Bloated govt to be pruned amid fiscal crisis

With government facing a fiscal cliff and President Cyril Ramaphosa having mooted trimming his bloated administration, Minister in the Presidency Khumbudzo Ntshavheni yesterday reiterated that work was underway to prune some departments, with public enterprises the first target.

Without giving timelines, Ntshavheni said the review and reorganisation of government was “underway by Treasury and the Presidency”.

“The president has maintained his word on trimming down government and there have been announcements on certain departments, in particular the department of public enterprises, which will no longer exist,” said Ntshavheni.

Describing fiscal constraints, which have led to a budget shortfall, as “not unique to South Africa”, Ntshavheni said Cabinet had endorsed belt-tightening measures expected to be announced today by National Treasury through a set of guidelines to all spheres of government.

These would not affect planned service delivery and infrastructure projects.

“The minister of finance will issue guidelines, clarifying the unintended misunderstanding arising from the cost containment letter issued on 31 August.

“In addition, as part of the inyear performance review of progress in the implementation priorities agreed to with ministers, the president and deputy president, there will be meetings with individual ministers to ensure that fiscal management does not derail the agreed on priorities.

“If inefficiencies are improved, there could be serious improvements in the budget – also realising that current fiscal constraints are not domestic but global – requiring planning for the short, medium and long term,” said Ntshavheni.

While unable to quantify the extent of the fiscal crisis, Ntshavheni said Finance Minister Enoch Godongwana should shed light on specifics during the delivery of the medium-term budget policy statement and may announce the full measures to be taken.

“We do not want to create a crisis in the country, giving the impression that SA is going to collapse,” she said.

Reflecting on the trimming of Cabinet, independent political analyst Sandile Swana said: “(The departments of) employment and labour; trade, industry and competition; and public enterprises could be merged into one department. Also forming one department could be home affairs and international relations.

“(The departments of) health; social welfare; and youth, women and people with disabilities could be another merger. Education and sport, arts and culture could be a single department.”

Departments that may remain independent were National Treasury, state security, police, defence and justice.

On Eskom, Ntshavheni denied the strong perception created by former power utility group CEO André de Ruyter’s unconfirmed revelations that senior ANC leaders, including ministers, formed part of cartels benefiting from the state-owned enterprise.

“There are ministers who have been implicated. There are no cartels at Eskom that include ministers.

“Our security cluster of ministers continues to deal with various cartels at Eskom and we have arrested people and reported on those arrests.”

Cabinet, said Ntshavheni, was updated on Eskom’s current planned plant maintenance programme, ensuring sustainability.

“The concerted implementation of the planned fleet maintenance programme has resulted in increased stages of load shedding in recent days.

“Cabinet was assured the current implementation of increased load shedding is a short-term phase,” she said.

On the economy, investment and trade, Ntshavheni said Cabinet was “pleased with the resilience of the economy as shown by the gross domestic product second quarter data.

“Statistics SA reported a GDP increase of 0.6% in the second quarter.”