Concentration of power in the presidency for co-ordinating the NDP seems to present us with a smokescreen.
Nine policy documents were published by the African National Congress (ANC) on March 12 as discussion documents for the ruling party’s structures towards its policy conference in June and final adoption by its December elective conference as new or amended government policy. These documents are all important and significant, but five stand out in terms of the current state of economics and politics.
The most important policy document would be the “Strategy and Tactics” document, which is the ultimate ideological game plan of the ANC, followed by the “Legislative and Governance” policy, “Economic Transformation”, “Social Transformation” and “Organisational Renewal”.
These are the ANC policy documents:
1. Strategy and Tactics
2. Organisational Renewal
3. Communications and Battles of Ideas
4. Legislature and Governance
5. Economic Transformation
6. Education, Health, Science and Technology
7. Social Transformation
8. Peace and Stability
9. International Relations
It is immediately clear that the National Development Plan (NDP) has now been integrated into most of these policy proposals, which must be applauded in terms of the institutionalisation of the NDP into the broad process of governance. The “Organisational Renewal” policy addresses the concerns the ruling party has about its own ability to stay in power. It shares its concerns about losing control of several metros and party decision-making paralysis.
The biggest concern, however, emanates from the “Legislative and Governance” policy proposals where a new and enlarged role for the presidency is proposed.
The most radical departure from the Westminster model of government from 1993 to 1996 was the introduction of an independent judiciary apart from the executive and legislative branches of government. Despite the Rule of Law now the dominating principle in our democracy, this did not prevent the ANC from “recalling” then president Thabo Mbeki in September 2008 on political rather than legal grounds. The infamous Nicholson judgment was used as a pretext (later overturned and nullified on appeal in 2009) for Zuma to become president in 2009 after Kgalema Mothlante was interim president. Two people, both close to the Mbeki administration, made no bones about the process: Dr. Frank Chikane and Professor Barney Pityana described the affair emphatically as “a coup d’etat in all but name”. The main criticism levelled at Mbeki was the excessive concentration of power in the Union Buildings and the perceived extraordinary autonomy he provided to the then finance minister, Trevor Manuel ,and the National Treasury.
The question of whether the final say on the Budget, especially on the expenditure side, should in future reside with the presidency cannot be divorced from the current political conflict around who eventually controls the national purse and upholds fiscal probity. To date the Treasury has been a bulwark against profligacy and against those who might want to pillage state finances or promote “state capture”.
In addition, the real problem about translating the vision of the NDP into reality so far has not been a shortage of money, but an inability to mobilize the necessary capacity and political will to do so. Government spending has in fact risen significantly since 2008 and the “deficit” has increasingly been on the revenue side, particularly as a result of weak growth. Indeed, the Treasury has meticulously related its budget decisions to the NDP since 2013, whereas elsewhere in the public sector there have unfortunately been big gaps in delivery. The current crisis over the payment of social grants is but only one dramatic example of delivery failure which is not related to inadequate funding.
This is not a new ANC proposal and has been informally canvassed in certain political circles in recent years. But now it is prominently included among ANC policy proposals for debate. The proposal must therefore be critically interrogated. The phenomenon of democratic centralism remains a valid issue today, especially when dealing with the complexities around fiscal policy. If we go down this road, the presidency would also have to consider duplicating at least some of the technical expertise in the Treasury if it wishes to successfully form an independent judgement on fiscal policy. Fiscal rigor would be as important in the presidency as it is in the Treasury.
In the event that the presidency in future determines the priorities for the allocation of resources, it would nonetheless still face the same tough economic and other constraints that the Treasury has had to cope with in recent years. Whoever decides the spending priorities would not be able to avoid the fiscal implications of a poor economic performance, either now or in the future. The ANC document commendably says that the organisation “is fully supportive of government’s program to take active steps to avoid arising national debt”, and that structural reforms are needed to boost growth. But it is not clear how divided control over fiscal policy will facilitate the achievement of these laudable objectives, and when in fact the real obstacles to these goals lie elsewhere. There also seems to be a misapprehension in some circles that somehow the Treasury is hiding away funds that could otherwise be usefully spent.
Although the minister of finance traditionally delivers the Budget speeches in Parliament, the fact remains that the Budget strategy is still ultimately a collective Cabinet decision. It is not the sole responsibility of the Treasury. Even under present arrangements the Presidency has a say on fiscal policy. For example, when Zuma announced that university student fees would be unchanged during the #FeesMustFall campaign, the Minister of Finance had to adjust his Budget accordingly. By suggesting however that the Treasury should generally be relegated to implementation and technical advice, the Presidency may also be taking on a poisoned chalice. The danger is that the Treasury may just become a bank teller and not a key strategic player determining national financial priorities. In a system of checks and balances it makes for better decision making on fiscal policy if the presidency remained at arm’s length from what may often be unpopular decisions. That is what finance ministers are often for — to act as valuable lightning conductors for fiscal and tax policy.
Another consideration is the question of overall policy uncertainty in SA, which is presently having a corrosive effect on investor confidence. Yet the one shining example of predictability and certainty in SA has been fiscal policy. For example, the fiscal targets outlined in the “mini-budget” last October were reaffirmed in the main budget last month and boosted confidence in the markets. The credibility and transparency of our fiscal process enjoys international recognition. The proposal also comes at a time when the stability of South Africa’s public finances are at the top of the ratings agencies concerns. Shifting key elements of the Budget decision-making process from the Treasury to the presidency could increase the risk of policy uncertainty and may jeopardise the advantage which SA currently enjoys in this regard.
Concentration of power in the presidency for co-ordinating the NDP seems to present us with a smokescreen. The real reason appears to be control over the autonomy of Treasury while the political “sweetener” is more efficient co-ordination and implementation of the NDP. The danger of an excessive concentration of power is that it will take place at the cost of the “balance of power” in terms of parliamentary oversight and monitoring. Some examples of this are already happening when ministers fail to attend portfolio committee meetings. Another two example are the president changing the composition of the Judicial Service Commission and ministers not complying with court orders.
Concentrating too much power in the presidency is a red flag in South Africa’s political and economic trajectory and may over the long term have more negative consequences than positive outcomes, however well intended. All this needs to be thoroughly debated in the national interest and should not be allowed to happen for what seems to be a short-term political power grab to the eventual detriment of a very vulnerable South African economy.
Raymond Parsons is a professor at the North West University School of Business and Governance.
Theo Venter is a political analyst at the North West University School of Business and Governance.