Who will guard the guardians?

Bureaucrats become slaves to the system they enter, feeding on mankind’s primal instinct for order. Result: legalised rorts by non-producers who add cost but little value.

Bureaucrats become slaves to the system they enter, feeding on mankind’s primal instinct for order.

mike hutcheson idealogIn Biblical times, tax collectors of the Roman Empire were hated and despised, reviled as collaborators who extorted tax from their fellow citizens on behalf of the local Roman governor. In the provinces of Syria or Judea, aside from gathering the prescribed tax levies, collectors could even accost a man in the street and tax him for what he was carrying. They became very wealthy through the fees they added on top of the tax.

With a logic that would warm the cockles of a modern investment banker’s heart, the Romans imposed governance and infrastructure protocols on territories they had invaded, saddling the recently acquired dominions with the cost of their invasion and colonisation.

Rome regarded their rule as a privilege to be bestowed and decided its expense should be borne by the conquered provinces. In Judea, for instance, every man paid one percent of his income in tax, but there were also random sales taxes, import and export taxes, 10 percent crop taxes, 20 percent taxes on wine and olive oil, property taxes, and special taxes used for raising armies and militias.

It was a big money-go-round, with the rights to extort tax going to local collectors who put in the highest bids. The Romans were happy, the tax collectors were happy; in fact, the only people who weren’t happy were the long- suffering Jews, who hated not only the Romans, but their tax collecting toadies, too. The latter were regarded as being in the same class as outcasts and prostitutes.

Fast-forward to today and not much has changed, except that supposedly respectable accountancy firms are now doing a lot of the tax-gathering work, enriching themselves in the process. No wonder accountancy firms regard the IRD as their best friend.

The more complex our governmental regulations, the more accountants have emerged to manage compliance, which is why the Inland Revenue Department has been able to conscript the support of the profession.

Our cities’ skylines are dominated by office towers occupied by service organisations that don’t make or do anything; instead, they record, hoard and administer. We’ve been taken over by bureaucrats, be they in accounting, law or banking.

It’s an indication of where the money flows most freely. Bureaucracies grow by feeding on themselves. The more rules and regulations we have, the more paper-sliders we have to administer them.

Imagine a world where artists and writers are paid at a rate of $500-$750 per hour – and by law, citizens are required to buy one of their original works each year, or risk going to jail.

Who’d have the tall buildings then? But that is precisely the regime under which accountants work. If companies (or non- PAYE-paying individuals) don’t pay tax, they get taken to court and can get put in the slammer! How many occupations are supported by that kind of threat?

Bureaucrats, many of whom enter the organisational labyrinth as clever, caring and dedicated human beings, become slaves to the system they enter. Consciously or unconsciously, they feed on mankind’s primal instinct for order, justifying their existence by identifying problems that need solving, arguing or assuming that they can’t be solved by common sense and unspoken civil consent, but rather by rules, regulations and compliance protocols.

There was a time when the tallest buildings in town were occupied by manufacturing companies, the powerhouses of commerce who made and sold stuff, creating wealth in the process.

Now commerce is dominated by non- productive and inherently inflationary activities that involve sliding money around, adding cost but little value.

For example, we know of cases where accounting firms, appointed as receivers or liquidators, have used preferential creditor claims to induce defendants to settle out of court. While ostensibly claimed on behalf of the IRD, the amounts recovered from the out of court settlements can be completely taken up as fees by liquidators and lawyers – sanctioned by the IRD.

It’s a game liquidators play. The dilemma for the defendants is that the cost of going to court is roughly the same as settling, with the hollow benefits of avoiding the distraction of the process, and the possibility of an adverse court decision.

This is a legalised rort, enabling those with special knowledge of legal process to put their snouts in the public trough, but I believe it is also an abuse of a professional responsibility that should be brought to public attention and curtailed.

The Romans had a saying, ‘Quis custodiet ipsos custodes?’: Who will guard the guardians?