By: Gareth van Onselen
How much Jacob Zuma costs the South African taxpayer.
FEATURE:
Cars, jets, VIP protection, spousal support, almost every week a new
figure emerges suggesting that those privileges afforded President Zuma
(and other members of the executive) are costing the taxpayer much
money; but how much exactly is hard to say. No one has ever tried to
total it all. The Presidency has certainly done everything in its power
to shield the information. I have given it my best shot in the article
below. It was a very difficult exercise but, using the Ministerial
Handbook as a guide and by being very conservative, I have generated a
total figure. To see it all set out, how much President Zuma costs per
year and per term, and whether or not you think it’s excessive, read on.....
Introduction
The point of the exercise to try and derive a credible and defensible
total figure for all primary direct expenses afforded to President
Jacob Zuma by the Ministerial Handbook and for which the public – the
taxpayer – is ultimately responsible. This is not an exact science. In
every instance, I have been extremely conservative and thus, while the
total figure might not represent the actual cost, I believe it certainly
does represent the absolute minimum cost. Most likely, the final and
ultimately unknowable total will be far, far higher.
It is not my purpose to analyse the cost or to give an opinion as to
whether or not the amount can be described as exorbitant. I am merely
setting out the facts. Regardless of whom served as President, a
variation of the costs listed in this document would have to be born by
the public purse. Likewise, one would have to take the opportunity costs
into account and inflation. Whether or not the bridge between
reasonableness and opulence has been crossed, I leave to you, the
reader, to determine.
The document that follows is essentially divided into three sections.
First, a summary. I have called this ‘The Zuma Balance Sheet’ and it
follows below these introductory remarks. It is, essentially, all the
key numbers totaled. Second, an explanation, in which I try to set out
my reasoning in arriving at each number and some additional context, to
try and set the scene, where appropriate. Third and finally, I have
concluded with some supplementary information, based on the final
numbers.
By way of concluding this introduction, a few brief words about the
methodology. Zuma took office on 9 May 2009. For each amount I have
tried to determine an annual cost (April to April) and the cost of a
full five year term. I have assumed his term will end in April 2014
(there is a three month window in which an election can be called). No
doubt there are many incidental costs I have not covered (I suspect they
are too small to make a real impact) and probably one or two more
substantial items I have not thought of – I am happy to adjust the
document in this regard, and will aim to update and improve it. That
said, again, the total amount can only really be adjusted upwards.
There are three kinds of figures:
[1] Those which can be fairly accurately quantified and which are publically available (his salary, for example);
[2] Those partly known and which can be broadly quantified or projected (allowances, for example); and
[3] Those which are unknown and which, in some cases, can be credibly estimated.
I have made use of the
Ministerial Handbook as a guide to expenses. Although it doesn’t mention the Presidency specifically,
the Presidency is on record
saying it “currently rel[ies] on the ministerial handbook” for
precedent. It gives a general framework and direction for the costs
associated with the highest office in the country. For all intents and
purposes, however, it remains a generally useless document. It was
approved by Cabinet in February 2007 and although the government has
been promising a new one for over two years now, nothing has
materialised. It is vague and incomplete; and so badly written and
constructed as to invite abuse – which has
invariably and frequently happened.
Likewise,
the Presidency’s Annual Reports
hide figures within other figures (the Spousal Unit, for example) and
makes oversight as difficult as possible. It is incredible hard, often
impossible, to tie hard numbers to the amorphous parameters set out in
the Handbook.
The ANC’s refusal to establish a portfolio committee for the Presidency
makes accountability even harder. Often one has to rely on
parliamentary questions (the answers to which are hardly a model of
transparency) and other sources.
A defining feature of this exercise, then, was how much effort the
Presidency puts into hiding, concealing, manipulating and covering up
its costs. The Presidency is an ostensible model of transparency and a
very real example of secrecy. Putting this together was extremely
difficult.
Here, then, is how much Jacob Zuma costs you.
The Zuma Balance Sheet
1. Annual Salary: [R2 275 802.00 to R2 753 689.00]
• Approximate Five Year Total:
R12 315 706.00
2. Medical Aid: [At least R1 300 000 per year]
• Approximate Five Year Total:
R6 500 000.00
3. Pension Payout on Retirement: [Approximately R2 753 689.00]
• Approximate Five Year Total:
R2 753 689.00
4. Spousal Support: [At least R15 517 500.00 per year]
• Approximate Five Year Total:
R77 585 000.00
5. Private Vehicle: [70% of salary - R1 835 792.00, for two vehicles]
• Approximate Five Year Total:
R3 671 584.00
6. Flights – VIP Squadron: [An approximate average of: R46 838 476.00 per year]
• Approximate Five Year Total:
R234 192 383.00
7. Flights – Additional: [R6 331 174.67 plus additional cost of two planes]
• Approximate Five Year Total:
R10 000 000.00
8. Flights – VIP Protection Services: [Unknown]
9. Flights – Helicopters: [At least R14 400 000.00 per year]
• Approximate Five Year Total:
R72 000 000.00
10. Overseas Allowances – President: [An average of R25 400.00 per year]
• Approximate Five year Total:
R127 000.00
11. Overseas Allowances – First Ladies: [Unknown]
12. Accommodation – Hotels: [An average of R420 000.00 per year]
• Approximate Five Year Total:
R2 100 000.00
13. Accommodation – Official Residences: [An average of R5 300 000.00 per year]
• Approximate Five Year Total:
R26 500 000.00
14. Accommodation – Private Residences: [R6 400 000.00]
• Approximate Five Year Total:
R6 400 000.00
15.VIP Protection [An average of at least R12 000 000.00 per year]
• Approximate Five Year Total:
R60 000 000.00
16. Legal Costs: [Unknown]
APPROXIMATE FIVE YEAR TOTAL: R514 145 362.00
AVERAGE ANNUAL TOTAL: R102 829 072.00
At the very least, President Zuma will cost the
South African taxpayer R514.1m over five years – an average of R102.8m
per year; in other words, half a billion Rand. Were he to secure another
term, his Presidency would cost the South African public, at least, R1
billion.
I have not adjusted some of these figures for inflation. VIP
Protection, for example, is all based on a 2009 sum. At a modest average
of 5% over this five year period, the R60 million I have projected
would be closer to R75 million if inflation were taken into account.
And, the R46.8 million per year on VIP Squadron flights is only based on
figures up to April 2012. At 5% it would be closer to R51m per year by
2014. Obviously, if one projected the total figure forward to a second
term, that too would not take inflation into account, easily an
additional R130million. So, this is worth bearing in mind when
considering just how conservative the total cost is.
Breakdown of Costs
1. Annual Salary [Known]: Zuma recently agreed to an inflation-related 5.5% salary increase,
as recommended by the Independent Commission for the Remuneration of Public Office Bearers,
bringing his annual salary to R2 662 561.00, up from R2 485 839.00 and
backdated to 1 April 2012. Zuma was inaugurated on 9 May 2009. His
annual salary breakdown over that period is as follows:
• 1 April 2009 – 1 April 2010: R2 275 802.00 (11 months, R2 086 151.00)
• 1 April 2010 – 1 April 2011: R2 367 466.00 (1 year, 5% increase)
• 1 April 2011 – 1 April 2012: R2 485 839.00 (1 year, 5%)
• 1 April 2012 – 1 April 2013: R2 622 561.00 (1 year, 5.5%)
• 1 April 2013 – 1 April 2014: R2 753 689.00 (1 year, projected 5% increase)
• Five Year Total: R12 315 706.00
I projected the Presidency’s salary for 2013/14 at R2.75m based on a
5% increase, which is typical. The five year total is approximately (and
very near to): R12 315 706.00.
Context: The graph below sets out how
the President’s salary has grown over the last nine years. A significant
increase occurred under President Mbeki, just before Zuma took office,
when it jumped by almost R1 million, from approximately R1.2m to R2.1m
in 2008/09. Zuma’s current salary makes him among the best-paid state-leaders in the world. Indeed, possibly among the top ten, certainly the top twenty.
Graph 1: The President’s Salary
[To view all graphs full size, right click on the graph and select 'view image']
2. Medical Aid [Known]: Zuma gets
at least R1.3m as a medical aid contribution per year,
outside of his salary. This would increase marginally with any salary
increase so this is a conservative estimate. Five years at R1 300 000.00
equals approximately: R6 500 000.00 million.
3. Pension [Known]: On a monthly basis, like every
employed person, part of Zuma’s salary goes to his pension (according to
the Ministerial Handbook 5% from the executive member, 17.5% from the
state). Outside and on top of that, however, he gets a lump sum paid
into his pension on retirement, based on his salary, in accordance with
the Remuneration of Public Office Bearers Act.
That percentage fluctuates depending on recommendation from the
Independent Commission for the Remuneration of Public Office Bearers. In
2008, the Commission recommended, exclusively for the President, the
lump sum amount get increased from 75% to “
equal to 100% of the annual remuneration paid to him or her on the day prior to his or her retirement from office”.
If Zuma gets a 5% increase next year, as set out above, the total
pension payout figure on Zuma’s retirement will be: R2 753 689.00.
4. Spousal Support [Known]: According to the
Presidency, the budget for the Presidential Spousal Support Unit was R15
517 500 million for the 2009/10 financial year. At that time, Zuma had
five wives. He now has six. So this will be a conservative estimate. The
total over a five year term, at R15.5m per year, is thus at least: R77
600 000.00.
Context: According to the reply to a March 2010 DA parliamentary question, the amount allocated to the Spousal Support Unit
had increased from R4.5m in 2004/05 to R8m in 2007/8, to R15.5 million
in 2009/10 under Zuma. In other words, it has effectively doubled.
Significantly, the only way you can get information on the Spousal Unit
is through parliamentary questions. There is no longer a stand alone
line item for it in the Presidency’s Annual Report (there used to be)
and no dedicated programme of action for it in the Presidency’s
strategic plan. It is money spent with no identifiable outcome attached
to it. And for the last two years, its full costs are unknown.
Graph 2: The Spousal Support Unit Budget
5. Official Vehicles [Known]: The Ministerial
Handbook states that every member of the executive is entitled to be
reimbursed for any capital expenditure paid for the purchase of a
private vehicle. Regulations set the amount at 70% of one’s annual
salary and allow for two cars: one in Cape Town and one in Pretoria. 70%
of Zuma’s currently salary is R1 835 792.00 which would make the total
amount available to him R3 671 584.00. Cars can be replaced when they
have travelled 120 000km or after five years. At the very least, then,
Zuma would have purchased two new cars during his term, one in Cape Town
and one in Pretoria, for a total amount to the taxpayer of, at least:
R3 671 584.00
Context: The amount they could spend was originally set at 50% but was then adjusted to 70%. Following a public outcry, it has been reported
that the revised Handbook (over two years in the negotiating and yet to
be seen or adopted) has proposed a new figure of 60%, 10% higher than
the original mark. If adopted, that would allow Zuma to purchase two
cars each to the value of R1 573 563.00 or a total spend of R3 147
073.00.
6. Flights – VIP Squadron [Known]: For both domestic
and international flights President Zuma is flown by a special squadron
of dedicated VIP jets, reserved for senior members of the executive and
operated by the Department of Defence. The primary such plane, a Boeing
reserved for the President, is called Inkwazi.
In response to a DA parliamentary question, the amount and costs of those flights for Zuma’s first three years were recently revealed to be:
• April 2009 – April 2010: 91 Flights
• April 2010 – April 2011: 92 Flights
• April 2011 – April 2012: 97 Flights
The total costs of those 286 flights was revealed to be R140 515
430.15, at an average cost of R491 000 per flight. Thus, the annual cost
would be approximately R46 838 476.00 and the total cost, over five
years, would be: R234 192 383.00.
7. Flights – Additional [Known]: The flights listed
above are only those undertaken by the VIP squadron. However, the
President has made use of other aircraft on an ad hoc basis. In
September 2011, for example, while the Presidential Jet was being
serviced, the Department of Defence hired a Boeing 727 to fly Zuma to
America.
In reply to a DA parliamentary question, the full cost of that flight was revealed to be R6 331 174.67. However, it was later revealed that
two further planes had ‘shadowed’ Zuma’s flight,
in case his plane suffered some shortcoming – a South African Airways
Airbus A340 and a Bombardier Global Express XRS, requiring around 35
crewmembers.
The cost of these additional flights is not known
but, together with Zuma’s Boeing, the exercise is conservatively
estimated to have cost R10 000 000.00. How many times this has happened
during President Zuma’s term is unknown.
Context: According to a document
submitted to the National Assembly defence committee, operational
spending on the President’s Jet for 2004/05 was R11m, rising to R23m in
2005/06 and just over R24m in 2006/07. The total amount for this period –
R58m – was however later increased to around R78m.
8. Flights – VIP Protection Services [Unknown]: In
November 2009 the reply to a DA parliamentary question revealed that the
South African Police Service (under which the VIP Protection unit
falls) had purchased a Cessna Citation Sovereign private business jet,
at a cost of R150 million, among other things to “
transport VIP protection service advance teams to countries in Africa“.
It is not known how often or at what cost the jet has been used to send advance teams ahead of presidential visits to other African countries.
9. Flights – Helicopters [Partly Known]: The DA
currently has a parliamentary question before the Minister of Defence
about Zuma’s costs in this regard. The helicopters form part of the VIP
Squadron. He typically uses them for interim flights; for example,
between the official residence King’s House in KwaZulu-Natal and his
private residence in Nkandla. According to experts, an hour flight in
such a VIP helicopter would cost between R60 000 and R80 000. It is
understood that a ‘shadow’ helicopter follows the one escorting the
President. A return flight to Nkandla in such a helicopter would last
approximately five hours. If we use the conservative figure of 15 such
flights a year at four hours per flight and at the minimum cost per hour
of R60 000 for each such helicopter, that would translate to at least
R14 400 000.00 per year and a five year total of: R72 000 000.00.
Context: The figures for all flights
cited above are massively conservative. The costs sited in response to
the DA’s parliamentary question on aeroplanes does not, for example,
include maintenance costs (Inkwazi – the President’s jet – recently
spent three months undergoing maintenance in Switzerland, we don’t know
how much that cost). It also doesn’t include the costs of additional
slip crews (as many as four could be used for a single flight).
Helicopter flights are almost entirely unknown and, likewise, when the
costs are revealed, in all likelihood the President will have undertaken
far in excess of the 15 flights I have estimated and, as with
aeroplanes, they won’t include maintenance.
10. Overseas Allowances – President [Known]: Working
out allowances for overseas travel is a tricky business, the amounts
are also very small and I was hesitant to include them. The Ministerial
Handbook states members and accompanying spouses are entitled to an
allowance “
equal to 110% of the daily allowance payable to Directors-General during visits abroad”.
That amount is re-determined every year by the Department of Public
Service and Administration. You can find the 2011 amounts
here.
In 2010 Zuma spent 25 days overseas on official state visits. Another
49 days on other business (summits, etc.) for a total of 74 days abroad.
Using the DPSA amounts I have determined an average amount for the
state trips of 127 US dollars a day for the President. (This is
complicated, but I have set it out below). Over the course of 2010
(April 2010 through April 2011) that works out to approximately R25
400.00 and, if we use 2010 as an average, R127 000.00 as a five year
total.
2010: Presidential State and Working Visits
1. India (State Visit, June 2010); (DPSA stipend: 79 US Dollars) (3 days);
2. Libya (working visit July 2010); (102 US Dollars) (2 days);
3. Zimbabwe (working visit, July 2010); (109 US Dollars) (2 days);
4. China (State Visit, August 2010); (117 US Dollars) (3 days);
5. Russia (State Visit, August 2010); (127 US Dollars) (3 days);
6. Lesotho (State Visit, August 2010); (84 US Dollars) (2 days);
7. Egypt (State Visit, October 2010); (107 US Dollars) (2 days);
8. Cuba (State Visit, December 2010); (121 US Dollars) (3 days);
9. Mexico (State Visit, December 2010); (78 US Dollars) (3 days);
10. France (State Visit, March 2011); (107 US Dollars) (2 days);
TOTALS:
• 25 days and $1 148
• $1 148 divided by 10 equals an average of $115 per day, per trip;
• 110% of $115 equals an average of $127 per day;
• Multiply that by 25 days equals $3 175;
• Multiply by an exchange rate of 8 Rand to the Dollars equals:
• R25 400.00
2010: Other Visits
I won’t set them all out (you can find the full list
here)
but Zuma undertook a further 23 trips abroad (49 days) in 2010 on other
business, for a total of 33. I have not calculated the total cost in
allowances for these as, when hosted by another country the allowance
drops to 30%, so small as to be incidental to the total and in the
majority of cases, the President would have been hosted.
11. Overseas Allowances – First Ladies [Unknown]: As
set out, when accompanied by his wives, they each are entitled to the
same allowance as Zuma qualifies for. It is difficult to determine how
many of his wives accompany him on each trip. Some reports have
suggested as many as four have accompanied him. I have not included a
total because the amount would be incidental and, in all likelihood, is
covered by the budget for Spousal Support Unit.
12. Accommodation – Hotels [Unknown]: If one again
uses 2010 as an average, of the 74 days abroad, the President would have
spent 42 days overnight. It is difficult to tell where Zuma has stayed,
but an internet search suggests the hotels used have been upmarket. In
India he stayed at the five star
Taj Mahal Palace Hotel. One night there in
a luxury suit
costs approximately R25 000 per night. The Presidential suit, even
more. In New York he is report to stay at the Carlton Ritz, costing as
much as R50 000 a night. If we take a conservative average of R20 000
per night and assume half his nights overseas – 21 – are funded by the
South African state, that works out to an annual average of R420 000.00
and a five year total of: R2 100 000.00
13. Accommodation – Official Residencies [Partly Known]: The Ministerial Handbook allows for members of the executive to stay rent free at official residences.
The President has five such residencies available to him:
Mahlamba Ndlopfu (Pretoria); Genadendal (Cape Town); Oliver Tambo House
(Pretoria); Highstead (Cape Town) and Dr John L Dube House (formerly
King’s House, Durban). They are each managed by the Department of Public
Works. Obviously the cost of maintenance and upkeep of these houses
must accrue to the President. So confusing has government information on
this been, however, it is difficult to determine a figure. In October
2011, the Minister of Public Works stated in reply to a DA parliamentary
question that
as much as R400 million was to be spent on renovations for them.
That figure was then refuted.
I have excluded that amount, whatever it is, as the residences are
national buildings and renovation and restoration is standard. However,
it is possible to estimate the running costs.
In a response to a parliamentary question in November 2009,
Minister in the Presidency Collins Chabane revealed that the running
costs of the five presidential homes was in excess of R5 300 000.00 for
2009/10, excluding the salaries of the 113 staff employed to service
them. A conservative five year total is thus: R26 500 000.00.
14. Accommodation – Private Residencies [Partly Known]: The President owns a number of private homes,
for him and his wives. Of these, two are his primary private
residencies: a house in Forest Town, Johannesburg and Nkandla, in
KwaZulu-Natal. Obviously the cost of the houses and their maintenance is
for the President’s private expense but the Ministerial Handbook does
oblige the state to provide security for them. How much has been spent
on the Forest Town residence in this regard is unknown, but an amount
has definitely been spent as it is surrounded by security and has been
described as a “bunker”. More is known about Nkandla.
According to a reply to a DA parliamentary question in August 2010, R6 400 000.00 was spent on security for the home, including a helipad, clinic and road bypass.
15. VIP Protection [Partly Known]: Working out
Zuma’s VIP protection costs is difficult. There are no exact figures
and, as with so many of these types of expenses, the ANC government goes
out of its way to conceal them. That said, thanks to DA parliamentary
questions, it is possible to work out a credible estimate. In March
2009,
the Minister of Safety and Security revealed
that the state spent R998 815.89 per month protecting Jacob Zuma. That
amount includes close as well as static protection (guarding his homes),
overtime, vehicle and telephone costs. This was prior to Zuma becoming
President. Since then, no doubt, it has increased significantly.
However, we can safely use the figure of R1 million per month as a
credible estimate. On that basis, the annual cost would be at least R12
000 000.00 and, over five years, at least R60 000 000.00.
16. Legal Costs [Unknown]: Zuma is currently
defending himself against the DA in court, in a protracted battle to
have some 400 corruption charges against him reinstated. It is unclear
who is paying for these nor are the amounts known – as the cases have
not yet been concluded – and so I have not included them. Were it the
state, however, the additional figure would be substantial.
Costs not Included
There are a number of costs I have not included in this analysis. For
example, the cost of Zuma’s inauguration (R75m), the cost of
renovations done to official residencies, the cost of the town
supposedly being developed outside Nkandla
at the President’s behest and smaller items, like the cost of the
credit card to which he is entitled (no doubt small and for which it is
next to impossible to work out an amount). Essentially I have focused on
the President’s running costs. Where one to include actual government
programmes, you might as well include the cost of the Presidency in its
entirety, which would be to defeat the purpose of the exercise.
In turn, the President is funded in numerous other ways. The ANC, for
example, would pay his costs when it comes to party political activity.
Likewise, the President might benefit from various private benefits,
financial or otherwise.
With regards to every one of the items listed, the public is
ultimately responsible for the cost and the President has a say in the
amount spent. Should he so chose, he could act to reduce or increase the
amount dedicated to them. So they are a fair reflection of his attitude
to public office and how he goes about his day-to-day business as
President.
Conclusion
One can do various things with the R514 million figure. For example,
one could break it down by term, year, month, week, hour, even minute:
•
Five Years: R514 145 362.00
•
One Year: R102 829 072.00
•
One Month: R8 569 089.00
•
One Week: R1 977 482.00
•
One Day: R282 497.00
•
One Hour: R11 770.00
•
One Minute: R196.00
Put another way, in the 15 or so minutes it has taken you to read this article, Zuma has cost the public R3 000.
One could also break the figure down into its major component parts.
Over five years Zuma’s salary and related expenses will cost at least
R25m; his accommodation at least R35m; his protection at least R60m and
his flights at least R316m.
Here is another blog I have created setting out and illustrating some of these such figures and a few others.
As I argued at the outset, South Africa needs a President, Jacob Zuma
or no Jacob Zuma, and so many of these costs would have been incurred
by the public purse regardless. How one interprets them is a matter of
opinion. Let me know what yours is.
What can be said definitively is that there is a fundamental with
transparency on this issue: The South African public simple doesn’t know
and the ANC government acts to conceal how much Jacob Zuma costs. Were
it not for DA parliamentary questions, the overwhelming bulk of this
information would be hidden. Indeed, very often, even where replies were
secured, they had to be fought for. The truth has been resisted at
every turn. That this information has been so carefully guarded must
tell one something.
Perhaps it is time for the Presidency to provide the definitive
answer. It might go at least someway to restoring its battered
reputation. Besides, we, the public, have a right to know.
Correction (21 August 2012)
: I
incorrectly totaled the original five year total at R517 721 164.00. It
is, in fact, R514 145 362.00. Apologies. All effected figures have been
corrected. As it so happens, since this post, the total has since been
superseded (new costs have emerged) and now stands at R522 312 029.00.
See
here for more.
UPDATE: For the latest up-to-date figures, including new information, see: ‘
The Billion Rand President: Update – R8.1m in Ferry Flights added‘
http://inside-politics.org/2012/08/20/the-billion-rand-president-how-much-jacob-zuma-costs-the-taxpayer/