Centre for Policy Studies Comments on the 2010/11 Budget

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Friday, 19 February, 2010 - 07:33

By all accounts, the first fully-fledged budget presentation by the new Finance Minister Pravin Gordhan, was a balanced affair – meaning that it was sufficiently pleasing to a sufficient number of organised interest groups, especially those groups with the capacity and potential to undermine the ability of the government to pursue its programmes.

By all accounts, the first fully-fledged budget presentation by the new Finance Minister Pravin Gordhan, was a balanced affair – meaning that it was sufficiently pleasing to a sufficient number of organised interest groups, especially those groups with the capacity and potential to undermine the ability of the government to pursue its programmes.

With the exception of COSATU Secretary General, Zwelinzima Vavi, who remarked “employers should be celebrating tonight, they snatched victory from the jaws of defeat, but the workers have snatched defeat from the jaws of victory”, major interest groups seem to have been pleased with the budget. One economist felt the Minister successfully calmed the markets and the fears of business and investors with an assurance that the Reserve Bank would remain independent, and its constitutional mandate would remain unchanged.

While the Business Day newspaper indeed appeared to celebrate what it saw as the Minister staring down populists allies within the ANC with a prudent budget, even the collective political opposition was not left out of the chorus of collective approval. The lone voice, generally, appeared to be that of the so-called populists, through their mouth piece, COSATU, who are describing the budget as ‘Old wine in new bottles. Interestingly though, the voice of organised civil society is conspicuous by its absence. What is civil society’s response to the budget? Popular perception holds that organised ‘civil society’, in general, serves as that column of dedicated and selfless citizens who are willing to toil endlessly, speaking out against the excesses of those in power and authority, to bring to light the plight of the impoverished and marginalised.

During this period of crunching global recession and astonishing figures of unemployment, accompanied by equally astonishing levels of official opulence, civil society ought to be taking centre stage to give perspective to the budget on behalf of the poor and disadvantaged. Make no mistake - the civil society sector is as varied as any sector – socially, economically and politically fragmented, and riddled astonishing levels of privilege and opulence ridding side by side with inequality and marginalisation. Yet that should not make it any harder for a collective voice to express a perspective on behalf of the sector than it was in the case of labour, business, the markets and investors. This is disappointing.

The budget itself appears indeed to be a balancing act that sought to please the major constituencies of business, investors and the markets, although it appears to have got it slightly wrong in the case of COSATU. It is not clear though whether the ultimate constituency (the ordinary households, man and woman in the street and potential voter) is as pleased or displeased as we are made to believe, depending on who we listen to or which newspaper we read.

The day after the budget presentation, one of the daily newspapers had a headline “There’s something for all in Gordhan’s balancing act”, suggesting that everyone, presumably ordinary citizens included, was pleased. We know though that there is a fount of discontent out there in communities across this country, willing to express their anger violently through the burning of libraries and stoning of municipal vehicles. For these ordinary citizens, the figures that the minister of finance cast about might not mean much. For instance, many of us were pleased to hear the Minister say that a total of R165 billion would be spent on education in the coming year; that an additional R10 billion would be allocated over and above the R80 billion allocated for social grant spending in the previous year; that R28 million would be made available for the government’s proposed annual national assessments for literature and numeracy in specified grades; that R60 billion would be provided to improve the working conditions for the police; that R1.2 billion would be made available for rural water provision and R8.4 billion towards the provision of antiretroviral medication for the next three years.

The government is even working on the idea of getting 800 000 young people into subsidised employment, presumably by the next fiscal year. These are truly impressive figures and the policy sectors for which these figures were announced seem to underpin the ANC administration’s key election priorities – education, rural development, health, job creation and crime. However, these figures do not say much about the state’s capacity to meet these enormous challenges. At the end of the day, lack of skills, corruption, lack of planning capacity, poor management skills, lack financial controls, widespread tender rigging, poor and politically driven recruitment practices and other usual defects of government delivery institutions are almost surely going to render these figures meaningless.

This is therefore the time when the government’s monitoring and evaluation systems, especially at provincial and local levels, should already have kicked into action to ensure that effective expenditure takes place and services are rendered to those who deserve them. It need not take distressing visual images of citizens burning libraries and trashing government property for us to find out that ordinary communities are not receiving services. Capacity for effective monitoring, oversight and evaluation is sorely needed at all levels of government, but especially at local and provincial levels. Equally important is the need for civil society to become more vocal and serve as a mouthpiece for the poor and marginalised, by monitoring and evaluating the work of government and its agencies, and holding government accountable to ensure effective spending of the financial allocations we witnessed on Wednesday this week.

Thabo Rapoo
Executive Director
Centre for Policy Studies

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