Ministerial vehicle purchases to be reviewed

Thursday, July 30, 2009

Pretoria - A Ministerial Task Team, established to look into government expenditure in the context of the current economic meltdown, will also look into the purchase of vehicles by Political Office Bearers.

The Task Team, comprising the Minister of Finance Pravin Gordhan, Minister for Performance Management and Evaluation in The Presidency Collins Chabane and Minister of Public Service and Administration Richard Baloyi , will advise Cabinet on how matters of this nature can be handled.

The work of the task team forms part of the comprehensive expenditure review that government announced a few weeks ago, Minister for Performance, Monitoring and Evaluation in the Presidency, Collins Chabane said on Thursday, following an ordinary meeting of Cabinet.

It will advise Cabinet on how best they can curb government spending in the current economic climate.

"The team will look into what is it that that we [Cabinet] need to stretch on in this current crisis and what is that the we need to spend on as priority and those issues will be determined in the next cabinet meeting once the cabinet explores all possibilities and what they think as cabinet needs to be corrected."

Cabinet ministers and their car allowances have come under the spotlight recently.

According to Mr Chabane, the ministers, who media reports said had made lavish purchases on vehicles, had not acted unlawfully and had not broken any rules.

"The Political Office Bearers have not broken any rules and are not at fault for following the rules. The official vehicles, which belong to the state, have been acquired for them by their departments in strict compliance with the regulations as contained in the Ministerial handbook," explained Mr Chabane.

According to the handbook, the state should provide Political Office Bearers with vehicles in Cape Town and Pretoria. The price of the vehicles must not be greater than 70% of the member's annual salary.

"It should be noted that the re-basing of the salary packages of Ministers, Deputy Ministers, MP's and MPL's - developed by the Moseneke Commission and adopted (earlier this year) - has affected the categories of cars that all these political leaders can acquire," Mr Chabane said.

In most instances, the state sources the vehicles from service providers on a full maintenance lease and the vehicles are used at a pre-determined rate. This rate includes financing of the vehicle, insurance, extras and maintenance costs. Once the contract expires, at 120 000 km or five years, the service provider is responsible for the disposal of the vehicle and carries the risk for any losses.

"Thus, the state receives the benefit of flexibility of choice of vehicle in terms of acquisition and disposal of these official vehicles," Mr Chabane said.

However, he said, recognising the sensitivity of this matter, the task team would look at how these matters can be handled within the current economic context.