PETER BRUCE: Cyril Ramaphosa gets ready to rumble

For the first time in perhaps a decade, there’s a line in the sand in SA politics.

It isn’t pretty and it’s going to be very hard to defend.

Finance minister Tito Mboweni stood up in parliament on Wednesday to deliver his 2020 budget and promised to cut the public sector wage bill by R160.2bn in the next three years — starting with R37.8bn in this financial year and rising to more than R60bn in year three.

Line. Drawn.

By allowing Mboweni to include the wage-bill target in his budget, President Cyril Ramaphosa has put his presidency on the line.

If he cannot achieve the cuts – or fiscal consolidation, as the economists like to call it – he will lose all credibility with the markets.

Or whatever might be left of it.

The only way to make the cuts is to duck and weave through hours of negotiations with angry unions, who have feasted on the huge public-sector hiring boom of Jacob Zuma’s presidency, particularly during his first term.

In his medium-term budget policy statement in October, Mboweni talked about the need to cut the public-sector wage bill. His broad target then was R150bn over three years.

Analysts were sceptical.

They said it wasn’t enough. And just days after, Moody’s, the last ratings agency to rank SA as investment grade, dropped its stable outlook for the country’s sovereign debt from stable to negative.

Will Moody’s stick to that grading after this budget? There’s one more notch before execution into junk — and that’s for Moody’s to put us on "negative watch", just to see how the early skirmishes with the unions go.

It’s possible. But this budget drips with Ramaphosa’s approach to fixing the country and holding his party together at the same time.

There were other cuts – among them, to health and education and transport. All are run by ministers Ramaphosa could consider allies and they are unlikely to rebel.

But the unions are another matter.

Cosatu, SA’s biggest union umbrella and ANC ally, solidly backed Ramaphosa’s presidency. He will have to spend all his political capital to keep them inside the tent now.

On Tuesday the government said it wanted to review public-sector pay. To say this went down badly would be an understatement.

There’s a three-year public-sector wage agreement in place at the moment and the state is now arguing it can’t afford this (third and final) year’s increase. The Public Servants Association, which represents almost a quarter of a million people, was outraged.

"Considering the current economic situation that is aggravated by rising electricity costs, petrol price increases, and a rise in the cost of most commodities, public servants simply cannot afford to sacrifice on a salary increase," the association said.

That was nothing compared to what Cosatu promised. Its central executive committee warned that if the review the government seeks was "smuggled" into the budget (it sure as hell was), the committee would consider it a declaration of war.

"This irresponsible and blatant act of provocation will seriously destabilise the public service and we warn the government to abandon this idea and give workers what is due to them on April 1 2020," the Cosatu executive said.

This is the big one, people.

If you’re Moody’s and you’ve stood by SA for so long while you wait for reform and consolidation, do you abandon the country now? Now that the actual fighting begins?

Besides the R160bn in wage cuts, Mboweni promised there was another R100bn in "adjustments" to the budgets of the other ministers mentioned earlier.

They all looked a little miserable. As did human settlements minister Lindiwe Sisulu, no longer (if ever) a Ramaphosa ally, whose budget takes a R14bn hit over the next three years.

But if Moody’s dumps SA now it is going to miss the theatre.

Cosatu will be on the streets, overturning garbage cans and threatening blood, as per its statement on the wage deal review. It will split from the ANC, start its own party, fight next year’s local elections on its own. There’ll be huge marches and demonstrations.

TV and newspapers and websites will carry earnest opinion from the Left on the "failure" of the ANC to stick to the national democratic revolution. But it’ll all come to naught.

In fact, Cosatu’s going nowhere.

Irvin Jim’s lamentable election performances ever since Numsa was expelled from Cosatu are an object lesson on the price of hubris.

Cosatu, like the SA Communist Party, needs the ANC just as much as the ANC needs it.

They’re bound to each other by the fear of what might happen if they each went their separate ways. It’s failure that keeps them together.

Heaven forfend we should grow GDP again at 5%. When that happened to a Spanish alliance that looked in the 1980s remarkably like the tripartite one here, they fell apart and, confident in their own futures in a growing economy, formed their own parties.

SA is not going to grow fast enough to break the alliance, more’s the pity.

But Ramaphosa is going to have to use every bit of charm he has to persuade the unions to stand aside while he drives the fiscal consolidation SA needs to become an investable proposition again. It is not beyond his powers and fortunately the threat from the former Zuma faction of the party has receded.

There may be other factions building but they are no threat at the moment.

I think Ramaphosa has been as brave as he can be in this budget. He is taking on his friends and that was always going to be a deeply unpleasant experience, as we are about to see.

Instead of Trevor Manuel’s apples, Mboweni has taken to bringing succulent plants to his budget speeches. Yesterday’s was an aloe ferox, an ungainly little chap with stumps for leaves and not a flower I could see. Apparently its main characteristic was that it "thrives when times are tough. It actually prefers less water. It wins even when it seems the odds are against it."

We will see. After the speech, people seemed slightly, well, impressed. There were no tax increases, so the Old Mutual economists are amateurs like the rest of us when it comes to predictions and it was Dennis Davis, speaking to a TV reporter, who reminded us about the courage it would have taken to keep all taxes as they were, given SA’s situation.

It’s a bet, he implied, that through fiscal consolidation and by not raising any taxes, the government would be creating, or at least doing no further harm, to conditions for growth, meagre though they may be.

And he is right, of course. We may all want a tougher, more decisive and more daring national leader. Ramaphosa has, at times, seemed to fiddle while Rome burns but he knows he cannot do anything if he does not survive politically. That’s just obvious.

What happened in parliament on Wednesday is that, speaking through his finance minister, he laid down a slow and arduous path to some kind of recovery. It wasn’t much but he doesn’t have much to work with.

Now, with an ANC national general council due in June, at which he expects to come under attack (though it is not legally possible to remove him), he has drawn his line in the sand and challenged his enemies to come for him.

There are many, to the left and the right.

He is banking on his national popularity (he is 40 points ahead of his nearest rival in polls), and increases in welfare payments and tax stability to get him through.

Ramaphosa seldom speaks directly.

Mboweni did the job his boss wanted him to do.