NEWS ANALYSIS
If something goes wrong with the payment of social grants – as seems likely – the responsibility will lie entirely with Social Development Minister Bathabile Dlamini and the Parliament that failed to do its oversight job.
Thanks to Dlamini’s habit of skipping meetings in Parliament and not holding press conferences, however, the department that reports to her, and the South African Social Security Agency (Sassa) that falls under it, have been answering the questions.
And those organisations have been contradicting themselves and one another, fudging the facts, dissembling, eventually even flat-out lying – then saying they haven’t.
These are their greatest hits:
We will/won’t go or have/have no longer gone to the Concourt
Sassa was advised at least four months ago to take its predicament to the Constitutional Court, urgently. It was told to admit to the court that it faced the highly irregular prospect of going into contract for another year with Cash Paymaster Services (CPS), even though that very court had found that the agency’s five-year CPS contract was unlawful in the first place.
It did not approach the court. In February it started to say it might approach the court, then started to provide dates: February 15, February 16, February 17, or before the end of March. On February 28 it did finally lodge a plea with the court. The next day, using a letter dated the previous day, it withdrew that filing again.
We couldn’t get it done in a year
This week Sassa told Parliament again that, because of legal complexities beyond its control, Sassa had too little time to phase out the current company to which it outsources the payment of social grants.
“We only had a year, from September 2015, to prepare for being a paymaster,” Sassa executive Zodwa Mvulane told a committee meeting.
But by all accounts Sassa only started preparing for a post-CPS solution in December, apparently doing little or nothing until then. A committee advising it was ignored for years, for instance – then “work streams” were suddenly started up.
We only need a year to do it
At almost the exact same moment that Sassa was telling Parliament it hadn’t had enough time, it was formally telling the Constitutional Court that it would be able to do without CPS within a year from now and would not need to do business with CPS beyond that one year, even though it is starting its preparations from scratch.
This contradicts a letter sent on February 2, in which Dlamini said CPS would be out of the picture by the end of 2019. In another letter a week later, Sassa chief executive Thokozani Magwaza said the contract with CPS would only last until November 2018 – both longer than a year.
It’s not (entirely) our fault
“To be frank and honest to members, half of it, yes, we can blame it on Sassa; half of it, no, we cannot blame it on Sassa,” Mvulane told Parliament this week. She could ultimately define the source of the non-Sassa blame only as being “somewhere else”, perhaps in the slowness of advice Sassa received.
In the 16 months between Sassa saying it would start handling grant payments in-house by April and its admission in February that it could not, there has been no sign of interference in its work: no changes in policy, direction, regulation or political leadership, no court cases relating to who should pay grants, no disruptions of technology or process.
CPS is willing to help us
In the Constitutional Court filing it subsequently withdrew, Sassa’s Magwaza provides wonderful, heartening news: “CPS has intimated in a letter dated 9 February 2017 that it is amenable to assisting Sassa in the transitional period on the premise that this is in the best interests of the parties, particularly the [grant] beneficiaries,” he said under oath.
The letter he attaches as proof does indeed use the word “amenable”; it says that CPS is amenable to an exploratory meeting to discuss “the transition of CPS operations” to a “new model”. The letter also does talks about the best interests of beneficiaries; it says it would be in their best interests if Sassa and CPS could meet before February 17. They only met on March 1.
CPS has scrupulously avoided making any solid commitments around social grant payments, other than a commitment to negotiate in the best interests of its shareholders.
This April, year-on-year inflation will be 14.4%
In a letter attached to its court papers and previously seen by the Mail & Guardian, Sassa warns the treasury that it may have to pay CPS up to R3.5-billion in the 2017 financial year to make grant payments, up from the current R2.2-billion annual fee. Mvulane told Parliament this week that number was simply an illustrative value that she herself had created, by applying the consumer price index (CPI) to the contract price agreed to five years ago.
“It is not the amount that the current service provider might be charging us,” she said, referring to a number labelled “estimated cost 2017”. “He might be coming less, he might be coming more. But that one is just the CPI-related figures that we put in, should it have been growing on an annual basis.”
In the five years of the contract, annual CPI has hovered at about 6%. For the R3.5-billion figure to be CPI-related, inflation this April will have to be 14.4%. It is projected to be below 7%.
That R3.5-billion number doesn’t exist
The estimated R3.5-billion payment to CPS is based on a price escalation of somewhere between 52% and 59%, depending on which starting point is used. On February 16, after having seen the letter to the treasury, the M&G disclosed to Sassa knowledge of the letter and asked whether it was accurate that Sassa expected to have to pay CPS up to 50% more to continue handling grant payments.
“We cannot write a letter to any government institution claiming that a new contract would cost 50% more without having even started negotiating with the service provider concerned,” spokesperson Kgomoco Diseko said.
When the letter was formally made public this week, the M&G asked Diseko in which way this had not been a lie. He first asked for a copy of the letter. Then he said: “The figure that you see on the documents is an estimate, not a final offer from the service provider.” When told that this was nonsense, he objected to the use of strong language.
Everything will be revealed soon/tomorrow/any day now
Opposition parties, one parliamentary committee and the media have been asking hard questions of Sassa for many months. It has consistently pushed those questions into the future. It said Parliament would get answers during the next session (it didn’t); there would be a Sassa media conference before the end of January (there wasn’t); the minister would appear before the committee (she didn’t); all questions would be answered after an appearance in Parliament (they weren’t); and, finally, this week, the minister would have a press conference. She did not.