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Crime and Fraud
Thursday, November 1, 2007
Time to go shopping

Crime will continue to increase in SA until crime does not pay. Government has to take steps to make crime less profitable than other ways of earning a living. Economic incentives and disincentives must be brought to bear on the problem.

The government spends a steady proportion of total taxes on policing. Given the general perception that the level of crime is ramping upwards, should government not substantially increase the policing budget to deal with the issue?
Safety and security (policing) will cost taxpayers R36 billion in the 2007/8 budget year, 6.7% of the total budget of R534bn. Correctional Services (prisons) costs another R10.7bn (2%) and Justice (courts) a further R8.5 billion (1.6%). The total for policing, prisons and the courts is therefore R55.2 billion, or 10.3% of the annual budget.
The annual policing budget is set to remain below 7% of total government spending until March 2010. Expenditure on policing has nevertheless increased significantly, from R2.93 billion in 1990/91, to R10.17 billion in 1994/95, to R36 billion in 2007/8, a 1128% increase on the 1990/91 cost of policing. So inadequate funding does not appear to be the problem.
According to the Department of Safety and Security (police) its aim is ‘to prevent, combat and investigate crime, maintain public order, protect and secure the inhabitants of South Africa and their property, and uphold and enforce the law’. Crime in the country is excessive so the department is not performing its task efficiently, a view that is clearly shared by an increasing percentage of the population.
More and more South Africans have been victims of crime or have family members, friends or acquaintances who have been shot, assaulted and robbed. Disrespect for the law appears to be growing and criminals have become more vicious.
Such a situation is untenable, more especially because protection of persons and their property is the most important function of government. Citizens give up their right to retaliate against aggressors when they appoint governments to protect them against criminals, to apprehend them, put them on trial, and punish them if found guilty.
Having the entire nation under constant threat is a situation that cannot continue. Government is failing at the most fundamental task for which it has been constituted – to keep the people and their property safe. It is time for lateral thinking and concerted action.
Government can go shopping for criminals by establishing a generous reward system for anyone who provides information that leads to the apprehension and conviction of wrongdoers. The price would have to be high enough to give ordinary people a real incentive to identify and report criminals, and rewards must be made known in advance. Informants are currently paid but the system is bureaucratic and the reward is determined after the event.
A placard that advertises a reward of R1m for a gang of armed robbers, R200,000 for a single murderer, R150,000 for a hijacker, R125,000 for a dealer in stolen property, and R100,000 for a housebreaker would definitely attract attention. The number of hunters would increase exponentially and the hunted would have nowhere to hide.
A large-scale reward scheme would require very careful handling and the separation of powers principle would need to be employed. A special unit in the Department of Justice could receive information, evaluate it, pass it on to the appropriate police unit, follow up on progress with investigations and prosecutions, ensure the safety of citizens who provide information, and pay them their rewards.

Unemployment

Changing the employment environment could also drastically reduce the incentive to commit crime. Poverty and crime do not necessarily go hand in hand but if strict labour laws prevent honest people from doing honest work, their aversion to crime will weaken.
We are repeatedly told that the labour laws are not the cause of SA’s appallingly high unemployment rate yet there is absolute opposition to putting that claim to the test. We have proposed that anyone unemployed for six months or more should be exempted from the labour laws for a minimum of two years so that they can enter into any contract they choose with an employer.
If the jobless were exempted, willing employers would be able to create jobs for the desperate unemployed without falling foul of the labour laws and without affecting the job security of those who are already employed. In response to our proposal, we are told that our sole purpose is to exploit the destitute. But are the real exploiters not those who prevent the unemployed from competing in the job market? In the absence of the existing disincentives, there would be real possibilities for a substantial shift, over time, from petty and major crime to honest employment.
Poverty reduction can be combined with crime reduction if the poor are encouraged to help the police catch criminals and receive rewards for their efforts. They would be especially helpful in identifying the people who support criminality by buying stolen goods. Destroying the market for stolen goods will, in turn, substantially reduce the incentive to steal.
Perhaps the best solution lies with ordinary people, the majority of whom are poor. Give the unemployed the opportunity to get jobs and take care of their families. Give ordinary people the incentive to help government turn the crime situation around. Let them become the eyes and ears of law enforcement, reduce the profitability of crime, and increase the likelihood of arrest and punishment of wrongdoers. Let the government go shopping for criminals. By Eustace Davie, director of the Free Market Foundation.
 

Copyright © Insurance Times and Investments® Vol:20.10 1st November, 2007
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