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Tuesday, 25 August 2009

Blindspots (Cosmos Mumba)

And Dr Mumba has condemned government's directive to councils countrywide to charge not more than three hundred thousand kwacha for the use of hearses. He said the hearses were bought using tax payers money hence Zambians should not be subjected to a charge.
By Cosmos Mumba's flawed logic everything provided by Government should be free because tax payers pay for it. He fails to recognise that it is possible government does not tax enough to provide everything for free. More importantly, if government where to tax enough to provide everything for free nothing would probably be produced.

10 comments:

  1. Cho,
    The govt bought these vehicles to help people in rural areas to bury the dead with dignity and because there were being ripped off by private providers of this service (this is according to Ms. Masebo). Mr Mumba therefore has a point. To me the whole thing has been a waste to taxpayers’ money and the govt led by our most forward thinking President to date should have scrapped the scheme.
    The PANEL.

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  2. When people in rural areas asked for hearses, they did not expect to pay for their use. They wanted these services for FREE! If they had been told that they would pay for them, they would have voted for the opposition who intend to provide these services for FREE. Zambians want FREE services! Do you get in now?

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  3. I agree that people need these services and that buying the hearses was not a mistake. But i do agree with Cho that there is a cost to providing these services and that tax collected may not be sufficient to cater for all the FREE services our people need. We should have started by creating jobs first, but then again, we dont have sufficient funds to capitalize the private sector to create mass employment. So we depend on FDI which is being hit by populist campaigns discrediting potential investors. Right now, China is the only country with the money and technology we need to create employment in non-agricultural areas. The west is going through trying times and cant be depended on.

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  4. Well, firstly a Chinese hearse at $30,000 a piece is a sheer waste of money, given what we all know about the quality of Chinese vehicles.

    Secondly, these vehicles have got to be paid for in one way or another. However it's a question of who contributes and how much. Can villagers, as one group asked to contribute to the cost, afford the amount being asked of them?

    Perhaps windfall tax on the mines could have contributed the bulk of it, leaving only the villagers a small amount to worry about.

    It is rather unfortunate that a supposedly forward thinking leadership is being hoodwinked into buying the worst quality vehicles on earth at first class prices. Whatever happened to tendering?

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  5. It is important to design self sustaining systems and engage in good management practices, otherwise there will be economic failure. Hint - look at what other successful countries have done.

    Obviously if the government does not have sufficient money to provide free services, then it should charge the users for them. It has already done what poor people cannot do on their own - buy the hearses. Now it is up to the people to pay the far smaller sums to use the service. Most nothing is for free in life.

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  6. Cho,

    By Cosmos Mumba's flawed logic everything provided by Government should be free because tax payers pay for it. He fails to recognise that it is possible government does not tax enough to provide everything for free.

    On the subject of which....

    ‘Copper Tax accounts for only 2% of govt revenue’
    Written by Mutuna Chanda in Kitwe and Chiwoyu Sinyangwe in Lusaka

    TAX earnings fromcopper mining only account for two per cent of government treasury's total annual revenue despite it being Zambia’s lifeblood owing to low taxation levels, mineral economics expert Dr Mathias Mpande said last week.

    And former Kitwe Chamber of Commerce and Industry chairman Eddie Kapungulya has challenged the government to stop ‘insider trading’ in the mining industry and ensure it collects tax revenues at the correct value of minerals such as copper.

    Commenting on the resurgence in international copper prices, Dr Mpande who is also a lecturer in the School of Mines at the University of Zambia (UNZA), said there was need for the immediate restoration of the 2008 mining fiscal regime abandoned this year following pressure from the mining companies, saying it was well researched and easier to administer than the current one.

    Read more...

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  7. According to the article referred to here, Beijing Auto Works is the manufacturer of the hearses:

    http://panel-on-zed.blogspot.com/2009/05/govt-buys-100-hearses-they-are-ready-to.html

    And according to the BAW website, BAW has passed the ISO 9001-2000 and GJB9001-2000 quality standards:

    http://www.chinabaw.cn/aboutbaw/introduction.aspx

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  8. 4 tenders received for hearses according to this article:

    http://www.times.co.zm/news/viewnews.cgi?category=4&id=1246339790

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  9. Kafue,

    I believe there are very good reasons why the rest of the world do not buy Chinese hearses, or indeed any other Chinese vehicles. The Chinese can quote whatever quality standards they want, for all I know car makers like Toyota can quote the same, and then some! and probably live up to their claims.

    The explanation from Masebo in that news item is rather simplistic. Surely when buying such expensive and important items as hearses, price is but just one aspect to be considered, is it not?

    The only exception I would give Chinese products are branded ones, and I don't mean fake ones.

    Having said that, the Japanese products had similar quality problems in the 50s and 60s. However, today they're setting standards and are the subject of many business studies on how they did it. Their tenacity paid off in the end, however long it took.

    The Chinese can do it too. However, the main problem they have is controlling the fake goods industry which is so lucrative to the Chinese govt that they turn a blind eye to it, according to the US govt!

    We failed to oversee Chinese quality in Chambeshi and we saw what happened. Surely the last thing we want is hearses killing people.

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  10. Interesting comments. I’ll respond randomly :

    Panel, I of course agree the purchase was a waste of money. But the principle Mr Mumba alludes to does not make sense if applied more widely. As for being ripped off, Kafue addresses that point by rightly noting that government can improve on the status quo, whilst still requiring some very small payment.

    I think Zedian’s question is important - “Can villagers, as one group asked to contribute to the cost, afford the amount being asked of them?” . Again, I am not defending the hearses, but I assume that Government believes that they can and will want to because the alternative is more expensive. In a way, what Government has done is displace the private sector. So if Panel’s quote of Ms Masebo is correct, then it seems direct provision has put government in direct competition with private providers. Which is not good! I would have liked government to have used the market in some way through may be providing credit to someone to set up this business (there’s a read across here to similar mistakes with the shambles of our fertiliser support framework). I don’t like an intervention that displaces the private sector. I prefer to work through or with them! Not so forward thinking of the President! I can see I will keep paying for that conclusion. Lol!

    I agree with FMD, on the importance of China and the credit it provides. I think many people share that including the opposition. But we have to recognise this can never be an equal partnership. We are The peasant girl with a rich lover The challenge is to make the impossible relationship work.

    MrK, our fiscal position is tragic :)

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