N5 – Module 1
1. Order and Protection To maintain law and order within its jurisdiction, a government has to execute a variety of defined functions and finance is needed to pay for the costs – the following are some examples of order and protection functions:
• Military defence function – to defend the state against aggression; external or internal forces (e.g. terrorism);
• Police – for protection of life of inividual and communities against threats; also protection of private property;
• Justice – administration of the judicial system; individual rights, and maintenance of juridical order;
• Imprisonment – withdrawal of criminals from society for protection and rehabilitation;
• State security – secure the safety of the state and citizens from internal threats;
• Civil defence – assist community in case of disasters, etc.; • Traffic policing – secure road safety.
2. Social Welfare To encourage the individual towards a level of self-actualisation, governments provide these services – very often only a basic minimum, thereby providing the means by which people may reach their potential: • Health – secure health services through environmental services (street cleaning and solid waste collection), sanitary; also personal health – hospitals, clinics, preventative health care;
• Social security – pensions, unemployment insurance, job creation; • Housing – assistance to less privileged; • Education/training – provide such from pre-primary to tertiary – free or with partial subsidy; • Sport/recreation – development of such in the form of training programmes and also facilities, such as stadiums;
• Cultural – development of such in providing libraries, theatres, galleries, museums, etc.; • Human sciences research – various bodies and institutions are established to identify problems, trends, needs, etc. They make their research findings available to the public. Business as well as other institutions makes use of the information.
The difficulty here is not always deciding whether social welfare services should be provided but just how many and how much should be offered. Should all people have free education, free health, or should some pay for all or a part of it? The present government closed all pre-primary schools, for instance, and in many countries this is free or at least subsidised as they consider pre-primary education to be very important in preparation for formal schooling. This is the business of politics, political parties and their voters. It is not a simple matter and in a country as complex as South Africa sometimes these issues cause a stalemate in which parties find it difficult or impossible to reach consensus.
Someone has to pay for these services; if a government over-taxes the successful business community there is a risk that they will take their business elsewhere. Lower the tax in order to encourage more investment and the government then has less revenue to spend on the services they have promised. Of course the socialist-minded will say the rich must pay for the less-privileged. The capitalist will answer, “Let us alone, let us make money and employ people and they will look after themselves!” What is the answer? This is the business of someone in public office and especially in public finance. It is perhaps easier in a country which has a population on the same level economically to provide the above services to everybody.
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