayers (1.5% of the total) earned more that R1m each and paid 24.5% of all income taxes collected from individuals.  

Economists tend to disagree over the level of taxes that individuals should pay, who should pay the taxes, what effects taxes have on their lives, and what form taxes should take. US economist Arthur Laffer became well known for his famous graph (the Laffer Curve) which suggested that there is a tax rate level beyond which total taxes tend to decline rather than increase when the rate is raised. According to this theory, cranking up the taxes on the highest-earning taxpayers can be counter-productive, while reducing the rates can result in increased tax income for the state. Ronald Reagan’s administration proved the accuracy of this prediction when it slashed tax rates and ended up with more revenue.  

Numerous reasons are put forward for the Laffer Curve phenomenon; higher after-tax income increases incentives and productivity; money saved from lower taxes is invested to increase production, and taxpayers spend less time on tax avoidance schemes and more on growing their incomes. Whatever the reason, some governments have implemented low-tax regimes with positive results. Unfortunately, the lessons learned are soon forgotten and calls for higher tax rates are once again making the headlines.  

TFD for the UK this year has been calculated as 30 May, 28 days later than SA. Other TFDs due to occur after SA’s as indicated by their 2010 TFD dates are Croatia (10 June), Israel (22 June), Poland (23 June), and Sweden (20 July). Swedish people spend 200 days (55% of the year) working to pay their taxes and have only 165 days to work for themselves.  

At the other end of the scale is Mauritius. This small island nation is the envy of most taxpayer nations. Its TFD fell on 22 March as a result of a deliberate effort to cut back taxes (15% tax rate for individuals and companies) and to make it more investment friendly. It is 9th on the 2010 Economic Freedom of the World index compared to SA’s 82nd, and 20th on the World Bank’s Ease of Doing Business index, with SA at 32nd.  

According to FMF Executive Director, Leon Louw, “A deliberate effort on the part of government to give SA an earlier TFD would make the country more business and investment friendly, increase disposable incomes, savings and investment (including foreign direct investment), increase economic growth, and reduce unemployment”.  

For more information: Garth Zietsman 083 309 3572 or Gail Day 011 884 0270

Information supplied by the Free Market Foundation of South Africa.

Wednesday, 27 April 2011

The biggest problem/challenge facing the new Kouga Council

This document reflects the personal opinion of Trevor Watkins, and is not necessarily the opinion of the Jeffreys Bay Residents Association.

The politicians in Kouga will face the same problem as the politicians in Bisho, in Pretoria and in Washington. This problem is: how to resolve the financial and social chaos that these same politicians have caused with their disastrous policies.

It is politicians and their policies that
·         Bankrupt businesses and individuals with some of the highest tax rates in the world. Ever increasing local rates and taxes are a part of this problem.
·         Stifle the economy under a blanket of incompetent bureaucracy. It can take months to get the simplest permission, document or decision out of this municipality, or any other branch of government.
·         Impose insane labour policies on businesses and the unemployed, stifling jobs growth and increasing poverty.
·         Impose excessive requirements and regulations on business, costing them time and money better spent on customers.  FICA, BEE compliance, tax returns, etc, etc.
·         Generate high inflation through manipulation of the money supply, impoverishing everyone.
·         Discourage overseas investment with exchange controls, tariffs, import delays.
·         Distort the usual market incentives of profit and loss, creating a vast culture of dependency financed through a diminishing pool of workers and entrepreneurs.
·         Fail miserably to fulfill their one actual responsibility – to enforce law and order in the country. They can’t even publish adequate crime statistics.

The best thing that the new and increased crop of politicians coming to the Kouga can do is
·         get out of the way of the people who actually generate wealth and prosperity
·         pass fewer laws, hold fewer expensive bosberaads, buy themselves fewer expensive cars.
·         Stop spending  income, which they did not create, on themselves. The new council could generate a great deal of respect and credibility by immediately voting themselves a 50% cut in salaries.
·         Do adequately those few things they are actually required to do; balance the budget, enforce the law, plan for disasters, provide a minimum standard of service to their residents.
·         Stop doing those things they are neither required to do nor equipped to do: redistributing wealth, providing jobs, subsidising particular businesses, handing out favours.

The biggest problem facing the new council will be the effects of the declining economy on the Kouga area and its residents.

The biggest challenge facing the new council will be for them to realise they are a part of the problem, not the solution. The solution lies in allowing the actual generators of wealth to do their job with less hindrance. It is the businesses, hotels, bed and breakfasts, surf schools, tour operators, retailers, accountants, engineers, airlines that create wealth, jobs, profits, and councillor salaries.  There is not a single task performed by the municipality that could not be done better and cheaper by a private company.

Sunday, 10 April 2011

How our Minister splurges money

Minister of Co-operative Governance and Traditional Affairs (which includes Local Government), Sicelo Shiceka, has abused taxpayers' money to lead a lifestyle befitting a multimillionaire.

Official documents seen by the Sunday Times show Shiceka went on a spending spree almost immediately after being appointed to the cabinet in September 2008.

He spent:

* R335 000 flying first class with his personal assistant and staying in a five-star hotel to visit his girlfriend in prison in Switzerland;

* Another R32 000 to hire a chauffeur-driven limo for the prison visit;

* R640 000 in one year for Shiceka and a handful of staff to stay at the One & Only - of which, he admits, R280 000 was spent on him alone;

* R55 793 for a one-night stay at the One & Only during President Jacob Zuma's first State of the Nation address, justifying taking a sangoma with him by saying the man was his "father figure"; and

* More than R160 000 in eight months flying 10 family members - including his estranged wife and current girlfriend - around the country at taxpayers' expense.

The Sunday Times has established that he went to Switzerland in December 2008 to visit his then girlfriend, SAA air hostess Phumla Masilela, who was in jail in Switzerland on a drug-related offence, while pretending to be on an official visit "on World Cup duties".

The five-day trip to Switzerland to visit Masilela, who was locked up in the women's prison, Anstalten, in Hindelbank near the Swiss capital, Bern, cost taxpayers R367 000 in total.   Read the full report by clicking HERE.

Thursday, 7 April 2011

South Africa: Finding a Way Forward

Keynote address by John Kane Berman, Chief Executive of the South African Institute of Race Relations, at the SwissCham Southern Africa luncheon, Johannesburg, March 10 2011:

I will try to answer three questions this afternoon
1. Which way are we going?
2. Why?
3. Can we find a better way forward?

Apart from racial policy, the institute I head has been documenting almost every aspect of South Africa since our foundation in 1929. It was inevitable then that when the ANC came to power in 1994, people asked us why South Africa should not become just another African disaster.

I gave the usual list of advantages: a greater pool of skills, good infrastructure, a resilient private sector, our strong international economic linkages, a tradition of political pluralism, independent trade unions, a free press, and the vigour of our NGO sector. Since then the country has won golden opinions for macroeconomic policy management, reflected most recently in a heavily oversubscribed 30-year government bond.

Despite this, we now learn almost daily of things that prompt the question once again: are we headed for the list of African failures. Recently an outbreak of foot-and-mouth disease occurred because a vital border fence with Mozambique had been neglected.
Such problems are not isolated. We have slipped further down global tables as a destination for mining investment, police behaviour seems to be increasingly lawless, maternal and infant mortality rates are rising, millions of schoolchildren have started another year without textbooks, and the country's commercial capital is run by people who are out of their depth. We also have much higher rates of youth unemployment than countries to the north that recently chased away their rulers.

Specific problems aside, among the main reasons we are going wrong are the following:
·         Affirmative action, which has denuded the State of both skills and institutional memory
·         Labour laws which protect unionised workers at the expense of the jobless
·         The cadre deployment policy, making loyalty to the party a key criterion for appointment to offices of state, and
·         Use of a model of government which makes elected institutions more accountable to party headquarters than to voters. 

Apart from policies and practices, the problems confronting us arise in part from assumptions and attitudes that affect the policy environment. These include:
·         limited understanding of what entrepreneurship requires
·         ideological hostility towards business
·         poor appreciation of how markets work or even antipathy towards them the belief that the pockets of our small number of major taxpayers are bottomless, and
·         too much faith in the efficacy of the State, leading to more and more regulation 

To these harmful factors must be added others:
·         corruption said by the deputy president to be "worse than anyone imagines"
·         lawlessness on the part of the State
·         a love of the grandiose, such as new bullet trains to Durban while we can't fix commuter rail services
·         the callousness towards ordinary people found all too often in service departments, and
·         no accountability even for preventable deaths of mothers and babies in public hospitals 

Then there are two key problems in the way policy is made. 

One is a habit of putting the cart before the horse - for example, embarking on ambitious education or health schemes without first fixing the basics such as training enough teachers and reversing the decline of public hospitals.

The second is failure to apply the lessons of admitted mistakes. To its credit, the Government has admitted the failings of outcomes-based education but the ANC nevertheless plans to forge ahead with a national health system without considering the State's capacity constraints.

These various aspects of our problems show that we are facing not just a few wrong-headed policies, but a challenge arising from the very nature of the Government and how it runs the State. Most of them have a direct impact on business.

Part of that challenge arises from the fact that the ANC is not a normal political party. When a party with a two-thirds majority in Parliament is still committed to a "national democratic revolution," we must ask what it is that they wish to stage a revolution against. The economic system? Probably. Democracy? Perhaps. The rule of law? Very likely. The Constitution? Possibly.

The Press pays little attention to the national democratic revolution, but the ANC is committed to it. This is one of the risks we face. Another is that tougher affirmative action requirements lead to a drain from the country of the most skilled segment of the population.
Yet another is that public spending gets out of control as the ANC promises more free things to more people and puts more of them on to the public payroll, including now members of Umkhonto we Sizwe. We might also see a more rigid labour market, destructive interventions in agriculture, attenuation of property rights, damage to private health care, more malfeasance with mining licences, further corruption of the criminal justice system, and more local governments collapsing.

It is ironical that we are expanding our social security commitments at the very moment when rich countries are having to cut back. It is also ironical that we are seeking to extend controls of the labour market while Europeans are trying to make their labour markets more flexible.

A further piece of irony is that we are lengthening the arm of the State at the very time when China and India are continuing to liberalise economically, when parts of Africa are liberalising, and when even Cuba is showing signs of liberalisation.

I have painted some dark clouds and the challenge now is to find the silver linings. Like a contrarian investor, we must look for signs of change that may not be obvious. One of these is the very fact that the Europeans, the Chinese, the Indians, and the Cubans have been here before and are having to reverse thrust.

The international context in which we make policy has changed. Africa is also having to pay more attention to good governance than in the past. Already, some African countries are more attractive as mining destinations than we are. If we don't look out, we may find that our lead as the most important economy in Africa is shrinking.

Despite the ANC's close historical ties with the Communist Party of the Soviet Union, it was unable in 1994 to follow a communist path because the USSR had in the meantime imploded. As welfare and dirigiste states elsewhere come under pressure, so will the ANC have to recognise that those role models are also unworkable.

Despite this country's achievements since the advent of democracy in 1994, we are pursuing an unworkable political model. This model will have to be abandoned just as communism and apartheid had to be abandoned. How long this will take I do not know. The evolution of liberal democracy can be a slow and difficult business. But we need to find ways of helping the process along, while also trying to minimise the fearful human and economic damage that may be done in the interim.

Among the reasons why apartheid disintegrated, two are relevant today. One is that its contradictions - notably the belief that you could run a modern economy without exploiting the skills of the whole population and granting them political rights - became unsustainable.
The second reason was that, as the policy crumbled under the weight of critical scrutiny and its own contradictions, the ruling elite began to lose faith in it. Disillusionment spread from the Dutch reformed churches, to the Afrikaans Press, to academia, to business, to the ruling party, to the Cabinet, and not least to the Broederbond. This made Mr FW de Klerk's bold actions on 2nd February 1990 both necessary and possible.

Parallels between the last 25 years of National Party rule and the first 15 years of ANC rule are becoming quite striking.

The most obvious is on racial policy. The NP thought it could run a successful economy without fully exploiting the skills of the black population. The ANC thinks it can run a successful state without fully exploiting the skills of the white population. The evidence that this cannot be done is apparent all the time at all levels and in all branches of government. And it is beginning to cause instability at local level and hurt the party.

Unfortunately, however, one of the parallels with our past is that failed policies are sometimes intensified rather than abandoned. This happened with the pass laws, for example, before PW Botha finally repealed them in 1986. It may also happen now with the Employment Equity Act, with its provisions for heavier fines to enforce racial quotas upon all employers - when the Government cannot even get Denel, or Eskom, or SAA, or Transnet to meet its racial targets at management or skilled levels.

But there are other parallels. Just as the National Party steadily lost support among the intelligentsia, the same is happening with the ANC. Some black newspaper editors and journalists are at least as critical of the ANC as their white counterparts. In discussions with black business leaders over the past few months, my Institute has been struck how some of them have become very critical of the government - more so than most of their white counterparts. Moeletsi Mbeki probably speaks for more people than we think.

Some of the squabbles in the ruling tripartite alliance are about spoils and patronage, but others are about policy. There are divisions over whether "decent" jobs should be placed above the need to generate more jobs. A growing minority is beginning to question the deployment policy. Others would like to have a professional civil service instead of one subject to ministerial whim. Racial policies are now also becoming a source of division, as we saw last week with Trevor Manuel's public attack on Jimmy Manyi.

This spat is causing the ANC to tie itself into knots. When my Institute pointed out that forcing employers in the Western Cape to conform to the national racial breakdown would necessitate the (illegal) dismissal of thousands of coloured workers, President Jacob Zuma said companies would have flexibility to conform to national or regional demographics.

This, however, is not what the proposed amendment to the Employment Equity Act says. Now the general secretary of the ANC, Mr Gwede Mantashe, has weighed in to the effect that national companies will have to use national demographics and provincially-based companies provincial demographics. This is the opposite of the flexibility of which Mr Zuma speaks.

In November last year the minister of finance, Mr Pravin Gordhan, told an audience in London that economic empowerment policies designed to improve the standard of living of the black majority after 1994 had not worked. After all the employment equity, labour, and land reform legislation, not to mention hundreds of billions of Rands in BEE deals, this is quite an admission. In the short term it may lead to an intensification of failed policies, but in the long term these policies will have to be abandoned.

The new constitution ushered in democracy in 1994. Ironically, however, the ANC's model of government - based on the Leninist idea of "democratic centralism" - in terms of which party headquarters dictates to local communities whom they must elect - is causing growing dissatisfaction at local level as the municipal election on 18th May approaches.

Though many officials are hostile to white farmers, others recognise that no one else has the expertise to reverse the failures of land reform. Despite antipathy to the private sector, some of the ruling elite see a growing role for it in getting our ports working more efficiently, in electricity generation, in the rescue of local government, in AIDS testing, and in sorting out the problems of further education and training colleges.

Indeed, as the failings of the State become more and more apparent, thanks in part to a critical media, more and more people in government will turn to the private sector for help. Even Cosatu wants private sector involvement to be mobilised when Postbank gets a banking licence.

These inconsistencies will multiply as the ANC continues to pursue mutually contradictory policies. Promises of creating millions of new jobs are incompatible with key components of official policy, among them affirmative action, the deployment strategy, restrictions on immigration, tightening up the labour market, and adding to the regulatory burden on business. Eventually the contradictions will become unsustainable. Either some of these key policies will have to be jettisoned, or the quest for millions more jobs will fall by the wayside.

In the meantime, what do we do? The first thing is to keep exposing the contradictions, so providing arguments for those in the ruling alliance who wish to see more realistic policies. Arguments for the liberalisation of our damaging labour laws need to be refined and intensified. The climate to do this is now more favourable than at any time since 1994.

I suspect that affirmative action and cadre deployment policies have also done more damage to this country than most people care to admit. Can you really run a modern industrial state if you would rather leave posts in the public sector vacant than appoint whites to them? The major victims of this folly have been blacks rather than whites.

The connection between these policies and lost growth and investment, high unemployment, shoddy RDP houses, inability to obtain social grants or medicines, preventable maternal and infant deaths, high crime rates, perilous roads, poisonous rivers, mismanagement of flooded dams, fraudulent passports and IDs, and a great many other problems needs to be repeatedly pointed out.

The ANC's economic objectives simply cannot be achieved while everything is subordinate to racial ideology and the imperatives of the "national democratic revolution". This message needs to be hammered home without reservation or apology until a critical mass of opinion within the ruling alliance comes to recognise it.

Secondly, it is necessary to stand firm in the defence of vital practices and institutions as they come under increasing threat, not only the rule of law but also academic freedom, independent civil society, a free Press, an independent legal profession and prosecution service, and independent courts. It is also necessary that organisations other than business come to the public defence of the free market system, private enterprise, and entrepreneurship.

Not for a second should anyone in the ruling alliance be allowed to forget that the money the Government spends on education, health, housing, child support grants, and everything else - including its lengthening list of promises to its constituents - arises from taxes extracted from the private sector and private individuals.

This is a point that needs much more emphasis than it gets. Business might wish to think of ways of getting the point across more strongly in public as well as to parliamentarians, civil servants, and other members of the ruling alliance.

Thirdly, keep proposing alternatives to present policies. Business may not necessarily see a direct role for itself here, but it is nevertheless essential that alternatives be put forward. Here is my list of a dozen:

1. Cut back on the size of the State
2. Put inspectors back into schools
3. Systematically extend private education
4. Radically redesign land reform
5. Democratise Parliament
6. Liberalise the labour market
7. Make economic growth rather than redistribution the topmost priority
8. Change our welfare state into one that promotes entrepreneurship
9. Direct all state interventions at helping the poorest of the poor regardless of race
10. Replace the deployment system with a professional civil service
11. Increase our global competitiveness as a destination for foreign direct investment
12. Repeal all racially discriminatory laws

Some of these may seem fanciful right now. However, given growing contradictions, policy failures, and paralysis in government, the climate is in fact auspicious. Detailed policy work on alternatives will of course be necessary. But the main point at this stage is to undertake a tenacious campaign to change ideas, preparing the soil, as it were, for new policies to be planted. This will be a long haul and a hard slog, so the sooner it is stepped up the better. The ruling party must be a prime target, both direct and indirect.

Don't forget that ideas predate policies and that their power, for good or ill, should never be underestimated. It was after all, that great incendiary journalist and armchair revolutionary, Karl Marx, who produced some of the most powerful ideas in history. Despite their murderous consequences some of these ideas still have an iron grip in South Africa.

They need constantly to be countered by the ideas that underpin liberal democracy. In particular, we need to keep on propagating the idea that the real alternative to apartheid is not another form of social engineering designed to promote an impossible equality of outcomes but an open society committed to equality before the law, political and economic freedom, corruption-free and proper democratic government, and rising living standards for all.

Social and racial engineers failed in South Africa last time around, and they will fail this time too. That is cause not for despair but for eager anticipation.

Tuesday, 5 April 2011

Comments on Kouga 2011/12 Draft Budget

The following comments on the Kouga Municipality draft budget refer to the page numbers in the draft budget, and should be read together with that document.

Comments on Kouga 2011/12 Draft Budget

Compiled by Trevor Watkins – Chairman – Jeffreys Bay Residents association.
Note: All figures in R,000.
Budget summary (Table A1 p7)

1)      Finance charges increase from 10,444 in 2010 to 26,628 in 2011 (255% increase). Does this represent a 255% increase in borrowing? What plans to repay this increased debt?
2)      Employee costs of 168,513 constitute 35.7% of total budget of 471,191, and a 17% increase on 2010 employee costs.  When and how will this trend be brought under control, if not reversed?
3)      Why are Total Current liabilities only 23,852, but finance charges 26,628. What are finance charges paying for, if not debt servicing?
4)      Please explain shortfall of 47,704 against cash backing?
5)      Revenue cost of free services provided of 393,441 is 14 738 greater than income from rates and services of 378,703.  In other words, more than half of Kouga’s potential income is not charged for (provided free). Is Kouga compensated for this major poverty relief from central government? How much? How long is this relief expected to continue?
Table A2 p10
6)      Police expenditure tripled from 3,308 in 2010 to 14,182 in 2011. What changed?
7)      Sewerage expenditure 26,734. Rumours that 40,000 needed. Why not budgeted?

Table A4 p 16
8)      Interest earned external investments in 2009/10 was 5,602, and only 555 in 2011/12. Are KM assets being sold to finance current expenditure?
9)      Interest earned – outstanding debtors in 2010 was 3,105 and more than doubled in 2011 to 7,689. What is expectation that this amount will actually be recovered?
10)  Income from fines (2,305) and licences (13,211) more than doubled since 2010. What is the cost to local tourism of these measures?
11)  What part of budget supplied by transfer from provincial and central government (transfers recognised 46,304?)
12)  Confirm that Remuneration of Councillors of 4,818 divided by 30 councillors gives annual payment of  R160,600 per councillor, or R13,383 per month?
13)  Debt impairment of 18,690 and finance charges of 26,628 in 2011 versus 10,444 in 2010. Is current expenditure being financed by borrowing in 2011?

Table A5 p17
14)  Capital expenditure of 500 on sport and recreation, on what? Centreton sports field?
15)  Capital expenditure - Waste water management 23,852. Is this sufficient to resolve sewage problems in J Bay – MM said 40,000 was needed.
16)  Is 14,000 surplus to be used on sewage system?

Table A7 p19
17)  Proceeds on disposal of PPE 26,000. What Plant, property or Equipment was this? Why? To who?

Table A10 p22
18)  Total cost of Free Basic Services 393,441. Do J Bay ratepayers bear this cost?

Inflation (p28)
19)   2011/12 inflation forecast 4.08%. Wage increase agreed for 2011/12 is 6.08%. Actual KM staff costs increase is 17%. Why?
20)  Eskom bulk tariff to increase by 26.71% on 1/7/2011.

4.2 Renewal and repairs of existing assets P32
Municipal councils are urged to ensure that allocations to repairs and maintenance and renewal of existing infrastructure is prioritised. Where municipality allocates less than 40% of its 2011/12 capital budget to renewal of existing assets it must provide a detailed explanation.

21)  IS KM within limits suggested in point 4.2?

Detailed budgets
22)   P52 Community Services – Vehicle rental  - 0 in 2010, 813,731 in 2011?
23)   P53 Disaster management – only 100,000?
24)   P55 Finance: budget & Treasury – bank charges 1,100,582 – doubled since 2010?
25)   P55 Finance: budget & Treasury – phone rental 160,000 – 0 in 2010?
26)  P55 Finance: Revenue – R18,000,000 provision for bad debt – 0 in 2010?
27)   P56 Finance: IT – Network connection – 1,208,741 – 200,000 in 2010?
28)   P56 Finance IT – printing & stationery – 500,000 – 30,847 in 2010?
29)   P57 Library – books & publications – 5,809 – 250,000 in 2010 – outrageous!
30)  P57 Library budget reduced by one third from 935,157 to 693,035 - !!
31)  P57 Mayors budget reduced from R4,244,765 to R206,884 – is he not expecting to be re-elected?
32)   P58 Municipal manager – audit fees – 5,000,000 – 2,150,000 in 2010???
33)  P59 – planning & development – printing & Stationery – 309,307 – 60,420 in 2010 – 5 fold increase.
34)   P59 – Refuse - external interest – 2,943,000 – 220,935 in 2010 – 10 fold increase?
35)   P60 – environmental management – equitable share allocation – 1,846,392 – 0 in 2010?
36)  P67 – Salaries 37% of ops budget – target 29%. Repairs & maintenance 5% of ops budget, target 9%.