Treasury budget cuts are an opportunity - FMF

Foundation suggests cutting the size of cabinet, and shelving the NHI

‘Cut Cabinet, shelve NHI’ – Treasury budget cuts are an opportunity, not a crisis, says FMF

Treasury’s announcement that there need to be significant budget cuts is a welcome sign of fiscal prudence in an age of reckless spending, but some regard this as a crisis.

The Free Market Foundation (FMF) proposes that there be a drastic cut to the size of government, without hindering the government’s obligations in terms of the Constitution. The South African government currently engages in a lot of expensive non-governmental work that crowds out personal and community responsibility, and stifles private sector growth.

The FMF will write to the Minister of Finance, Enoch Godongwana, urging him to consider the proposal.

‘While the unions and many activists may try to label budget cuts as “unconstitutional”, the truth is that South Africa would have a far more effective government if organs of state were solely dedicated to fulfilling constitutional obligations,’ said FMF Head of Policy, Martin van Staden.

‘The most logical place to start would be to get rid of any Cabinet portfolio and Cabinet department that cannot be traced directly back to a constitutional provision,’ continued Van Staden. ‘That should be followed by shelving any financially unsustainable plans like National Health Insurance or the Basic Income Grant.’

The text of the Constitution only mandates the existence of the Cabinet portfolios of President, Deputy President, Finance, Cooperative Governance, Justice, Defence, and Police, but additional portfolios are required by necessary implication. Those that are not required explicitly or implicitly are simply discretionary – and South Africa has too many of these discretionary portfolios, costing the taxpayer millions.

The FMF proposes that the current 30-member Cabinet can be constitutionally and responsibly reduced to only 10 bureaucracies.

The new Cabinet, if the proposal is adopted, would be organised as follows:

- Presidency (including the President and Deputy President)

- Finance

- Defence (including State Security)

- Justice

- Home Affairs (including Police and Correctional Services)

- International Relations (including aspects of the current Trade, Industry, and Competition portfolio)

- Public Service (including Planning, Monitoring, and Evaluation)

- Public Works (including Transport, Electricity, and Water and Sanitation, and aspects of the Agriculture, Land Reform, and Rural Development, and Forestry, Fisheries, and the Environment portfolios)

- Cooperative Governance

- Social Development (including aspects of the Forestry, Fisheries, and the Environment portfolio and of the Labour and Employment portfolio)

One might wonder where the Basic Education, Higher Education, Health, and Human Settlements portfolios would be housed. The FMF proposal would scrap these portfolios entirely and devolve their necessary functions to municipal and provincial governments. The Social Development portfolio in the central sphere of government would be responsible for the administration of education, healthcare, and housing vouchers for indigent citizens.

The portfolios that would be scrapped entirely, with only a handful of their essential regulatory functions falling to the aforementioned 10 departments, are:

- Mineral Resources and Energy

- Women, Youth, and Persons with Disabilities

- Small Business Administration

- Sport, Arts, and Culture

- Tourism

- Science and Innovation

- Communications and Digital Technologies

- Agriculture, Land Reform, and Rural Development

- Labour and Employment

‘One must not be naïve. We realise that South Africa’s Cabinet and the dizzying number of official posts has more to do with political patronage than with constitutional government. However, with this proposal we seek to show the small number of responsible people in government, and society at large, that reform is possible without drastic interventions such as a constitutional amendment,’ said Van Staden.

The FMF is heartened that the National Treasury is realising that fiscal responsibility is key to South Africa’s sustainability. Municipalities like Tshwane have had similar realisations, and others, like eThekwini – presently experiencing a necessary and commendable rate boycott – must have them sooner rather than later.

Issued by the FMF, 11 September 2023