Malusi Gigaba. Picture: THE SOWETAN/PETER MOGAKI
Malusi Gigaba. Picture: THE SOWETAN/PETER MOGAKI

Finance Minister Malusi Gigaba, who tables his medium-term budget policy statement on Wednesday, is at the mercy of government ministers and the heads of beleaguered public entities, according to DA MPs.

Gigaba’s budget speech comes amid reports that Russian President Vladimir Putin has effectively ordered SA’s government to push ahead with the massive nuclear build programme, despite procedural and legal hitches.

Also causing jitters is the mandate paper for 2018, which appears to place budget prioritisation on Minister in the Presidency Jeff Radebe and away from the Treasury.

Government departments and state-owned entities are in financial turmoil. Despite Dudu Myeni having been dropped as South African Airways (SAA) board chair, the carrier is not out of the woods yet. Eskom, the South African Post Office and the SABC are also in dire need of financial assistance.

DA MP David Maynier told reporters in Parliament on Monday that in the context of "fiscal slippage", "zombie" state-owned enterprises, weak growth and political uncertainty, Gigaba would have little political room to manoeuvre in tabling a medium-term budget policy statement that could instil investor, as well as consumer, confidence.

"The main budget forecasts economic growth of 1.3% in 2017, 2% in 2018 and 2.3% in 2019 for SA. We expect the economic growth forecast to be revised down in the medium-term budget policy statement closer to 0.6% in 2017, 1.2% in 2018 and 1.5% in 2019, in line with forecasts of the South African Reserve Bank," Maynier said.

He said the centralisation of decision-making on the budget priorities to Radebe’s office, as well as last week’s government reshuffle, gave signals that were bound to undermine any efforts by Gigaba to calm anxiety.

"The appointment of new Energy Minister David Mahlobo following a reported final warning from Russians, signals an intention to accelerate the implementation of the nuclear build programme, which is terrifying. The nuclear build programme may cost up to R1.2-trillion, over a period of perhaps 20 or 30 years and has the capacity to blow up the balance sheet," said Maynier.

Fellow DA MP Alf Lees said the institutional vulnerability, as well as moves that undermine the independence of other entities such as the Public Investment Corporation and the South African Reserve Bank, amounted to a defanging of the Treasury.

"The South African Reserve Bank, Public Investment Corporation and National Treasury’s institutional independence are under threat, which risks compromising monetary policy, fiscal policy and pension savings, not to mention the sovereign credit rating of SA," said Lees.

Lees said no one should discount the previously denied claims that PIC funds would not be used in the funding of SAA’s gaps.

"The minister must find a way of funding it that is deficit neutral, and the minister must stick to his word," Lees said.

Maynier said he had not been able to access the mandate paper for 2018, which places the Presidency at the centre of budget prioritisation as the document had been classified as secret. However, he said on Thursday that he asked that the standing committee on finance to be allowed to quiz Radebe on this development.

"I have asked [committee chairperson Yunus] Carrim to bring Radebe to the standing committee to explain the mandate paper to the committee on Thursday. That invitation has been extended [and] we are not sure if it has been accepted," he said.

Maynier said his reading of the situation was that there remained huge confusion in the working process of the mandate paper and that there was no clarity between Treasury and the President on budget prioritisation.

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