Gigaba pledges to protect budget integrity as Zuma's no fee plan rocks Treasury

Cape Town - Finance Minister Malusi Gigaba has promised to protect "the integrity and transparency of the budget system and process" in the wake of the abrupt resignation of National Treasury's budget head Michael Sachs.

Fin24 reported earlier on Monday that Sachs, a deputy director general who headed up the budget office, quit last week over interference by the Presidency, according to two sources close to Treasury. 

The issue of free higher education, that is being steamrolled by President Jacob Zuma, has pushed Sachs, a Treasury veteran of ten years, to resign. “Michael didn’t necessarily oppose the idea of free education, but he wouldn’t stand for the interference in the budget process,” a source said.

READ: Treasury rocked as budget chief quits

Zuma’s plan to find R40bn within the constrained budget to fund a free-education policy for families who earn less than R350 000 comes amid changes to the budget process, where National Treasury’s role in managing the fiscal framework has taken a back seat to the Presidential Fiscal Committee (PFC).

The no-fee proposal - which has not yet been confirmed by Zuma - goes against the recommendations that were confirmed in Zuma's release of the Heher Commission report on Monday, following an inquiry into the feasibility of making high education and training fee-free in South Africa.

Zuma made it clear on Monday that the report was not the final word on the matter, saying in a statement that Minister in the Presidency  Jeff Radebe and Gigaba were still "processing the report" and that he will "make a pronouncement on the report once the ministers have concluded their work".

READ: SA doesn't have money for free higher education - Heher Commission

However, Gigaba said in a statement on Monday: “Both the director general and I are aware of protecting the integrity and transparency of the budget system and process, and ensure that all tax and expenditure decision processes continue to be run by the Treasury and minister of finance, and continues with the consultative process introduced by the first democratic government."

Gigaba said that Sachs would not be leaving Treasury immediately and would first "ensure a proper handover to another senior official and ... allow for a smooth transition with as little interruption to the work of the Budget Office as possible".

"Mr Sachs works with many knowledgeable technocrats who he has also helped groom over his years at the department," read the statement. 

Gigaba added that Sachs had "expressed his interest to serve the public sector in a different capacity".  

The finance minister said he remained committed to a "budget that focuses on fiscal consolidation and mindful of the economic challenges of the country while protecting the poor". 

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