Tito Mboweni sticks to his guns: Expenditure cuts are coming
CAPE TOWN – Finance Minister Tito Mboweni on Wednesday stuck to his guns, giving South Africa a concise picture of its public finances, and told all and sundry, including his Cabinet colleagues and fellow MPs, to prepare themselves for a bumpy ride ahead.
Mboweni used his second Medium-Term Budget Policy Statement (MTBPS) to ask unions to work with him in reducing the state wage bill, adding that government ministers on their part would take a salary freeze, and that in all probabilities, would earn less in the future than they are currently used to.
He also continued his tough talk on government spending and bailouts for state-owned enterprises.
In his mild-mannered approach Mboweni repeated his presentation of an aloe plant as the cold winter season that is still gripping South Africa. But the blistering cold will soon disappear and the sunshine rise from the other side.
It was Mboweni’s chuckle and jovial character that lightened up a gloomy picture of the country. The public finances may be in chaos and expenditure breaching acceptable levels, but Mboweni said his was a job to ensure he whipped everyone into line.
For example, he said the cost of official cars will have to be capped at R700 000 (bye, bye BMW X7), cellphone allowances would be capped and domestic flights will now be confined to economy class. And no more daily travel expenses, either.
Not everyone was spared as he promised more cuts in salaries and perks. For this, he got the loudest applause from the opposition benches.
Weekend reports of his alleged shenanigans did not distract Mboweni from sending his message loud and clear. In his continued use of the aloe plant fad to reignite the economy and prudent public expenditure, he said the public purse must be protected like the plant.
Since he took over the position exactly a year ago, Mboweni seemed to be enjoying support across the political spectrum in Parliament.
Some have argued he may be facing massive resistance inside the ANC on his economic recovery plan, which drew criticism from the ANC’s alliance partners when it was unveiled several weeks ago in August. But Mboweni has been forthright on what needs to be done to get things right.
Yesterday he was not in a position to change his stance on his maverick tone on economic plans for the country.
While he may have outlined some of the key things he still wished for, he was honest about his prospects of winning over labour on the public sector wage bill.
It is the trade union movement that has opposed some of the measures to cut the wage bill in the public service.
Mboweni also issued a warning to political leaders that they need to do what is necessary to get expenditure right.
The next four months will be tough as he prepares to table another Budget in February. But Mboweni has promised to bring back the aloe plant.
Whether it lives to see the day remains to be seen.
One thing is clear though, expenditure cuts are the sign of things to come.
Mboweni is walking a tightrope, but his job is not yet done as more departments face major cuts in the next few months to reduce expenditure.
Like his promise of the green shoots in the economy soon, Mboweni has not minced his words in doing the right things and implement more prudent policies.
This is the tight fiscal space he will traverse and the MTPBS was a glimpse of more measures to reignite growth in the economy.