National Treasury had mastered the art of pushing through with both the Medium Term Budget Policy Statement (MTBPS) and the budget speech, to the extent that any protestation towards it would fall on deaf ears.
Though not for the same reasons, before he took his last breath, Professor Ben Turok protested the 2019 MTBPS. His pleas fell on deaf ears. But now he must be smiling that the budget speech could not be read because there was protest all round. For the first time the game played by the Treasury of refusing to listen was over. The internal contradictions were so strong that a key lesson has now been learnt. While the arguments by Sars commissioner Edward Kieswetter might have been among those that led to the collapse of the budget speech, they did not demonstrate fool proofing or future proofing. However, the alternative thinking he brought into the discourse together with the chorus of the many, demonstrated that the Treasury is not so invincible after all and the force of alternative reasoning that Turok represented with his boots on just before he departed this earth shows that the power of discourse can work. In fact, reasoning opens the possibility of more protests against any ill-conceived manoeuvre of public affairs and raid on civil servants’ pensions.
This is the moment that heterodox economic thought should barge into the discourse. There are two reasons for this possibility. First, there is unfinished business on conclusively making a determination on what made South Africa flirt with 5-6% growth between 2002 to 2007. Second, and as a corollary, there seems to be enthusiastic faith in the urgency-based decision that the private sector can rationally intervene in rail, logistics and energy.
To demystify these three sectors, which indeed are important and probably urgent, one has to discuss just energy and electricity. Electricity was just based on uninformed government interference and their eagerness to please the West. Inviting the private sector as a messiah in energy is deliberate misinformation that misdirects public knowledge from the real culprits — the government. The question of who shut down Komati must be answered. The question of who made the loudest noise around old machines must be answered. The question of who appointed de Ruyter and for what reasons needs answers. Eskom CEO Dan Marokane and Eskom board chair Mteto Nyati are not doing anything different from what former chair Ben Ngubane and former CEO Brian Molefe did when Eskom faced problems. The six years of mismanagement of Eskom fall squarely on government mismanagement and the idea that it is now priority is deflecting the bullet that should be directed at government. What is good about Marokane and Mteto is that they are saying we are fixing the coal fleet and they are succeeding despite setbacks that visited us momentarily.
This is not economic management. Far from it, it is just really poor and incompetent bookkeeping of public finances.
The second reason the budget that never was provides possibility of discussion is the commonly raised question of the 2002-2007 surge in economic growth, gross fixed capital formation surge, high levels of credit extension, a drop in unemployment from 30% to about 23% and an increase in the number of people employed. The social indicators of the period showed that mortality had dropped, access to water, electricity and refuse removal was up and South Africans felt more secure. All these happened without the private sector’s enthusiastic intervention and participation. It was all government-led. The argument adjudging this performance is that it was a flash in the pan driven by China’s thirst for minerals and the build-up towards the 2010 World Cup.
As for employment, the arguments were that this was a jobless growth. But when one looks at developmental outcomes, what is observed bears a semblance of heterodox policy outcomes. And in comparison, to the 1994-2000 and post-2009 periods, one is certainly inclined to see a marked difference of outcomes whereby in this period more of orthodox policy outcomes have marked these two periods, with the latter happening with hastened thirst for the private sector to lead. At the rate we have gone, Donald Trump seems to be a learner who appointed Elon Musk to be an unelected participant in public policy. There is very little difference from what Trump decided to do with Musk and what Cyril Ramaphosa decided to do with business.
That would have been a lot different from what is happening now had Ramaphosa intervened and danced with the targets Business For South Africa as a united front brought to him in 2020 and proceeded with the four-party movement of government, labour, society and business. This configuration that discusses the principal objective of targets to be achieved, which B4SA came with, would be a politically, socially and economically acceptable rational way forward that engaged a whole of society approach. There is an additional reason this would be important and should still be done: an independent modelling exercise that Indlulamithi undertook showed earlier in 2018 that the targets which business proposed were actually attainable. Thus, there was no difference in this, but what was fundamentally different was that business never had a path towards how their targets would be achieved, while Indlulamithi showed that policy combinations, over which period and what variables will be impacted through a six-pillar policy. None of this economic modelling stuff directs the choices government is making, nor are there coherent model outcomes on economic and social terrains currently. This is now the most dangerous space to be in.
The fiasco around the budget and the protestations that accompanied it should provide an opportunity to revive therefore the revisitation of the basket of targets that B4SA brought to government in 2020. But in addition, accompanying this should be Indlulamithi Scenario and modelled economic outcomes of 2020. With these important economic products then government, labour, business and society can review these targets and deliberate on how the path towards these congruent targets can be traversed.
With targets as a prime mover, business need not have to look over its shoulder because that will be B4SA participating with one voice and one criterion for participating in one execution of one or the other project. This practice is different from the pick and choose modality that takes us to the second coming of chief justice Raymond Zondo.
To avoid the fiasco again the approach I am proposing will pave the way towards a Turok approach on public policy. What other tricks are left in the black hat of the magician is yet to be seen. If the Treasury were so eager to defer payments, would borrowing from paid-in pensions not be better so that employees contribution retain value of growth than disrupt them as they did in weakening the retirement benefits of civil servants in the two pot candy-wise system? This is not economic management. Far from it, it is just really poor and incompetent bookkeeping of public finances.
What Kieswetter put on the table through internal revolt seems to have opened an opportunity for society to function differently and for that, an opportunity to exploit. Perhaps ultimately Kieswetter's halfway house purgative will be dispensed so that we can purge ourselves of moribund bookkeepers' ideas that paraded itself as economics.
Dr Pali Lehohla is a professor of practice at the University of Johannesburg, a Research Associate at Oxford University, a board member of Institute for Economic Justice at Wits and a distinguished alumni of the University of Ghana. He is the former statistician-general of South Africa
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