National Treasury is said to be on the back foot as a team appointed by President Jacob Zuma attempts to find R40-billion to fund free higher education, making a mockery of Finance Minister Malusi Gigaba's medium-term policy statement.
Business Day reported that a team of Treasury officials and officials from the department of monitoring and evaluation in the Office of the President are tasked with finding the money, following a decision by Zuma to announce free higher education. The decision was allegedly made against the advice of Treasury and the Heher Commission of Inquiry into free higher education.
Two weeks ago, Zuma reportedly told Treasury director-general Dondo Mogajane that he intended to announce free higher education.
The Sunday Times reported this week that Zuma wanted free education to be announced in his state of the nation address in February, but was stopped by Treasury officials. The plan was reportedly drawn up by a former boyfriend of Zuma's daughter Thuthukile.
The Mail & Guardian reported last week that government had considered slashing social grants an and the roll-out of RDP houses to fund free education, which was not budgeted for.
But the Presidency denied the reports, and said Zuma did not have plans to announce free education.
The revision of the policy statement shows a loss of influence by Treasury and is likely to have an impact on ratings agencies' assessment of the country.
According to Business Day, one Treasury official has already resigned over Zuma's alleged interference while more are expected to do so. Michael Sachs, head of the budget office, reportedly resigned last week.
But Mogajane told Business Day that there is no coup at Treasury.
"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 this way before, but it is necessary now. The principle is that we are helping each other jointly to determine what should be cut from the spending side," he reportedly said.
Zuma has reportedly abandoned Treasury's normal way of budgeting, which is usually done by a committee of Treasury and senior Cabinet officials. Now, Zuma has appointed a presidential fiscal commission to do the work, Business Day reported. Mogajane said the changes to the budget were only "mooted changes".