There was something eerie in the moment this week when finance minister Malusi Gigaba strode to the podium in parliament to present the country’s budget — widely seen as the most tricky budget to balance in years.
It wasn’t quite like a dead man delivering his own eulogy. But, given that many believe this is likely to be both Gigaba’s maiden and his swansong budget, it wasn’t entirely dissimilar either.
In an imminent cabinet overhaul, the first for new president Cyril Ramaphosa, Gigaba is expected to be torpedoed, along with other deadbeat relics of the kleptocracy that arose under Ramaphosa’s predecessor, Jacob Zuma. Social development minister Bathabile Dlamini and mining minister Mosebenzi Zwane are examples.
If Gigaba is axed, it would be a stretch to call it a pity. After all, it was his tenure as minister of public enterprises from 2010 that laid the platform for the years of looting that followed. It was he who empowered hopelessly compromised boards at stateowned companies such as Transnet and Eskom, pulling the trigger on state capture.
But if you hadn’t known that — if you were an economist who’d arrived from Mars and watched Gigaba’s speech in an entirely ahistorical context — you’d have to say he did pretty well.
He said the right things, pointing out that state-owned companies wouldn’t get any extra bailouts.
"We have limited fiscal room, and are loathe to use it to subsidise inefficiency," he said firmly.
And he took the sort of unpopular but vital steps that would have been anathema to a swathe of Zuma loyalists, including a hike in Vat from 14% to 15%, and hikes in the fuel levy.
In all, Gigaba’s tax hikes will raise an extra R36bn — not enough to offset the R48bn hole in revenue, but a step towards it.
By the same token, spending will be cut by R85bn over the next three years. And the budget deficit will narrow from 4.3% to 3.5% in 2021. "We are not seeking the easy way out, and our efforts will not be superficial," said Gigaba.
It’s the sort of budget that, fingers crossed, should buy some more time from the ratings agencies — hopefully enough time for GDP growth to recover from last year’s 1%.
Of course, it would have helped if Gigaba had announced the sale (or closure) of some stateowned companies. But the Ramaphosa era is just days old. Those hard decisions will surely follow.
If one of those decisions is to fire Gigaba, Ramaphosa played his cards close to his chest during the budget speech. He sat in the front row, even guffawing at the minister’s jokes.
What’s clear is that the giddy euphoria that has emerged during the "Cyril Spring" will create more leeway than would have been the case had Zuma still been in charge.
Sentiment makes all the difference. A hike in Vat — the first since 1993, before the introduction of democracy in SA — would have been just more dismal news under Zuma; under Ramaphosa, the market was more forgiving. Analysts spoke admiringly about "fiscal responsibility". The rand even strengthened, from R11.70/US$ to R11.62, while the JSE’s all share index gained 0.8% in hours.
Speaking after the budget, Mmusi Maimane, the leader of the opposition DA, warned that "you can’t tax yourself to prosperity". He spoke of how the poor are now paying the price for the years of looting under Zuma.
And, of course, that’s true, if trite. But considering the severely limited options Gigaba’s treasury actually had available to it, and considering where the country was just a month ago, it seems churlish to think that there were many other options.