Ramaphosa’s 'Patronage Cabinet' costing South Africa millions of Rands

Today, together with my colleagues, DA Chief Whip, John Steenhuisen MP and DA Shadow Deputy Minister in the Presidency, Yusuf Cassim MP, we presented information on the full cost to the taxpayer of President Cyril Ramaphosa’s bloated cabinet.

Since assuming office, President Cyril Ramaphosa promised to address government excesses including giving due consideration to downsizing his Cabinet.

It is clear, however, from some Parliamentary replies we have received that he has not taken any steps to address some of the opulent costs that come with his Cabinet. He had failed to address the same issue when he was Leader of Government Business in his previous capacity as Deputy President.

South Africa’s sluggish economy and growing budget deficit calls for restraint in government spending. The ANC government, however, appears far removed from this reality and continues to spend recklessly for the comfort and extravagant lifestyles of members of the Executive.

South Africans are currently bearing the full cost of a 15% VAT increase, but the government’s profligacy still goes unchecked.

This document sets out the current state of the Cabinet and proposes immediate steps which President Ramaphosa has failed to enact.

Ministerial Salaries and Size of the Cabinet

The bloated Cabinet of former President Jacob Zuma continues to live on through the current administration. This Cabinet is by far one of the biggest in the world, with 35 ministers, far bigger than the United States at 15 ministers, Kenya with 18 ministers and the United Kingdom with 21 ministers.

This year alone our 35 ministers and 37 deputy ministers will earn R163.5 million and over R510.5 million over the medium-term.

Ministers' Private Offices

The Ministerial Handbook currently recommends that Ministers’ and Deputy Ministers’ Offices be limited to 10 and 6 respectively. However, in practice Ministers have not be adhering to this as evidenced by the former Minister of Public Service and Administration, Faith Muthambi, who had 26 people in her office.

The current Minister of Public Service and Administration, Ayanda Dlodlo, made a call on Wednesday that ministers should stick to ten people for their private offices. However, under her tenure at Home Affairs between October 2017 and February 2018 she had 17 people in her own private office.

Earlier this year, the DA laid a complaint with the Public Service Commission over the private office of the then-Minister Muthambi who allegedly hired friends and family to her bloated office that totalled 26. Minister Dlodlo has not replied to Parliamentary questions, but based on her predecessor and her own record she likely has a bloated office as well.

Some Departments such as the Department of Defence will spend R76.5 million in 2018/19 and R244.3 million over the medium-term. Private offices also divert funds from other important functions in departments as evidenced in the Department of Women where this year’s budget for Minister Bathabile Dlamini is nearly 20% (R16.1 million) of the total Administration component (R78.7 million) of the Department. In total this year all private offices will cost a whopping R1.09 billion and R3.485 billion over the medium-term.

Ministerial Houses

The Department of Public Works has a specific division called the “Prestige Portfolio” that manages the accommodation for the Presidency, ministers, deputy ministers and other VIPs. The Department spent over R188 million on acquiring just 33 properties in Pretoria and Cape Town at a staggering average of R5.7 million per residence. It was revealed last year that an additional R48 million will be spent on acquiring six additional residences at an average of R8 million per residence in the 2017/18 financial year.

The total of R236 million spent on acquiring 39 ministerial houses could have been spent on building nearly 2 000 RDP houses.

Prestige Accommodation and State Functions funds allocations for activities relating to the residences of parliamentarians, ministers, deputy ministers, the Deputy President and the President is set to cost R87.5 million in 2018/9 and R298.4 million over the medium-term.

Ministerial Vehicles

The current Chapter 5 of Ministerial Handbook allows for a maximum of 70% of inclusive annual remuneration package of minister and their deputies for official vehicles chosen (R1.75 million for ministers and R1.44 million for deputies in 2018/19). Where the DA governs in the Western Cape, ministerial vehicles are capped at 40% of the inclusive remuneration package of provincial ministers.

A set of Parliamentary question replies last year revealed that ministers were living the high life with Faith Muthambi, the then-Minister of Communication spending R2.9 million on cars and the current Deputy Minister of Justice and Constitutional Development, Thabang Makwetla, spending R2.4 million on cars.

If the National Handbook provisions are considered with the current bloated Cabinet in mind and accepting that two official vehicles are allowed (in Cape Town and Pretoria), ministers and deputy ministers are permitted to spend as much as R3.5 million and R2.9 million, respectively. Thus, the National Handbook provisions allow for a total spend of R229 million on luxury cars.

Subsistence and Travel Allowance

This year the taxpayer is set to spend R296.9 million on Travel and Subsistence for Ministries and R934 million over the medium-term. Ministries are set to spend R5.7 million on “entertainment” over the medium-term and R1.8 million in this year.

Not only current ministers, their deputies, MECs, Presiding Officers and their deputies in Parliament and the Provincial Legislatures, but also former ministers, deputy ministers and their spouses still benefit.

Chapter 10 of the Ministerial Handbook describes their travel privileges that include:

48 single domestic flights in business class per annum for former ministers and 24 for their spouses;

36 single domestic flights in business class per annum for former deputy ministers and 18 for their spouses; and

12 single domestic flights in business class per annum to widows/widowers of former ministers or deputy ministers.

In the DA run Western Cape, the Provincial Handbook states members should to fly economy class unlike their national counterparts.

Currently spouses are included for international travel which is a huge cost to the taxpayer and is not necessary (air tickets/hotel fees/daily allowance). It has now emerged that a staggering R873 366.68 was blown on international travel for the Minister of Finance’s spouse, Norma Gigaba, who accompanied him on investor roadshows to China, the United Kingdom and the United States.

While national ministers like the then-Minister of Police, Nathi Mthetwa, spent R734 448 on accommodation at five-star hotels in Cape Town and Durban in 2011, the Western Cape Handbook states that ministers must, as a rule, avoid staying in five-star hotels.

VIP protection services/Static and Mobile Security

Ministers are provided with VIP security services in the Police’s budget programme including security at their ministerial residences. The total budget for VIP protection over the medium-term stands at a staggering R4.84 billion (includes protection for the President, ministers and other VIPs) and R1.5 billion in 2018/19.

Static and Mobile Security provides for the protection of local VIP residences that include ministerial residences, foreign dignitaries and the places in which all dignitaries, including persons related to the President and the Deputy President, are present. Static and Mobile Security is set to cost R3.411 billion over the medium-term and R1.062 billion in 2018/19.

The DA’s Plan for a cutting the costs of the Cabinet

The bloated Cabinet has simply become a waste of taxpayers’ money and will only worsen the poor state of public finances. The section below sets out proposals in order to contain and reduce the huge expenditure of the current Cabinet.

Cut the size of the Cabinet

Simply put the country’s current Cabinet is not fit for purpose and needs to be cut. We don’t not have to look abroad for a more frugal cabinet: previous presidents had smaller Cabinets as outlined below.

Former President’s Cabinet sizes:

Nelson Mandela – total Cabinet size: 50 (28 ministers)

Thabo Mbeki – total Cabinet size: 50 (28 ministers)

Kgalema Motlanthe – total Cabinet size: 47 (28 ministers)

Jacob Zuma/Cyril Ramaphosa – total Cabinet size: 73 (35 ministers)

The table below sets out the various savings scenarios if the salaries of this year was applied to the smaller Cabinet sizes. Thus, if for example Ramaphosa used the same Cabinet size as Mbeki he would save R52.5 million in 2018/19 and R163.7 million over the medium-term.

Review the National Ministerial Handbook

The National Handbook is extraordinarily lenient in some respects, allowing for excessive expenditure. Ministers have therefore used the Handbook as an excuse for exorbitant expenditure, which cannot be justified, given the levels of inequality we live with.

The Handbook was set for an update but has not been updated since 2007, while millions are waisted. The Department of Public Service and Administration already stated in 2014 that they are reviewing the Handbook with little to show.

If the President is serious about helping National Treasury reign in the runaway budget deficit, he will have to cut executive spending by finalising a stricter and more frugal Ministerial Handbook, as well as cutting the overall size of the Cabinet.

The Western Cape Ministerial Handbook already provides for a model of more austere spending and we call for an immediate review of the current National Ministerial Handbook to rein in spending and provide clear measures to enforce compliance.

Submit the Executive to Lifestyle Audits

President Ramaphosa stated during the debate on his State of the Nation Address that he wants lifestyle audits for the Executive. While this is welcome, no action has been taken to date.

Conclusion

South Africa’s sluggish economy and growing budget deficit calls for restraint in government spending. The ANC government, however, appears far removed from this reality and continues to spend recklessly for the comfort and extravagant lifestyles of members of the Executive.

The unrestrained spending is an insult to ordinary South Africans, of whom 9.5 million are unemployed and struggling to survive in this tough economic environment.

Government cannot honestly expect South Africans to tighten their belts when it is doing the exact opposite.

Statement issued by Desiree van der Walt MP, DA Shadow Minister of Public Administration, 20 May 2018