Cape Town – Finance Minister Nhlanhla Nene says cost containment measures that government announced in 2013 have led to a reduction in government consumption.
Tabling the Medium Term Budget Policy Statement (MTBPS) in the National Assembly on Wednesday, the Minister said austerity measures that were introduced to reduce wastage in the public sector has led to government reducing its spend notably.
The National Treasury announced wide-ranging measures to reduce public spending when Cooperative Governance and Traditional Affairs Minister Pravin Gordhan was still the finance Minister.
At the time, Minister Gordhan issued an instruction for government credit cards to be closed, and for cost containment measures relating to consultants, travel and subsistence, entertainment, catering and events, be implemented by all government departments.
Minister Nene said the measures were now starting to bear fruit.
“We are now in a position to report on the impact of this reform. Across all national and provincial departments, in the first year, a three percent decrease was achieved in spending on consultants, a six percent decrease in travel and subsistence and a 47 percent decrease in catering, entertainment and events expenditure,” he said.
At the time cost containment measures were introduced, National Treasury also announced that spend on official travel would be reduced.
Only Ministers and Directors General would be allowed to travel on business class, while other officials could only travel on economy class regardless of whether they were travelling locally or abroad.
The National Treasury would also look at the bulk buying when it comes to vehicles bought for Ministers, Deputy Ministers, Premiers, MECs and Mayors to curb wastage.
Through the newly established Office of the Chief Procurement Officer, the National Treasury would procure official vehicles in bulk in order to save public funds.
Hotel stays would be limited – with officials required to spend R1300 and less, including subsistence and travel, for all their hotel stays, with exception being made for peak periods where government is hosting major events, like the BRICS Summit.
Minister Nene said there was further light at the end of the tunnel as far as government spending was concerned.
“Preliminary budget data indicate that there will be further reductions in these categories of spending over the MTEF period, contributing both to value for money and improved public service delivery.
“We recognise that there is not yet full compliance with these measures. The Treasury is currently revising the cost containment instruction to review thresholds and clarify its implementation, especially on expenditure related to conference,” he said. – SAnews.gov.za
