Is it tough balancing a big state (with big spending) and securing the macroeconomic stability and predictability the government is now well-known for?
There isn’t really a tension. For the state to stamp its agenda on all the areas we need to — ranging from poverty alleviation to extending services — needs stability. Stability is still a key ingredient in our ability to deliver.
How much of the funds for some of the big-ticket social development items we saw in the budget — such as the expanded public works programme — is new money?
We need to improve the effectiveness of public works by pooling resources across national, provincial and local government to deliver infrastructure. We create opportunities for employment and training by making their delivery labour-intensive. By and large, we are not talking about new money. We are talking about doing things in a different way that enhances the impact.
A bigger state invariably requires more welfare, especially in a country with our imperatives. Is the basic income grant [BIG] completely off the Treasury’s radar screen?
It is quite legitimate for a whole range of NGOs to mobilise around a specific idea to deal with the problems so we are not saying people have no right to raise issues like the BIG. But it is also important to look at sustainability and what is meant by a developmental state. We want a society of active citizens with opportunities for people to participate and therefore increase their incomes and productivity.
But we are not blind to the realities of the day and hence a whole range of grants and issues related to a social wage have been put in place. We know that, in the short term, there are people in our society who are vulnerable and we have to deal with that vulnerability.
But we have to think about sustainability and of resources — and [shortages] mean we must target the most vulnerable — children, women, the disabled. Sometimes, the way the BIG debate comes across is “if you don’t implement BIG, you’re not dealing with poverty”. This is not true.
I don’t think that at this point the BIG will feature as one of the mechanisms to deal with poverty and vulnerability.
Are the country’s provinces and local governments working?
There is more and more devolution of functions to municipalities — the closer you bring delivery of services to citizens, the better it is for citizens to be empowered.
The key questions we must ask are: Does the current system increase accountability and delivery? If the answer is yes to both of them, then let’s not change what’s working. If the answer is no, it means there is a need to review. People raise things like “we don’t need the provinces” because they are a waste. But we need to look at the system of government. It’s 10 years now, so maybe we must look at it.
Is the Public Finance Management Act [PFMA] bearing fruit?
The PFMA is meant to increase accountability and provide value for money. Once everything’s on the table, it raises the bar for the executive and for public managers. It’s not just about filling in a report — it’s a piece of legislation that ensures we begin to ask hard questions; about why, if the money’s spent, we don’t see things on the ground.
We are beginning to see the results and among them is the increase in the number of favourable audit opinions: in Gauteng, where I worked, the entire province had an unqualified report. You are seeing it in national government too. It is not the only indicator but it does say things are beginning to happen.
Is the continent fairly represented on the International Monetary Fund and the World Bank?
The developing world is not fairly represented and hence the work that Trevor [Manuel] is doing to up the participation and voice of the developing world is quite critical. There is a lot of advocacy work that must still go into it, but it must also be backed up by the ability of Africa to put on the table viable and sustainable development programmes.
There are a whole range of examples where the developing world is beginning to make an impact on the multilateral institutions — at the World Trade Organisation, India and Brazil played a pivotal role in recent negotiations. We can’t bring change as South Africa alone. The world is unipolar and you need strong alliances to challenge the paradigm which seems to be emerging.
What would you say are the three key economic challenges facing the continent?
We must do everything to ensure that we ourselves are seen to be credible at managing our affairs, democracy and macroeconomic stability. The New Partnership for Africa’s Development and all the other forums are an attempt to deal with [poor] perceptions.
Infrastructure is crucial for sustainable economic development. Africa, like other continents, must meet the objectives of the millennium development goals to halve poverty by 2014. And, thirdly, Africans are all over the world, highly qualified and serving a whole range of other economies in the world — we must develop mechanisms to attract those Africans to begin to plough back their expertise and skills.
How is your new job [Moleketi used to be the provincial finance minister of Gauteng]?
I’ve never been in an organisation where your achievements do not improve your own image, but seem to undermine it. One of my areas of responsibility is Stats SA where all the data improvement in terms of collection and increasing the sample sizes [to give a more accurate picture] are seen as a new set of [incredible] statistics.
My other responsibility is the Public Investment Commission [PIC] which manages more than R300-billion in government employee pension funds. I believe the PIC must lead in BEE funding, but it cannot do it on its own. It can’t be seen as the fund every person turns to when they want to fund a black economic empowerment deal.
Most commentators reckon you’ll be our next finance minister. Do you agree?
When I was appointed, the president just said: “I am appointing you deputy minister of finance, end of story.”