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State run bank? OUTA says; “you’ve got to be joking!”

Government should govern – not run businesses. If you need convincing, just look at how well Eskom and SAA are run and the billions they’re costing us taxpayers because of their inefficiencies and corrupt practices. Now we have calls from the ANC and its allies to create a state run bank – perfect timing given the scandals involving our banks (which by the way is part of a current global phenomenon around exchange rates). The mind simply boggles at what may happen (given the corruption-laden environment in which key decision makers in government ensure their cronies get filthy rich at the expense of service delivery). The Organisation Undoing Tax Abuse (OUTA) has issued a strong appeal for government to stay out of competitive business, where it inevitably fails, and stick to creating checks and balances against abuses in the private sector (such as the Competition Commission). It would be ultimate parody if government ends up tendering to itself because it has created all these State-run business entities. What a wonderful prospect for the Zuptoids… – Chris Bateman

From Fin24

Cape Town – The Organisation Undoing Tax Abuse (OUTA) cautioned against the call for a state-run bank following a scandal by banks allegedly manipulating the rand.

“The idea of a state-controlled bank smacks of ulterior motives and OUTA believes that in light of the current high levels of corruption and squandering of state funds within government, a state-run bank under the control of the current government leadership could be a recipe for disaster.”

OUTA said while the state has every right to have the state-controlled Post Office to apply for banking license, if granted it would need to be operated independent of political interference and within a competitive environment, with no support from taxpayers’ funds.

“The laws and regulations which apply to all banks must apply equally to the state-controlled bank, to ensure exceptional governance and sustainability.”

The civil rights body said the problem with state owned institutions that operate in a competitive environment, such as the South African Airways, is that they tend to fail and require bailouts from Treasury.

“Government is not good at doing business in a competitive environment and even when they operate in a monopolistic environment – such as Eskom – they fail to be efficient and end up costing the consumer billions of additional rands due to inefficiencies, lack of governance processes and corruption.”

Wayne Duvenage, chairman, OUTA

OUTA suggested that to drive competitiveness and a vibrant economy, the state needs stay out of the business of business and instead, it should focus on ensuring the checks and balances from oversight bodies – such as the Competition Commission and others – are in place to effectively tackle any unwarranted conduct.

“Government should applaud the success and conduct of the Competition Commission in this and other instances of exposing anti-competitive conduct.

“Furthermore, OUTA believes the state should take steps to beef up the capacity of this credible organisation, so they can do more good work in routing out the unwarranted behaviour within business and state-owned entities.”

If the government believes it should opening up state-controlled entities in reaction to unruly business conduct, then it would need to be consistent with that principle, said OUTA.

“This would mean they should look at starting a state-controlled construction company in reaction to the recent collusive conduct in the construction industry. Going this route would eventually end up with the state tendering to do business with itself and that will take the entire nation down the road of a failed state,” said OUTA’s chairperson Wayne Duvenage. – Fin24

Source: http://www.fin24.com/Economy/why-state-run-bank-will-be-a-disaster-20170216

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