I was dreading yesterday’s mini-budget.
Firstly the objective conditions were against us. It was clear that the Great Recession was going to squeeze revenue – and therefore the space available for the new Minister of Finance to operate in. As it turns out, lower revenue and higher than expected expenditure has pushed the estimated deficit on the consolidated budget to R184bn or 7.6% of GDP.
Now that is a significant shortfall, but not bigger – and in some cases a lot smaller – than governments around the world are operating on in these difficult times.
Secondly the long triumphalist Polokwane after-party had led me to miscalculate. It had begun to feel as if every milestone we reached was another opportunity to celebrate the crushing of “the 1996 class project” (read “fiscal rectitude”) and the rise to dominance of woolly thinking and left populism in an uneasy alliance with a new more voracious layer of vampire capitalist aspirants.
And here comes stout Pravin Gordhan and the new parliamentary autocue to wipe away my cynical fears. He said it loud and clear for all to hear:
Special appreciation is therefore due to Minister Manuel for his sound stewardship of our public finances.
The new Minister of Finance stood before our parliament and clearly phrased the budget in the terms of this ANC’s election manifesto (emphasising education, health, rural development/agrarian reform/land, crime/corruption and the creation of decent jobs). However he did so while clearly placing himself within the macro-economic framework of the past – including by continuing to relax exchange controls and defending inflation targeting.
I have no reason to think that Gordhan will gradually bow to pressures from any quarter before the the real budget early next year. This does not mean that we won’t have higher taxation and more poverty relief in future. In a country like South Africa these thrusts are inevitable and appropriate.
So the chickens that actually came home to roost yesterday were not born in Polokwane in December 2007. They are in fact the fruits of pro-investment policies and fiscal austerity in the mid-90’s. Those chicken were hatched as part of the macro-economic framework developed under Nelson Mandela and Thabo Mbeki and guided by the stewardship of Trevor Manuel.
Pravin Gordhan yesterday spent some of the heritage of a sound macro-economic framework that has prevailed for the last 14 years. It is this very framework that the ANC’s left-wing and Cosatu and the SACP excoriate at every opportunity. It feels better to know that the politician dealing with these issues at the centre of the Zuma government understands perfectly well what is owed to those men and women who held the line against self-serving economic populism in the 90’s – at great cost to themselves and their future careers.
Nic Borain 
Amen! Excellent piece Nic.
Thanks Mark – It’s a relief to have a clear positive to write about.
Note to self: no-one likes a moaner, focus more on the silver lining ….
The Bolshevist Finance Minister , Comrade Pravin Gordhan of the SACP , is clearly a devotee of John Maynard Keynes’s ,
” General Theory of Employment , Interest and Money .” But , has he read Charles Dickens’s ” David Copperfield ” ?
‘ Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds,
annual expenditure twenty pounds ought and six , result misery .
—- Mr. Micawber .
Then , of course , bolsheviki Gordhan is an exalted member of the Nomenklatura and he will feel no pain when the depredations of his dubious
“fiscal deficit response to the global economic crisis ” exact their toll on ordinary, miserable South Africans .
Comrade Pravin Gordham is reported to have stated that he is no longer a member of the SACP ( Business Report ,
October 28,2009 ). But , has the Communist cadre recanted his Communist religion? Is he an ex-Communist? Having read Whittaker Chambers’s
book “Witness” (see his ‘ Letter to My Children ‘), I gather that this an extremely painful decision for faithful Communists , and that few are able to give up their Communist faith. On the other hand , is he one of ” those thousands who continually drift into the Communist Party and out again ? The turnover is vast . These are the spiritual vagrants of our time whose traditional faith has been leached out in the bland climate of rationalism . They are looking for an intellectual night’s
lodging . They lack the character for the Communist faith because they lack the character for any faith . So they drop away , though Communism keeps its hold on them .”
—- Witness .
Should Comrade Gordhan, on inspecting the national balance sheet, have made the droll discovery, “money speaks sense in a language all nations understand,” and consequently have made the migration described by Clemo, he might give pause and remember ,”Ill fares the land, to hastening ills a prey, where wealth accumulates, and men decay”.