Mboweni a victim of Reserve Bank's inaccuracy
September 18, 2009
Outgoing Reserve Bank governor Tito Mboweni recently received bad press over his salary increase of nearly 14 percent in the 2009 financial year. This was after a 28 percent increase the previous year and followed Mboweni's complaints about above-inflation increases to labour, which are likely to put upward pressure on inflation.
Mboweni said the figure also created problems with his ex-wife and prompted relatives to phone him asking for loans.
The figure, which was widely reported, was not accurate - but the bank has only itself to blame. This is because the annual report failed to point out that the latest figure included a long service award equal to six weeks of pay. So figures for 2008 and 2009 are not directly comparable.
Noluthando Orleyn, who chairs the bank's remuneration committee, defended the governor after the bank's annual general meeting yesterday. She said he had received only a 6 percent adjustment if the long service award was excluded.
Other items apart from salary are included in the overall remuneration figure. These include retirement and medical benefit contributions, bursaries that are available for children of all bank employees and the cost of the governor's residence.
The governor received R3.9 million in remuneration and fringe benefits and with retirement and medical contributions the package was worth R4.3m. Mboweni will also be paid the equivalent of a restraint of trade for a "cooling off" period of between six and 12 months still to be determined.
Orleyn pointed out it would not be appropriate for the governor to move straight from his key position at the centre of the financial system to a job somewhere else.
Mboweni will not be looking to farming as a future career. His attempts to farm avocados in Limpopo, in his spare time, have already met with failure. On a previous occasion he confessed the trees died because he had neglected to research whether they were suited to the soil.
No socialist nirvana
Deputy President Kgalema Motlanthe has dismissed outright the possibility of the ANC being snatched by either of the components of its alliance, the SACP and Cosatu. He poured cold water on the possibility that South Africa was on its way to being a nirvana of socialism.
Tackled on the issue at a Cape Town Press Club interactive session this week, Motlanthe insisted that the ANC remained a broad church - before and after the December 2007 Polokwane conference which brought the Jacob Zuma group to power and placed Motlanthe temporarily in the presidency, before he stepped down to be deputy president in May.
The trade unionists and the communists brought along their perspectives, he reported, noting "the trade union perspective is an invaluable element I think".
The result of this interaction with the alliance partners was that there was significant healthy debate in the ruling movement and "independent, thorough criticism within the ANC", which he said was more strident than anything which the opposition political parties presented to the government.
When assessing whether Cosatu and the SACP had snatched power within the ANC one had to look at the policy positions taken first at the policy conference and then ratified at the national conference. These positions took years to formulate, debate and put in place.
Admitting that there were "flanks that are forever sniping", he said this kept the movement and elected leaders "on your toes", but he said it "would be a weakness if one day one component enjoys a monopoly of ideas".
Cabinet cross-currents
Motlanthe was also candid about the rigorous debates and communication that go on in the cabinet. There was constant discussion and interaction between ministers, he reported, something which might distinguish it a little from previous cabinets.
Another factor which distinguished it from other cabinets - such as former president Thabo Mbeki's and the cabinet which Motlanthe led for seven months until May - was that there were "more new faces".
One minister, Sicelo Shiceka, who is in charge of co-operative government and traditional affairs - previously provincial and local government - had been prone to making "pronouncements" that "correctly speaking should have (been) served before cabinet". It was an obvious reference to the minister's announcement that Merafong municipality - which includes the troubled area of Khutsong - would, after months of protests by the local community, shift from North West province to Gauteng.
Motlanthe did not mention that another cabinet member, Public Service and Administration Minister Richard Baloyi, had astounded the cabinet - and Treasury - by signing a wage deal averaging 11.5 percent with public service unions - higher than the mandated 8.5 percent. This is expected to cost the state R2 billion in the coming year and would raise the fixed costs when the state went back to the negotiating table to forge inflation-linked raises each year.
Motlanthe spent a lot of time trying to explain away the costs of ministerial motorcars. He argued that the cars "for about 30 or so" ministers meant that if one were cutting the cost, from R800 000 to about R200 000 for each car, this would not amount to a large amount of savings.
But the arithmetic didn't come out right - there are 64 ministers and deputy ministers and scores of provincial ministers, all of whom are provided with cars.
Motlanthe acknowledged that there was the problem that national ministers needed two cars - one in Pretoria and one in Cape Town. Yet the costs of procurement of such things as bottled water, he argued, was a problem. Whereas the bottle cost under R10 in a shop, it cost the state sometimes over R30.
Somehow, one suspects, the message of prudence has been lost somewhere.
Edited by Peter DeIonno. With contributions by Ethel Hazelhurst and Donwald Pressly
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