Cape Town – Deputy Finance Minister Sfiso Buthelezi warned on Tuesday that the public outcry over the resignation of National Treasury deputy director general Michael Sachs threatens to undermine the 1 300 dedicated officials who are still working there.
In a debate in Parliament on the Division of Revenue Bill, Buthelezi paid tribute to Sachs for the role he played in “deracialising” South Africa’s economy.
Sachs, who has headed up National Treasury’s budget office, tendered his resignation last week, reportedly because of the Presidency’s alleged interference in the budget process.
Buthelezi, however, pointed out that drawing up the budget is a “collective” process and that the rest of National Treasury would be able to continue Sachs’ work.
He also rubbished claims which have surfaced during recent months that the budget process has been hijacked by the Presidency.
Minister in the Presidency Jeff Radebe has taken charge of prioritising budget priorities through a so-called Mandate Paper to guide the budget process to ensure a more “focused implementation" of Government’s plans.
There are, however, increased fears that National Treasury’s role in managing the fiscal framework has taken a back seat to the Presidential Fiscal Committee (PFC).
On August 16 this year, Cabinet approved the Mandate Paper 2018, which will serve as a prioritisation framework for next year’s budget.
Earlier during the debate on Tuesday, Democratic Alliance (DA) spokesperson on finance David Maynier said the Constitution requires transparency and sound financial management in the budgetary process.
“Yet we now have a presidential fiscal committee undermining the Finance Minister’s committee on the budget,” Maynier said.
He added that no one knows whether fiscal consolidation has been abandoned and it seems that the budget under Zuma is in favour of a “pay later” fiscal policy.
Fin24 earlier reported that Zuma wants National Treasury to find R40bn within the current constrained budget to fund a free education policy for families who earn less than R350 000.
The rand breached R14.50/$ on Monday when the news filtered through, but has since recovered to R14.42.
“We can be sure that ratings agency has taken note of this,” Maynier said. “And the probability of a credit ratings downgrade is greater today than the day before yesterday in South Africa.”
South Africa is coming up for a credit ratings review on November 24 and it is widely expected that the country will face a further downgrade.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.