Gigaba: Public Protector can’t remove finance minister’s Reserve Bank role | Fin24

Gigaba: Public Protector can’t remove finance minister’s Reserve Bank role

Jul 06 2017 20:09
Matthew le Cordeur

Cape Town – Finance Minister Malusi Gigaba said Public Protector Busisiwe Mkhwebane can’t remove his role from the Constitution, in which he should be consulted by the Reserve Bank on a “regular” basis.

This is contained in Gigaba’s founding affidavit, in which he seeks Mkhwebane’s report into Bankorp set aside in its entirety because the remedial action violates provisions of the Constitution.

His legal action follows that of the South African Reserve Bank (SARB) and ABSA. The Public Protector’s office told Fin24 on Thursday that she was opposing the three applicants, as she believes they have all misinterpreted her remedial action.

Gigaba said the Public Protector removed the minister of finance from the provisions of section 224(2) of the Constitution.

“She has not explained why, in her view, the minister of finance should not be consulted by the Reserve Bank on a ‘regular’ basis as envisaged in section 224(2),” he said in court papers filed on Wednesday.

“There are sound policy reasons why the Reserve Bank must operate in consultation with the Minister of Finance, and not Parliament.

“The Reserve Bank is ultimately accountable to Parliament, but its primary object, namely the protection of the value of the currency in the interest of balanced and sustainable economic growth in the Republic, touches upon questions of economic policy of the Republic.

“Those are matters that are at the heartland of executive power. They cannot simply be parcelled out to the legislative branch.

“While the Public Protector seeks to cut out the minister from the consultative functions in section 224(2), the statute remains binding and applicable.

“It is accordingly irrational to call for an amendment to the Constitution, when the statute that gives effect to the Constitution remains binding and operative.

“According to the principle of subsidiarity, the first port of call for any revision of the mandate of the Reserve Bank ought to be the legislation.

“It is submitted that the findings, conclusions and remedial action of the Public Protector should be set aside in their entirety. I do not seek a costs order, regardless of the outcome of the application.”

Gigaba: Public Protector ignored Treasury submission

Gigaba said that from a comparison of the provisional and final reports, the representations of the National Treasury were not taken into consideration.

“I am advised that this is an irregularity that could justify the review of the final report of the Public Protector,” he said.

“She failed to have regard to the answers provided to her. In the submissions made by National Treasury to the Public Protector, the circumstances under which CIEX were contracted by the Government were specifically set out.”

Gigaba said the "remedial action" flows from investigations of maladministration or impropriety, while the recommendation for a constitutional amendment has no foundation in any finding of impropriety or maladministration. “For that reason alone, it is an irrational conclusion,” he said.

Gigaba: SARB protects value of currency for economic growth to occur

Gigaba said there are fundamental grounds why the proposed Constitutional amendment is irrational.

“There is no basis to the conclusion that the Reserve Bank should not play the role of protecting the value of the currency.

“Insofar as the Public Protector argues that in her view that aspect of the mandate of the Reserve Bank should be reconsidered, she is not entitled to direct a policy change. The formulation of policy is pre-eminently an executive function.

“In any event, section 224(1) does not require the Reserve Bank to protect the value of the currency for its own sake. It requires that function to be carried out ‘in the interest of balanced and sustainable economic growth in the Republic’.

“As such, there is no rational foundation to the recommendation to remove the ‘currency protection’ mandate of the Reserve Bank.

“It is not as if there is a contradiction between the protection of the currency and the necessity to address socio-economic challenges facing the economy.

“The two objectives contained in section 224(1) should not be read disjunctively or in opposition to one another -they are mutually reinforcing and supportive.”

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