Zero-based budgeting is a lost cause
Tweaking the budget isn’t the answer, writes Gumani Tshimomola, creating an efficient and corruption-free state is
Last week, during a debate on the Appropriation Bill in parliament, finance minister Tito Mboweni said he would suggest to his cabinet colleagues that SA move to zero-based budgeting (ZBB). However, such a move in the absence of a functional state is a meaningless exercise. If anything, this will allow Mboweni to fend off the pressure against his austerity budgets coming from civil society, political parties and academia.
Mboweni will not be the first finance minister to run to ZBB in time of financial distress. William Watson recently reminded us of how Canadian finance minister Paul Martin presented a zero-based budget in February 1995 when the country had its back to the wall. Many have come to associate that budget speech by Martin as the most consequential in Canadian history.
The outcome for Canada was deep cuts in government expenditure and a reduction of social security insurance benefits. This has been the case with many other countries, and private companies, that have introduced ZBB.
A ZBB system allows decision-makers to structure budgets in a manner that evaluates, ranks and prioritises important service-delivery programmes. This can lead to the efficient allocation of limited resources at a time of crisis. To achieve such efficiency, every one of the 41 votes that appropriate money every year at a national level, all nine provinces and their respective departments, and more than 250 municipalities must be able to justify every cent of the funding required.
Covid-19 did not expose how dysfunctional the state is. Year in and year out, the auditor-general presents a disturbing picture of billions of fruitless, wasteful and irregular expenditure by government departments, state-owned enterprises and municipalities. While the auditor-general’s report presents a window into the state of affairs inside state institutions, the institution cannot audit every file. The reality on the ground can often be far worse.
The fact is that the government does not have capacity — capacity to deliver services, or to ensure that appointed service providers deliver the services agreed and paid for. There are several reasons for this, including poor contract management, incompetence, lack of political oversight and, in many cases, the theft of public money.
If the Treasury, considered to have significant power and a key flag-bearer of central state-building, has failed in its constitutional mandate to ensure expenditure control — and judging by the state of public affairs it has — is anyone else capable of engaging in the often time-consuming and technical exercise of ZBB?
Mboweni and the Treasury know all too well that there is no capacity in state institutions — which rely mostly on consultants to do most of the basic functions, such as preparing financial statements — to engage in an exercise such as ZBB. If we thought the Treasury was on the austerity trail up to now, we must brace ourselves as ZBB will boil down to “We will fund what is properly motivated and is a priority”.
The solution is not tweaking the budget, the solution is building a capable state that will deliver services, including building a justice system that will arrest and successfully prosecute those involved in corruption. ZBB is a lost cause without a capable state — unless the minister’s goal is to continue with the austerity budget without the noise.
• Tshimomola, a doctoral student at Wits University focusing on the role of the Treasury in SA’s political economy, is the EFF senior researcher in parliament.
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