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17 January 2017 06:41 (South Africa)
South Africa

Post-Budget 2016: Greed isn’t good. A kleptocracy looms unless we change our ethics – Pravin Gordhan

  • Marianne Merten
    Marianne Merten
  • South Africa
Photo: South Africa's Finance Minister Pravin Gordhan delivers his 2016 budget address to the parliament in Cape Town, February 24, 2016. REUTERS/Mike Hutchings

The Budget narrative is that South Africa cannot spend what it does not have. That there is a crisis is accepted and this has helped focus efforts. The national spreadsheet is being rebalanced to shift resources into economic growth efforts while the social wage - including social grants and free education and health for the poor - is held steady, despite the fact that South Africa is frequently described as the most unequal country in the world. What doesn’t work effectively and cannot be made to be efficient, will be phased out or its funds reprioritised be it government programmes or in the state-owned entities By MARIANNE MERTEN.

Finance Minister Pravin Gordhan stayed on message during Thursday’s Budget eight-hour blitzkrieg. Starting with an early morning television briefing, sans the politically-connected Guptas’s New Age newspaper, this was followed by the call-in SaFM programme and finally a meeting with Parliament’s four different finance committees. 

 But Gordhan’s narrative on Thursday was unequivocal on the need to change South Africa’s ethics. The poor do not get what they are entitled to because of the greed of “extractors” in both the private and public sector and “internal transfer pricing” or the practice of determining a set price for goods and services traded within an enterprise. “There are many parts of transacting between government and business, which have gone seriously wrong and, if we don’t stop this, we’re going to become a kleptocracy,” he told guests at the etv/eNCA and SABC2 television briefing. “Government and the private sector… must change the ethical system.”

The statement was made in response to Gift of the Givers’ boss Dr Imtiaz Sooliman, who recounted how of the goods valued R1 million only R300,000 of goods arrived, and being told by individuals to charge government R100 for goods worth R50.

Later on SaFM, Gordhan remained blunt in that quiet manner of his. “Money isn’t the problem in South Africa. It is how we spent it. There is far too much corruption. There are too many extractors…”

As he had earlier in the day, he pointed out that it wasn’t just a government problem: the multi-billion rand delays over several years at the Medupi coal power station and at Kusile, happened at private-sector drive projects. “Doing favours” whether for politicians or business people must end, he said.

These are brave statements.

They come as the governing ANC and its alliance partners are just starting to talk about “state capture” and the need to resist this. A recent bilateral between labour federation and Cosatu and the South African Communist Party (SACP) called for action against “those associated with state capture through parasitism in public sector formations”. Although stated in different language, it echoes the criticism of “predatory hyenas” former Cosatu general secretary Zwelinzima Vavi referred to several years ago. But specifics on the action front remain sketchy, and every time the Gupta family is named, defensive manoeuvres are conducted.

Gordhan’s statements also are a brave foray on another front. He issued them just over two months after his return to the finance portfolio following the 9/12 fallout, triggered by the appointment of little known backbencher Des van Rooyen. The matter was thought to have been put to bed, but just before Budget day President Jacob Zuma publicly said Van Rooyen was the best qualified finance minister he had ever appointed.

Meanwhile, another battle is still being fought on the South African Revenue Service (SARS) front where the controversy over the so-called rogue unit has still not died. It has been widely reported Gordhan has ordered a halt on the restructuring at SARS. Those tensions have played out in public, ending the traditional Team Finance show on Budget day. SARS commissioner Tom Moyane seemed to be missing in action. He was not in the standard photo of the finance bosses on route to the House for Budget, nor was he seated at the top table during the traditional briefing just ahead of the Budget speech in the House. “It’s no secret there are issues to be resolved at SARS. We will resolve them in a couple of weeks and we will communicate to the public,” said Gordhan after he had been asked twice.

Gordhan has been self-deprecating about his return, calling himself the new-old minister. “If you see me here in October, then I have political support. If not, then I don’t have political support. That’s how life works,” said the finance minister. He said this just before delivering the Budget to stave off a ratings junk downgrade while somehow sparking economic growth and maintain a social security for the poor.

While the Budget allocated specific tasks to specific ministers, it was a joint cabinet decision it was said on Wednesday. A key political test came after the two public engagements at the ANC’s parliamentary caucus. Afterwards Gordhan ran a few minutes late for his meeting with the parliamentary finance committees.

He apologised and presented the Budget narrative of joint action to make South Africa work to MPs and the delegates of the National Council of Provinces (NCOP). For opposition parties, he posed this challenge: “How do you criticise the government and not shoot down the country?” Gordhan said, adding the national interest should come first, rather than party politics and elections issues.

However, the parliamentarians seem to be more concerned about putting their respective political parties’ positions to the finance minister than engaging in the overall political and governance thrust of the Budget. Gordhan listened without showing impatience as parliamentarians made statements reflecting their individual concerns from the sugar tax, the tyre tax, the state of the SOEs and the like. “We admitted our weaknesses. We want to be frank with the public – and with you as well,” he told parliamentarians at one stage.

Then it was done. Gordhan now hands over to Parliament, which must in terms of the Constitution and law hold the executive to account. And Gordhan now depends on his cabinet colleagues and counterparts in provinces and councils, to implement the Budget effectively, efficiently and in the interest of the country.

In these unfolding official processes, and against the background of potential outflanking manoeuvres, it will emerge whether Gordhan has political support. But for now the finance minister may just have the time to regroup before the next skirmish begins. DM

Photo: South Africa's Finance Minister Pravin Gordhan delivers his 2016 budget address to the parliament in Cape Town, February 24, 2016. REUTERS/Mike Hutchings

  • Marianne Merten
    Marianne Merten
  • South Africa

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