How Trevor pulled the fat from the fire

By Gaye Davis

‘I think he’s running on autopilot right now,” the Treasury official said as the lift doors closed. “This weekend, he will probably crash.”

She was referring to her boss, Finance Minister Trevor Manuel, whose office is on the third floor of the giant office block housing government ministries, across the way from parliament.

It was Thursday, the day after his 13th Budget. There had been no respite for Manuel, no time to savour the headlines welcoming a bold yet realistic Budget designed to offset as far as possible the fallout from the perfect storm raging in the global economy.

Producing this Budget, he told a television interviewer minutes after delivering it, was “like walking a tightrope strung from Table Mountain to Devil’s Peak”.

Manuel’s day started with a business breakfast at 6am, broadcast live on TV, then he fielded calls on radio. Back in his office, his secretary brought him a cup of tea and a croissant to make up for the breakfast he didn’t get to eat.

It was the school-going daughter of one of the breakfast guests who asked the question everyone wanted answered, but were too afraid to ask: “Is this your last Budget?” she asked.

“Is this my last Budget? Is this your last question?” he shot back.

If not his last Budget, it was certainly the toughest yet. Budget Day was brought forward this year in the expectation that the election would be called early – ratcheting up the pressure.

But the killer was trying to plan in a world turned on its head since the subprime catastrophe in the United States.

Imagine piloting a tiny plane in an immense storm, with zero visibility, and then having your instruments fail on you.

That’s a taste of what Treasury staff had to deal with: the forecasts had to be made – they had to be accurate, but “none of the tools you use to get the numbers are currently delivering”, said Manuel.

His policy course over the past decade, the conservatism that has seen him vilified by the Left, is exactly what has allowed him to produce a Budget that will pump billions into an economy already sluggish from the first shock-waves of the global turmoil rippling into every corner of the world.

Manuel brought it all home in his speech: “When a global motor company cuts back on making cars, it cancels its orders for catalytic converters. This firm making catalytic converters is not in Detroit or Shanghai, it is here, in the Eastern Cape.

“The mine producing the platinum that goes into that converter is near Rustenburg. The worker in the factory in Uitenhage and the mineworker in Rustenburg are now without work.

“And the woman running the little stall selling vegetables outside the mine is making less money each passing week. Their families, all of them, face a future made more precarious by the vagaries of global finance.”

South Africa is going into debt so that the government can spend at a time when the private sector won’t be.

Billions have been allocated for roads and rail networks, pipelines and power stations, hospitals and classrooms, municipal water-works and other projects that will not only create jobs and offset the slowdown, but will also provide a lasting legacy – and position the country for the growth that will inevitably come. It’s an investment in the future.

Spending has to be sustainable, said Manuel, which is why he balked over extending the child support grant to 18.

He doesn’t want a culture of dependency created, and that goes for industries coming begging for help too. It’s a debate that’s going to rage.

“There are some jobs that we will have to do everything in our power to try and save – but we need to focus on people, rather than the jobs.

“Manufacturing, mining – these are the sectors that underpin the real economy, for their workers’ production is the dynamo that generates the other jobs. That’s where we either save jobs, or we look at how we look after the people who’ve lost their livelihoods.”

But there is also the concept of “creative destruction”, said Manuel, when excess gets deservedly cut away.

“It’s what the money buys that matters,” he said. That’s why he called for a review of government spending, including the provinces, and given notice of a crackdown on wasteful state expenditure – the travel, the consultants’ fees, the self-promoting advertising that politicians love.

“You can sit in your car in Cape Town and hear Mpumalanga road safety ads. Why?” he asked. “We need some order about this.”

Hence his call on whoever becomes the country’s next president – most likely ANC president Jacob Zuma – to launch a comprehensive government expenditure review right at the start.

Whatever Manuel’s own future, he said the country had a precious asset in its “exceedingly competent, high-pressure, high-energy” Treasury team. What was most important for him was that this be recognised, whether he was at the helm or not.

• • This article was originally published on page 8 of Saturday Star on February 14, 2009
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