#Budget2018: Ramaphosa and Gigaba have failed SA

Minister of Finance Malusi Gigaba and his team from National Treasury walk into Parliament ahead of the 2018 Budget speech. PHOTO: Ayanda Ndamane/ANA Photo

I was sitting at OR Tambo International airport this week and overheard someone speaking on the phone. His words were roughly: “Do we know somebody at X municipality? We need to talk to them about this tender.” He then went on to say how important it was to speak to the right person so that his company could influence the tender process.

His comments, a week after Parliament elected a new president – who has promised us a corruption-free government – once again convinced me that the road ahead is not going to be easy. There are too many people who are used to “eating”, and they will not stop “eating” voluntarily. The problem is not only at national government level, but probably more prevalent in local government.

It was ironic that the municipality he was referring to is named after a respected communist leader who would probably be turning in his grave knowing that crimes of corruption are being committed in a municipality bearing his name.

It is good that everyone seems to be falling in love with our “brand-new, out-of-the-box” president (my apologies to Archbishop Emeritus Desmond Tutu who used this phrase in relation to Nelson Mandela), but Cyril Ramaphosa will need much more than his considerable political skills to effect real change in our society.

Already, Ramaphosa has failed his first test when the finance minister he inherited and who, by all accounts, appears to be living on borrowed time, delivered a Budget speech that should make all of us face reality.

It will take much more than walks – whether they be on the beachfront or from township to township – and quoting legendary jazz saxophonist Hugh Masekela to get South Africa back in the shape that we all know it can be. He will also need a lot more than the Mandela magic that he will inevitably turn to at regular intervals this year, in what would have been Madiba’s 100th birthday year.

If the Budget is an extension of the cabinet’s wishes, which is also an extension of the president’s vison, then Ramaphosa and Malusi Gigaba have failed the nation with the first opportunity they had to show us that things are improving now that Jacob Zuma is no longer Number One.

A caring government would never increase VAT, which directly impacts on the poor. The 1 percentage point increase will offset the additional R90 social grant recipients are receiving. But the increased tax on petrol will also have the effect of pushing up food prices, which will probably impact on the poor even more.

There are people who argue that we need to accept the hardships bound to be imposed by the Budget because it is part of undoing the damage done by nine years of Zuma rule. Some are also pointing out positives, such as that more students will now be able to study without paying university fees. It’s a pity the focus on education does not extend beyond tertiary education. It should include basic and even pre-school education.

As with any Budget, there will be people who will see the glass as half-empty while others will see it as half-full, but the Budget was the first real opportunity for Ramaphosa to show his intention to do things differently to his predecessor, to go beyond the beautiful speeches and the healthy walks.

Budgets, while appearing to be highly complicated, are very simple. A Budget is based on the rule that you can only spend what you have. If you spend more than you have, you end up borrowing, which comes with interest, which adds to your spending.

With all his faults, former president Thabo Mbeki insisted on reducing South Africa’s deficit, which decreased the amount we borrowed.

The more we borrow, the more we are likely to be influenced by the people from who we borrow, usually foreign governments and international institutions with dubious agendas. And we will always be beholden to what a former finance minister called the “amorphous markets”.

Any good Budget must have a balance between increasing revenue and reducing spending or, at least, spending mainly on what is necessary. Part of our problem is that we lost much of our national fiscus to corruption and mismanagement.

At the same time, the revenue service has focused too much time on political and internal issues and has gone backwards in the drive to collect taxes. Additionally, some state-owned entities have been corrupted to such an extent that it will take major surgery to repair them.

What happens next is even more important than the Budget. Hopefully, by the time you read this column, Ramaphosa would have introduced a new, much-leaner cabinet from which he would have dropped all ministers who face state capture allegations, including the finance minister (we can only live in hope).

To help us get out of the hole we are in, South Africa needs its best brains in leadership positions in government, not only as ministers but also as senior civil servants. The political allegiance of these people should not matter, only their competence and their commitment to the national project.

Ramaphosa still has enough goodwill among many sectors of society to enable him to “send” people into jobs where they can make a difference. He may be forgiven for this year’s Budget, but he will not be forgiven if the situation has not radically improved by next year.


Ryland Fisher is an independent media professional. Follow him on Twitter: @rylandfisher