CAIPHUS KGOSANA | If only ANC learnt this on their ‘fact-finding’ missions in China

Deng Xiaoping was a man ahead of his time.

He lived through the mistaken idealism of chairman Mao Zedong’s Cultural Revolution experiment and was convinced China had to take bold decisions to free its people from forced peasantry and underdevelopment.

Upon assuming power as the de facto leader of the People’s Republic of China in 1978, Deng dared the Communist Party not to fear the outside but to embrace it, even if it meant diluting some of its socialist character.

“Absorbing foreign capital and technology and even allowing foreigners to construct plants in China, can only play a complementary role to our effort to develop the productive forces in a socialist society. Of course, this will bring some decadent capitalist influences to China. We are aware of this possibility, it’s nothing to be afraid of,” he is quoted in one of his speeches.

It’s trite to repeat the success story China became once Deng forced the CCP to cross the Rubicon and embrace private enterprise, foreign money, industrialisation and technological advancement. But a billion people were taken out of poverty by that one leap of faith.

The ANC is fond of passing resolutions at its conferences that seek to influence government spending without putting in the extra work of quantifying the costs of these pie-in-the-sky wishlists.

ANC politicians like bragging about their close ties to the CCP. They go on “fact-finding” missions to Beijing, Shanghai and those other great cities that sprang up in a space of two decades. Do they ever learn anything, or are these just nice shopping jaunts and social media mementos?

If they did, they would realise there’s nothing wrong in dumping what has not worked in favour of what works.

The ANC is fond of passing resolutions at its conferences that seek to influence government spending without putting in the extra work of quantifying the costs of these pie-in-the-sky wishlists.

Nationalise the Reserve Bank. Introduce free education and a basic income grant. Implement National Health Insurance and on and on.

Whenever you ask them if they considered costs when passing resolutions, they tell you that’s the work of the National Treasury.

We are lucky in a way to have a treasury that knows how to sift dreams from reality. Finance minister Enoch Godongwana — who served a lengthy spell as head of the ANC’s economic transformation subcommittee — told me in October that whenever he encountered resolutions that were unrealistic he’d simply reword them in a more pragmatic tone.

Godongwana took to the podium on Wednesday afternoon to table a budget that must strike a balance between multi-sector expectations and the realities of a limited public purse.

First, there’s the skyrocketing costs of servicing a R5-trillion debt. Interest payments to bondholders and other lenders will rise from R269bn to R338.6bn in 2023/24. Over the next three fiscal years we will pay R1-trillion in debt service costs which are rising faster than any other expenditure item.

“Funds that could be spent on economic and social priorities are being redirected to pay local and overseas bondholders. Over the next three years, annual debt service payments exceed government spending on most functions including health, economic services and peace and security,” the Treasury told us in the 2022/23 budget review.

ANC politicians brag about how much their government spends on social grants. Creating a welfare state is not political victory when your global peers are busy putting young people to work.

Economists expect the finance minister to have R100bn more to work with this financial year thanks to another commodities windfall. The amount could be higher, but Transnet’s political and administrative challenges mean we all lose out.

We suspect he’ll use most of this to dole out benefits to the unemployed through either a basic income grant or an extension of the R350 grant. Stats show most of the recipients are young people who should be productive members of the economy, working and contributing to tax coffers.

ANC politicians brag about how much their government spends on social grants. Creating a welfare state is not political victory when your global peers are busy putting young people to work.

Deng warned the Chinese of this ideological inertia. “Poverty is not socialism. To be rich is glorious.”

Then there’s Eskom. I’m writing this caught in another power blackout. The utility is R423bn in debt and will most certainly drown in it if government doesn’t intervene. The finance minister will finally reveal the quantum of Eskom debt the Treasury will be absorbing. While it frees up Eskom from half the obligation of heavy debt interest repayments, it adds to the country’s immeasurable debt burden. There goes fiscal consolidation down the drain.

Because of Eskom’s inability to keep the lights on, many of you are now contemplating other power generating options. Businesses and households are opting for solar power as an alternative to an unreliable grid. Government has decided to subsidise some of the set-up costs through possible tax breaks, and Godongwana will shed more light on this subject.

Hardliners in the ANC and government still insist on a baseload of coal. That’s OK, we have it in abundance. But coal is a commodity that is dug from underneath the earth, transported (on roads because rail is failing) to power stations, where it must be dry-stored and burned. This not only damages our roads but adds significantly to our greenhouse gas emissions. It doesn’t take a rocket scientist to figure out that less reliance on coal in favour of renewable power presents significant benefits for energy availability. Ideologues such as energy minister Gwede Mantashe are hell-bent on preserving coal jobs. Good luck to the electricity minister.

Then there are public servants who believe they have a divine right to pay increases when they know the state can’t afford these without breaching debt covenants with lenders and ratings agencies. They are threatening an indefinite strike unless the state agrees to a 12% wage hike. I say let them down tools, I doubt we’ll feel the absence of those paper pushers.

Deng Xiaoping suspended ideological blinkers to see China attract investment, create jobs, build incredible infrastructure and prosper.

Here, the finance minister’s job consists of telling politicians and other wishful thinkers that there’s no money for their expensive expectations.