Finance Minister Pravin Gordhan did not use the words but Cabinet did: austerity measures. In adverse economic conditions, the mention of the two words by a country’s finance minister can send the markets into shock. It means dramatic cutbacks in spending to reduce budget deficits. Luckily, in the current context, the austerity measures announced in the Medium Term Budget Policy Statement on Wednesday relates mainly to the binging habits of government bigwigs. But can this belt-tightening exercise change the mind-set of the high-flyers in the public service where delusions of grandeur result in an inability to tell right from wrong? By RANJENI MUNUSAMY.
The former Inkatha Freedom Party premier of KwaZulu-Natal between 1999 and 2004 Lionel Mtshali was constantly in the news back then for all the wrong reasons. As head of government in the province, Mtshali felt entitled to certain privileges which should be funded by the taxpayer. So he had a private jet at his beck and call to fly him between Durban and Pietermaritzburg – reducing the 40-minute journey to work by road to 15 minutes by air. It cost the taxpayer at least R12,000 at a time for the commute, which happened at least four times a week.
At the Truro House government building in Durban, there was a lift reserved only for Mtshali – a person of his importance could not very well use the same lift as the hoi polloi, now could he? At one time he blew R24,000 flying between Ulundi and Durban on two successive days to watch a theatre production of Jesus’s crucifixion, twice – as one does.
The ANC, which was the minority partner in the KwaZulu-Natal coalition government at the time, was outraged. They said the actions of the premier were as a result of “extreme ego”. The ANC also used the big spending habits of the IFP premier in its 2004 election campaign, when it finally won control in KwaZulu-Natal.
So it is perhaps a grand irony what has happened in the ANC government over the past 10 years. From designer shoes, bouquets on Valentines Day, paintings at McDonalds, top-of-the-range BMWs, six-star hotels, first-class flights, exorbitant credit card bills, and the cherry on the cake, the R206 million upgrade of President Jacob Zuma’s private home at Nkandla, the public purse has been a feeding trough for the ANC top brass.
The “extreme ego” they once accused Mtshali of having is now rampant in the upper echelons of the state – unashamedly so. The curious thing is that many of the people now wildly spending taxpayers’ money came from humble beginnings and some of them distinguished themselves with selfless acts during the liberation struggle. Somehow, when they assumed high political office, they become afflicted with delusions of grandeur.
For years the Ministerial Handbook has been used to cover up all manner of excessive spending, as the public did not have access to what exactly members of the executive are entitled to. This has led to all sorts of abuse. There is also the fallacy that the lives of all members of Cabinet, provincial executives and local councils are in danger, hence the requirement for special security arrangements and VIP protection for all these people.
Are there criminals who go around targeting slow moving vehicles carrying politicians to justify why all of them require high-speed blue light convoys? Or is there perhaps a gang of bad guys who check the guest lists at normal three-star hotels, looking to murder politicians in their sleep? Of course security arrangements are necessary but when mayors have 16 bodyguards and ministers book into six-star hotels with their sangoma, then the system is exposed as a joke.
Finance Minister Pravin Gordhan has been making repeated calls for belt-tightening in government. Up to this week, his calls have been falling on deaf ears, it appeared, as if most people in government assumed he was not talking to them.
So it came as quite a surprise that he started trimming the fat right at the top where the splurging is most visible and the sense of entitlement most flagrant. Some ministers feel they do not have to account for their expenditure and overseas travel, and display extreme arrogance when asked questions by opposition parties and the media. They also use the guise of “security” to camouflage their big spending habits.
Among the austerity measures Gordhan announced in the Medium Term Budget Policy Statement was that the cost limits for official cars will be standardised and there will be no compensation for use of personal cars. Up to now, ministers could blow in excess of R1 million on luxury vehicles. They are only allowed to spend half that amount from now on.
The budget for overseas travel has been curbed. Gordhan said only ministers are allowed to fly business class and the number of officials travelling with them should be limited. Ministers are constantly travelling overseas, sometimes for reasons that are not quite clear, with a large number of flunkies in tow. If the cutbacks are to have a real impact, there also needs to be proper checks into the reasons for overseas travel.
Ministers are also no longer allowed to revel for months in luxury hotels while they await official accommodation. They will now be put up in rented apartments. Their wining and dining at state expense has also been curbed as government credit cards are to be cancelled. Entertainment budgets will be limited to R2,000 per month.
Gordhan’s cost-cutting measures could also have the effect of having public servants buck up and do the jobs they were hired to do. There is to be stricter control of consultancy fees and each government entity is to develop a consultancy reduction plan. The work ethic in the state is shockingly poor and therefore many government departments rely on consultants to keep the wheels turning.
Another channel for splurging is advertising and the Treasury now wants to limit non-essential costs and encourage “better use” of the Government Communications and Information System. This could frustrate the lucrative money-spinning arrangements between government, state-owned enterprises and some politically connected media houses.
Gordhan has instructed that no public funds are to be used for purchasing alcohol and catering and event costs are to be reduced. Government departments are notorious for splashing out on big conferences and networking events where little gets done and much gets consumed.
So far, it appears as if Gordhan has political support for the squeeze on the political high-flyers. A Cabinet statement on Thursday said: “Cabinet supports the austerity measures propose[d] for government. These measures will go a long way in reducing any wastage in government spending. Such measures will ensure that government uses its resources effectively and efficiently.
“Cabinet calls on all national and provincial departments, municipalities, public entities and constitutional institutions to implement these measures,” the statement read.
Also on Thursday, Minister in the Presidency Collins Chabane announced that much-awaited amendments to the ministerial handbook would be finalised soon. The amendments are also aimed at curbing spending.
The dilemma for Gordhan and the Treasury will be how to change the mind-set of those who either believe that these measures do not apply to them or that they can flout the rules and get away with it. They also have the challenge of infusing throughout government the understanding that the state is there to serve the country, not to serve as a feeding trough for those in its employ.
From a clerk stealing milk from a government office to a minister treating his family to an overseas holiday at state expense, there is a serious sickness in government in terms of how the public purse if perceived and abused.
It will take more than austerity measures to change the psychology in government of “do little, expect much”. Only good leadership and proper management can do that.
Unfortunately, that is something Mr Gordhan has little control over.
And there’s another aspect he will have difficulty controlling: human ability to work around rules and regulations, no matter how well-meaning or well- crafted they are. Expect plenty of inventiveness, incentives and delivery in that specific department in the months and years to come. DM
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Microwave popcorn is nothing special. You can have the same effect with normal popcorn kernels and a brown paper bag.