Donwald Pressly: Gordhan half opens the ‘P-word’ door

While many feel Finance Minister Pravin Gordhan’s budget dealt with the spending issue and produced a positive budget, credit rating agencies said initiatives that will spur GDP growth or provide enough business confidence were lacking. And suggest that the country will be hit by ‘junk status’ before year end. Cape Messenger editor Donwald Pressly is in the former camp and feels Gordhan reassured the nation and investors. He said it was a superb performance which opened the door to hope. And while Pravin never said ‘Privatisation’, Pressly says his actions have at least jarred the door, a little. – Stuart Lowman

By Donwald Pressly*

One of the questions asked at Finance Minister Pravin Gordhan’s press conference on Wednesday, Budget Day, was why South African Revenue Service commissioner Tom Moyane was not sitting next to him as was usually the case. All the other notables were, including SA Reserve Bank Governor Lesetja Kganyago and national treasury director general Lungisa Fuzile.

Gordhan, the ultimate diplomat, waved at the back row of the auditorium at the Imbizo Centre at Parliament, indicating that SARS officials were in the room. He did not mention Moyane, who apparently was not among them. He was later spotted outside.

Then Business Day reported on Friday that Gordhan had threatened to resign (saying it is “either Moyane” or him) from the cabinet last weekend – something which would have made 12/9, the fallout over the axing of Nhlanhla Nene last December look like a picnic.  Gordhan has made it clear that he is angry about Moyane’s allegations about a “rogue unit” in the SARS. A number of key officials including Ivan Pillay a former acting commissioner – known to be close to Gordhan – have left the tax collection agency as a consequence of the investigation.

Using his clout to achieve aims

What this indicates is that Gordhan is not afraid of using his new-found political clout to achieve his aims. He knows that President Jacob Zuma was forced to bring him back to the finance ministry. The president still insists that he would have preferred the disastrous David van Rooyen in the job. Gordhan knows that Zuma cannot afford to have him leave the cabinet again – certainly not so soon after the December fiasco. Asked at the press conference whether he enjoyed the political support needed to implement his reforms, Gordhan joked that if journalists saw him in the same seat – at a press conference at parliament – in October at the medium term budget policy statement, then people could deduce that he had political support.

Gordhan appears to have garnered the upper hand. He is tackling government procurement wastage, made some attempt to cut back on the overwhelmingly large public service – largely through attrition rather than axings – and, most importantly, he has allowed for minority stake partnerships in a new airline company which could start with the merger of the hugely troubled South African Airways and the, the less troubled, SA Express. Perhaps he has similar public private partnerships in mind with the power monopoly, Eskom too, but this was not mentioned.

Not using the P-word

This latter issue is perhaps the most significant feature of Wednesday’s budget. Even though Gordhan went out of his way not to use the P-word (privatisation), this is a turning point in policy making. The private sector is now offered a door to the business being carried out by the parastatals – it may be a half-open door, but that is a significant change.

Gordhan appears at this stage to have the winning cards in his rack. One certainly hopes that his reforms in the budget will be enough to deter the ratings agencies to downgrade South Africa to junk. He has, however, given it a good shot.

• Donwald Pressly is Editor of Cape Messenger, an online site focused on Western Cape business-related news. He has corresponded from parliament for 23 years. He is also secretary general of the Cape Town Press Club.