In Parliament

The B team takes the fiscal charge

24 October 2014

Politics is an unfathomable business sometimes. The replacement of the considered Pravin Gordhan as finance minister with his exceptionally dull deputy minister Nhlanhla Nene is one of them. Gone is the gravitas that Gordhan – and to a certain extent his predecessor Trevor Manuel – gave to the portfolio.
The whole economic cluster seems to be firmly in the grip of the B team. Nene has never stood out as one of the visionary ANC politicians. He is rather like the head bank teller who has landed the top finance job. Just why President Jacob Zuma replaced Gordhan is still a mystery. There is some speculation that with the municipal elections coming up in 2016, it will be good to have him in place to clean up the mess that is local government. But that appears to be an implausible explanation: Gordhan could do much more about the mounting debts owed to municipalities while based in treasury than he could as the line function minister for local government.
Might it be that Gordhan was becoming a bit too stroppy about gravy train economics, with his warnings that it was high time to start cutting back on hotel bills, fast (and furiously expensive) motor vehicles and trough politics – all features of what has become the way of life of ANC-appointed cabinet ministers? Gone are credit cards for ministers (and senior officials). Perhaps Gordhan was uncomfortable with the bouncing political football that is Nkandla, the president’s rural compound? Who will ever know, because Gordhan was always careful to remember who appointed him as minister – and he was never going to put the president’s head on any fiscal block. Like Nene, he never put a foot or a word wrong when penetrating questions were asked about government waste at the top. He was politically correct to the end.
Or maybe even Gordhan was not proving pliable enough and had to be shifted downwards to a lesser portfolio – where he could not block politically-motivated avarice. Or, finally,could it be that Gordhan was smart enough to leave the finance portfolio before chaos descends?
Nene at least has realised that the spending can’t continue. He has revised the spending ceilings for the medium term. He is looking for more taxes in the February budget, so you can expect to get nailed if you are a high income earner or a business person. Nene and his deputy Mcebisi Jonas, who suffers from verbal diarrhoea, were asked when the political establishment would be slashed, they poo pooed it. Most analysts have said it was a worthy budget under the circumstances. I beg to differ. Raising taxes is going to be counter-productive. It will drive away investment and disincentivise hard work – even more so than now. Why bother to work an extra two hours a day when there are punitive tax regimes in place? Asked by David Ross, the DA finance spokesman, if he intended to slash the size of government (one assumes he meant the almost 70 strong executive of ministers and their deputies), Nene suggested that Ross had better be careful because he may find that it costs him his parliamentary seat. Although there is a freeze on government posts at national level for two years, real cuts are needed. We need the cabinet to be halved and the public service cut by at least 10 percent. Those figures would mean that we would need to borrow less to keep SA Incorporated afloat. It would also be a powerful political signal that politicians need to be an example of restraint. But Nene and his team have no intention of moving in this direction.
While the prospective sell-off of non-core state enterprise assets (Nene did not want to call this privatisation) is clearly a change in policy– but it is too little too late. SAA, SA Express, the SA Post Office, Eskom are all in financial trouble. There will be no bailouts, Nene promises – except for Eskom. Selling off some of the family silver – which apparently will start with the technical division of SAA – when the state entities are on the financial skids, means the private sector will get their stakes cheap-cheap.
One can just imagine which private sector interests will benefit from these deals. I leave you to speculate about that!
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Submitted by : Andre Louw on 2014-11-27 12:01:24
You state in the article above; "Just why President Jacob Zuma replaced Gordhan is still a mystery". The reasons are becoming very apparent with the appointment of another JZ confidant, Thomas Moyane, to head the one remaining functional government department having initiated the purge of his executive committee who it would appear have become too close to uncovering embarrassing truths affecting our beloved president and those close to him. Again it would appear that the Sunday Times has been used a la the Cato Manor report to discredit the good guys in the department. Nothing like a little conspiracy theory with sex shenanigans thrown in to create a rumor to rid number 1 and his friends and family of these pesky civil servants.


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