Lindiwe Zulu’s contrarian move could be a sign of new ANC factional fights to come
Social Development Minister Lindiwe Zulu’s suggestion for a National Social Security Fund, made without the agreement of the rest of the Cabinet, while disregarding important stakeholders, could become a test of President Cyril Ramaphosa’s ability to keep control over his Cabinet.
Over the past week, more details have emerged about a Green Paper published by the Department of Social Development and about the context in which it was published. While it seems unlikely at this stage that its main elements will ever become government policy, the fact that it was made public in the first place and that it came during this time may be politically significant.
This mini mess may be proof of just how much some ministers believe they are able to act without the backing of the rest of the government. This could turn out to be a test of President Cyril Ramaphosa’s mantle and his ability to keep control over his Cabinet.
On Thursday last week, the Department of Social Development published the Green Paper on its website. It starts off by saying: “I, Lindiwe Zulu, Minister of Social Development, hereby give notice for the publication of the Green Paper on Comprehensive Social Security and Retirement Reform (2021) for public comments.”
After the executive summary and other parts of the introduction comes what may be the most contentious proposal: a National Social Security Fund. The paper says:
“All employers and employees will be obliged to initially contribute between 8 and 12 percent of qualifying earnings up to a ceiling, based on the Unemployment Insurance fund (UIF) ceiling, which is currently at R276,004 per annum.”
In other words, it would be mandatory for people to pay into the fund.
Later it details how the fund would be run, with an independent board and a CEO etc.
The paper also suggests moves towards a full basic income grant (BIG), in other words, government money which everyone would receive.
Already by Thursday afternoon last week it was clear that not everyone in the government was on board with this.
On Newzroom Afrika a deputy director-general of the department, Brenda Sibeko, explained the rationale behind the proposal. She said that the pandemic had revealed the deep inequality and poverty in South Africa, how so many people had become exposed to a lack of income and a lack of food, and that the government needed to change policy.
She explained that many people reach retirement age with no pension at all to fall back on, and a National Social Security Fund was a way to ensure that this no longer happened.
But immediately after that interview, the National Treasury’s Deputy Director-General for Tax and Financial Sector Policy, Ismail Momoniat, appeared on the same television station programme. He made it clear that this was not government policy and still had to be examined and debated.
When asked if the proposal of forcing people to make mandatory payments to such a fund (on top of the money already paid to the government through tax and other means) would be constitutional, Momoniat suggested, “That’s a good question….”
In other words, the National Treasury poured as much cold water on the proposal and as quickly as it possibly could.
Then, on Monday morning, Business Day reported that a National Economic Development and Labour Council (Nedlac) report on the issue, which spelt out the risks of this approach, had been ignored. The paper said that research commissioned by the International Labour Organization had also been disregarded. The newspaper suggested that the social partners at Nedlac had been taken “by surprise”, because there is no consensus on this issue.
So why would such a document be published now, and without the agreement of the rest of the Cabinet, while disregarding important stakeholders?
There can be no question that the timing is difficult.
The country’s middle classes have just finished binging on the climax of the Zondo Commission, a TV series which demonstrated almost to the last decimal point how much money had been stolen by people in government and linked to those in government. Even the president, the politician with probably the highest approval ratings in the country, did not manage to escape unscathed.
And here was a government department suggesting that it be made mandatory for people to pay more of their money to the very same government.
At the same time, this proposal goes counter to the demands of organised labour.
Cosatu and other unions have been pushing for workers to be given access to their pensions in order to be able to pay off their personal debts. The Treasury had opposed that demand, but suggested that it could be considered.
Now Zulu is pushing the idea that these workers, who want to access their pensions now, should in fact have even less access to their incomes in the future.
At worst, this suggests that Zulu has not been aware of public sentiment, ignored the wishes of unions, ignored Nedlac, ignored reports detailing the risks and decided to go alone.
If that is the case, why did she do it?
Zulu has previously come out in support of a basic income grant, speaking in favour of the idea during a mini-plenary debate in Parliament this year.
The debate in the ANC has gone back and forth many times over the last two decades. But in the past fortnight Enoch Godongwana, the still-new finance minister, has said that he opposes the idea. He would prefer to use the money such a grant could cost to pay for more education and training for young people.
Some might presume that Zulu is trying to put pressure on Godongwana as he starts his new job.
But there may be other agendas at play.
One of the political near-certainties about a BIG in any country is that if you ask people if it should be implemented, those who have no certain income will always say yes. It is in their interests to do so. Given the numbers of our people who do not have a substantial and secure income, any referendum on the issue would see the proposal being adopted by a landslide.
It may be that Zulu is trying to be on the “right” political side of this debate.
It is also not clear where her allegiances lie in terms of the factional divisions within the ANC.
Zulu has a long history in the party: she has previously been a spokesperson for the ANC, chair of its sub-committee on international relations and an adviser on international relations to former president Jacob Zuma (it appears her main focus was the situation in Zimbabwe, and perhaps as a sign of her effectiveness, then-president Robert Mugabe hurled an insult on her at one point).
During Zuma’s long-running dispute with the then finance minister, Pravin Gordhan, Zulu displayed her support for Zuma and disdain for Gordhan in Parliament in 2017. In February that year, as the battle lines were drawn between the factions in the ANC and Zuma was preparing to fire Gordhan, she and three other ministers showed their political colours.
When almost all of the MPs stood to applaud Gordhan’s Budget speech, Zulu and the three others remained stubbornly in their seats. It was a moment which showed who supported Gordhan and who supported Zuma
It was clear that Zulu supported Zuma and was happy to show it.
This may suggest that she believes she needs all the support she can get to remain in Ramaphosa’s Cabinet.
It is also not clear how much of an interest she has in all aspects of her portfolio.
Her department is responsible for social grants, and for early childhood development centres, or care centres for younger children (these are moving across to the Department of Basic Education; some are currently already in that department but others are under her ministry).
The sector eventually went to court because the conditions under which it could reopen after the hard lockdown were unclear. It appeared that those centres under the Department of Basic Education had clear guidelines, while those under Zulu’s control did not. Her department has also been accused of not paying out subsidies to these institutions.
Eventually, the high court said that Zulu’s “conduct falls short of the standard expected in these crucially important proceedings concerning young and vulnerable children”.
All of this may suggest that she is concerned for her job. Or it could suggest that she is looking for an issue to champion, one which would be difficult to oppose. The BIG could be a useful issue for her at this moment.
This could pose a challenge for Ramaphosa.
He now knows that Zulu is prepared to ignore reports about risks and simply publish a Green Paper, which then required swift action from the Treasury. For a deputy director-general (DDG) of one department to immediately comment on an interview with a DDG from another department in the way in which this occurred could well suggest divisions in the government that Ramaphosa leads.
(Another issue that jumps out of this latest development is that Zulu’s support for a BIG could be the birth of the next acronym that the populist forces coalesce around. What started as an anti-WMC [White Monopoly Capital] brigade morphed into RET [Radical Economic Transformation] just before the 2017 Nasrec conference – encompassing land expropriation without compensation – and today pretty much defines the divide within the ANC. As RET forces have been so fatefully, and self-destructively, associated with July looting, it is striking how a BIG can become this faction’s next rallying cry. It is popular with the masses and Zulu’s decision to publish could be a shape-shifting spark that creates a new battlefield in a country that’s already scarred by so many needless fights. – Ed)
Ramaphosa is now likely to see Zulu as someone whom he cannot trust.
Whether he feels that he must take action against her, or whether he feels that he can take action against her is an entirely different question. DM