Fact is, it takes money to build, and run public infrastructure and to deliver other public services. Government generally will directly finance these – capital and operating expenses – first from taxes, non-tax revenues, and ‘donations.’ BUT, government, like individual households, almost never has enough from these sources to cover all its programmed expenses. The gap is what we will call a deficit. To plug this hole, Government usually will take loans i.e. borrow. (Ps: Government also generally borrows 1. To pre-finance its expenses while waiting for tax and other revenues to come in, and/or 2. To pay off maturing loans/obligations. Among other things). Of course, there’s a limit to how much government can borrow, and at what cost, before it becomes unsustainable. And, for infrastructure whose economics lend itself to monetisation/revenue flows that make commercial sense, government might choose PPP as a financing and delivery strategy.How a government prioritises its programmes (within the its policy-politics space i.e. political economy considerations), budgets for, and optimises the available funds for all the competing interests without sending the economy into a tailspin and subsequent downward spiral is always a balancing act. A balancing act mastered through competence which this government has amply demonstrated.
My position was, and still is, that given the reduction of corruption and waste to xy, ‘x’ being the lowest possible occurrence of corruption over time ‘y’, the degree to which the state can prioritise its programmes, budget for it, and optimise spend will be determined by its ‘stage’ of development, ‘D’ (Ps: I disagree with Rostow by the way), and therefore the quantum of resources it will need to finance infrastructure-for-growth ‘Dg’, while delivering basic infrastructure, ‘Db’, other public services, ‘Ds’, meeting ‘political-economy’ obligations, ‘Dp’, and therefore what level of fiscal deficit – Fd – it can run without sending the economy into a tailspin.
So, while it makes good optics and provides a feel-good high to run #OpenUGMCNow-Like campaigns, it’s also necessary to ask ourselves: why do you think the economy went into a tailspin and spiralled downwards between 2008 and 2016 (it led us into an IMF Bailout) and is this what we want? Again?
Government will always have finite resources, even including loans (loans, and its costs have constraints), and it is the reason why you need competent hands to run it, not the incompetence that leads a government to borrow to put up a hospital, or clinic, commission it when it is not yet completed, and make no provision for staffing and operational costs.
At some point, we’ll all have to accept that there is a stiff price to pay if we want everything now, and also, it requires of us to step up to the plate and meet our tax obligations/pay more IF we want the state to increasingly step up and provide the public goods we need.
Which brings me back to the responses to the survey question on cutting public sector pay to finance healthcare costs.
Most responses demure, and based on the comments under the poll (See poll and comments here: https://www.facebook.com/Evronhughes/posts/10156585244317806) suggests strongly that citizens’ perceptions of ‘fat cat politicians’ is not going away soon.
Denials will hardly work. But DELIVERY would. So, if ‘politicos’ want to achieve a détente with citizens, they’ll have to deliver tangible, quality services that compensates over and above the perception deficit.