MaKhumalo’s tuck shop vs. Pravin Gordhan’s dire warnings – which will SA ignore?
There is a common thread to all the scandal stories involving South Africa’s elected representatives that provides a shocking glimpse into their mindset. There is a sense of entitlement and an underlying belief that the state is a bottomless resource that can be milked as much as possible for as long as possible. But it is not, and yet Finance Minister Pravin Gordhan’s persistent warnings go unheeded. By RANJENI MUNUSAMY.
With each new startling revelation about the renovations at President Jacob Zuma’s Nkandla residence, it becomes clearer that there was a completely cavalier attitude towards how the project was undertaken and how much it would cost. There was no consideration given to the social consequences of creating a garish monstrosity in the middle of a deeply impoverished area, or the outrageous costs involved. No expense whatsoever was spared as there was to be no burden on any individual. Most of the upgrade was at the expense of taxpayers and therefore there was no limit to the indulgence.
On Sunday, the City Press revealed that included in the R206 million government spending spree at Nkandla is a tuck shop built for first lady Sizakele Khumalo’s use. The paper said that a 2010 official Public Works progress report put the cost for the construction of a guard house, bin and tuck shop at R586,467. This despite Public Works Minister Thulas Nxesi claiming last week there was no evidence that the state was paying for any building costs and was footing only the bill for security and operational measures at the Nkandla compound.
Nxesi’s office is still refusing to provide a detailed breakdown of the costs on the grounds that Zuma’s private home is a “National Key Point”. However there is no denying of the existence of MaKhumalo’s tuck shop. The website of her Mashobane Foundation states that she runs “a vegetable garden and a tuck shop at Nkandla”. Though the first lady is perfectly entitled to run a commercial enterprise from her private household, it is yet to be explained how the flow of poor villagers to her shop in the compound is reconciled with the stringent security measures required by a National Key Point.
But then, in all probability, MaKhumalo and her preferred lifestyle as a rural housewife was not the primary consideration when it was decided to give the compound the elaborate facelift. Rather it was to turn the simple rural home into an opulent showpiece that would allow Zuma to continue to live a life of magnificence long after his retirement from the presidency.
The one person who has yet to be heard speaking on the Nkandla splurge as well as other examples of outrageous spending, such as the R65 million spent on renovating the houses of ministers and deputy ministers, is Finance Minister Pravin Gordhan. It is difficult to reconcile these spending patterns with Gordhan’s consistent mantra of the need for belt-tightening and warnings of dire consequences should the requisite belt-tightening not take place.
In his medium-term budget policy statement last October, Gordhan had the difficult task of trying to talk up the economy to counter the ratings agencies downgrades while at the same time stressing the need to reduce the rising budget deficit. The budget deficit was expected to rise to 4.8% of gross domestic product (GDP) in 2012-2013, while public debt was expected to rise from 35.7% in this fiscal year, peaking at 39.2% in 2015-2016.
By 2015-2016 it will cost R114.8-billion just to service this debt, “draining resources that could be spent on productive investment and social priorities,” Gordhan said in the medium-term budget policy statement. By the time the debt stabilises in 2015-2016, more than R1 trillion will have been added to the government's tab.
“In difficult times it is important not to carry on with business as usual,” Gordhan said.
But spending patterns in government suggest that Gordhan’s colleagues in Cabinet are most guilty of disregarding his warnings and seem to think his appeals for belt tightening apply to other, ordinary people.
In the ANC policy discussions at its Mangaung conference, there was little talk of belt tightening, but big plans for increased state intervention in the economy. This theme continued at last week’s ANC national executive committee lekgotla, with the ruling party discussing the state’s role in stimulating economic growth and job creation.
But reports coming out of the lekgotla say Gordhan was again ringing the alarm bells, warning the ANC that the state is simply unable to afford the party’s big plans. He is said to have told his NEC and Cabinet colleagues at the meeting the rising rate of government spending would counter attempts to boost economic growth.
The National Treasury also revealed last week that taxpayers would have to fork out over R80 billion more to fund government’s National Health Insurance (NHI) scheme by 2025. Treasury chief director Dr Mark Blecher said the NHI would need public funding in addition to the national health budget, and this could amount to R80.4 billion.
“Various funding options including an increase in the VAT rate, a payroll tax on employers, and a surcharge on the taxable income of individuals, are being looked at to cover that R80.4 billion,” Blecher said.
Later this month, Gordhan presents the National Budget when he will no doubt be doing another dance on eggs. His budget will have to give shape to the promises Zuma will make in his State of the Nation speech next week, while at the same time trying to curtail spending to balance the books.
While Zuma, his Cabinet and the ANC remain impassive to Gordhan’s juggling act, further stress on taxpayers and consumers might result in even more social upheaval than is already besetting the country. As has been made evident by the public outcry over the e-tolling system and proposed increases in electricity tariffs, ordinary people are reaching the threshold of just how much they will allow themselves to be squeezed dry.
As part of its sense of entitlement and invincibility, the ANC government still believes it enjoys the confidence and trust of the majority of South Africa’s people, and that this will continue for decades to come. Despite the litany of corruption and abuse by senior leaders, the ruling party considers that its grand history and liberation credentials will guarantee the loyalty of the vast majority of the electorate for the foreseeable future. As long as no opposition party poses any substantial threat to the ANC, this sense of indomitability will persist.
It is South Africans who can challenge the conceit and stop tolerating the abuse. Last week, the Daily Maverick diagnosed “scandal fatigue” and how it has permeated the psyche of the country. But the time is coming when the state will have no more to give and the taxpayer and consumer will remain the only resource to milk. By then, it might be too late for outrage.
The choice now is to ignore either the continuous government splurges or the finance minister’s alarm bells.
Don’t say you weren’t warned. DM
- A new South African syndrome - Scandal Fatigue, in Daily Maverick.
Photo: New South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg January 17, 2013. REUTERS/Siphiwe Sibeko