The Generation of Income and the Expenditure Within a State
In both these countries each state (province) not only makes its own laws, such as those regarding marriage, abortion, policing, education, and many others, but the central government also allocates wide-ranging taxing authority to states in order to collect revenue (see more on p.74). Each state will then allocate taxing authority to various counties (not countries), or local authorities to do the same. In this case there is a clear vertical relationship, from central to regional to local. There will, however, be less vertical control than with a more centralised government system. How would you place South Africa on the continuum of Centralisation and Decentralisation? Each province does have some autonomy, but not nearly as much as each state in America. Some people want the provinces in SA to have more than they do now. This does, sometimes, result in competition between regions – also it means that the country as a whole loses some of its identity. In Canada and America, for instance, a drivers’ license in one state might not be recognised in another; a dentist will have to re-write his/her exams when moving to a new state. Many people think this is not cost effective, and there is also a loss of national identity. Do you agree?
Accountability When a vertical relationship exists and the central government allocates funds to the provincial authority, or when the province allocates funds to a local authority, the body that donates the funds remains accountable to the taxpayers. The donor government will then also demand financial accountability from the recipient government. This is necessary as the principle of democratic financial control means that the taxing authority (the government level which collects the funds in the first place) is directly responsible to the voter-cum-taxpayer for the spending of the funds. It would be unwise to have a situation in which the donor government (usually the higher authority) abdicates responsibility saying: “We gave the money to the province,” and in turn the recipient government authority says: “We did not tax the people and are therefore not accountable.” The principle is, therefore, that the donor government demands accountability from the recipient authority because, as the taxing authority, it is directly responsible to the voter-cum-taxpayer.
Sufficient Revenue It is important that each government level should have sufficient revenue to provide the essential services required, and also those services which the voters might have demanded during the general or regional election. Once again there exists the problem of insatiable demand versus limited funds. The capacity of each community or country to pay tax is limited by its economic prosperity this is, of course, linked to productivity in the micro-economic sense and particular economic policy on
Electorate Constitution Public Protector Auditor General Legislature
State President & Deputies Cabinet
Parliament
Provincial Legislature Premier
Local Government Finance Committee Town Clerk departments
Financial and Fiscal commission
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