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Mboweni's maiden speech: All pizzazz and no substance?

2018-10-25 07:55
Finance Minister Tito Mboweni walks with members of the Treasury to deliver his mini budget speech. (Rodger Bosch/AFP)

Finance Minister Tito Mboweni walks with members of the Treasury to deliver his mini budget speech. (Rodger Bosch/AFP)

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Gabriel Crouse

Tito Mboweni's maiden speech as finance minister might as well have begun, "call me Tito". At times avuncular, at times swaggering, Mboweni played the man who has come in to clean up a mess after the original cleaners turned out to be the mess. And he played it like he was born for the job.

At his most broad shouldered, Mboweni was an ex-soldier calling in army generals to drain and plug the Vaal River System crisis. He even told Parliament that the president had reported back to him, Mboweni, to say that he, the president, would be looking into the matter further just in case. And then, as a kind uncle, he announced the VAT zero-rating of sanitary pads after reading a tweet straight from the people. Mboweni was anything but monotonous.

He spoke with a candid frustration at poor government that has been missing from Cabinet. When he said "[n]obody should learn in a school that is unsafe" he went off-script and made it clear to whom he was speaking … "madame minister of basic education".

When addressing the R23bn debt to service providers, he did not plead poverty on their behalf. "In many cases" he said, "the financial challenges faced by municipalities are a reflection of weaknesses in governance, or even fraud and outright corruption". He plugged in the decrepit Modimolle-Mookgophong (formerly Nylstroom) example for effect.

He is unapologetically in favour of market solutions to a broad range of social problems. "Too often, government spends money on infrastructure when it could be better and more effectively done by the private sector." After announcing a plan to tilt the balance away from an overreaching government, there was meek applause – so Mboweni gave the National Assembly a lite slap. "You are supposed to clap a bit harder" at the chance to get out the way of good business, he said, pleading for Parliament to at least pretend they have faith in the work of ordinary South Africans.

Mboweni frequently used repetition to drive home particularly painful messages to the ANC-led government. The longest pause between repetitions came when he said the "2018 public-service wage agreement exceeds budgeted baselines by about R30.2bn over the medium term... We have not allocated additional money for this". In other words, the salaries are R30bn above the ceiling and the ceiling ain't goin' up, so deal.

Mboweni also made it perfectly clear that his interpretation of the governor of the SA Reserve Bank's (SARB) mandate is to keep inflation "low and stable", and told the National Assembly to stop trying to "distract" SARB by threatening its full independence. Mboweni's own mandate is to "strengthen the fiscus". No mention of "transformation" in either regard or anywhere in the speech.

When it comes to the most debated policy of 2018, property expropriation without compensation, there was another round of silence. (Ramaphosa has long stopped promising that expropriation without compensation will boost the economy). Instead, Mboweni promised the extension of soft loans to farmers, through the Land Bank, worth R16.2bn over the next 3 to 5 years with an emphasis on "export-oriented crops that are highly labour intensive", like avocados. A good idea buttered up with a bit of Mboweni swagger; he's an avocado farmer himself.

So much for style. The substance is less well-rounded. Mboweni promised that when it comes to loss-making state-owned enterprises there "should be no holy cows!" He said this in the direct context of SAA, to screams from the opposition: "Sell it!" He then followed up by explaining that in the 2018/2019 financial year the state will once again "provide additional funding" for the unholiest of SA's haemorrhaging holy cows, SAA.

In addition, Mboweni ordered the release of long overdue VAT refunds, but then ginned this up as "stimulus". A pretty weak attempt to make a buzz out of a bare correction to the norm.

And this is the general problem with Mboweni's first major contribution to public debate since laughably tweeting about a SA sovereign wealth fund before his ministerial appointment. Mboweni got more serious in his official capacity but many of us have not. The five-minute countdowns, breathless commentary and wall-to-wall anticipatory coverage of this speech could almost trick you into believing that it was bound to be consequential. But Mboweni's best accomplishments were symbolic, to temper expectations by realism and not to incite much in the way of -phoria or delusion.

Moreover, and here he outdid expectations, Mboweni laid potent but merely verbal blame at the feet of those who still lead.

What Mboweni has not accomplished is anything like a new budget or new vision for South Africa. Despite the spanking pizzazz, the vision he put forth is very old, tried and tested – conservative monetarism, fiscal discipline and accountable limited governance as the best framework for a growing, dynamic and fairly rewarding economy. Then he twisted this vision through substance, not symbolism, by promising another SAA bail-out.

So the twin questions of how committed he is to the clear old vision (in contrast to his tweets) and how successful he will be in translating it into reality are open to the future. This speech could be a harbinger of discipline and excellence, or merely a feint in that direction.

Mboweni is charismatic and accomplished so must stand a chance of dragging policy in whatever direction he likes. But the only thing beyond doubt is that he falls under President Ramaphosa, that great enigma of South African politics who has managed to encourage and perturb capitalists and Marxists, race-nationalists and classical liberals one and all. The end to which Mboweni works is likely whatever Ramaphosa has in mind. There lies the mystery still very much in the shadows of the deep.

- Gabriel Crouse is an Associate at the Institute of Race Relations (IRR), a liberal think tank that promotes political and economic freedom. If you agree with what you have just read then click here or SMS your name to 32823 (SMSes cost R1, Ts and Cs apply).  

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

Read more on:    tito mboweni  |  mini budget 2018
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