Arms and sewerage

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Democratic Alliance leader Helen Zille again attacked the Strategic Defence Package yesterday. Standing next to a stinking sewer spewing raw sewerage into the Vaal River, she said government – and the ruling party – had money for arms but not sanitation.
Her comments are easy to dismiss as politicking in the run-up to next month`s national and provincial elections, but as previously articulated here, that type of remark feeds into a wide seem of public discontent on defence spending. She is not unique in this criticism.
Congress of South African Trade Unions general secretary Zwelinzima Vavi and his SA Communist Party colleague Blade Nzimande have expressed similar sentiments.
We can expect more of this as the chickens let loose by global bankers come home to roost. Appropriately, for the superstitious, the French ADIT research agency reported on Friday the 13th (of March) that Morgan Stanley had changed its view on the defence market.
“Until now, the defense business has been widely perceived as a useful counterweight to hard times coming in commercial aviation. Defence pure players, as well as several well-balanced companies have been favoured by analysts, whereas civil oriented stocks were despised.
In a new report [that obviously concentrates on the US – the world`s largest defence market – Morgan Stanley analyst Heidi Wood is said to look back very carefully on defence budgets evolution in the last decades, and gives a very detailed analysis on the new administration priorities, influenced by a few personalities coming from former Clinton`s administration.
“Her main conclusion is that the Obama administration will finally be the first one in decades to really – if not slash – at least clearly decrease [the] defence budget: ‘We believe President Obama’s intent is to lower defence spending, building awareness this year, paving the way for 2010 freer to make cuts`. Logical consequence: ‘We advise lightening up in front of rising controversy for defence.”
The subtext is Obama needs to free up funds to rescue US banks from themselves, pay off the massive deficit the spendthrift Bush administration left future generations and finance healthcare as well as other reforms that got him elected.     
It is safe to say some of these dynamics will shortly surface here, in the form of both domestic and international cutbacks.   
defenceWeb has previously estimated SA`s defence spending at about five cents in every government rand, in other words, about 5% of government spending. Others have put defence spending at two to three cents in the rand. Whatever figure is used, it is a given that at least 95% of government spending goes elsewhere.
It is not hard to predict that any administration that gives Nzimande and Vavi a hearing may be persuaded to divert funding away from unfashionable (read defence) to trendy budgets, such as welfare and education. This inclination may be accelerated by the very real danger social grants are coming to pose to the stability of government finances, as articulated by colleague Donwald Pressly in yesterday`s Business Report.
About 13.3 million out of about 50 million South Africans are now receiving social grants. This is paid for by just 5.3 million taxpayers. Economists expect the number of grant recipients to grow another 3.3 million in the next three years – to 16.5 million – while the tax base will grow just 700 000 to six million. This does not even consider rising unemployment caused by the commodity crash and retail slump. It also does not take into account that even parastatals such as Transnet, the Airports Company and Eskom are delaying their infrastructure spending plans, which will directly impact on employment and taxation.
The R70 billion SA already spends on welfare is just short of three times as much as – you guessed it – we spend on defence. While these grants do social good and in a way amounts to security spending, one has to ask where the line is to be drawn.
A defence minister once told Parliament “South Africa has much poverty and there is a definite upper limit to what the country is prepared to spend on defence.” This was Oswald Pirow and it was September 1938. A year to the month later, SA was at war with the Nazi Reich. A month after the outbreak of that conflict, German warships were prowling our waters. To oppose them SA had three naval officers and three ratings – but no navy and no ships. To be fair, there was not much of an Army and Air Force either and a “Seaward Defence Force was hastily organised.    
Defence is a grudge purchase and arguably every Rand spent on defence is one too many. In an ideal world there is no war and no need for soldiers or peacekeepers. But this can be said of many other items of government spending too – surely no one deserves to be ill or poor. But life`s not like that.
The poet Hilaire Belloc reminds that it doesn`t always take two to pick a fight: “Pale Ebenezer thought it wrong to fight/But Roaring Bill (who killed him) thought it right.” Thus until human nature changes – an unlikely event – governments will do well to maintain health and pension departments – and a military.