NEWS

Gordhan: There Are Some Institutions That You Just Shouldn't Mess With

“Treasury is a highly professional organisation, and treasury departments all over, whether in the public or private sector, are virtually indispensable.”

22/02/2017 14:15 SAST | Updated 22/02/2017 15:26 SAST

ANALYSIS

Finance Minister Pravin Gordhan and his A-team sent out an unequivocally clear message from National Treasury to its detractors and attackers: "Don't mess with us."

The minister of finance, self-assured and dapper and flanked by Treasury's director-general Fuzile Lungisa, Deputy Finance Minister Mcebisi Jonas and Reserve Bank Governor Lesetja Kganyago, spoke to the media for almost 90 minutes before he delivered his budget speech on Wednesday.

He made two disguised, but biting, references to the Gupta family. The family are friends of President Jacob Zuma, whom Gordhan is battling in court.

Gordhan twice referred to the Guptas, first, when answering a question from an ANN7 reporter (the Guptas own the news channel ANN7) he said: "I don't know if ANN7 covers that sort of thing, it always seems occupied by other things."

The second reference was when he spoke about the need for creating new opportunities for South Africans to accumulate wealth: "Now I'm not talking about Warren Buffet-type of wealth, or the type of wealth accumulated by any other family in South Africa you might think of, illegitimate of legitimate ..."

Gordhan left no doubt as to how Treasury goes about its business and what its role in society is.

"Treasury is a highly professional organisation, and treasury departments all over, whether in the public or private sector, are virtually indispensable," Gordhan said, before driving home his point.

"There are a couple of institutions [in the state] which I would suggest, and I'm saying this in quotation marks, 'you don't mess with'. And Treasury is one of them. And [so] I would add is the South African Revenue Service."

Gordhan and his team were defiant in the face of political attacks, confident in what their mandate guiding the country's finances entails and dismissive of political white noise based in fiction more than fact.

Jonas, who, according to political chatter, might make way for former Eskom CEO Brian Molefe, was especially strident, telling the assembled media at Parliament in Cape Town and at Treasury's headquarters on Church Square in Pretoria the environment their department operates in is complicated by politically motivated deployments "even though sometimes it flies in the face of all logic".

Molefe was found by the public protector's office to have been in very frequent contact with the Guptas while they were in negotiations to buy a coal mine to supply Eskom. He has been deployed to Parliament by the African National Congress.

The deputy minister, with his tie as usual hanging loosely underneath the undone top-button of his white shirt, said that patronage is a scourge that undermines growth and development. He added that political noise does indeed have a direct impact on Treasury's work.

"Political decay reflects in the strength and weaknesses of institutions, institutions that are important for growth and development. Now, I'm not saying that is the case here," Jonas said laughingly, looking at an approving Gordhan.

"You must connect events and decide for yourself, you [the media] are much better with it than I am."

A running theme for Gordhan and his colleagues was that Treasury's enemies need a reality check, that drastic intervention to ensure better economic growth is needed and that Treasury operates within a transparent and inclusive environment.

But the reality of the political environment was omnipresent.

Lungisa said: "I have been director-general for six years and have had four ministers. It takes time to find the chemistry with a new minister, to get working together well ... I'm a civil servant, but I'm also a human being.

"I can tell you directly: the high turnover of ministers damages morale in Treasury. I know that for a fact, I've seen it when things have been stable and I've seen on the other side. When [there is instability] I get whispers from the market saying 'I have this CV on my desk, why is this person leaving?'

"I know what I'm talking about, just walk down the road to that big, black building and see how many Treasury officials work there?" he said, presumably referring to the Absa building in lower Adderley Street.

Gordhan and his colleagues comments serve as a reality check to their opponents, and transmitted the message that Treasury remains the shining beacon of good governance and fiscal prudence, but that there are limits and visible threats.

Does it matter who is minister or deputy minister and is Treasury institutionally strong enough to survive and changes, a reporter asked.

"Let me say," Gordhan said, looking at Jonas. "We work very well together."

"Does it matter who sits in these chairs? Yes, it does matter. Because it impacts on the policies and ideas that goes to Cabinet. It takes many years to build an institution, to build confidence and trust, to build skills, culture, effectiveness, resilience. But it's very easy to break it down," he said.

But, he reminded everyone, they serve at the pleasure of Zuma -– and if Zuma decides to redeploy them, that will be his decision. "There's no recourse, we can't appeal. We're either in or we're out. And we're very much alive to that."

It was an extraordinary display of confidence and clarity. Confidence in the task at hand and clarity about the means to achieve them.

But the message was clear: don't mess with stability.