Supplementary Budget 2020

Mboweni: State Capture was a 'great public sector heist'

New Finance Minister Tito Mboweni addresses staff (National Treasury)
New Finance Minister Tito Mboweni addresses staff (National Treasury)

The public service sector is not dishonourable – however there are dishonourable people, said Finance Minister Tito Mboweni.

The minister was speaking at the second annual Kader Asmal Memorial lecture at the Cape Peninsula University of Technology's Mowbray Campus in Cape Town, just three days ahead of his mini budget address.

Mboweni spoke of Asmal's influence on ANC policy and the government, and encouraged "young people" not to follow Asmal's bad habit of smoking, among other things.

He also discussed the scourge of state capture.

"Those who worked with Kader Asmal would not agree with these machinations of state capture," he said.

"That's what we found happened in the past nine years, this great public sector heist in the form of State Capture. It's a heist. It's robbery. Daylight robbery.

"Those who participated in that heist are dishonourable," he added.

Limited funds

Mboweni also lamented government's low income, given low tax collections.

Quoting the Bible he said, "If people do not render unto Caesar what belongs to Caesar, where will the money come from?"

He said that South Africans should be cognisant of how the system works. If there is low economic growth then tax collection "goes down".

"[Government] can't keep spending in the way we did when growth was at 4%. It is different – with growth of 0.8%  for this year, we can't expect tax collection to be higher."

Mboweni said that Deputy Finance Minister Mondli Gungubele would not be happy with what he is saying at the lecture ahead of the mid-term budget, but he went on to explain that the public wage bill is too high.

"If we are better organised, we should be making sure we do not have a situation where R8 of every R10 goes to salaries and wages in the public service. That means we are left with R2 for other services - to fix a hospital, a clinic," he said.

"Mathematically it does not make sense that R8 out of R10 goes to salaries – and [unions] still demand services. Where will the money come from for services?"

Using Eskom as an example, Mboweni said that 30 000 jobs would have to be shed because the power utility is bloated. "The salary bill is consuming too much. It is not leaving much for infrastructure management," he said.

Government could implement a whole range of programmes - such as the public works programme - but at the end of the day jobs are created by farmers, mining companies, small and big businesses. 

Mboweni concluded by saying that Asmal would have encouraged "robust conversation" about these matters of policy.

* Visit Fin24's 2018 mini budget hub for all the news, views and analysis.

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