Report doesn’t give contrary opinion
I WRITE in support of the standpoint of Ntsikelelo “Sparks” Limba, of Motherwell, expressed in The Herald of June 27 (“Must take into account entire economic system”).
In her report No 8 of 2017/2018, paragraph 3.26, public protector Busisiwe Mkhwebane quotes a court case in which it was ruled: “The function of the public protector is as much about public confidence that the truth has been discovered as it is about discovering the truth.” (My emphasis)
It is well-known that the report is mainly devoted to the rescue package afforded to Bankorp which, according to the argument presented, eventually illegally benefited Absa at the detriment of the broader South African society.
Of concern here is the question which the report addresses in paragraph 6.3, namely “whether the South African public was prejudiced by the conduct of the government of South Africa and the South African Reserve Bank and if so, what would it take to ensure justice”.
Preceding the conclusions reached in respect of this question the methodology followed is explained and in this regard the following two statements are significant:
In paragraph 4.2.8 it is stated: “The enquiry regarding the remedy or remedial action seeks to explore options for correcting maladministration and redressing its consequences.”
The phrase “to explore options” will be attended to soon.
In paragraph 4.2.10 it is stated: “The report in the circumstances seeks also to look into reform of the republic’s monetary system in order to realise government’s commitment in improving socio-economic inequalities and solicit an amendment to the constitution . . .”
When conclusions are drawn in paragraphs 5.3.20 to 5.3.28 to formulate remedial action “to ensure justice”, at least one such a conclusion needs our attention.
Paragraph 5.3.24 refers to “leading authors” who advocate the ideology of state banks and nationalisation of monetary currency.
At this point the report seriously neglects to discover the truth in the light of the methodology advocated earlier, namely “to explore options”.
The only option explored here is that expressed by the “leading authors” on one side of the debate. There is no evidence in the report that the contrary views were also explored and the two sides of the debate weighed.
What makes this one-sided conclusion so much more important in the context of the recommendation it leads to is the conclusion stated in paragraph 5.3.26 that “the debate on nationalisation of monetary currency and creation of state banks . . . has found its way into our democratic society and is a debate which must reach its conclusion by the people of South Africa.” (My emphasis)
The conclusion must clearly still be reached. Yet, the public protector finds it appropriate, before this debate has reached its conclusion, to recommend that the constitution be changed in respect of the mandate of the South African Reserve Bank.
The public protector seems to have reached the conclusion on behalf of “the people of South Africa”.
The first amendment to the constitution drops the present stipulation, namely that the value of the currency needs to be protected. In its place comes a vague formulation that the socio-economic well-being of the citizens must be protected.
There is a debate on whether inflation targeting is the best method to protect the value of the currency, but there is less debate on whether the value of the currency ought to be protected.
To protect the value of the currency against the ravages of inflation is a major contribution to the socio-economic well-being of the citizens – the richer echelons of society can to some extent hedge against inflation, the poorer echelons have no defence in this regard.
There is also a debate on the balance between achieving price stability and stimulating economic growth.
Even in this debate the significance of price stability is not totally discarded.
The second amendment removes the requirement for regular consultation between the governor of the South African Reserve Bank and the minister of finance.
The minister of finance is replaced by parliament. The governor anyhow regularly reports to parliament.
Does the public protector not trust ministers of finance to conduct meaningful consultations? Finally, may I nail my colours to the mast? I stand on the side of the debate in favour of keeping the keys to the printing press out of the hands of politicians who are more skillful in spending money than in making it.