Transparency and accountability are key, says Gordhan. The Mail & Guardian‘s Lynley Donnelly speaks to the finance minister.
You have introduced measures to combat corruption, including the advanced submissions of tender programmes to relevant treasury authorities and the disclosure of company directors by all those bidding for tenders. How do you expect other departments to receive this? Could it be seen as “micromanaging” by the treasury? What we are micromanaging is corruption, so if someone doesn’t like it, then that’s sad for them. Let me emphasise that throughout the world, greater transparency and openness and accountability are key principles in good governance. All we are trying to do in the context of many mishaps on this front is to ensure that taxpayers’ money is spent well, that as government we receive value for money and that we narrow down any incentives or inducement that might be in our system for public servants and business people to do the wrong thing.
State measures resulted in departmental savings of R30-billion, and about R6-billion raised for higher education through a general 0.3% budget cut. Yet, R3-billion worth of corruption was uncovered and there was under-spending of R12,4-billion. Do you think government is getting the message on fighting corruption and improving efficiency? During the post-recession period, the message has certainly got through that you can cut out the frills and you need to engage in savings. Non-priority items must be put at the back of the queue. That has become even more serious by virtue of the emphasis on jobs and the five priorities that this administration is addressing.
There will be a tendency to revert to old habits and accounting officers must make sure that they don’t. And it is key that state institutions work more efficiently. Is the message getting through completely? No, because we still have mishaps.
Underspending is a huge challenge, due to a lack of skills, lack of proper planning, very poor contract management, and a lack of vigilance in what is delivered. Good financial management from our point of view is a case of closing loopholes that allow for excesses to exist.
What is your feeling on the success of microeconomic reform and programmes in the face of so much pressure on the treasury to solve the country’s problems through macroeconomic policy? We have been saying for some time that there is no silver bullet that will solve all our problems. A preoccupation with one suite of policy instruments doesn’t actually help us meet our challenges. How we create a more competitive economy and more competitive enterprises is part of the challenge. Macroeconomic stability is a necessary but not a sufficient factor in terms of generating the kind of growth and inclusivity that we want in this country. Any expectation that merely handling the macroeconomic lever is going to solve all problems in South Africa is not a wise expectation.
Following last year’s public service strike, you allocated an additional R39,4-billion to government’s wage bill. Do you think there is more coherence between unions and government on this matter and do you feel the issue is under control going forward? That is the brief of my colleague, Public Service and Administration Minister Richard Baloyi. Our job is to present the facts to the public and we are stating the facts. But we are also stating the dilemmas we face as government. There are competing priorities and you need to choose which to address. But be aware of how the land lies, understand the data that sits behind it, and then through processes, within and outside of government, make a determination about what is the best way forward for South Africa and what is the expenditure mix that we would like to have.
In your document on reform of the financial sector, you point out bankers’ bonuses are not out of line with other sectors nor out of line with our state-owned entities. Do you think those heading SOEs could be paid less? As a society, we should be extremely concerned about inequality of income. We should be extremely concerned about an elite developing that has all sorts of privileges that the vast majority of our people don’t share. And this is becoming a major preoccupation around the world. Inequality is becoming much more significant in developed societies, let alone developing societies like ours, and that inequality is not socially sustainable.
The choice that we have on our side is whether to carry on as we are, or come to some understanding about how to create agreement on how to share the benefits of economic growth. That’s going to become a key debate in the period that lies ahead.
In that context, there is a review committee looking at issues as far as state-owned entities are concerned and we’ll wait for its report. But as far as the private sector is concerned, society has become — certainly after the financial crisis — very aware of the gaps between ordinary workers and top executives. In South Africa, this is something we have got to apply our minds to as well.