Wasteful Expenditure: R1.7 billion on hotels, travel and catering

In his budget vote speech yesterday, Finance Minister Pravin Gordhan stated:

"Too often, the culture in the public service and in state owned enterprise is to ratchet up salaries, spend on frills, travel in luxury and spend more on marketing the agency than fixing up the service."

The DA welcomes the Minister's frank and honest admission. Last year the Democratic Alliance set out in some detail the amount of money the executive was spending on luxury cars, we also detailed the huge amounts being wasted on conferences and advertising. Across the board it appears that, wherever there is room for indulgence, it has been excessive and unnecessary.

Today the DA can reveal that the problem extends to the amount government is spending on travel, restaurant expenses and accommodation. The DA asked a generic question to each national department and, of the 19 departments to have responded to date, between March 2008 and September 2009, we can reveal that they incurred a total cost of R1.7 billion on these three line items. As those 19 departments represent roughly half of the national government, one can fairly and safely estimate that the full cost, between all departments, runs in excess of R3 billion. This means that the ANC administration is spending about R158 million every month, or R5.3 million per day, on travel, restaurant expenses and accommodation.

(See a full breakdown of the costs below this statement.)

A summary of the DA's key findings is as follows:

Biggest Total Spenders:

The five departments which spent the most across all three categories are:

• International Relations: R426 million
• Justice and Constitutional Development: R292 million
• Labour: R159 million
• Public Works: R134 million
• Rural Development and Land Reform: R134 million

Biggest Food Spenders:

The five departments that spent the most on restaurants/catering are:

• Labour: R53 million
• International Relations: R46 million
• Rural Development and Land Reform: R6 million
• Science and Technology: R3.2 million
• Women and Children: R1.5 million

Biggest Travel Spenders:

The five departments which spent the most on travel are:

• International Relations: R224.8 million
• Public Works: R97 million
• Justice and Constitutional Development: R95 million
• Rural Development and Land Reform: R82 million
• Labour: R74 million

Biggest Hotel Spenders:

The five departments which spent the most on accommodation are:

• Justice and Constitutional Development: R196 million
• International Relations: R155 millions
• Rural Development: R45 million
• Public Works: R37 million
• Labour: R30 million

Biggest Cost per Employee:

By dividing the number of staff members per department (as recorded in each department's annual report) by its total cost, the cost per employee is:

• Sport and Recreation: R369 000
• International Relations: R169 000
• Science and Technology: R151 000
• Social Development: R104 000
• Public Service and Administration: R89 000

This last table is possibly the most significant, because, while it is understandable that departments such as International Relations spend a lot of money on travel, it is far more difficult to explain why Sport and Recreation has an average cost per employee more than twice as much as that department (R369 000 versus R169 000). And why departments like Science and Technology and Social Development feature in the top five.

The DA will be asking further questions to determine the answer.

A further point is important. In response to a DA question last year the Department of Finance revealed that it was making extensive use of first class travel and could have saved a significant amount of money had it used economy class. It is not clear from these responses whether the cheapest flights were sought and what standard of accommodation was purchased. The DA will be asking further follow-up questions to determine the answer to this.

Certainly if the kind of cars and conference venues used by the national government are any indication of what was used, you can be sure they chose predominately first class flights and five star hotels.

The Finance Minister made a good speech yesterday and certainly his intent is to be welcomed, but if he's going to successfully counter the culture of excess and extravagance that defines the ANC government's conduct, it is going to require a sustained and relentless drive on his part. We look forward to reading his recommendations, for amendments to the Ministerial Handbook.

Statement issued by Dion George, MP, Democratic Alliance shadow minister of finance, February 18 2010

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