Daily Dispatch

Real action is off the field

WHILE the spotlight will be on Finance Minister Pravin Gordhan today as he delivers the annual budget, the real action is happening off the field.

As Carol Paton points out in the article below, the presentation of the budget should be an occasion for charting the country’s course ahead. But the absence of will from President Jacob Zuma to implement its vision has reduced the budget to a nip and tuck exercise.

Meanwhile in the background big wheels are turning – in completely the opposite direction.

One is around an amount of R140-billion that is paid to 17 million grant recipients annually.

It is the task of the SA Social Security Agency to disburse these grants. Sassa was established specifically for this purpose in 2005.

That function, however, has been contracted out, most recently to Cash Paymaster, a subsidiary of the US-based Net1 UEPS Technologies, which in 2012 was given a five-year, R10billion tender.

In 2013, after a lengthy dispute over the procurement process, the Constitutional Court ruled that the contract was invalid. But the invalidity was suspended for the short term to allow for the smooth payment of grants.

In 2015, Sassa announced that rather than issue a new tender, it would make the payments itself and would be ready by the stipulated April 1 deadline.

This has not happened. In fact, very little preparation seems to have taken place.

Recently Sassa staff, the Treasury and the SA Reserve Bank put their heads together to come up with a rescue plan. Gordhan wrote to Social Development Minister Bathabile Dlamini to say a new contract should be awarded to commercial banks and the SA Post Office. The minister refused. Dlamini then failed to appear before parliament’s portfolio committee on social development on February 1 to explain. In her stead a Sassa representative told parliament the agency would approach the ConCourt “as a matter of urgency” to extend the contract.

One would have thought that fiscal prudence would be a priority for the political head of a department that is supposed to look after the poor. Indeed, one would have thought the minister would have been bending over backwards to ensure Sassa was ready for April 1.

But Dlamini, who is also president the ANC Woman League, appears to march to an entirely different drum. Credible reports have emerged that she inserted Zuma’s attorney Michael Hulley into talks in Durban in December about how to continue Cash Paymaster’s contract.

Sassa staffers have also confirmed that she showed up personally in an effort to pull the plug on the rescue plan.

The brinkmanship here is clear enough: Do nothing until the last moment and so create the emergency that will allow the contract to be extended. In the process, hand the contractor the power to set the terms.

Lo and behold, Cash Paymaster does not even have the contract, but has already indicated it will hike its fee.

Writing in the Dispatch recently, Elroy Paulus of the Black Sash pointed out that Net 1 owns 87.5% of CPS. The rest belongs to BBBEE partners. The question, he said, is who are these partners and by how much do they stand to profit?

The same question could be asked of a number of other wild but very pricey horses that Gordhan has been trying to rein in.

This is where the real action is. Expect today’s budget to be more about form than function.