By Ron Weisennberg, Non-Executive Chairman at Micronized SA Ltd

 

The Queen of England, who has served her nation longer than most incumbent politicians have lived, generally uses scheduled British Airways flights for long-haul international transport. So does her Prime Minister. They are not alone.

The heads of government of Hong Kong, New Zealand and Singapore utilise scheduled flights run by Cathay Pacific, Air New Zealand and Singapore Airlines respectively. Even Robert Mugabe, not quite democratically elected but nevertheless the incumbent President of Zimbabwe often shares scheduled Air Zimbabwe flights with normal fare-paying passengers. As an aircraft technician will tell you, if necessary, it takes hardly any time to reposition a standard partition and curtain on an aircraft to afford passengers some privacy from politicians.

And there is good reason for VIP’s and politicians to economise. For example, the operating and maintenance costs for the South African Presidential Boeing 737 Business Jet (BBJ) are averaged at R48 000 (US $5050-) per hour(3). On a typical 23-hour return flight duration to London, the cost to the taxpayer is just over R1, 1 million. Add to that the lease, depreciation and amortisation costs estimated at R2.9 million per month (3). In addition to the number one citizen, the BBJ carries a further 16 passengers in leather scented splendour. Assuming a four-flight monthly utilisation, this calculates to R107 000 per passenger. A lesser known fact is that another empty aircraft accompanies the VIP jet for contingencies and not all the seats are consistently filled – so the cost per passenger is substantially higher than the figures quoted.

By comparison, a return Economy fare to London on a scheduled carrier is R9 608 and for extra legroom and ceramic crockery with your meal, a Business Class seat is R40 428(4). And, bonus – with the volume of travel undertaken by most of South Africa’s political elite, enough air miles would be accumulated to fly their immediate family to Polokwane or Durban for every December holiday.

But why must rulers travel so much at all – except for exceptional circumstances or in times of emergency? Ambassadors and High Commissioners are governments’ permanent representatives in every country of significance to a nation. It is these costly diplomatic missions and missionaries which need to attend funerals, weddings, inaugurations and exchanges on behalf of the country – not the President or Ministers who really should be on home soil, working. And, if the eyes and ears of our rulers are really required, technology such as satellite links and video conferencing can connect in colour at a tiny fraction of the cost of air travel.

Other than the obvious ethical issues and governance around frugality with taxpayers’ money, there are abundant reasons to reduce non-essential government expenditure dramatically. At the end of May 2013, South Africa’s government debt (which has to be paid back with interest) was just short of R 1 500 billion (that’s 1.5 trillion Rand). On this mountain of increasing debt and questionable sustainability the interest bill alone is R11,800,000 per hour (5). South Africa is not doing particularly well in the casino pa natet financial arena and has few medium term prospects of reversing the poor policy which precedes the inevitable poverty. In the meantime, basic services, service delivery and critical capital expenditure projects are being sacrificed to the Jetstream of bling and needless excess.

To be fair, this amount of debt and interest is average compared to that of many of South Africa’s trading partners, but just because other countries are mired in bankruptcy doesn’t mean that South Africa needs to follow suit. Government debt is approaching 50% of GNP. If the government was a company with debt on its balance sheet amounting to nearly 50 percent of its turnover and on-going annual losses with no repayment plan or management mindfulness, what would happen? This is a classic example of bankruptcy. The Companies Act and regulatory framework, IFRS and auditing protocols would ensure the company is reported and placed under curatorship. Creditors would be protected as best as possible and if it can be shown that management continued operating wilfully under bankrupt conditions, they would be held criminally liable and likely face prosecution.

In a company where I serve as a non-executive director, business has been challenging over the past few years. To cut non-essential costs, the senior management minimise air travel and where required, economy class is the rule. At destination, budget type rental cars are utilised. Skype and teleconferencing is the rule rather than the exception. It’s not only a case of good business sense; it is prudent, environmentally responsible and fits into an emerging culture of corporate awareness and social conscience. Can ostentatiousness, bling and ego-based excess be justified in difficult economic conditions?

In a country still struggling with the provision of basic services to its citizens and operating in a condition of technical bankruptcy, citizens need to insist on moderation of and frugality in government spending – or remove them from power at the next available opportunity. Why can’t our rulers make a reservation, stand in a queue and carry their own hand luggage as they settle into a perfectly acceptable economy seat on a scheduled flight?

For the ruling elite to be so detached and unaware of economic realities, indifferent to spending an unearned wealth and oblivious to the consequences of the debt they have created is beyond belief. At best, it is surely insensitive in the extreme, repulsive and antagonistic to every measure of good governance, sustainable practice and human decency?

(1) Duncan, Jane – A culture of Political Assassination, SACSIS 2010

(2) Quintal, Genevieve (2012). Political Murders – it’s About the Dough, SAPA, and quoting SAIRR (SA Institute of Race Relations).

(3) AviaGlobal – base formula 41, costs for Boeing 737 – 800/900 series, 07/2004 adjusted for 2013 fuel prices. Note: weather conditions and aircraft utilisation affect cost averages

(4) Virgin Atlantic and South African Airways, published rates www.travelstart.co.za incl. of all taxes & charges, May/June 2013 return airfares – OR Tambo/

(5) Source: National Debt Clocks 2012 – www.nationaldebtclocks.org