It would be churlish to just dismiss as a complete waste of time last Wednesday’s medium-term expenditure framework. It had its uses: for example, we must commend the finance minister for a frank assessment of the state the country is in.
He did well to tell us how bad the crisis is – public debt has soared to unsustainable levels, tax revenues are on the decline and the deficit is on the rise. But the absence of a plan to get us to the state we want to be in — an economy that is growing and creating jobs — is an unforgivable omission.
It would be naïve to expect one man, Malusi Gigaba, to have all the answers to our problems. But, as I have argued in this space before, there are many things that are within the government’s control and those are the ones it ought to focus on. Two come to mind.
First, the size of the public service is a large part of the proverbial elephant in the room. Not filling vacancies is old-style management, as is tinkering with salaries to arrest the runaway rise of the public sector wage bill.
In the spirit of being brutally frank — seemingly the central idea behind last Wednesday’s speech — we really have to confront the question: is the size of our public service appropriate for our economy?
Second, the government requires no permission to overhaul the hundreds of state-owned enterprises (SOEs) it owns. It inspires no confidence when one hears that the Cabinet is fussing about vetting the qualifications of South Africans to serve on the boards of an important SOE such as Eskom or the South African Broadcasting Corporation.
— THE TREASURY GETS ITS POWERS FROM THE CONSTITUTION. DILUTING THESE WILL REQUIRE A LEGISLATIVE PROCESS THAT WILL BE RESISTED.
If she was doing her job properly, Public Enterprises Minister Lynne Brown ought to have a well-maintained, extensive database of potential candidates to serve on these boards. This could easily be done in three months.
Gigaba’s inner circle is surprised the speech — the key message of which has been amplified in briefings with ratings agencies — failed to excite economic operators and is likely to trigger another round of downgrades in November.
As well as the absence of a plan to dig us out of the crisis, part of this administration’s problem is its propensity to generate uncertainty.
The changes at the Treasury are a case in point. Instead of bringing certainty and clarity of purpose, the departure of the old guard after Pravin Gordhan’s dismissal in March – Lungisa Fuzile and Andrew Donaldson, among others — has merely increased the uncertainty. Today it is unclear where authority lies – in the ministry or in the professional class at the Treasury?
The appointment of an insider, Dondo Mogajane, as director-general has failed to clarify this. The other example of self-generated uncertainty relates to the attempt to shift budgeting powers from the Treasury to a new ministerial committee residing in the Presidency and chaired by President Jacob Zuma. Supposedly, this would assist with the prioritisation of resources allocation, but there are several problems with the proposed move.
First, it’s unclear what it would do differently, other than creating another layer of bureaucracy. Second, although Gigaba would have a seat in this committee, his is likely to be just another voice instead of the decisive one.
The voices of his predecessors — especially Gordhan and Trevor Manuel, but also those with brief stints in the job such as Chris Liebenberg, Derek Keys and Nhlanhla Nene — carried much more weight than he is likely to enjoy after the implementation of this mooted committee.
Typically, this administration has done a poor job of managing expectations around this change.
Efforts to get more information about its role have come to naught — ask the DA. Of even more concern, unlike other state departments, the Treasury derives its powers directly from the Constitution. Therefore, diluting these powers will probably require a legislative process that will be resisted by opposition parties and the banks.
The opaque manner in which these changes have been implemented has fuelled suspicions that the move was dreamed up with Gordhan or Nene in mind.
Shortly before his dismissal, Gordhan had skirmishes with colleagues such as Water and Sanitation Minister Nomvula Mokonyane, Small Business Development Minister Lindiwe Zulu and Social Development Minister Bathabile Dlamini.
Ordinarily, there should be nothing wrong with the president showing interest in the affairs of state. That’s what taxpayers pay him to do. And by being head of the executive, he has a bird’s eye view of every function of government. However, it raises eyebrows when he wants to, in effect, take over a portion of a function from one of his charges.
This isn’t the first time this has happened. It’s happened with state-owned enterprises and the mining industry, and the results of the power grab have been dismal. The much-vaunted parastatal reforms have yet to be implemented.
After the dilution of the Treasury’s budgeting powers, what’s next? Changes to the other obvious irritation – the Public Finance Management Act? These are the questions the various ratings agencies will be asking.
• Dludlu, a former Sowetan editor, is founder of Orwell Advisory Services.
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