Resignation of Michael Sachs plunges the budget process into chaos in the middle of a fiscal crisis

The Minister of Planning, Monitoring and Evaluation, Jeff Radebe, tried to reassure us that there was “nothing to fear” from the new “budget prioritisation framework” during his briefing following the medium-term budget policy statement on 26 October 2017 in Parliament.

However, the shock resignation of veteran budget office head, Michael Sachs, which is a huge blow to National Treasury, confirms our fears that decision-making on budget priorities, and the budget itself, have now been centralised under President Jacob Zuma.

We now have:

• a “Presidential Fiscal Committee” making decisions about the budget at the expense of the Minister’s Committee on the Budget;
• a “Mandate Paper” setting out budget priorities, in terms of a new budget prioritisation framework, compiled by the Department of Planning, Monitoring and Evaluation, at the expense of National Treasury; and
• that is not to mention rogue elements, such a Morris Masutha, who are reportedly peddling a R40 billion budget-busting plan for higher education, with the support of President Jacob Zuma.

What this means is that in the middle of a “fiscal crisis”, which Michael Sachs himself described as the most challenging since the global financial crisis, decision-making on the budget has been plunged into chaos.

And it seems that National Treasury are slowly being “defanged” and reduced to “bookkeepers”, with declining influence over budget priorities, and the budget itself, under President Jacob Zuma.

That is why I will write to the Chairperson of the Standing Committee on Finance, Yunus Carrim, requesting him to schedule an urgent hearing on this matter before the end of recess in Parliament.

We can only hope that there is no snowball effect and that other senior officials at the apex of the system hold steady do not resign from National Treasury.

 

 

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