Dear
President Jacob G. Zuma,
Mr.
President please allow me to make the following proposal on a matter that I
believe is key on the objective of our government to achieve a better life for
all in our country. The matter is about
government role or involvement in the pricing of goods and services in our
country. Pricing of goods and services
in an unequal society like ours can be a tool that can be used for both good
and bad. The implication is that pricing
can be used to deepen the poverty of the ‘have nots’ while the ‘have’ due their
material or capital advantage may continue to enlarge their privileged vintage.
The question is what instrument of state can be used to establish or to verify
the credibility of pricing? For instance, the recent e-toll issue brought to
the fore the element of fairness of the proposed tariffs and question how they
were determined, and by who?
Unfortunately in most capitalist societies players in the market system
are both the players and the referee as far as pricing is concerned. In most cases, there is a total lack of
transparency on how a given price was arrived at. In addition, the upward swings and the
volatility of pricing only works in favour of the sellers while for buyers who
are mostly members of the public it is “take it or leave it.” There is a need for our country to have an
independent body that has a mandate to calculate and or perform verification of
prices of goods and services using transparent, objective, scientific
methods. Beyond price fixing and other
anti-competitive pricing behaviours, such a body should have a mandate to
investigate the role of pricing in enslaving our people to poverty. Pricing left to market forces makes
affordability of goods and services a key component for the creation and
worsening of poverty. The body must be empowered to demand transparency of all
price movements determined by the sellers of goods and services, corrective
action of unfair exorbitant prices, and to issue penalties to deter corrupt
pricing practises.
With this
brief problem state, I propose the following solution. That the President establish an independent
but centralized pricing commission made up of experts, scientists,
professionals, and representatives from labour, business and the civil society
including the poorest of the poor. Among
others, the terms of reference for such a commission may encompass but not
limited to the following:
·
Advocate the use of pricing to make a positive and
measurable contribution to both the alleviation and the eradication of poverty.
·
Regulate price movements for both increases and decreases;
for example when the cost of fuel goes up, sellers increase their prices but
rarely adjust downwards when the input costs including the cost of fuel tumbles
down.
·
Interrogations of all the justifications of all price hikes.
·
Enforce transparency around cost build-up and price
increases especially for basic necessities, like groceries, transportation,
clothing, petrol, etc.
·
Independent, objective, and scientific calculation of the
value of land, passenger cars, tractors, shares, etc.
·
A centralized pricing function that may merge all existing
pricing bodies in treasury, competitions commission, etc. into one body
empowered by legislation to perform all the above mentioned responsibilities
including:
o
Evaluation
o
Adjudication
o
Price determination
o
Approval of steep price increases (that fall above the
inflation target band).
Hoping
that Mr. President you find my thoughts on this subject in order. In the final
analyses user charges for the government’s infrastructure development program
will benefit significant credibility when they carry the sanction of an
independent body like the one that I have proposed to the president in this
letter. In my view most of the
scepticism around the road user charges for the e-tolling system in Gauteng
could have been pre-empted by implied objectivity as per my proposal.
Fortunately, because of my book that I had written on the subject of
INNOVATION, I can make a contribution by way of this proposal on how a credible
pricing way forward can come about for our nation. This proposal is for me just one way of
applying the innovation concepts I written into the Innovation book project,
which is also available online on the web links below.
Best
Regards,
Eliyah T. F. Khumalo
Phone:
+27 76 582 6501
Fax: 086 578 4170
E-mail: elizabethkhumalo@lantic.net
Luke 6:40 “A student is not above his teacher, but everyone who
is fully trained will be like his teacher.”
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