MID-TERM BUDGET ANALYSIS

Mr Hard-edged Honesty Mboweni offers mostly blood, toil, sweat and tears. Did we mention Honesty?

By Marianne Merten 24 October 2018

Finance Minister Tito Mboweni delivers his maiden Medium-Term Budget Policy Statement in Parliament, 24 October 2018. Photo: Leila Dougan

Finance Minister Tito Mboweni wore the wrong suit for his maiden Medium-Term Budget Policy Statement (MTBPS) in a sweltering Cape Town. But that MTBPS he delivered regardless – two weeks into the job, in just under two hours on a day spiked with a curious mix of derision for government protocol, self-deprecating quips about having to adjust to public service, and frankness on non-traditional finance ministerial topics like his recent weeding out of a certain plant from his farm before the Constitutional Court declared it legal for personal consumption. Yes, really.

This is where we are and this is what we must live with.”

That was the comment from Finance Minister Tito Mboweni, in shirtsleeves and tie loosened, a couple of hours after delivering his maiden Medium-Term Budget Policy Statement (MTBPS). That the jacket was ditched did not detract from the authority of the newly minted Cabinet minister who – and this is something not to forget – has nothing to prove.

Hours earlier his MTBPS delivered a hard message of slowing revenue in a low-growth economy with stubbornly high unemployment, with not very much good news, although government scratched together R32.4-billion for education, health and social spending.

There was “nothing for mahala”, Mboweni later told journalists, and so South Africans had better get used to the “user pay” principle. The national health insurance could be paid for with a 2% value-added tax (VAT) hike, but that was a political and ideological conversation to be had. And there needed to be a conversation around the public service wage bill that would take up just over a third of government revenue. It wasn’t necessarily about cutting numbers – those could stay if remuneration was cut. But that is a conversation that needs to be had given the unsustainable level of the public sector wage bill.

But perhaps that’s his years in the private sector speaking. Compensation is paid on performance and a score of 4.5 was below par – “you simply packed up and left, without telling your colleagues”. There’s no such thing as a 13th cheque that’s just paid as part of a salary package, Mboweni said in sharing his surprise when he signed on the dotted line as finance minister.

Mboweni’s public sector wage bill has already antagonised trade unions and their federations, as have the MTBPS statements about the reconfiguration of State-owned Entities (SoEs), including “a long-term plan to restructure Eskom” and to deal with its R350-billion government-guaranteed debt and radical steps over loss-making SAA, which nevertheless got a R5-billion bailout to be paid before March 2019.

But it seems Mboweni’s mantra should be: “There should be no holy cows!”

The finance minister didn’t mince his words either over reducing some of the benefits ministers and their deputies enjoyed, be it cars or the number of office staff, or cutting the size of Cabinet: “No more than 25 (ministries), probably 20.”

There was simply no money to sustain a 70-plus-strong executive.

It’s a political conversation that does not reside with the Treasury. It resides with the president.”

That re-engineering of government, announced by President Cyril Ramaphosa in his maiden State of the National Address (Sona) in February, remains under way. While there is no deadline, the MTBPS on Wednesday said funding had also been reprioritised “to build capacity in the new research on policy advisory unit in the Presidency”.

The MTBPS also raised the need to improve government project management and contract management.

The Giyani water project which ballooned from R40-million almost a decade ago to R4-billion now – “a cesspool of corruption”, is how Mboweni described it – will be a test for accountability. National Treasury and Water and Sanitation are working to investigate those identified by the auditor-general for dodgy dealings.

And Mboweni has called in the soldiers, obviously with approval of minister and president, to help clean up the polluted Vaal Dam. It’s a case of identify the problem, act rather than sit in an inter-ministerial committee for further discussions, and so forth.

That’s some hard-edged honesty, not often heard in government, particularly one where for the past few years ANC factionalism played out in often bruising Byzantine machinations that left governance paralysed as everyone was watching which way the political winds blew.

Mboweni, a member of the ANC National Executive Committee (NEC), straddles an insider/outsider role as former labour minister in the Mandela administration, then South African Reserve Bank governor for a decade to 2009, turned private businessman.

By the way, he may be finance minister now, but he still likes being called “Gov”, or the 8th governor of the South African Reserve Bank, while current Governor Lesetja Kganyago was dubbed “the 10th Governor” by the now finance minister.

In many ways that combination of public and private sector experience of Mboweni’s mirrors that of his current boss, President Cyril Ramaphosa, the National Union of Mineworkers founding trade unionist turned businessman after leading the constitution-writing process in the first democratic Parliament.

And no, Mboweni didn’t want to return to government.

I actually did not want this job. I was doing very well in the private sector, thank you very much… I was free from Thursday to Monday,” he told journalists post-MTBPS.

I had more time with mu lambs, dogs, chicken, cabbage, spinach… There were other things that were growing on my farm (but) I chopped them before the Constitutional Court decision. I should have allowed them to grow. They were not for me, they were my caretaker’s who had been planting certain greenies not allowed at the time.”

He was doing well when the call came.

I can tell you, I resisted to the best of my ability. But he used to be the secretary-general of the NUM, and he out-negotiated me.”

And Mboweni said he hoped that was the last time journalists asked him this question. Yes, he was grumpy at first.

Once you signed that (oath of office) thing, no matter how grumpy you are, you put that grumpiness aside and get to work.”

And that is what Mboweni did. The rands and cents of the MTBPS were settled a while ago, given the budgeting cycle, but his speech was also settled in good time. Tuesday night he got his usual amount of sleep – from midnight or 01:00 to 07:00, a habit he picked up at university:

Don’t call before 8am, we’ll fight.”

What Mboweni presented and represented in Parliament on Wednesday is in essence the new narrative – honesty and change. It’s another step in the political narrative Ramaphosa is attempting to craft, also with the new dawn Thuma Mina rhetoric, in government while consolidating ANC unity despite a clear pushback by disgruntled elements.

In many ways Wednesday’s MTBPS was playing kick for touch. Some of it relates to the behind-the-scenes tussles now unfolding over where the February 2019 Budget must go – it is in an election year, and there will be pressure to up spending. Some of it also relates to the stuff that must happen within government and without to allow for genuine partnerships with the private sectors that it is hoped will side-step problems that have beset the public sector, including mismanagement and State Capture.

Mboweni appears to have garnered firm supporters within the governing ANC, and government. The emphasis on getting the private sector in appears to echo at least in some circles of the governing ANC. This is part of the unfolding contestation, within government and the governing party.

There’s a reason Ramaphosa has called on Mboweni. The question that will be central: does Mboweni have the political capital to prevail in the fights that will unfold? DM

Gallery

In other news...

The South African economy is choking harder than the Proteas. Although to be choking you have to actually be eating and the Proteas seem to be on some sort of juice cleanse-like fast…*

Back to the economy: In the first quarter the GDP dive-bombed by a whopping 3.2%. The sense of futility can paralyse us into inaction and moaning. But it’s times like these that call for effort and action, no matter how small. Yes, South Africa is hurting. Yes the ravaged economy is evident everywhere you look. But you can make a difference, in your own personal way and by supporting independent media like Daily Maverick. We’ve pledged to continue the fight through producing incisive and impactful investigations and analysis, the same way we have done every day for the last decade.

By becoming a Maverick Insider you can help us keep doing what we do, so that you and others who can’t afford it, can keep reading the truth. For whatever amount you choose, you can support DM and it only takes a minute.

Support Daily Maverick→Payment options

*Proteas, you know we love you. We’d just love you more if you won occasionally...


Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or if you are already an Insider.

DAYS OF ZONDO OP-ED

Zuma’s spy claims are implausible, paranoid, and a red herring

By Nel Marais

"The real problem of humanity is the following: we have paleolithic emotions; medieval institutions; and god-like technology" ~ Edward Wilson