Mboweni to read the cabinet’s mind

● Finance minister Tito Mboweni is seeking to bring an end to the battle for the soul of the National Treasury, which had played out under former president Jacob Zuma’s administration and was fast becoming a risk to the country’s international credit rating, leaving the Reserve Bank as SA’s last bastion of institutional strength.

Shortly before delivering his maiden medium-term budget policy statement this week, Mboweni said he was refamiliarising himself with thought processes in the cabinet.

But he added: “I thought one of the things I am going to do is try and provide political protection to the National Treasury and, to the extent naively possible, to depoliticise the National Treasury.

“I say to the extent naively possible because revenue and allocation, by definition, is highly political. But if we can protect the National Treasury from unnecessary interference, we’ll try and do that. It’s near impossible but we’ll try and do that.”

Under Zuma, the Treasury was forced to provide for the shortfall in university fees after Zuma announced a fee increase would be suspended in 2016.

Last year, he put the Treasury on the spot by announcing free higher education for students from poor households.

The Treasury had to allocate an additional R57bn over the next three years, then finance minister Malusi Gigaba said at the February budget this year.

Mboweni said that during the few days before the budget on Wednesday, he and other Treasury officials had met leaders of political parties in parliament “to try and give them an understanding of the direction in which we are going, be it the national office bearers of the ANC, the leaders of the DA, premiers, the MECs of finance, the EFF and ACDP”.

He said it was clear that the conversations had to be continued with the political leadership for them to understand that even when “things turn better and good, we still have to talk to them all the time”.

Mboweni said he intended to send a letter to deputy finance minister Mondli Gungubele to instruct him to “spend time” with leaders of political parties.

Mboweni is the country’s seventh finance minister in five years.

A reluctance to continually bail out struggling state-owned companies was one of the messages Mboweni emphasised this week, stating that there were “no holy cows” when he was asked about the potential sale of SAA.

Mboweni also suggested that the public sector wage bill, which constituted 35% of the government’s consolidated spending, should aim for a “sweet spot” below 30%.

He would also suggest to President Cyril Ramaphosa that the cabinet size could be reduced to 20 ministers from about 70, including deputy ministers.

Sanisha Packirisamy, an economist at Momentum Investments, said the wage bill, at 14% of GDP, was higher than that of many countries, including other emerging-market nations, especially given that the rate of productivity for the size of the wage agreement reached was “very low”.

“It is still a very big risk to the expenditure side simply because it is very big,” Packirisamy said.

I am going to try and provide political protection to the National Treasury Tito Mboweni

Finance minister