Fundamental Principles of Public Finance


Depoliticisation – divorcing or separating important services from party politics Many services such as the supply of water; houses and even education should, according to many, never be a political matter in that a particular political party controls the supply or provision. They feel it should be a community or private matter only. Not only will this divorce party politics with all its fighting and power struggles from important community services, but this should also increase efficiency and effectiveness.


One of the problems of a pure capitalistic society or ideology is that, as in Hong Kong, where most regulations are removed, entrepreneurs might provide employment opportunities, but the workers are often neglected. This can mean a return to a pre-socialist era when people were exploited (the former Ciskei was a good example of this – foreign owners often paid workers low salaries while pocketing the monetary incentives from the central government).


The challenge of every government which believes in privatisation is to allow entrepreneurs as much free economic reign as possible – allowing and encouraging private ownership – while at the same time satisfying the needs of the people that placed it into power. The workers within a state seek also to have some economic stake in the wealth of their country. Sometimes companies encourage economic involvement by workers through profitsharing incentives. This means that good work is rewarded with a share in the profits. Should the company do well, the workers share in the profits. This makes them more inclined to be productive as their performance in the workplace will determine the degree of return (how much money they receive in the form of profits). Already many companies in SA have adopted this approach.


The problem that business has experienced in South Africa is simply that most of the wealth was in the hands of the owners while the workers felt they were excluded from participation. This has created a great deal of mistrust on their part. Even though big business has tried, as indicated above, to involve workers in the running of the companies, many schemes of sharing and participation have not worked. What many owners and leaders are now discovering is that communication is the key – the workers themselves need to feel they are being consulted, that they are being involved at all levels.


Example: Profit-sharing A case in point is a large manufacturer who decided, because of loss due to theft, to build a wall around its plant. It cost millions. When the workers got to hear about it they decided that the money might have been better spent on housing. What management had failed to do was consult them. Only after industrial action on the part of the workers which resulted in loss of production and wages, did management release figures showing costs of the loss of equipment due to theft over a number of years. Once the workers understood the reasons, they were perfectly happy. The Japanese have long since realised the value of consulting workers and they invented quality circles by which workers and supervisors meet regularly and everyone has input. Very often, to the surprise of management, the ordinary worker, who works closely with the product, comes up with very creative ideas on how to cut down waste and increase productivity. What route should a government take? This is always a difficult question.


19


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140