SA enters ‘budget politics’ era

Quietly, almost unnoticed, over the past four weeks the landscape of South African parliamentary politics has changed profoundly.

The new focus is on where established democracies have always had it: where government policies impact on your pocket, where tax money is spent – the budget.

Ladies and gentlemen, fasten your seatbelts: budget politics has arrived in South Africa. And before you fog over and think “boring!”, remember this: The script of what has defined US politics since the Republican revolution of 1994 is written mostly by budget politics.

The signs are there. Last week, parliament failed to pass the Division of Revenue Amendment Bill, which decides how much money provinces receive from the adjusted budget, because the ANC could not raise a quorum. Parliament was supposed to go into recess this week, but MPs will have to change their plans and legislate at least another week, maybe two – because of budget politics.

UK-based emerging markets research analysts Nomura has taken note. In the analysis “South Africa: Pandora's box is being opened, budget process risk arrives”, analyst Peter Montalto points out that South Africa has not had parliamentary budget amendment risk since democratisation.

The reason for this is clear. Treasury has, for many years, traded on the dividend of what commentators call its “state within a state” reputation – under the Mandela and Mbeki administrations, Treasury, SARS and related institutions earned a reputation for transparency and efficacy which elevated them above the party-political fray.

This has changed under President Jacob Zuma, and the key that opened the Pandora's box was the R246-million spent at Zuma's private home near Nkandla, as the embodiment of fruitless and wasteful expenditure by a weak political elite insulated from the biting economic depression by their massive salaries, paid by a population struggling to make ends meet.

The impetus was strengthened by a more robust political opposition, led by a larger DA and the robust EFF, which seem to have reignited the oppositional fire.

We should have seen this coming the moment the DA moved its most effective and combative MP, David Maynier, from the defence portfolio to finance.

Indeed, on November 4, he served notice in a member's statement in the National Assembly: “We are on a collision course with National Treasury and I want them to listen carefully: I am not your galley slave; if you want a war, that’s fine, but know this: you have come to the right place, and you will lose, and you will lose badly.

“The next time, I ask a question, stop zig-zagging, and answer the question, as you are required to do by the Constitution.”

This has now come to pass.

The point of budget politics is to change the budget to eliminate what is seen by some as wastage – to amend the budget so it is better.

The #feesmustfall crisis, which meant money had to be reprioritised in favour of higher education, provided the direct catalyst.

To get the money required for the additional funding of universities, the DA is expected to propose more than twenty changes to the budget, to exclude what they see as R804-million worth of wasteful expenditure (see box).

“We will not agree to a budget dripping in waste,” says Maynier.

So the DA has activated the process for changing the budget, as prescribed in the Money Bills Amendment and Related Procedure Act of 2009, which outlines a complicated and specific timeline for finalising the budget.

The various hold-ups mean that the National Council of Provinces has not yet passed the Division of Revenue Amendment Bill – despite some provinces jumping the gun and illegally giving final mandates to a bill not even passed by the National Assembly yet – a process that will drag into next week.

Only then can the DA table its proposal to amend the Adjustments Appropriation Bill – a process which should mean parliament’s session will drag into December because the budget is being interrogated more closely.

Two great positives can be gained from this process. First, the government refuses to lift the debt ceiling and will reprioritise money rather than borrowing more, as confirmed this week by deputy finance minister Mcebisi Jonas.

And second, if any budget is not passed timeously, the previous version of the budget (in the current case this year's main budget) kicks in, avoiding the grinding halt to government services which has been caused by American budget politics.