How government officials spend your money on luxury cars

A Deputy Minister of Co-operative Governance and Traditional Affairs apparently wasn’t happy with the list of cars that Treasury negotiated bulk discounts on. So he asked Treasury for permission to purchase a Volvo XC90D4, at a cost of R1,118,352 to the public purse. The reason for the request was “National Treasury Transversal Contract RT57-2016/2017 does not cater for prefered [sic] vehicle”.

Treasury conditionally approved his request. But he was not alone. Three ministers and a deputy minister, including the above one, applied to Treasury for a deviation when buying new cars in 2017 and 2018 because they did not like the choice of vehicles allowed.

In his most recent budget speech, Minister of Finance, Tito Mboweni, announced spending cuts of R50.3 billion over the next three years. This was not the first year in which Treasury has had to announce spending reductions to help balance the budget. In 2013, government started taking measures to control growth in spending.

Treasury has entered a bulk discount contract with car retailers on behalf of government. This means it has listed a variety of vehicles that qualifying government employees – including ministers and deputy ministers – can purchase at fixed prices to save the state money.

Despite this, some departments have requested deviations from normal supply chain processes, because the contract does not offer the cars some ministers and deputy ministers prefer as official vehicles.

An analysis of requests for deviations to the National Treasury – which are published on its website, reveals:

• The request by the deputy minister described in the first paragraph of this article.This model requested was a seven-seater vehicle with an eight-speed automatic gearbox and offers a panoramic sun roof, with optional heated seats and a tablet style entertainment screen.

  There are two deputy-ministers in Co-operative Governance and Traditional Affairs: Obed Bapela and Andries Nel. Despite repeated requests via various channels, we were unable to identify which of the two made the request.

• In June 2017, the Department of Transport requested a deviation of R984,990 to buy a Mercedes Benz for the Minister of Transport. The reason given was that the “vehicle is not available in the RT57 contract”. The Treasury provided conditional support for the deviation. The car was for Minister Joe Maswanganyi.
• In February 2018, the Department of Justice and Constitutional Development requested a deviation of R975,760 to procure a new vehicle for the Minister of Justice and Constitutional Development Michael Masutha to use in Cape Town. The reason given was that the “National Treasury Transversal Contract RT57-2016/2017 does not cater for the vehicle needs of the Minister and the minister opted for Mercedes Benz”. Treasury agreed to the request.
• In May 2018, the Department of Labour requested a deviation for the single source procurement of an Audi, valued at R1,023 319. Treasury supported the request. The documentation does not clarify who the car was for, although the minister is Mildred Oliphant.

In a response to a request for comments, when asked how many of the cars for which deviations were requested are listed on the transversal contract, Treasury responded that only the Audi was.

Responding to what it means to conditionally support a request, National Treasury said, in a nutshell, that it requires the institutions to prove that they’re complying with official policy.

In 2013 already, in an attempt to rein in government spending, Treasury announced a range of measures that included cancelling government credit cards, stricter controls of the use of consultants, and cutting back on travel, entertainment and events costs.

In his 2013 Mini-budget speech, then Minister of Finance Pravin Gordhan said: “Wasteful expenditure on expensive cars and overseas trips is unacceptable.” He put limits on the cost of official cars, and introduced bulk purchasing of cars to reduce costs.

The measures applied not only to Cabinet, but also officials at all levels of government and state-owned enterprises.

However, the Cabinet did not amend the Ministerial Handbook to reflect these measures, which could have effectively restricted this spending. The handbook describes the benefits and privileges that Members of the Executive, presiding officers and their families are allowed on the public purse. It also covers residences, transport, travel privileges, entertainment, and official travel abroad, security measures at private residences, credit cards and prestige accommodation.

As early as September 2011, Minister in the Presidency, Collins Chabane had announced that a review of the Ministerial handbook was at an advanced stage and a public announcement was imminent.

But eight years later, the Ministerial Handbook remains unchanged, effectively allowing ministers to continue purchasing luxury vehicles and splurging out on other extravagances.

The Handbook currently allows them to purchase a vehicle valued at up 70 percent of their inclusive annual remuneration package. With effect from 1 April 2018, the remuneration package for ministers is R2,497,698 and R2,056,907 for deputy Ministers. This means that the value of vehicles they can buy is up to R1.7 million for ministers and up to R1.4 million for deputy ministers. And two cars are allowed – one in Pretoria and one in Cape Town, because of time spent at Parliament.

In March 2019, DA MP Désirée van der Walt posed a series of questions to President Cyril Ramaphosa regarding the Ministerial Handbook.

The response revealed that the proposed amendments to the handbook were submitted to the Presidency in June 2018. The amended handbook was then sent to the Department of Public Service and Administration to consider a number of amendments.

With elections having taken place, the sixth Parliament will be installed at the end of May. It is likely that there will be changes in terms of Ministers, Deputy Ministers and MECs and that this will give rise to new car purchases. In response to what happens to vehicles when Members of the Executive cease to be members, National Treasury advised that “a disposal process in line with the Ministerial Handbook is followed”.

Republished from GroundUp. 

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