Looking ahead to cuts and consolidation
A smaller cabinet is a likely part of a reduced public wage bill. But policy consistency is a more important concern
A consolidation of economic departments into a “super ministry” is believed to be highly possible when President Cyril Ramaphosa reconfigures his cabinet after the May election. But a more pressing concern is that of ensuring policy consistency across the government.
Under former president Jacob Zuma, the cabinet swelled to 70 members. Given that this left taxpayers footing a cabinet wage bill of about R164bn, a reconfiguration of the executive — announced by Ramaphosa in his state of the nation address — would seem necessary. It would go some way to reducing a public sector wage bill that finance minister Tito Mboweni called “unsustainable” in his budget presentation on Wednesday.
While no specific announcements about the cabinet have yet been made, Mboweni said the first step towards tackling the public wage bill would be to allow older public servants “to retire early and gracefully”. This will save an estimated R4.8bn in 2019/2020, R7.5bn in 2020/2021 and R8bn in 2021/2022.
The FM understands that the merging of ministries such as economic development, trade & industry and small business is under consideration. The National Treasury is expected to remain untouched in the overhaul and to continue as a standalone ministry.
ANC head of economic transformation
Enoch Godongwana will not comment on how, or whether, the economic cluster of ministries will be affected by the reconfiguration. However, he says what is certain is that, after the upcoming polls, there will be “tighter co-ordination” within the government.
Over the past five years, the Treasury faced an unprecedented onslaught, with ministers pulling in completely opposite directions to the line set by the key department.
At its lowest point, the Treasury was accused by senior government ministers, ANC leaders and even Zuma of working to bring about a “coup”.
The need for policy consistency from within government is key, and having just two instead of four largely economic ministries would go a long way towards resolving the inconsistencies and uncertainty of the past.
Michael Sachs, Wits adjunct professor and former head of the
Treasury’s budget office, says the coordination of government, and particularly the economic cluster, is critical.
“Industrial policy cannot be separated from telecommunications, mining and energy, for instance,” he says.
Sachs describes how, traditionally, the finance minister has been seen as a de facto prime minister. But this is no longer the case — and hasn’t been for the past five years.
In fact, new, powerful ministries such as the ministry of monitoring & evaluation were created, in a possible attempt to neutralise the National Treasury.
Sachs says one of the main items on the agenda of the post-polokwane ANC administration was to restructure government. “It wasn’t nine wasted years [under Zuma]; [the government restructured] very effectively — it separated higher education and basic education, and agriculture. It was massive restructuring of government, but did it achieve anything? Did it make any of those departments more effective? The answer is: probably not; and, quite possibly, it made them less effective,” he says.
[Under Zuma] there was massive restructuring of government, but did it achieve anything? Did it make any of those departments more effective? The answer is: probably not Michael Sachs
“Structural reforms are important, but policy trade-offs are more important. Confronting a policy and saying: ‘Where is the economy going?’ is more important than saying: ‘Here is a minister who is in charge of everybody.’”
Godongwana says it is also crucial for the Treasury and the economic cluster to have the “unquestionable support of the head of state”.
Ebrahim Fakir, political analyst and programme director at the Auwal Socio-economic Research Institute, points out that SA already has a department that was supposed to be a “super economic ministry”.
This, he says, was the expectation behind the creation of the economic development department — but it failed spectacularly.
Fakir says the success of tinkering with economic ministries will depend on the politics.
The fractious nature of ANC policy making is at the heart of policy uncertainty and the lack of co-ordination in government. “If you don’t have that consensus in the ANC, it is going to be difficult to effect real change,” he says.
The ANC is more fractious than it has ever been — with those led by Zuma claiming to support “radical economic transformation” (many of whom would seem to have enabled state capture and huge corruption), versus the reformists, led by Ramaphosa.
Sachs says he is not optimistic that consensus is possible between these two groups.
So the creation of a new ministry working alongside the National Treasury may end up simply being a cosmetic change, if actual policy remains fractious and as chaotic as it has been in the past.