Don’t steal, government hates competition

GDP can’t be “lost” as this politician, whose wife was busted and sentenced to 12 years in jail for drug smuggling last month while still managing to keep her job as director of health and community services at the Hibuscus Coast Municipality, claims.  All that can change is the distribution of the profits, between private citizens and their enemy, the state.

Note the philosophy here:  the economy is “illicit” if the state cannot regulate and tax it.   The state believes that it owns all productive activity, and that it has a right to decide how much private people are allowed to keep.  As a result, if you choose to keep your profits to yourself, and not share it with the state, which is entirely legitimate, you become a “tax fraudster” and part of the “illicit” economy.

And now, the state will use this to justify taking even more money from taxpayers to crack down on these industries and eliminate “unfair competition” so it can concentrate profits with those gold miners and tobacco companies that already have the state gangsters on their payroll, to boost their earnings and ultimately, state revenues.

SA loses 10% of GDP to ‘illicit economy’


Published: 2011/06/03 06:46:34 AM

CAPE TOWN — SA is losing 10% of gross domestic growth (GDP), or R178bn a year, to its “illicit economy”, which is to become a special focus of the intelligence community, State Security Minister Siyabonga Cwele said yesterday.

At the heart of the problem is the smuggling of tobacco products, counterfeit textiles, along with the movement of drugs across SA’s porous borders, and the illicit mining of gold and diamonds.

Introducing his budget vote in the National Assembly, Mr Cwele said that last year state security looked into the losses being suffered in the gold industry as a result of illegal mining and found them to be substantial, at R6,7bn.

“We have, with the co-operation and collaboration of other government departments, subsequently scoped the extent of the illicit economy, which is estimated to be about 10% of our GDP, quantified to a loss of about R178bn to the economy.

“This illicit economy has the potential of seriously compromising the New Growth Path and is costing SA hundreds of thousands of jobs,” Mr Cwele said.

He explained that the scoping exercise revealed that the economic threat was “rife” in the mining, textile and tobacco industries.

“These illicit activities create unfair competition to legitimate businesses and industries; erode the tax base; distort trade; violate foreign exchange regulations and create conducive conditions for espionage,” Mr Cwele said.

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One Response to “Don’t steal, government hates competition”

  1. freeman says:

    Last I checked, SA GDP was around R2.6 trillion. 10% of annual GDP is R260 billion, not R178 billion.

    Am I missing something here??? Not only is this economic nonsense but it appears to me to be factually sloppy.