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KHAYA SITHOLE: Budget blues — balancing commitments with realities

Big state’s lethargic nature makes innovation and agility impossible when alternatives exist for same services

Members of the Public Servants Association. File photo.  Picture: NQUBEKO MBHELE
Members of the Public Servants Association. File photo. Picture: NQUBEKO MBHELE

Across the spectrum of state organs and institutions, the most contentious question relates to viability and sustainability in light of diminishing public resources.

Over the past two decades, as public resources have become constrained and wasteful practices and inefficiencies limited the reach of what little existed, the options available to the government have all been explored and exploited with predictably mixed results and consequences. 

In the simplest case, institutions trying to balance the books can either receive more funds from internal or external resources, exploit new ways of doing things creatively and more efficiently, or simply start doing less.

For institutions that are dependent on general allocations with little scope for revenue-generating activities, the contestation for resources has been a challenge as everyone has been competing for a slice of a small pie that — when one considers the trends in cost inflation versus the growth in underlying resources — has resulted diminishing per capita allocations.

Within the dimensions of the public service and SA’s political architecture and alliances, the instinct to borrow through the problem became endemic and entrenched.

Job rationalisation initiatives are a matter of persuasion rather than prescription. In the most recent budget speech, the minister of finance once again made an appeal for those towards the end of their public service journey to consider early exits to create some breathing space on the wage bill.

If enough public servants take up the idea, the theory is that more expensive public servants will exit ahead of time. The problem with their classification as expensive servants is that it partly reflects the deeper experience they tend to have.

Decapacitation

Persuading them to exit the system then cuts costs in the medium term, but unless the next layer of public servants can seamlessly step up, the decapacitation of the state is the most obvious consequence of such a model.

Given the relationship between the ANC and the labour union movement, getting the balance between capacity and cost management has proved elusive and every wage negotiation process is an exercise in attrition. 

An alternative response to challenges relating to viability can be an embrace of different and more efficient ways of delivering on mandates.

Unfortunately, the lethargic nature of the big state makes innovation and agility impossible and when alternatives exist for the same services, state and public institutions can even be displaced by less restricted market participants — the SA Post Office being a case in point.

The eternal viability loop that gets created — where underperforming institutions are under-capacitated and undermine their own mandates — means that their respective roles as bit players in the bigger play of growth, service delivery and the economic turnaround that the country desperately needs, are equally impossible to execute.

While the government previously believed that it could borrow its way through it all while hoping for a solution to materialise from somewhere, it is no longer possible to espouse commitments to debt stabilisation and also shy away from confronting the deeply problematic structure of how government has been configured and financed.

As the finance minister builds towards the February budget, which should map out how the government aims to balance its commitments with its realities, the various conversations involving those in and outside the state must find a way of abandoning old habits of deferring difficult deliberations and pretending trade-offs can be simply ignored in the hope that someone else will fix the problem.

Ideas that sound radical in nature but will ultimately fall short of addressing core problems — like wealth taxes and a new slate of levies — will increasingly dominate the conversation, but after 30 years of hard evidence regarding what actually works, politicians will have a rather difficult time selling imaginary solutions.

• Sithole (@coruscakhaya) is an accountant, academic and activist.

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