Enough is enough

We are ‘shuffling around in old and comfortable brown shoes’ – and it’s time to get real, says Mboweni.
‘Our people have become poorer’ and ‘we cannot wait any longer’ – finance minister’s solutions may make him even more unpopular among some politicians. Image: Waldo Swiegers, Bloomberg

Figures and statistics are of the utmost importance. They represent facts: cold, hard, measurable facts. Decision-makers in SA know the figures. Or they should.

And the figures show that SA has been on a downward path for a long time, maybe as long as ten years. Some people would say as long as 20 years.

On Wednesday, Finance Minister Tito Mboweni looked beyond the figures when tabling no less than six bills – all full of figures – for ratification by Parliament. These include adjustments to the original budget for the current fiscal year, taxation, division of revenue and adjusted estimates of national expenditure. Each of these bills contains detailed figures of the state of the country’s finances, to be analysed, criticised and commented on by experts from different fields.

However, it was Mboweni’s speech to members of Parliament that was impressive.

Mboweni, not known for calling a spade a shovelling implement, told SA citizens that we are in trouble. “Our people became poorer,” he declared within 60 seconds of taking the podium. “Some lost their jobs. The food cupboards are almost bare.”

But we are “shuffling around in old and comfortable brown shoes”, he said, indicating that we are way too complacent about the way things are going.

“Our expenditure continues to exceed our revenue. Our national debt is increasing at an unsustainable pace. The economy is not performing well.” 

‘Hope is good, but it is not a strategy’

Mboweni referred to one of the most important sectors in our economy, saying that any farmer will tell you that if you want a bumper harvest, you must be prepared to work hard at the end of winter and in early spring.

“Now is the time,” he said. “We cannot wait any longer.”

And he is correct, with rating agencies watching our every step, a shortfall of more than R50 billion in tax collections, government debt set to exceed 70% of the GDP and state-owned enterprises (SOEs) endangering SA’s delicate fiscal balance.

Read: The good and bad about the MTBPS that Moody’s will watch

Mboweni indicated that far-reaching structural reforms are necessary, referring to the successes of countries that have implemented reforms, such as China and India.

“The average person in China is seven times richer today than 25 years ago. The average person in India has become three-and-a-half times richer over the same period.”

Meanwhile, the average South African is only 1.3 times better off. Admittedly, growth in emerging markets is lower, partly due to lower growth in the global economy, but also due to policy missteps.

Mboweni quoted from the preamble of the Constitution, saying that we are all responsible for improving the quality of life of all citizens and freeing the potential of each person. “The growth outlook is far too low to support this vision,” he said.

Having set the scene, Mboweni hit Parliament with a few sobering figures and some forceful decisions that might make him even more unpopular among some politicians that he already is. “After adjusting for inflation, the average government wage has risen 66% in the last ten years,” he said.

“We will need to deal with the challenges of the wage bill, state-owned companies, executive remuneration and benefits and fiscal leakages. We are all in this together.”

His strict actions include:

  • Salaries of cabinet members, premiers and MECs will be frozen at current levels and are likely to be reduced.
  • Cost of official cars will be capped at R700 000, including Vat.
  • Policies with regards to cellular telephones will be adjusted to cap payments of cellular bills by government.
  • All domestic travel will be limited to economy class.
  • No subsistence allowance for domestic or international trips.

In addition, he invited members of Parliament to think about how they can further contain their compensation and benefits.

SOEs, notably SAA

Mboweni has often stated his views on the dire situation of SOEs. On Wednesday he said bluntly: “Eskom is a business and should be run that way.”

And on South African Airways: “SAA is unlikely to ever generate enough cash flow to sustain operations in its current configuration. Which begs the question: How long are we going to be on this flight path? Forever?

“I think not,” he said.

Read: SAA unlikely to ‘ever’ be sustainable in current configuration

On other SOEs that are performing badly, his opinion is that managers and their teams should not receive bonuses or salary increases when they fail to meet financial targets and, in fact, should take a pay cut or be fired. In addition, businesses with outdated business models should be closed.

Mboweni’s basic message is that SA needs to do things differently. One can only hope that members of Parliament, politicians, trade unions, government employees, citizens and taxpayers take his pleas to heart before it’s too late.

We also hope that he and his tough attitude survive in the political world, to herald in the necessary changes.

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What amazes me is that our debt will continuously grow at about R500 billion a year for the next 3 years? Why or for what is this debt? Even if Escom receives a R100 billion a year, what is this debt for? If our debt increases at that rate, government will have to increase taxes at the same rate (17% per year?), how on earth will that be achieved?

We are spending more than we get in – debt is needed to fund the shortfall, also new debt is issued to refinance old debt that is maturing.

He may be laying that figure on a bit thick in order to get his message across.

We should use different headline indicators. In round numbers, our GDP is 5000bn and state revenue is about 30% of that, say 1500bn.

If the budget deficit is 6% of GDP that is 300bn already that has to be borrowed, every year. It’s 20% of state revenue. Like spending 18 000 a month with a salary of 15 000. That’s why the debt piles up.

That 20% is a lot scarier than the 6% and easier for people to grasp.

When it comes to cutting the bloated labour forces of SOE’s it is clear that Pravin is against cutting numbers and seems to be forever interfering in the running and is probably responsible for the lack of progress.

He is past his sell by date and needs to be replaced asap with a proper person to lead. Not a socialist politician or a friend of the Pres. This is what got us to where we are.

Our previous president, the giggling buffoon, should be tried for treason no less for landing us in this almighty mess. How many thousands or millions of lives has he destroyed with his policies of opening up the country’s doors for all manner of local and international thieves, crooks and criminals to steal our country blind. Makes me sick as we and future generations are now left to sort out the mess created on his watch. And yet the ANC and voters still drool at the very sight of him. Disgusting !

Not just him. Let us not forget that Cyril Ramaphosa was the deputy President & very involved with the SOE’s. And now as President he has allowed no positive reforms to stimulate the economy. To date his legacy is actively fighting for EWC, NHI & changes to intellectual property rights. All communist policies that will bankrupt the State.

I am consistently amazed at how many people have fallen for this Charlatan who loves foreign travel so.

The real question is how does a country rid itself such devastating corruption? Obviously its going to be a long road but let’s look at some positives. In SA, more than in any other country I would bet, our dirty clothes are there for all to see. Which impacts short term decisions etc. And in a world context that’s a massive longterm positive. Do we know what our problems are? For sure. It’s the first step in righting it. Can it be done? We don’t have a choice. A lot of other “progressive” countries with strong currencies, when one dig deeper, one will find structural deficiencies, which even if the citizens know about it, would be unable to be rectified or addressed. For ideologies to change things will have to be bad. ANC ideologies are going to change and massive potential will be fruit of it. I am staying

@Tievo…one can only admire your naive spirit

Its people like you that makes SA great – and there are many good ‘ole South Africans here still [ bear in mind, its us remaining few who are in effect keeping her alive ]

Unfortunately, as long as you have the ANC in power, you might as well be conducting the orchestra on the Titanic as it slowly sinks

I wish I could say the same, I really do. However the numbers simply don’t add up, not just the Rands & Cents but the number of voters that actively contribute to the economy are just not enough to counter the corrupt, or the loaf-abouts or the opportunists. These cannot wait to get their hands on other people’s hard earned property and goods, for which they did not work/pay for but which government tells them they are entitled to because those self same brain washed masses will secure them votes come another 5 years from now. Also our government deems itself fit to interfere and dictate labour policies that has lowered actual production and global competitiveness with the “help” of it’s trade union bedfellows. So the cycle and downward spiral continues and so must Mr and Mrs Taxpayer foot the bill with ever increasing (and creative new) taxes with still unchechecked government spending and now almost exponential unemployment. Unemployment brings a whole host of other maladies. The French revolution led to a sudden cure of all head aches if you remember…

Words mean nothing when there is zero action to back then up.

Indeed Tito just looks like a fool….we’re not going to carry on with SAA…oh, and here’s another 9 BN bailout.

Probably not his fault, but this is the story of the ANC.

100% , perhaps, and it is a long shot that he is one of those, and there are very few, that are not fools where and when it comes to having the capability of governing a country! Political correctness alone is holding this whole country and continent back, as it’s Governments(the majority) do not want to tackle the basic problem’s of overpopulation(unsustainable incubation), education, corruption, and basic denialism of where they are at capability-wise!!! There cannot be progress otherwise!!

Simply put, they need more time to “get up to scratch”!

Tito. Fool me once,shame on you. Fool me twice shame on me.

The elephant in the room is the trend of SA’s uncontrolled explosive population growth.

ALL our social and economic problems are DIRECTLY tied to this ONE phenomenon.

The central practical problem preventing dealing with this?

An ingrained attitude of DELIBERATE DENIALISM about this subject!

Politicians, Economists, Journalists … all to blame for this conspiracy of silence!

Why would you educate people into a state where they no longer produce more voters for you?

Population growth is well under 2% and well under control. We are however seeing the results of explosive previous growth with a very young (and uneducated) population. Have a look at our current population pyramid. It is frightening.

Sunnyside, if you believe the “official stats”, you will also believe in the Tooth Fairy!

How can we have a population growth of only 2%,and “well under control”, yet somehow have a hugely skewed population of very young children?

Show me the SA population chart that shows this sudden and dramatic change in growth rate.

Dont worry Patrick Cairns will soon publish telling us everything is rosy and scolding us for being negative…

Socialism and racist laws prohibit this country from achieving anything of worth.
Delete the comment moneyweb, propaganda is is your game.

Like those racist laws did in the old days?

Dear God!

His strict actions include:

Salaries of cabinet members, premiers and MECs will be frozen at current levels and are likely to be reduced.
Cost of official cars will be capped at R700 000, including Vat.
Policies with regards to cellular telephones will be adjusted to cap payments of cellular bills by government.
All domestic travel will be limited to economy class.
No subsistence allowance for domestic or international trips.

What self-respecting politician would want to work under these conditions? Expect massive resignations! Bwahahahaha….

I’d love to know how many government ministers and their entourages are flying to Japan on the public tit to watch rugby. A first class flight to Japan is probably the most expensive flight you can take from S. Africa. Not to mention hotel bills, etc etc. Perhaps someone in the DA can find out and enlighten us all.

Easy solution to the debt crisis : allow citizens to sell the right to their vote. Half the proceeds goes to the voter. Half goes to repay Treasury debt. I would buy a few thousand votes in such a scheme. A few thousand of me and we have a few million votes and we are king makers in all the metros.

Now, if we could just find a Party that is filled by competent people to apply the votes for! There appears to be none. Therein lies our tragedy.

What would a vote sell for in SA is the other question. R100? R500? R5000? It would be a fascinating social experiment if it were ever allowed.

Enough is enough, please get me out of this s#$thole.

End of comments.



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