There is something wrong with South African development indicators

According to Dave Steward there is something wrong with South Africa’s statistics and after reading the facts I have to agree.

For example, the Development Indicators measure the remarkable success that the Government achieved in bringing down the budget deficit from 9% in 1993/94 to a surplus of 1% in 2007/08.  In so doing we reduced our national debt from almost 50% of GDP in 1995/96 to less than 23% in 2006/07.  Despite the fact that we are now returning to budget deficits, the Government should be given full credit for this remarkable achievement.  We also learn that gross fixed capital formation increased from less than 15% in 2001- 02 to more than 24% in  2007-08 and that unemployment in June 2009 was 32.5% (according to the broader definition) compared with 40% in September 2002.  These dry statistics will not excite everyone – but they reflect the realities that determine our prosperity and success as a nation.

Significantly, the percentage of the population living in poverty (less than R524 per month) declined from 58% in 2000 to 49% in 2008.  This is still unacceptably high – but it is a measure of progress.  One of the main reasons for this progress has been the substantial increase in social grants (old-age pensions, disability grants and child support grants) from 3.77 million recipients in 2000/01 to more than 13 million in 2008 (supported in part by only 5.2 million registered income tax payers).  Expenditure on social grants now accounts for R69.45 billion (equivalent to 3.4 % of GDP – and not 5.5% as indicated in Development Indicators).  Progress has been made in other areas as well: 91.8% of households now have access to potable water; 77% have access to sanitation and 73% have electricity.

The Development Indicators become a little more confusing when they deal with the important question of income distribution.  According to one of the tables, based on AMPS (All Media and Products Survey) data, the monthly per capita income of the top ten percent of the population was R 97 899 in 2008 compared with only R 1 040 per month per capita in the bottom 10%.  This means that the richest 10% earned more than 94 times as much as the poorest 10% – which is both unacceptable and unsustainable.  But wait a minute: if this is correct, the top ten percent would be earning R5.75 trillion per annum – a bit unlikely since the total income for all South African households during 2008 was R1.53 trillion and total GDP was around R 2.068 trillion.  It also means that the top 10% would owe the Receiver almost R1.8 trillion in unpaid tax!

5.200.000 (million) taxpayers divided by R59.45,000.000.000 (billion) state grants does not ad up

In another table – based on the South African Advertising Research Foundation’s Living Standards Measure (LSM) – the poorest group (LSM1) included 1.062 million people who had an imputed monthly per capita income of R 1 080.  However, the 1.989 million fortunate people in the richest group (LSM10) had a monthly per capita income of R 23 054 – only 22 times that of the poorest group (quite a difference from the 94 to 1 differential in the AMPS survey).  Nevertheless, if one adds up the total annual income reflected in the SAARF LSM table it comes to R 2.455 trillion, still more than GDP and R 900 billion more than total household income for the year.  So again, something is wrong.

According to a third table – based on StatsSA’s  Income and Expenditure Survey – monthly white per capita income was R 8 141 in 2008 – up by a whopping 83% in real terms since 1995.  Coloured incomes increased by 60% during this period and those Asians by 87%.  However, the incomes of black South Africans increased by only 37%.

If this is, indeed, so it has far-reaching implications for our national debate – since it means that Asians, whites and coloureds have overwhelmingly been the main beneficiaries of the new South Africa.  If this is correct, the ratio between black and white per capita incomes would have grown from 7.2 in 1995 to 9.6 in 2008.  It would also mean that the white share of total income would actually have increased to 45.5% from 44.8% and that of blacks would have decreased by more than 2% to 41.4%.  But is it so?  According to a survey by the Bureau for Market Research the white share of income declined from 56.2% in 1990 to 40.4% in 2007 while that of black South Africans increased from 35.7% to 46.5%.  That’s the problem with statistics: "you pays your money and you takes your choice".

What wait they say that the white populations income as increased by 83% that is insanely inaccurate. If all these percentages are to be believed we would have a very rich nation. And the whites are better of now than before apartheid. Where do they get it that a coloured earn more than blacks? That can’t be because they are ‘to white’ for BEE and if you take a look around here in the Cape the black population is replacing all the coloured workers at a alarming rate not even mentioning the whites. If you are white and unemployed there is almost zero chance of you getting a job. And those with a job is taxed so badly that they cannot keep up with necessary expenses.  The government is looking at everything with prejudice if this is anything to go by because there is no way that these figures make sense.



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