President Zuma’s proposal at the State of the Nation to move Parliament to Pretoria was a red herring and misdirection.
Not one economist and ratings agency mentioned the cost of two capitals as the reason constraining South Africa’s economic growth and contributing to possible downgrades. They repeatedly referred to high government debt, spiralling public wage bill, electricity shortages, policy uncertainty and an unfavourable investment climate.
Let’s put the alleged benefits of moving Parliament in a financial context. The money for the multi-billion cost (I don’t believe it has been quantified) will be borrowed; the national savings fund has been raided to pay for last year’s above-inflation public sector wage hike and the hard-pressed taxpayer can’t pay more.
The interest on the capital will be hundreds of millions of rand a year. The financial benefit, estimated at R750 million a year, will only be realised after 10 years, long after South Africa has been relegated to junk status.
Reducing cabinet by half, which is already among the largest in the world, will save billions a year . Reducing cabinet would thus halve salaries and benefits and accommodation, travel (including luxury cars), offices, support staffs, etc for those required to work in Cape Town during session. This would close the Cape Town-Pretoria cost gap to a more manageable amount, say R350 million, without the cost of building a new parliament complex.
This can be done immediately with little cost, as ministers and director generals “serve at the pleasure of the president”. But of course, this obvious and neat solution is too simple for the president, ANC and finance minister because of their extensive patronage networks.
I believe the reason moving parliament was raised again is to get the public talking about this irrelevancy so perhaps they will forget about Nkandla, Nenegate and ratings downgrades, and the hard decisions the president failed to make at Sona and before and probably after too.
If this is the best cost-cutting proposal government and Treasury can come up with, then I fear next week’s budget and Pravin Gordhan’s supposedly intelligent and steadfast management of the country’s fiscus.
I can't believe this flim-flam is getting the attention it has been getting locally. But be assured investors and rating agencies are not fooled.
Not one economist and ratings agency mentioned the cost of two capitals as the reason constraining South Africa’s economic growth and contributing to possible downgrades. They repeatedly referred to high government debt, spiralling public wage bill, electricity shortages, policy uncertainty and an unfavourable investment climate.
Let’s put the alleged benefits of moving Parliament in a financial context. The money for the multi-billion cost (I don’t believe it has been quantified) will be borrowed; the national savings fund has been raided to pay for last year’s above-inflation public sector wage hike and the hard-pressed taxpayer can’t pay more.
The interest on the capital will be hundreds of millions of rand a year. The financial benefit, estimated at R750 million a year, will only be realised after 10 years, long after South Africa has been relegated to junk status.
Reducing cabinet by half, which is already among the largest in the world, will save billions a year . Reducing cabinet would thus halve salaries and benefits and accommodation, travel (including luxury cars), offices, support staffs, etc for those required to work in Cape Town during session. This would close the Cape Town-Pretoria cost gap to a more manageable amount, say R350 million, without the cost of building a new parliament complex.
This can be done immediately with little cost, as ministers and director generals “serve at the pleasure of the president”. But of course, this obvious and neat solution is too simple for the president, ANC and finance minister because of their extensive patronage networks.
I believe the reason moving parliament was raised again is to get the public talking about this irrelevancy so perhaps they will forget about Nkandla, Nenegate and ratings downgrades, and the hard decisions the president failed to make at Sona and before and probably after too.
If this is the best cost-cutting proposal government and Treasury can come up with, then I fear next week’s budget and Pravin Gordhan’s supposedly intelligent and steadfast management of the country’s fiscus.
I can't believe this flim-flam is getting the attention it has been getting locally. But be assured investors and rating agencies are not fooled.
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