The well-read Pravin Gordhan likes to sprinkle the words of others to add spice to his Budget Speech. But PG himself, his Deputy Mcebisi Jonas and their top civil servant, Treasury DG Lungisa Fuzile, are also a source of eminently quotable quotes. Herewith a selection of some from the embargoed Press Conference held at 11am in Cape Town this morning. – Alec Hogg
On rumours the Finance Minister and/or Deputy are about to the replaced:
Pravin Gordhan: “Does it matter who is the Minister or a Deputy in a particular Department? It depends where you are. Right now it’s very important (at Treasury). It does matter in terms of the ideas and policies that are generated. We work very well as a team here. It can take many years to build a solid institution but a very short time to mess it up. Overnight someone can come in and say they don’t like it. That’s where civil society comes in. They must understand – and know that sustaining these institutions is the centrepiece of democracy.”
“Am I going to be fired? Do you know something I don’t know? If you do, see me afterwards and we can have a chat about it….But seriously both the Deputy Minister (Mcebisi Jonas) and I serve at the pleasure of the president. When you use words like fired, I don’t think that is dignified. The record is very clear what we have delivered over the past 15 months. If the president decides to redeploy us that is his decision. There is no appeal process. You are either in or you are out. We are very much alive to that situation.”
“Treasuries are virtually indispensible to any effective organisation, be they in a public or private sector. It is in the interests of the generations to come that you don’t mess with certain institutions. Treasury is one. SARS is another.”
On SA Revenue Services:
Pravin Gordhan: “The Deputy Minister (Mcebisi Jonas) and I had a new set of engagements with the management of SARS – we met four times in recent weeks. We are hoping that these will have a constructive result in the interest of the country. I am concerned about the shape of revenue collections. That is why we are having engagements with SARS. We will disclose that after we are finished our discussions.”
On recapitalising SAA and the SAPO:
Lungisa Fuzile: “SAA definitely needs a capital injection. It could be a bit substantial and in the current environment we will have to stagger the instalments over time. But we will be sure that it is financed on a way that is fiscally neutral. The Post Office has been given R600 million and more is probably needed.”
Pravin Gordhan: “Cabinet has agreed a new policy framework on State Owned Enterprises. We met with the SAA board on Friday – the chairman (Dudu Myeni) couldn’t avail herself to meet with us but new board members have a good grip on the business of the airline. They need to find a new CEO and CFO in the next few months. It is a work in progress.”
On the cancer of Patronage bedevilling South Africa:
Pravin Gordhan: “Patronage is a factor in all societies – there will always be people who want to extract things for themselves and illegitimately accumulate wealth. We call it corruption. No society wants this or cronyism. Patronage needs to be discouraged. We need to instil a culture in South Africa where patronage and kleptocracy are discouraged in every form.”
Mcebisi Jonas: “Political decay reflects itself in how strong or weak a country’s institutions are. It has huge implications on development. You need to connect all these things that are happening to that truth. Patronage has a direct impact on economic growth and development. Dealing with the patronage system is fundamental. In South Africa the picture is complicated by (cadre) deployment factors that fly against any logical thinking. “
On National Treasury staff morale:
Lungisa Fuzile: “I’ve been Director-General at National Treasury for close to six years and I’ve had 4 Ministers of Finance. It takes a bit of time to get chemistry and to work well with the Minister. I’m a civil servant and I will serve, but I’m also human. A high turnover of Ministers damages morale. I have experienced it. When things are stable fewer people whisper about your staff that are throwing their CVs around.”
On balancing the Budget and economic growth:
Lungisa Fuzile: “If the economy grows then Treasury gets more revenue. When GDP slows and revenue falls short, we make adjustments to keep things on course. But economic growth is central. We have already cut goods and services spending, We are now cutting into the administration. Some of the cost reduction must come from moderation of the wage bill. We need to do more on the legal framework that allows for voluntary retrenchment of public servants.”
Pravin Gordhan: “Can you trust us? We are not here to manipulate numbers. Our intent is to balance the books and stabilise debt and so on. But unless we find some way of growing this economy the fiscal space we have will keep narrowing. We have the task of trying to manage the balance between huge needs in society and getting the money to fund it.
“The fiscal path is clearly laid out. There is enough money in the system to achieve what we want to do – if we use the money wisely. Unless we grow this economy in an inclusive way we are not going to get there. We need a national obsession for it.”
On the process of transformation in SA:
Pravin Gordhan: “We need to focus on the ‘missing middle’ – those people who earn between R60 000 and R350 000 a year. Something needs to be done to move that sector of society to a higher level of prosperity. We have to get beyond slogans.”
On SA’s new economic guru, the late Tony Atkinson:
Pravin Gordhan: “In December last year, the economics profession lost one of its great champions of redistribution as a public policy priority. Tony Atkinson was both a leading author and academic in the field of public economics, and an expert in the study of the distribution of income and wealth. He was of the view is that in both developed and developing societies inequality should be put at the heart of everything a government does. He even suggests that income tax rates of 65% should be imposed. The big issue for South Africa and the world is who gets to benefit from economic growth. You cannot have a small elite pocketing all the money.”
On income distribution and inclusive growth:
Pravin Gordhan: “We believe in a progressive tax system; and this tax system is crucial in redistribution. Without a working redistribution system we won’t have the social stability South Africa has enjoyed and requires. So we all need to start focusing on inclusive growth so that more people can participate.“
On the decision to increase the top income tax rate from 41% to 45%:
Pravin Gordhan: “There was no input from the CEO initiative – we don’t consult on tax rates. We have our antenna into different sectors of society but at the same time we look at what the country requires and what is reasonable. We will be looking at share repurchase schemes as well.“
Regarding Budget cuts in proposed infrastructure spending:
Pravin Gordhan: “Many of the infrastructure cuts are in outer years and in projects that are underspending. The bigger concern should be how that money is being spent? Are we getting value for money? Are we paying double or triple what we should be,? There is a lot of room for improvement in value on how that money should be spent.”
On the future of the SA economy:
Pravin Gordhan: “A new conversation needs to take place now linked to the economy. Nedlac got us to an agreement on minimum wages. We are putting out this idea of a Charter of Economic Rights to get the debate going. Even within business circles there is a realisation we need a South Africa that goes way beyond where we are today.”
