DOCUMENTS

Belt-tightening measures save a mere R1.85bn – David Maynier

DA MP says although cost containment measures send right fiscal signals, they are ineffective

Belt-tightening measures save a mere R1.85bn, or 0.03% of consolidated expenditure, over five years in SA

13 June 2018

The Minister of Finance, Nhlanhla Nene, is battling to impose belt-tightening measures and cut spending on non-core goods and services such as travel and subsistence, catering and events, and venues and facilities, which cost a staggering R109 billion between 2013/14 and 2017/18.

The belt-tightening measures were originally introduced via National Treasury Instruction No. 1 of 2013/14 which imposed “cost containment measures” aimed at slashing spending on non-core goods and services in all departments, constitutional institutions and public entities.

However, a reply [see here] to a parliamentary question on the implementation of “cost containment measures” reveals that:

- spending on cost containment items by national departments decreased by R2.6 billion, or -5.3%, between 2013/14 and 2017/18; and

- spending on cost containment items by provincial departments actually increased by R813 million, +2.0%, between 2013/14 and 2017/18.

What this means is that after imposing belt-tightening measures, for a period of five years, the combined saving, of national government, and of provincial governments, was R1.85 billion, which is a mere 0,03% of consolidated expenditure between 2013/14 and 2017/18.

What this suggests is that, although cost containment measures send the right fiscal signals, they have been ineffective at significantly cutting spending on non-core goods and services, between 2013/14 and 2017/18.

I will, therefore, write to the Chairperson of the Standing Committee on Appropriations, Yvonne Phosa, requesting her to schedule a hearing on how to improve the implementation of cost containment measures in all departments, constitutional institutions and public entities in South Africa.

We cannot afford to be spending a R100 billion plus on non-core goods and services such as travel and subsistence, catering and events, and venues and facilities given the demands for additional spending on education, policing, health and social development in South Africa.

Issued by David Maynier, DA Shadow Minister of Finance, 13 June 2018