SANE Views

Vol.7 No.8, 02 May 2007

Spending, More, Efficiently Through Government

Margaret Legum

Few would disagree with Finance Minister Manuel that government’s capacity to spend is a powerful constraint on the developmental state. Even those of us who argue for an active state that deliberately spends to enhance the country’s human infrastructure understand that effective spending is itself a skill – and one that we need more of. And that inhibits the pressures that pro-poor advocates can put on government to spend more in the direction of alleviating the misery and enhancing the chances of poor people.

So it is important to find ways that government – at all levels – can spend while we build more capacity. Here is one.

In every poor community – rural and urban – there are people doing literally life-saving jobs under the most appalling circumstances. They are looking after people in their, usually dilapidated, homes who are slowly dying of AIDS or TB or other deadly painful diseases. They are keeping people out of hospital: we do not have anything like enough beds for them.

Those workers are coping with double incontinence, lack of food and sanitation, as well as extreme fear and misery on the part of family members, especially children. They are doing this day after day, for a stipend of a few hundred rands a week.

Others like them are looking after orphans and other abandoned or neglected children in children’s homes. Those children have suffered unimaginable horrors, so they are unlikely to resemble the Von Trott family, gaily yodelling among the backyard shacks.

All of these extraordinary workers are women. Almost without exception they are paid a stipend, not a salary. They are given the equipment they need for their job: rubber gloves, aprons, disinfectants and so on. In the case of the ‘house-mothers’, homes are built and equipment provided, as well as an allowance for food. They are expert managers, emotionally and financially skilled women; and they are paid up to R2,000 a month. Government pays the routine fostering allowance for each child, and that is all.

If the salaries of these workers were to be quadrupled, South Africa would still be getting a bargain. R8,000 is about the salary of a mid-level teacher, who suffers perhaps the same level of emotional and professional stress in schools in poor communities.

The difference is that the carers do not have acknowledged training and qualifications. Not because they couldn’t do with training and professional support, but because the jobs have arisen in response to need before training was devised. The lack of training and support is, indeed, a further demoralising factor, suggesting we do not value what they contribute. Training is now being developed for these extraordinary multi-tasking women; but funding is a battle, and so far it has made no difference to their pay.

Quadrupling their pay would have the additional advantage of putting money – buying power – into poor communities where it would work beautifully to prime the local economy. Poor communities stay poor largely because there is no multiplier to make money work locally. There is no demand, so setting up small business doesn’t succeed, and what money there is gets sucked out. Locally based workers earning the sort of salaries that enable local shopping, rather than imported goods, is exactly what is needed.

If these community workers were paid directly by government, those results could be achieved by changing a computer setting on the pay-roll mechanism. At a stroke that would enlarge government’s effective spending – without employing or burdening one government official. It would put new money into local economies where it could do best. The cry of inflation could not be sustained in the context of pay rises higher up which dwarf even the enhanced pay of these workers.

But government does not pay these women directly. For good reason, government now tends to partner with others – faith-based, private sector or NGOs – for the delivery of service. That means government is not in charge of the salaries of these front-line workers, who are paid by a local community agency.

That need not matter. The faith-based and NGO sectors are not interested in paying people the least they can get away with, but in getting, training and keeping reliable people for these appalling jobs that demand the ultimate in compassion. Government grants that specified increased workers’ salaries would ease their burdens, and meet with no resistance.

On a wider plane, Business Report’s columnist William Pesek has pointed to the U.N.’s Economic and Social Commission for Asia and the Pacific, which delivers mind-numbing statistics about the loss of effective economic output resulting from the under-employment and under-payment of women worldwide. (Business Report 30 April)

Employers in the competitive private sector must obviously try to get people to work for them for as little as possible. Governments can take a wider view. They can deliberately enhance the capacity, the sustainability and the long-term direction of the economy by defying market forces. They can intend, and effect, that people will be paid something like what they are worth, rather than what they would take because the alternative is worse.