Our Minister of Finance can be as subtle as a Sade track. It’s no surprise that many analysts and writers missed the much-anticipated radical economic transformation that was promised. But it was there if you know where to look.
Radical change could be financed by raising more money through taxation, or letting the deficit run wild or spending better. The budget that the Minister delivered was within the expenditure ceiling determined in the Medium Term Expenditure Framework. The deficit, at 4% of GDP, is hardly revolutionary. So, as the Minister acknowledged, the focus of the next fiscal year would be on ensuring that expenditure is allocated efficiently and on dealing with management, waste and corruption. In his words, it is time for action and implementation.
The National Treasury and the South African Revenue Service are known as some of the most effective institutions in the public sector. They are lauded for having competent employees, functional systems and good leadership. But there is only so much that those who collect revenue and those who guide its expenditure can do. Action and implementation occurs at the front lines; at the home affairs counter, the classroom and the clinic. This is the contradiction that has bedevilled the public sector over the past twenty years: competent high-level planning, dysfunctional grass-roots delivery.
For many of us who were young adults in the nineties, the idea that we did not need government – whether effective or ineffective, whether corrupt or clean – was an easy sell. With the horrors of Apartheid authoritarianism just behind us and the promise of a global, cosmopolitan and market-driven future ahead, governments appeared to be quaint, irrelevant institutions.
But we grew up. Confronted by the sheer depth of Apartheid-engineered underdevelopment, the limits of the market and global economic crises, it became clear that we have to look to government to create an enabling environment for the poor and marginalised to develop their capabilities and to help unlock their potential. The same goes for creating an enabling environment for business. My business school classmates from Nigeria insisted that they could get by just fine without Abuja, but encountering the public service meltdown that is Lagos will convince most people otherwise. Even valiant efforts by financial institutions in that country to adopt streets can never compensate for the need for a functioning road network, an effective sanitation system where waste does not spill onto the streets and co-ordinated traffic control. The state has its limits too, but the blind faith in markets of the pre-crisis Washington consensus is well behind us.
Now, back to the R1.1 trillion that our government plans to spend over the next fiscal year. In addition to the massive allocations to health, education and social grants, a significant part of this amount will be spent on infrastructure, public sector employment programmes (such as the Expanded Public Works Programme) and incentives to boost special economic zones and small business. Yet the evidence to date suggests that resources are seldom the problem. Outcomes are stymied by dysfunctional or weak institutions that are unable to spend these resources effectively. Waste, corruption and inefficiency undermine even the best crafted policies.
Minister Gordhan had much to say about the findings of the public works review of government property leases, which revealed corrupt practices in the way that the state’s property portfolio is managed. The review also pointed to the parasitic relationship between the government and the property development industry. This comes after revelations of widespread collusion in the construction sector, where the state fell victim to bid rigging, market allocation and other shady cartel practices. Add to that daily acts of corruption in procurement and it’s clear that the next administration will have to (finally) tackle the implementation challenge.
There are two programmes that the Minister touched on that could revolutionise the public sector: expenditure reviews and procurement reform. The current administration came with various new ministries. If there is one whose continued existence I would advocate for, it is the Department of Performance Monitoring and Evaluation. It is not easy to set up a government-wide performance and monitoring system. The department has yet to become visible but it beginning to release a stream of information that will not only allow for better implementation within government but would also empower taxpayers and citizens to hold government accountable for the outcomes of its programmes. The expenditure reviews conducted by this department, in conjunction with National and provincial treasuries, if released to the public, will add to that knowledge base.
Given all the ills of associated with tenders, the recently established office of the Chief Procurement Officer might bring sanity to a tender system riddled with avarice and untold wickedness. The brief for the office is wide-ranging. Immediate objectives include reviewing major contracts, standardising procurement processes and assessing government employees’ business interests.
An initiative not mentioned in this year’s budget speech, but which might power the technocratic revolution relates to Parliament. With the current balance of power in Parliament, it seems like wishful thinking to talk of more critical scrutiny of the budget and performance coming from that institution. But with the setting up of a parliamentary budget office that would give key portfolio committees the capacity to analyse government spending and its outcomes, the oversight function of Parliament might also improve, adding to the much-needed institutional revolution in the public sector. Optimism does not come easy given how much of this depends on reorienting the behaviour of incumbent civil servants. With the might of powerful trade unions behind them, they might take to the streets and without much subtlety, wave their placards and tell the reformers where to get off. DM
"The soul is known by its acts" ~ Thomas Aquinas