Michael Sachs, the head of the budgeting office at the national treasury, has reportedly resigned because of interference in its budgeting process by the presidency, according to reports.
It was reported on Monday morning that “a joint team from the treasury and the Office of the president” are searching for R40-billion in expenditure cuts from the medium-term budget to fund fee-free higher education.
This adjustment to the budget process has led Sachs to call it quits.
Finance Minister Malusi Gigaba tabled the medium term budget two weeks ago in Parliament. It may now be revised by the cohort from the presidency and treasury to fund President Jacob Zuma’s fee-free higher education plan.
On Friday, the report was that a treasury document has been put before Zuma which outlines potential funding cuts from social grants and the freezing of the roll-out of RDP housing to finance free higher education.
The joint team that is alleged to be revising the medium-term budget, which serves as a blueprint for the February budget, includes the department of monitoring and evaluation. It is this department that represents the presidency’s interests, according to the Business Day report. The department is located within the presidency’s offices.
But treasury director-general Dondo Mogajane has denied any allegation of a takeover by the presidency.
“I’m not going to let anyone take control of the budget process. We have to bring Treasury and the [department of monitoring and evaluation] closer. It was not done in this way before, but it is necessary now,” Mogajane told Business Day.
He confirmed that the treasury officials and the presidency department were working together to decide what spending should be cut from the budget.
Sachs, who has worked at the national treasury for around 10 years and is the son of former Constitutional Court Judge Albie Sachs, reportedly resigned last week. He is the third high profile treasury official to make an exit after former finance minister Pravin Gordhan was axed earlier this year.
Former treasury director general Lungisa Fuzile left shortly after Gordhan departed Treasury’s offices. Andrew Donaldson, who was at the Treasury for more than 20 years, also resigned as acting head of the government technical advisory centre, an agency in the Treasury, after Gordhan’s departure.
Over the weekend Sachs was “believed to be angry” about Zuma’s free education budget move, and had “undertook to resign” this week.
The free education budgeting process is reportedly the brainchild of Morris Masutha, an ex-boyfriend of Thutukile Zuma – Zuma’s daughter with ANC presidential hopeful Nkosazana Dlamini-Zuma.
Finance24 has also confirmed with two of its sources that Sachs has resigned, because of the presidency’s emerging influence within the treasury.
Sachs holds a masters degree from the Harvard Kennedy School of Government. He was the chief director of international finance and development in the treasury in 2007 and went on to become chief director of fiscal policy in 2011. He was appointed deputy director general of the budget office in 2013.