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Tuesday, 15 September 2009, 16:39
UNCLAS SECTION 01 OF 02 CAPE TOWN 000204 
SIPDIS 
EO 12958 N/A 
TAGS PGOV, KDEM, SF 
SUBJECT:  GOVERNMENT SPENDS EXCESIVELY ON LUXURY CARS 
¶1. (U) In recent months government Ministers and senior officials have spent roughly 4 million USD on luxury vehicles. Although the spending is in accordance with the Ministerial Handbook and no
regulations have been broken, the public outcry has been enormous. (Note: Ministers are entitled to a state-purchased car equivalent to the value of 70 percent of their annual salary End Note.) In light of the global economic crisis, and the fact that many South Africans lack access to basic services such as water, sewage, electricity and garbage removal, there is a renewed public awareness and discontent over excessive government spending. 

¶2. (U) In August, President Jacob Zuma stated that newly sworn-in Ministers were thinking about the recession and no longer spending large amounts of public money on luxury cars. However the spending spree continued throughout August and September leading to opposition parties raising the issue in Parliament and trade unions weighing in on the matter. The Congress of South African Trade Unions (Cosatu) went so far as to urge those Ministers who bought extravagantly expensive cars to give them back, leading to a war of words between the trade union and Communications Minister Siphiwe Nyanda. Nyanda, who himself purchased vehicles totaling several thousand dollars, the most spent by anyone in the Cabinet, said it was absurd for Cosatu to suggest that the Ministers should return the official vehicles because vehicles are needed to deliver on their mandate and meet the expectations of the public. It is, however, the expenditure incurred by Blade Nzimande, Minister of Higher Education and Training and leader of the South African Communist Party (SACP) that has caused the most strident public backlash. Nzimande’s vehicle purchase has evoked the most criticism as it highlights the double standards at play in government. In June this year while endorsing the principles and values behind Nelson Mandela Day, Nzimande stated it was necessary to reaffirm the values Mandela represents and “roll back the greed, corruption and selfishness of capitalism.” However, two months later he spent thousands on a new car. In response to the public outcry Nzimande stated that “I have not abandoned my values. I don’t think I’ve abandoned my moral leadership. I am still a communist, I am still committed to the working class, and I am still committed to taking up the issues relating to the poor.” 

¶3. (U) In a study commissioned by the Democratic Alliance (DA) it was found that if every Minister, Deputy Minister, Premier and Minister in the Executive Committee (MEC) were to spend the full amount allowed by the Ministerial Handbook on vehicles, the total cost would come to approximately 32 million USD for 220 motor vehicles. That is enough to have built 5500 houses, 25 schools, or to pay the salaries of 1500 nurses for a year. The DA has submitted a letter to the Director-General in the President’s Office requesting that the Ministerial Handbook be amended to reflect a more sympathetic appreciation for the financial hardships faced by most South Africans. In addition, the DA has launched an “austerity” drive as well as a wasteful expenditure monitor and Western Cape MECs have been told to use vehicles in the government garage car pool rather than purchase new ones. Western Cape Premier Zille is using an old vehicle and the official car she used as mayor of Cape Town, a hybrid Prius, is now being used by her successor. Zille has also said that the Western Cape executives would no longer QZille has also said that the Western Cape executives would no longer use blue light escorts for travelling and would cancel their corporate credit cards, stop using VIP lounges for domestic air travel, and give up their state subsidies for domestic employees. Recognizing the need to address the situation Minister in the Presidency Collins Chabane, issued a statement saying that Cabinet has established a ministerial task team to look at government spending in the context of the economic meltdown.

¶4. (U) Comment: The global economic recession has unleashed a reappraisal of the role of state spending in the South African economy and the Zuma administration should be on the cutting edge of defining this role for South Africa. Zuma’s government has failed to do this and, despite winning an overwhelming majority in the April general election, is currently faced with a credibility problem as on the one hand it advocates serving the needs of the poor and encourages all South Africans to tighten their belts during the current economic crisis, while on the other it is allowing excessive spending of public money on personal luxuries. In order to restore public confidence in the government, there needs to be a marked improvement in service delivery and an eradication of entitlement and inefficiency. Effective management of government is a priority. This also applies to the curtailment of corruption and overspending which is sapping state coffers and inhibiting the delivery of basic services. However, there needs to be a political will to combat corruption and self enrichment, as any failures to do so weaken the government’s authority to combat corruption and excessive spending at lower levels in government. Local municipal elections are due to be held in 2010 with many constituencies expected to be closely contested. Opposition parties have already expressed the possibility of an alliance to contest the local elections and the ANC could find itself in a precarious position should its legitimacy be weakened. South Africa is believed to have one of the highest per capita rates of protest action in the world, and South Africans are openly critical of a government most of them vote for at the polls. Politically, the “cargate” scandal has the ability to weaken the Zuma government and increase protests, as a loss of credibility has the potential to create a climate for instability, unrest and
CAPE TOWN 00000204 002 OF 002

¶1. (U) In recent months government Ministers and senior officials have spent roughly 4 million USD on luxury vehicles. Although the spending is in accordance with the Ministerial Handbook and no regulations have been broken, the public outcry has been enormous. (Note: Ministers are entitled to a state-purchased car equivalent to the value of 70 percent of their annual salary End Note.) In light of the global economic crisis, and the fact that many South Africans lack access to basic services such as water, sewage, electricity and garbage removal, there is a renewed public awareness and discontent over excessive government spending. 2. (U) In August, President Jacob Zuma stated that newly sworn-in Ministers were thinking about the recession and no longer spending large amounts of public money on luxury cars. However the spending spree continued throughout August and September leading to opposition parties raising the issue in Parliament and trade unions weighing in on the matter. The Congress of South African Trade Unions (Cosatu) went so far as to urge those Ministers who bought extravagantly expensive cars to give them back, leading to a war of words between the trade union and Communications Minister Siphiwe Nyanda. Nyanda, who himself purchased vehicles totaling several thousand dollars, the most spent by anyone in the Cabinet, said it was absurd for Cosatu to suggest that the Ministers should return the official vehicles because vehicles are needed to deliver on their mandate and meet the expectations of the public. It is, however, the expenditure incurred by Blade Nzimande, Minister of Higher Education and Training and leader of the South African Communist Party (SACP) that has caused the most strident public backlash. Nzimande’s vehicle purchase has evoked the most criticism as it highlights the double standards at play in government. In June this year while endorsing the principles and values behind Nelson Mandela Day, Nzimande stated it was necessary to reaffirm the values Mandela represents and “roll back the greed, corruption and selfishness of capitalism.” However, two months later he spent thousands on a new car. In response to the public outcry Nzimande stated that “I have not abandoned my values. I don’t think I’ve abandoned my moral leadership. I am still a communist, I am still committed to the working class, and I am still committed to taking up the issues relating to the poor.” 3. (U) In a study commissioned by the Democratic Alliance (DA) it was found that if every Minister, Deputy Minister, Premier and Minister in the Executive Committee (MEC) were to spend the full amount allowed by the Ministerial Handbook on vehicles, the total cost would come to approximately 32 million USD for 220 motor vehicles. That is enough to have built 5500 houses, 25 schools, or to pay the salaries of 1500 nurses for a year. The DA has submitted a letter to the Director-General in the President’s Office requesting that the Ministerial Handbook be amended to reflect a more sympathetic appreciation for the financial hardships faced by most South Africans. In addition, the DA has launched an “austerity” drive as well as a wasteful expenditure monitor and Western Cape MECs have been told to use vehicles in the government garage car pool rather than purchase new ones. Western Cape Premier Zille is using an old vehicle and the official car she used as mayor of Cape Town, a hybrid Prius, is now being used by her successor. Zille has also said that the Western Cape executives would no longer QZille has also said that the Western Cape executives would no longer use blue light escorts for travelling and would cancel their corporate credit cards, stop using VIP lounges for domestic air travel, and give up their state subsidies for domestic employees. Recognizing the need to address the situation Minister in the Presidency Collins Chabane, issued a statement saying that Cabinet has established a ministerial task team to look at government spending in the context of the economic meltdown.

general lawlessness. End Comment