He has been doing sterling work in what is arguably government’s most important job for more than a decade, so it comes as little surprise that former taxman Pravin Gordhan covered himself in glory in his maiden budget.
Delivered in exceedingly tough economic times, with the economy in recession and revenue proceeds down by R70-billion, Gordhan tabled an ambitious borrowing programme coupled with a declaration of a war on waste and corruption, while neatly easing the upward pressure on the rand by further relaxing exchange controls.
His medium-term budget was generally applauded by opposition parties, business and economists. One economist suggested that the technical standard of Gordhan’s budget even surpassed the world-class standards achieved by his predecessor, Trevor Manuel.
Trade union federation Cosatu welcomed the budget and its key priorities — job creation, education, health, rural development and crime prevention. Cosatu welcomed the expansionary fiscal policies in the budget but expressed concern about the sizeable bailouts to state enterprises. Gordhan’s budget also quoted the Growth Commission, saying ‘any profit-seeking activity that needs subsidies to survive does not deserve to do soâ€, which suggests he’ll be tough on uncompetitive enterprise.
He made no concessions on easing monetary policy, such as by scrapping inflation targeting, but he is making it very clear that he’d like to see a debate, which will include incoming Reserve Bank governor Gill Marcus, on what the appropriate monetary stance is for the country.
In interviews he has made pointed reference to the Constitution, which states that the primary objective of the Reserve Bank is to protect the value of the currency in the interest of balanced and sustainable economic growth. You have to suspect that Gordhan and Marcus will be scrutinising the second part of this mandate more closely than their predecessors, Manuel and Tito Mboweni, did.
Gordhan took a multi-year view of his job as the taxman, systematically growing collections by widening the net. He will now do the same thing for government spending, scrutinising line items for waste, inefficiency and corruption.
He identified savings at a national level of R14.5-billion and R12.6-billion at provincial level. These include spending on administration and non-essential items, such as catering, consultants, communications, inventory, stationery, printing, travel, subsistence accommodation and entertainment.
Gordhan also announced that a high-level task team is reviewing 300 programmes, agencies and public entities to identify cost cuts. Gordhan gave notice that more was to come. He spoke of a social compact across the divides ‘in this house and across the nationâ€.
‘We will not tolerate corruption, we will act forcefully against wastage, we will insist on value for money for the billions that we spend, we will clean up the procurement system and take strong action against those who feed selfishly off the state.â€
To show he was ready to match deeds to words he departed from his prepared speech to announce that warrants of arrest had been issued for alleged Ponzi supercrooks Dean Reese and Barry Tannenbaum.
Gordhan, at least at this stage in his career, does not have the charisma of his predecessor, but Manuel must have listened with great satisfaction to Gordhan, happy that his former job had been passed to both a big and a safe pair of hands.