Debt leaves no room for ANC dithering

Pule Mabe, the spokesman for the ANC, has had a difficult week. First he joined calls for the SABC to give more airtime to ANC officials because it’s the biggest party. That quickly sank. He then went on the radio and found, when asked what the ANC’s position was on the issue of expropriation of land without compensation, that he didn’t know it.

I don’t troll Mabe, but I caught one interview where he was asked about the effects of Wednesday’s petrol price increase on the general public. I wish I could find a soundbite of his answer — it was so incoherent it was genuinely funny. Basically, he blamed Donald Trump.

Oh dear. The EWN website later quoted him saying that “what we should be doing is to allow our cadres time to be able to consolidate whatever they could be able to work on so that measures that are required to deal with the situation as it presents itself are also assembled before the public”.

Having learnt to speak a few languages myself, I never make fun of people who struggle with English. It isn’t easy. But had Mabe taken the trouble to think about a clear answer to an obvious question he would have been better prepared. The “measures that are required to deal with the situation” are themselves obvious.

The rand is not, as he suggested, falling because crude oil prices are increasing. It is falling because of a toxic mixture of internal and external pressures. Principal among the latter is that investors are fleeing (selling) emerging market currencies like the rand and buying up dollars because they see US unemployment falling to record lows and anticipate increases in US interest rates as a result.

One short-term measure that might be assembled before the public is that the Reserve Bank could raise domestic interest rates to encourage some buying of the rand and, thus, its strengthening. But in the face of a VAT increase, debt ratings downgrades and Eskom seeking steep rises in electricity tariffs, a rise in interest rates would hurt the very people Mabe is supposed to speak for.

That leaves only one other route — sensible domestic policies that, even in the face of external events, can serve as a floor from which to build viable defences of our own.

First we need to reduce our debt. Ask any household. Jacob Zuma’s administration ballooned the national debt by dramatically increasing the size of the public service and turning its back on, or directly indulging in, monumental theft and corruption in the state.

Mabe was a vocal Zuma supporter and I can’t find any record of him warning of the consequences as Zuma took government debt from less than $20-billion to more than $80-billion during his time in office.

And what do we have to show for it now? By 2021 just the interest we will pay on that debt will average more than R850-million per working day.

Now we find Mabe, as ANC spokesman, telling the government that replaced Zuma’s to “do something” about the rising price of fuel.

Build up our fuel reserves, he says, ignoring the fact that the Zuma government secretly and probably illegally sold off our fuel reserves. The proceeds are possibly paying Mabe’s salary as we speak.

Freeze the fuel levy, he says. But the fuel levy is tax revenue for the government. It also finances the Road Accident Fund, which was systematically mismanaged throughout the Zuma years. So do we cut taxes? Yes, please, but it’s not going to happen.

In a way, our grim situation may be a good thing. Like any household in debt, we finally have clear choices. You cut your debt or you make more money. Nothing more, nothing less.

You cut your debt through fiscal austerity. The national household cuts public sector jobs and sells off or somehow gets rid of expensive toys like SAA and parts of Transnet and Eskom. In other words, lose the Porsche.

Or you persuade other people to invest in you. You convince them they’ll make money if they invest here. To prove it to them you put every piece of legislation you pass through just one stress test — will it attract or repel investors?

Sure, our politics make even simple choices difficult, but that’s your job, Pule.

And you can’t dither. Unless you and your party make your choices and stick to them you’ll still be struggling for clear answers on the radio when a litre of petrol passes R20 in the not-too-distant future.