(Sub-Committee) Parliamentary Budget Office (PBO) Director: interviews

Meeting report

The Joint Sub-Committee of the Standing and Select Committees on Finance and Appropriations responsible for recommending a candidate for appointment as Director of the Parliamentary Budget Office (PBO) interviewed the six shortlisted candidates in a virtual meeting. Initially, nine candidates had been shortlisted for the position, but three of the candidates withdrew.

The Chairperson made brief opening remarks and explained the interview process.

Refer to the audio for each candidate’s response to questions.

Candidate 1: Dr Dumisani Joseph Jantjies [3:54]
The Chairperson asked the candidate to tell the Committee about himself.

Ms D Peters (ANC) said it has been almost ten years since the establishment of the Parliamentary Budget Office. What does the candidate think are its prospects and challenges. What should be prioritised for the PBO to fulfil its function.

Ms Peters asked the candidate from where the PBO drew its mandate and what in the candidate's view are the strengths and weaknesses of the Office and what still needs to be addressed as challenges.

Mr Z Njadu (ANC, Western Cape) said South Africa is viewed as a developmental state; however, the candidate may agree or disagree? Based on the candidate's response, he should indicate how the budget is used in particular and the taxation system to address the country’s socio-economic challenges.

Mr M Moletsane (EFF, Free State) said the COVID-19 pandemic has led to the following critical questions: Is it now the time for a zero-based budgeting system in the country and is it advisable to approach institutions like the International Monetary Fund, the World Bank or BRICS Bank for loans to help the country deal with the COVID-19 economic impact?

Ms P Abraham (ANC) asked the candidate for details on the budget cycle so the Sub-Committee could be convinced that the candidate has a full understanding of this. What would the candidate do to ensure that the PBO provides oversight support to Parliament through the budget cycle. What are the key objectives underpinning the South African budget policy.

Ms Abraham asked the candidate to explain how the budget would be enhanced if he were appointed.

Mr D Joseph (DA) said the Minister of Finances budget speech in 2019 indicated that the budget is built on six fundamental prescripts, one of which is stabilising and reducing public debt. What in the candidate's view are the prospects and challenges of this approach, given the COVID-19 outbreak.

Mr G Hill-Lewis (DA) said policy proposals could cause disagreement, but the PBO has provided credible forecasts of revenue and growth that are often better than National Treasury’s analysis which tends to be optimistic in its assessment of growth and revenue forecasting. It is important for the successful candidate to have a solid background in econometrics and economic modelling. He asked about his experience in econometric forecasting, revenue modelling and growth modelling which is so crucial for the position.

Ms Peters noted that in response to Ms Abraham’s question, the candidate mentioned that the PBO should not be over-reliant on other institutions. Taking into consideration Mr Hill-Lewis’ question, if appointed, how would the candidate approach the position given its limited budgetary resources. How would he be able to safeguard the independence and integrity of the Office and ensure that the Office would adhere to the Money Bills Amendment Procedure and Related Matters Act. How would the candidate enhance the independence and integrity of the PBO within a limited resource space and a small team with a lack of capacity.

Mr Njadu said that strategic leadership was necessary given the demands and nature of the position and asked the candidate about a time he had to make unpopular or tough decisions in his previous employment. How did the candidate go about this and manage various interests affected by this unpopular decision?

The Chairperson asked the candidate to talk about his PhD thesis and if his research would assist in his position as PBO Director, if appointed. How can the budget be used to transform the economy of the country? If the candidate disagrees with this question, he should motivate why.

The Chairperson said that Parliament needs to be transparent in its activities. He said a member of public commented about an investigation at the PBO and who had been implicated in it. He asked the candidate to comment on this and whether he had also been implicated.

The Chairperson thanked the candidate for availing himself for the interview.

Candidate 2: Mr Bongani Khumalo [1:47]
The Chairperson welcomed the candidate, explained the interview process, and asked him to tell the Committee about himself.

Mr Moletsane said it has been almost ten years since the establishment of the Parliamentary Budget Office. What does the candidate think is its prospects and challenges. What should be prioritised for the PBO to fulfil its function?

Ms Abraham followed up and asked whether any tax incentives were implemented.

The Chairperson wanted to ensure that the terminology was correct and asked if the candidate was saying that a tax incentive could be used to deal with a negative externality. He asked if this was not a disincentive.

Mr Joseph said the Minister of Finance's 2019 budget speech indicated that the budget is built on six fundamental prescripts, one of which is stabilising and reducing public debt. What in the candidate's view of the prospects and challenges of this approach, given the COVID-19 outbreak?

Mr Hill-Lewis asked the candidate what he would do to ensure the PBO provides oversight support to Parliament through the budget cycle. What are the key objectives underpinning the South African budget policy?

Ms Peters said the Minister of Finances budget speech in 2019 indicated that the budget is built on six fundamental prescripts, one of which is stabilising and reducing public debt. What in the candidate's view is the prospects and challenges of this approach, given the COVID-19 outbreak and the state of National Disaster and its impact on South African society.Also to be considered is the governments risk adjusted approach and the support packages that it introduced.

Ms Peters said the second part of her question was related to the Presidents pronouncements as leader of government and the interventions during the COVID-19 pandemic and whether the Ministers Budget speech of 2019 is doable.

Mr Njadu said that in managing key stakeholder relationships, which is a responsibility of the PBO Director, stakeholders can be very demanding and unreasonable at times. He asked the candidate to describe how he would manage unreasonable expectations and demands.

Mr Moletsane asked how the candidate would protect the independence and integrity of the PBO.

The Chairperson said he was sure the candidate could hear that members were concerned about the independence of the institution. Why did the candidate think this was so important, apart from that it is prescribed in the legislation?

Ms Abraham asked the candidate to reflect on a complex decision which he has had to make in his previous employment and a decision on the procedures of the Office and one that was so complex, but affected others who have different interests and viewed it as an unpopular decision. How did the candidate deal with this?

Ms Abraham asked who else was affected besides the candidate and wanted him to explain about the consultation of stakeholders in this process.

The Chairperson said the candidate kept talking about himself as an Acting Chairperson and amending legislation. He asked how things worked at the Financial and Fiscal Commission (FFC) as he thought this was the preserve of the Minister and executive in Parliament. He asked the candidate to reflect on this as he understood that the candidate was consulting the Minister on amending legislation as opposed to the other way around.

The Chairperson said the candidate mentioned that he was involved with establishing the PBO. The National Treasury at that stage was very strong. He asked about the separation of powers and if this would not be a good reason to have a strong PBO.

The Chairperson asked the candidate about a different matter. “You would have been asked by Parliament for permission to make your information available to the public. Thank you for agreeing to that. It must align with the prescripts of our constitution as a participatory democracy and being transparent about the things that we do. A concern has been raised by a member of the public about your tenure at the FFC. Do you know anything which occurred at the FFC that could disqualify you and if so, please share this with the Committee? We think it would be fair for you to reflect on that, because it has been brought to the attention of this Committee”.

The Chairperson explained the process going forward and thanked the candidate for availing himself for the interview.

Candidate 3: Dr Seeraj Mohamed [3:34]
The Chairperson welcomed the candidate, thanked him for availing himself for the interview and explained the interview process.

He asked the candidate to tell the Committee about himself.

Mr Joseph said it has been almost ten years since the establishment of the Parliamentary Budget Office. What does the candidate think are its prospects and challenges? What should be prioritised for the PBO to fulfil its function?

Mr Hill-Lewis asked the candidate a follow-up question. It was good to hear you talking about filling the vacancies related to technical analysis. I wanted to ask about your view regarding the PBO’s role in producing very hefty, substantive and rigorous analysis and forecasting. My view is that the PBO should be a credible, substantive economic voice on its own. At the moment it tends to focus more on policy commentary rather than on rigorous statistical forecasting and analysis. What is your view on this?

Ms Peters said the COVID-19 outbreak has led to the following critical questions: Is it now the time to consider a zero-based budgeting system in the country and is it advisable to approach institutions like the International Monetary Fund, the World Bank or BRICS Bank for loans to help the country deal with the COVID-19 economic impact.

Mr Njadu asked the candidate what he would do to ensure that the PBO provides oversight support to Parliament through the budget cycle. What are the key objectives underpinning the South African budget policy?

Mr Moletsane said the Minister of Finances budget speech in 2019 indicated that the budget is built on six fundamental prescripts, one of which is stabilising and reducing public debt. What in the candidate's view are the prospects and challenges of this approach, given the COVID-19 outbreak?

Ms Abraham said that in managing key stakeholder relationships, which is a responsibility of the PBO Director, stakeholders can be very demanding and unreasonable at times. She asked the candidate to describe how he would manage unreasonable expectations and demands.

Mr Joseph asked the candidate how he would safeguard the independence and integrity of the PBO.

Mr Joseph asked a follow-up question and said that the candidate explained the internal processes that he would follow, if appointed, but wanted to know how the candidate would build the capacity for his staff to ensure that the Office did not rely mostly on outside institutions or projections to ensure the Office remains independent.

Mr Hill-Lewis said given the nature of the position and demand, could the candidate tell the Committee about a time when he had to make complex, unpopular or tough decisions in his previous employment. How did the candidate go about this and how did he manage various interests that were affected by this unpopular decision?

The Chairperson said he wanted to add to Mr Hill-Lewis’ question. “This is mainly about being a director, an accounting Officer of the institution. You will be expected to make some serious decisions which would not be palatable with some people. The Committee is also trying to see your management style and how you manage complex issues”.

The Chairperson asked the candidate if he had ever been strongly against some proposals which came from the Minister of Finance or the Executive. Does the candidate think this advice is taken seriously by Members of Parliament? Can the candidate offer some critique on the budget and economic modelling?

The Chairperson said the interview process is open and transparent and the Committee had received information on an investigation at the PBO and that some Deputy Directors have been implicated. “Are you implicated? What is the nature of this implication and do you know anything about this investigation?” Please be very brief.

The Chairperson asked if the candidate had any questions, explained the process going forward and thanked the candidate for availing himself for the interview.

The Committee adjourned for a Lunch break and interviews resumed at 15:30.

Candidate 4: Dr Jacobus Willem Mostert [0:05]
The Chairperson welcomed the candidate, thanked him for availing himself for the interview and explained the interview process.

He asked the candidate to tell the Committee about himself.

Ms Peters said it has been almost ten years since the establishment of the Parliamentary Budget Office. What does the candidate think is its prospects and challenges? What should be prioritised for the PBO to fulfil its function?

Mr Njadu said South Africa is viewed as a developmental state; however the candidate may agree or disagree. Based on the candidate's response, he should indicate how the budget was used in particular, taxation systems to address the country’s socio-economic challenges.

Mr Moletsane said the COVID-19 outbreak has led to the following critical questions: Is it now time to consider a zero-based budgeting system and is it advisable to approach institutions like the International Monetary Fund, World Bank or BRICS Bank for loans to help the country deal with the COVID-19 economic impact?

Ms Abraham asked the candidate how he would ensure the PBO provides parliamentary oversight through the budget cycle. Take the Sub-Committee through the process of the budget cycle and the key objectives underpinning the budget policy of South Africa.

Mr Joseph asked a follow-up question on the candidate's response about stabilising and reducing public debt. The Minister of Finance made reference to this in his 2019 Budget Speech. There are six fundamental prescripts, one of which is stabilising and reducing public debt. What in the candidate's view are the prospects and challenges of this approach, given the COVID-19 outbreak.

Mr Hill-Lewis said he enjoyed the analysis the candidate presented in his previous answer. He directed his question toward strategic management and the leadership aspects of the position applied for. In managing key stakeholder relationships, which is a PBO Director responsibility, stakeholders can be very demanding and unreasonable at times. He asked the candidate to describe how he would build relationships and manage unreasonable expectations and demands.

He referred to an earlier comment made by the candidate. His concern was about the candidate's analysis. Although excellent, the candidate has had such a distinguished career in government, he is quite deferential to the views of government. The PBO is supposed to stand on its own two feet as a strong and independent voice. What is the candidate's view of this and does he feel he has the scope and confidence to take positions which are contradictory to National Treasury or to produce research, modelling or statistical analysis which contradicts that of National Treasury.

Ms Peters asked if appointed, how the candidate would be able to safeguard the independence and integrity of the Office. Based on what Mr Hill-Lewis said, there is a need to decipher and be able to provide Members of Parliament with an objective view of what National Treasury presents. This is a very small office at present, and you have indicated the need to rely on universities for research. Would those universities then not influence the outlook of the PBO or PBO Director to the extent where you end up being biased towards the views of higher education institutions? She was raising this because of the consistent indication on his part about the role of universities and the importance of research. While research is important, she would think that it is important for the PBO to have its own standing and gravitas.

She said Parliament is a multi-party driven institution and asked how the candidate would balance the interests of different parties operating in the space and also do work for four different Committees that straddle the NCOP and National Assembly. How would the candidate balance all of this?

The Chairperson referred to the debt-to-GDP ratio in the early 2000s and the very low debt servicing costs at that time. He asked the candidate about the opportunity cost of this. Was this a good strategy for a developing country, given all the challenges the country was faced with at the time? He asked about reaping the bitter fruits of not investing at that time in energy generation and borrowing money. He was very concerned about the macro economic ratios. He asked the candidate to comment on this.

Mr Njadu said that strategic leadership was necessary given the nature of the position and the demands and asked the candidate about a time when he had to make unpopular or tough decisions in his previous employment. How did the candidate go about this and manage the various interests affected by this unpopular decision?

The Chairperson asked if the candidate had any questions, explained the process going forward and thanked the candidate.

Candidate 5: Ms Nelia Orlandi [1:19:09]
The Chairperson welcomed the candidate, explained the interview process and asked her to tell the Committee about herself.

Mr Moletsane said it has been almost ten years since the establishment of the Parliamentary Budget Office. What does the candidate think of its prospects and challenges. What should be prioritised for the PBO to fulfil its function?

Ms Abraham said South Africa is viewed as a developmental state; however, the candidate may agree or disagree. Based on the candidate's response, she should indicate how the budget was used and, in particular, the taxation system to address the country’s socio-economic challenges

Mr Joseph said the COVID-19 outbreak has led to the following critical questions: Is it now the time to consider a zero-based budgeting system and is it advisable to approach institutions like the International Monetary Fund, World Bank or BRICS Bank for loans to help the country deal with the COVID-19 economic impact?

Mr Hill-Lewis asked the candidate how she would ensure that the PBO provides support to Parliament in its oversight role throughout the whole budget cycle. What are the key objectives underpinning South Africa’s budget policy?

Ms Peters said the Minister of Finance's Budget Speech in 2019 indicated that the budget is built on six fundamental prescripts, one of which is stabilising and reducing public debt. What in the candidate's view are the prospects and challenges of this approach, given the COVID-19 outbreak? The Government declared a State of National Disaster and also introduced support packages for different sectors of society to mitigate against COVID-19. Without losing the Minister’s injunction for stabilising and reducing public debt, what is the candidate's views on this matter?

The Chairperson said debt is coupled with COVID-19, to put Ms Peters question differently: if she were Minister of Finance, how would she deal with this type of challenge?

Mr Njadu said that in managing key stakeholder relationships, which is a PBO Director responsibility, stakeholders can be very demanding and unreasonable at times. He asked the candidate to describe how she would manage unreasonable expectations and demands.

Mr Moletsane asked the candidate to reflect on a complex decision she has had to make in her previous employment such as procedures of the office which affected others with different interests who viewed it as an unpopular decision. How did the candidate deal with this and manage the various interests affected by her unpopular decision?

The Chairperson referred to the country's inequality and poverty levels which are still not improving despite government interventions. What does the candidate think is lacking and how could this be improved?

The Chairperson asked if the candidate had any questions, explained the process going forward and thanked the candidate.

Candidate 6: Prof Daniel Plaatjies [2:43:34]
The Chairperson welcomed the candidate, explained the interview process and asked him to tell the Committee about himself.

Ms Abraham said it has been almost ten years since the establishment of the Parliamentary Budget Office. What does the candidate think of its prospects and challenges. What should be prioritised for the PBO to fulfil its function?

Mr Joseph said South Africa is viewed as a developmental state; however, the candidate may agree or disagree. Based on the candidate's response, he should indicate how the budget was used and, in particular, the taxation system to address the country’s socio-economic challenges.

Mr Hill-Lewis asked what the candidate's opinion is of zero-based budgeting and whether it is advisable to approach institutions like the International Monetary Fund, World Bank or BRICS Bank for loans to help the country deal with the COVID-19 economic impact.

He said the candidate made a great point in his response about the lack of access to data and how one cannot make a decent analysis without this. This links to the candidate's response on zero-based budgeting. He said he is often shocked at how little data government has on its own spending, the impact of this spending and the efficacy of its programmes.

He said the country did not get to its current fiscal crisis because of the pandemic. COVID-19 exacerbated this. The country was in a fiscal crisis in February and it has been a slow process over ten years to get to this point. To what extent does the candidate think the PBO and the Financial and Fiscal Commission (FFC) must carry some culpability for not speaking out loudly enough to warn the country about its fiscal trajectory. Does the candidate think he would be able to place the PBO on a more muscular footing to speak out about such risks.

The Chairperson asked the candidate to speak more about shared capability and how this could be done.

Ms Peters asked what the candidate would do to ensure that the PBO provides adequate support and oversight to Parliament through the budget cycle. What are the key objectives underpinning the South African budget policy? Does the PBO at present have the capacity to advise and provide Members with the requisite to allow for amendment to the budget?

Mr Njadu said the Minister of Finance's Budget Speech in 2019 indicated that the budget is built on six fundamental prescripts, one of which is stabilising and reducing public debt. What in the candidate's view are the prospects and challenges of this approach, given the COVID-19 outbreak.

Mr Moletsane said that in managing key stakeholder relationships, which is a PBO Director responsibility, stakeholders can be very demanding and unreasonable at times. He asked the candidate to describe how he would manage unreasonable expectations and demands.

Ms Abraham said the responses the candidate gave showed that he is an innovative thinker. She was worried about the candidate saying that instead of talking about inequality, we should talk about equality, poverty and employment. He does not seem to have a view of "this is where we come from and therefore, we want to go to where you want us to be". The second area that worried her about his way of thinking which also carries an element of truth but is a bit problematic is when he says that people do not eat ideology. She asked him to talk about how he disputes the use of budgeting being a political exercise and will this not get him into trouble with his team. Remember the Office is established in terms of a legal framework and an existing manifesto. How would the candidate deal with this?

If appointed, how would the candidate be able to safeguard the independence and integrity of the Office?

Mr Joseph said that strategic leadership was necessary given the nature of the position and its demands. He asked the candidate about a time when he had to make unpopular or tough decision in his previous employment. How did the candidate go about this and manage the various interests affected by this unpopular decision?

The Chairperson asked the candidate to critique the following statement: “Our economy has been stuttering for decades if not centuries. Despite the economic growth we have had during certain periods, in my opinion, it is an economy which is not able to provide water, houses and electricity”.

The Chairperson commented that perhaps there was not enough time to deal with all the issues but some were cross-cutting whether to do with the PBO or FFC. There is a need to engage on the challenges that our country is faced with.

The Chairperson said that Prof Plaatjies had alluded to some of the things that he would put to him. This is a participatory democracy and so one tries to be as transparent as possible. When the names of the shortlisted candidates were published, there were comments from the public and the Sub-Committee would like to hear what he has to say about them. Someone person wrote to the Committee about a FFC report which the person said Prof Plaatjies had used to justify his iron fist to fight certain individuals. He was not quoting the comments verbatim. There is also an allegation that there are some people who committed sexual offences at the FFC but who have your protection. Please respond to this.

The Chairperson interjected during the candidate's response saying that this was not the platform to go into extensive detail on the allegations. The Committee only wanted to know if the allegations had merit. The Committee wanted to make the candidate aware of the allegations and this was not a disciplinary hearing or court. The Committee simply wanted to hear the candidate's side of the story.

The Chairperson asked if the candidate had any questions, explained the process going forward and thanked him.

The Chairperson made brief closing remarks saying there would be no discussion as the Committee had already had a discussion prior to interviews. He was happy with the professional manner in which interviews were conducted. The Committee now awaits the vetting of candidates to be completed.

The meeting was adjourned.