Minister in the presidency Maropene Ramokgopa has called for introspection on the budgeting process after last month’s unprecedented delay put question marks over the National Treasury’s constitutionally enshrined power over SA’s most important fiscal policy document.
“One of the things we’ve learnt is the acceptance that we are now in the government of national unity (GNU),” Ramokgopa said in an interview with Business Day on the sidelines of the launch of the Harith-Cisco smart building showcase on February 28.
“Being in the GNU means ... we need to exhaust the processes of finalising the budget because it’s not necessarily a budget of the National Treasury; it’s the budget of the cabinet.”
Unified
The comments by Ramokgopa, whose role as planning, monitoring & evaluation minister makes her a chief co-ordinator and supervisor, came shortly after finance minister Enoch Godongwana was sent back to the drawing board after a rare unified stance within the GNU to oppose his proposal to fund an increase in spending on front-line social services and social grants with a two percentage point VAT rate hike.
Godongwana is due back this week to have another go at tabling the R2-trillion budget after three weeks of talks in which proposals ranged from a tax on the wealthy and a smaller VAT rate increase to similarly politically painful cost cuts and the government temporarily withdrawing its contributions to public servants’ pensions for a year. .
Ramokgopa, a 45-year-old Lebowakgomo-raised politician who served two terms as treasurer of the Consular Corps in Mumbai, said the decision for greater inclusivity in the Treasury’s decision-making process would be up to President Cyril Ramaphosa.
“The National Treasury is the only department that is actually protected by the constitution itself. All of us have to wait for the president. Tell us what you want us to do through a proclamation,” she said, referring to the vast autonomy enshrined in the constitution to ensure the Treasury make decisions based on economic principles rather than political pressures.
“We’ve always just allowed them to actually just look at, for example, what the manifesto of the ANC would say, and decide to do what they think is correct. But no-one questioned them. I see now with this GNU, people are starting to question, even in the ANC, and say, ‘we don’t agree. We think maybe you should look at this’.”
Ramokgopa’s call for more people in the room in the budgeting process has the potential to increase the risk that market sensitive information could be leaked. In a rare occurrence, this year’s budget information was dripped out days before Godongwana’s was due to table the budget, particularly the rejected proposal to hike the VAT rate.
Rand
But she said the Treasury could maintain confidentiality, which is crucial for the stability of the financial markets, including the rand, the most heavily traded currency in emerging markets, by focusing on the basics and the thinking behind the decisions.
“You can’t lay out the budget but you can explain the thinking. You may not ... say, ‘we’re going to increase VAT’ but you’d say, ‘we’ve got a shortfall of R58bn. What do you think we can do? And this is our thinking’,” Ramokgopa said.
“It’s not necessary to disclose the budget because the markets are very fidgety. You don’t want to upset them, so I suggest you talk about the basics and your thinking without divulging too much. By the time you come up with what you are going to do people have an appreciation of what you went through and the options that were there.”
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