The 2017 Budget was extraordinary in various ways. In post democratic South Africa, never has the finance ministry been on such shaky political ground. Never has the National Treasury faced so much hostility from within the party that runs government. And never has there been so much global uncertainty, mostly due to a powerful new world order driven by irrationality, resentful of the poor and marginalised, and driving humanity to turn on itself. South Africa’s Finance Minister Pravin Gordhan did not present a national budget as much as a new political vision. This is what makes him and his team so much more of a threat to those heavily invested in the current system. By RANJENI MUNUSAMY.
Pravin Gordhan and his deputy Mcebisi Jonas are talking up a new vision – an economic consensus for transformation and inclusive growth. There is something of a variation in what they are saying from the language of their political party, the ANC. Unlike the party’s strategic and policy documents that talk about the ANC being the proponent of change, Gordhan and Jonas are shifting the focus to broad South African society.
In a think piece published in City Press at the weekend, Jonas wrote of a growing restlessness in society as “obscene inequality” abounds, and what needs to be done to counter this.
“A critical mass in society – emanating from within the state; the higher education sector; the business sector, established and new; and labour and civil society, including the media – must be mobilised to support a number of policy choices that can rapidly transition the economy out of its low-growth and high-inequality trajectory.
“Such a consensus will not be easy to broker, given the vested interest in the current status quo,” Jonas said. “Visionary leadership capable of mobilising support across interests and sectors, and of managing spoilers, is required.
“We have no choice.”
This provided the backdrop for Gordhan’s tightrope act on Wednesday. He had little room to manoeuvre in tough economic conditions. But Gordhan presented a decidedly pro-poor Budget, allocating two-thirds to “realising social rights” and introducing a new 45% tax bracket for those earning over R1.5-million annually. “Transformation” was a key theme in the speech – not what you would expect in the usually nuts-and-bolts set piece.
Gordhan said budgets alone could not achieve transformation goals. What was needed was “a consensus on a transformation programme – with each of us clear about the contribution and sacrifices we have to make to ensure optimal inclusivity”.
Speaking on global strains, which he said included “the rise of strident economic nationalism and protectionist policies”, Gordhan said government and business leaders throughout the world had to reflect on the “deficit of trust and loss of social solidarity in their societies”.
He cited Pope Francis: “Reforming the social structures which perpetuate poverty and the exclusion of the poor first requires a conversion of mind and heart.”
A former communist accused by his detractors of protecting the interests of white minority capital quoting the Pope in a budget speech? Strange times indeed.
But Gordhan, Jonas and their team at the Treasury realise that the current economic trajectory is unsustainable and that new thinking is required. That thinking is not coming from the ANC, which is stuck in power battles and factional interests. So, in a strange turn of events, the financial czars in the state are painting a new vision.
“Fellow South Africans, if we make the right choices and do the right things we will achieve a just and fair society, founded on human dignity and equality. We will indeed transform our economy and country so that we all live in dignity, peace and well-being,” Gordhan said in his speech.
“This is the time for activists, workers, businesspersons, the clergy, professionals and citizens at large to actively engage in shaping the transformation agenda and ensuring that we do have a just and equitable society.”
But this was no idle invitation to society. In a rather extraordinary call to action, Gordhan said:
“Obstacles there will be many. Overcome them.
“Detractors abound. Disprove them.
“Negativity inspired by greed and selfishness will obstruct us. Defeat the bearers of this toxic ethic.
“South Africans, wherever you are… Own this process; defend your gains; demand accountability.
“Be an active agent for change. Umanyano Ngamandla (Unity is power.)”
Perhaps Gordhan’s boldness is based on the fact that he is on borrowed time at the finance ministry. It is no secret that Zuma does not want him there but is hamstrung by the fact that the country needs him to be there.
If the world were not on its head, the greatest criticism of the 2017 Budget would have come from Economic Freedom Fighters (EFF) leader Julius Malema. Malema is the biggest and most vocal opponent of the South African government. The Budget represents the financial game plan of that government and Gordhan is the person who articulates who gets what, and how.
Yet in the bizarreness of the world as it is, Malema had this to say about Gordhan: “Pravin is a unifying figure in this difficult moment. He gives that sense of hope in a situation of hopelessness.”
Malema said that when Gordhan stood to speak, the country united behind him.
“We saw some people in the ANC benches were reluctant to applaud him,” Malema remarked. Gordhan had a standing ovation from most of the MPs in the House, including from the two main opposition parties, the Democratic Alliance (DA) and EFF. But some of his Cabinet colleagues did not stand to applaud him, including Social Development Minister Bathabile Dlamini, Small Business Minister Lindiwe Zulu and State Security Minister David Mahlobo. This prompted howls from the opposition benches.
Two weeks ago, President Jacob Zuma’s State of the Nation Address was delayed by almost an hour due to interjections by the EFF. They were eventually muscled out of the House by parliamentary security. The DA then staged a walkout, leaving Zuma to address a half empty chamber.
In stark comparison, it was the opposition that applauded Gordhan enthusiastically on Wednesday. When Gordhan acknowledged Jonas at the end of the speech, there was extended applause from the opposition benches. Gordhan repeated his thanks to Jonas, perhaps deliberately. The opposition parties repeated their applause.
For the first time, the Budget speech was interrupted, albeit briefly. The EFF’s Mbuyiseni Ndlozi objected to Gordhan thanking Zuma and Deputy President Cyril Ramaphosa for their guidance.
“There is no guidance that Zuma gives,” Ndlozi said.
Outside the House, Malema was more scathing. Responding to widespread expectations of a Cabinet reshuffle that might see Gordhan or Jonas replaced by discredited former Eskom chief executive officer Brian Molefe, Malema said this would be “the most stupid thing ever”.
“Pravin is the only person (in Cabinet) with some sense of respect from everyone. I think Zuma sitting there so wishes it was him who was given such respect and a standing ovation by everyone, irrespective of political differences. If you got such a person and you throw such a person away, it will be his loss. But Zuma is known for own goals,” Malema said.
Photo: Leader of the opposition party Economic Freedom Fighters (EFF) Julius Malema tips his hat ahead of South African Finance Minister Pravin Gordhan’s (not pictured) Budget Policy speech to Parliament in Cape Town, South Africa, 22 February 2017. EPA/NIC BOTHMA
Resentment against Gordhan, Jonas and officials at the Treasury have been building for some time – ever since they set themselves up as a bulwark against corruption, patronage and “state capture”. The build-up to the Budget was also marked by extraordinary criticism of the Treasury, including from Zuma who told an ANC national executive committee meeting that the department was blocking transformation goals.
While ANC officials including secretary-general Gwede Mantashe and treasurer-general Zweli Mkhize praised the Budget speech, others in the party were reluctant to do so. When Daily Maverick asked Water Affairs and Sanitation Minister Nomvula Mokonyane, who also criticised Gordhan for being too tight-fisted, for her reaction to the Budget, she said: “Let me not comment.”
When Dlamini was asked the same question, she said: “We still have to analyse the speech as the ANC Women’s League.”
Asked to comment in her capacity as Social Development Minister, in light of the looming crisis over the social grant payment system, Dlamini explained that she had not asked Treasury for extra funding but a “deviation in funding we already have”. She admitted “we don’t know” what would happen regarding the payment of grants come April 1.
It would appear that like with so many other demands on the fiscus, Gordhan is reluctant to allocate or redistribute funding until there is clarity of thought and proper systems in place.
This might have been a Budget with a social conscience but it was also Gordhan and his team staring down their detractors. The transformation they are advocating for requires society to rally behind them. Based on the events of the past year, when Gordhan and Jonas faced a range of attacks, including from state institutions and the president’s friends, there is already significant goodwill and an activated civil society around them.
But the next move is Zuma’s. He needs to consider carefully what he does next. Budget 2017 was not about the money. It spelt out the difference between good and evil in the world. It gave ordinary people a choice to make. In a time of global and domestic turbulence, it provided vision where none exists.
Above all, Budget 2017 was a political power play that few saw coming. DM
Photo: South African Finance Minister Pravin Gordhan (C) arrives with his staff to present his Budget Policy speech to Parliament in Cape Town, South Africa, 22 February 2017. EPA/NIC BOTHMA.
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