It’s budget day, again. The national spending plan is unlikely to bring good news. Years of warnings about bloating debt service costs went unheeded despite graphic analogies of the jaws of the hippo or, slightly more optimistic, the aloe’s resilience against drought.
The tough policy decisions have been kicked into the long grass again and again. The social relief of distress (SRD) grant is still around, three years after the Covid-19 lockdown ended, because of the failure of the until-recently solo governing ANC to decide on the basic income grant.
The April 2022 ANC special national executive committee documents noted that the social development department “with support of the International Labour Organisation completed working out the modalities for income support for 18 to 59-year-olds (basic income grant [BIG]) in a phased manner, building from the positive experience of implementing the R350 SRD grant…”
But no BIG happened. So the SRD grant remains a convenient fudge — enabling pro-poor rhetoric while sidestepping the hard policy decision and funding trade-offs that are required to establish a properly costed, structured and implementable income support and social security net.
It is unclear what was achieved over the past two weeks of conversations in the multiparty cabinet, within political parties and among political parties. Last week an official statement said no agreement on the controversial VAT hike to 17% had been reached. Talk was continuing, it was said this week. Strategic leaks and commentary signal a VAT hike of less than a percentage point might be announced. Or not.
The messaging around the 2018 VAT hike from 14% to 15% was clear: the R23bn it would raise was needed by March 2019 to settle the VAT refund backlog amassed by then tax chief Tom Moyane, some say intentionally to pad out the national purse.
Since the 2018 VAT hike the national purse has benefited from those additional billions each year. Spent on SRD grants? Perhaps. On dodgy Covid-19 personal protective equipment tenders? Perhaps. On cleaning up and equipping hospitals and clinics, and hiring much-needed additional doctors and nurses? Probably not.
Often the question of who benefits determines decision-making and resource allocation. So R35,594.80 was found for blue lights for the deputy correctional service minister’s car, according to a recent parliamentary reply. While the State Information Technology Agency of SA (Sita) struggles to keep home affairs online so that ordinary South Africans can get IDs or birth and death certificates, shortly into the Covid-19 lockdown Sita developed — and successfully maintained — a secure online cabinet meeting system.
Business Day reported that planning, monitoring and evaluation minister Maropene Ramokgopa was looking to bring inclusivity to matters budget “... because it’s not necessarily a budget of the National Treasury; it’s the budget of the cabinet”. The lesson from last month’s no-budget debacle seems to be “acceptance” by the ANC that it no longer controls all levers of state power.
It took eight months to get there. After all, the ANC got its way on the controversial school education reform and expropriation laws. On the proposed VAT hike to 17% that the finance ministry kept mostly schtum about, the DA and other national unity government partners might have found their political backbone. How this shifts the national unity government dynamic remains to be seen.
However, Ramokgopa’s sentiments highlight the confusion of the political processes underlying budgets, and the technical processes which, already inclusive, take much of the year to finalise after departments submit their wishlists. The budget is the National Treasury’s. The policy decisions on the basis of which rand and cents are allocated in the national expenditure plan? That’s for the politicians.
And here it seems the real policy discussions, including hard decisions on spending allocation trade-offs, are just not happening. Publicly, it’s been about the optics, such as renaming the medium-term strategic framework the medium-term development plan.
That’s just making superficial changes while the mess worsens. Muddling along is no longer an option.
• Merten is a veteran political journalist specialising in parliament and governance.
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