On Wednesday, Pravin Gordhan presented the Budget speech by attempting to walk the tightrope of balancing the Budget, finding R28-billion in additional taxes, and cutting R26-billion from expenditure that is all required to keep South Africa going. Gordhan also attempted to perform some nuanced footwork by providing a pivot on the issue of radical economic transformation that was presented in President Zuma’s State of the Nation Address.
All of this is a tall order, especially when our Finance Minister is not the president of the republic and when the president appears to have a preferred candidate who has just been sworn in as a Member of Parliament.
Gordhan’s job will always be focused on the numbers, on the tinkering required to balance the Budget, on the levers that can achieve higher tax revenue and, important, on the mechanisms that will be required to enable industry and enterprise. National Treasury cannot be ringfenced from the rest of the executive and so it would be foolhardy for us to hold on to the hope that somehow Gordhan could have provided an alternative State of the Nation.
Gordhan could only do so much in his speech and what he was able to do was to talk about economic inclusion, which requires a “conversion of mind and heart”. The question South Africans should be asking is whether they have the grit and resilience to start the work that will be required for that conversion.
The role of the president is to provide the vision for real economic transformation. The president should have provided the framework of that new consensus in his State of the Nation. We should have been provided with a plan that can move us away from the sound bites. Away from the idea that growth alone is the answer. We cannot rely on principles and visions any more. We need a plan that clearly outlines the steps that will be taken to tackle the structural barriers that perpetuate poverty, unemployment and inequality. Instead, we were provided with the farce of soldiers in the parliamentary precinct and the standard call for radical economic transformation without any real plans or ideas that can be implemented.
Gordhan’s Budget was not received with much fanfare by his colleagues in the legislature and their apparent ambivalence to the (re)introduction of the so-called “wealth tax” was noticeable, especially when he had to remind them that the very point of progressive taxation is that those who can afford it should pay more. Many of the honourable members and senior civil servants, with another 100,000 or so South Africans, will need to contribute more in order to achieve the transformational agenda that Gordhan spoke of.
Of course, there are concerns about how our taxes are spent in the wake of the Zuma years, but the principle of progressive taxation is necessary and largely accepted as one of the key tools to tackle inequality. It is important to acknowledge that democratic South Africa has always had these fractures. With high growth, many would have been happy to ignore the structural issues and inequality but because of our stagnant growth and the Zuma years we are finally able to meaningfully talk about the need to really confront poverty, unemployment and inequality.
Gordhan emphasised that he believed that there is a collective responsibility for us to achieve the expectations of those who fought for our freedom. The responsibility must be to find real solutions to address inequality in our society “despite the many distractions”.
In the build-up to the Budget speech on Wednesday, I engaged with the 20 young finalists, either undergraduate or graduate students, of Old Mutual/Nedbank’s Budget Speech Competition where I was struck by their acknowledgement that our issues were not simply about economics or tinkering with the Budget but rather that we needed to find real solutions that answered Gordhan’s call.
The young finalists in their essays attempted to provide real solutions to issues in education and healthcare, which is far more than we are currently seeing from many our leaders. Observing this conversation take place in Nedbank’s “Newsroom Hub” reminded me of Gordhan’s call last year in October, that it really is a duty on all South Africans to meaningfully engage with issues and that the only way to “defend our gains” is by participating and contributing to the achievement of real transformation that confronts poverty, unemployment and inequality.
There is a need to move away from the 1994 consensus, to tackle the structural issues within our country, and to start moving to higher growth that is inclusive. The Budget speech did not offer substance as to how the structural issues within our country would be tackled. Gordhan did not provide us with any immediate answers but instead emphasised that we should approach those challenges with a set of principles and that government procurement (R1.5-trillion over the next three years) of goods and services will be used as a key mechanism to achieve inclusive economic growth and opportunity.
Gordhan mirrored the views recently expressed by his deputy Mcebisi Jonas that South Africa is trapped in high inequality, coupled with low growth, and that the only way to meaningfully address it is by developing a new consensus that addresses the structural issues and to enable growth that is inclusive.
Gordhan may have focused on the notion of transformation throughout his speech by reminding all South Africans that the only way to address our issues and circumstances is for “wider participation … across as broad a range of industries and social formations as possible”.
However, Gordhan cannot convene that conversation as the centre that we must collect around should be a call made by the president of the republic. The challenge in realising the pivot will be whether South Africans, especially those in positions of power and influence, are able to “make the right choices and do the right things” because without that concerted effort we will fail in achieving real transformation and the vision that Inkosi Albert Luthuli had. DM
Andrew Ihsaan Gasnolar was born in Cape Town and raised by his determined mother, grandparents, aunt and the rest of his maternal family. He is an admitted attorney (formerly of the corporate hue), with recent exposure in the public sector, and is currently working on transport and infrastructure projects. He is a Mandela Washington Fellow, a Mandela Rhodes Scholar, and a WEF Global Shaper. He had a brief stint in the contemporary party politic environment working for Mamphela Ramphele as Agang CEO and chief-of-staff; he found the experience a deeply educational one.