Streamlining to benefit national development

Wednesday, October 25, 2017

Government’s Mandate Paper proposes to cut programmes that are not aligned to the National Development Plan (NDP) to strengthen the alignment of the national budget.

“To support spending in these areas, the Mandate Paper proposes to cut programmes that are not aligned to the NDP (“non-core”), or which are not realising their intended outcomes,” reads the Medium Term Budget Policy Statement (MTBPS), tabled by Finance Minister Malusi Gigaba on Wednesday.

Prepared by the Department of Planning, Monitoring and Evaluation (DPME), the paper serves as a Cabinet-endorsed mandate against which departments and public agencies should refine their plans and budget proposals.

The purpose is to strengthen alignment of the national budget, the Medium Term Strategic Framework (MTSF) and NDP during the final 24 months of the current administration.

“The paper observes that on the current trends, South Africa is unlikely to achieve its NDP goals. It also notes that there will be no additional funds available to increase baseline expenditure over the 2018 Budget, and some programmes might have to be cut to meet unanticipated spending pressures,” noted the MTBPS.

Seven focus areas to streamline spending

The Mandate Paper establishes key expenditure priorities and identifies focus areas that should be addressed in the 2018 Budget.

Reducing spending on consultants; establishing strict limits on contingent liabilities and litigation costs, and ensuring that the initiatives of the Office of the Chief Procurement Officer take effect are some of the suggestions that the document makes to departments.

Departmental submissions for the 2018 Budget complement the Mandate Paper priorities, with several proposals that require large additional resource commitments. These include significant additional funding for the post-school education and training system, National Health Insurance (NHI), qualified teachers for Grade R and the implementation of the Defence Review, among others.

When coming to job creation and small business development, the paper speaks to the implementation of 30% set-asides, localisation and integrated community development and community-based workers.

With regards to the 2018 Budget, the Mandate Paper states that youth development should include developing business opportunities for youth, including access to the internet, as well as scaling up labor-intensive programmes, learnerships and artisan training.

Confidence boosting measures

At a briefing at the Johannesburg Stock Exchange (JSE) in July, Minister Gigaba unveiled details of inclusive economic Growth Action Plan, a plan which will inspire confidence in the country.

In his maiden MTBPS to Parliament, Minister Gigaba said government recognises that the best way to ensure the sustainability of public finances is to achieve higher economic growth.

“We aim to kick-start inclusive growth by implementing the 14 measures to improve confidence and accelerating progress on structural and microeconomic reforms. Delivery on these commitments will be complemented by a stimulus package, options for which are being considered,” said Minister Ggigaba.

The MTBPS gave an update of the plan. The Budget Facility on Infrastructure, ran by National Treasury and the Presidential Infrastructure Coordinating Commission, received 59 project submissions, with an aggregate funding requirement of R135 billion. Several projects have been recommended for detailed appraisal.

Meanwhile, negotiations on the next public-service wage agreement are under way.

In the area of creating policy certainty by finalising key legislative and policy processes, the Council for Scientific and Industrial Research has completed a study on spectrum availability and open access.

The Competition Commission has also launched a market inquiry to investigate data prices, while draft legislation is being finalised to facilitate the licensing of Postbank.

The mini-budget noted that the implementation of the revised Mining Charter has been postponed to December 2017. – 

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