Some of the highlights from the budget mid-term review

The Expanded Public Works Programme created 970 000 work opportunities last year. This was revealed by Finance Minister Pravin Gordhan, MP while highlighting progress on the implementation of the National Development Plan (NDP), during his medium-term budget policy speech.

Minister Gordhan also mentioned that rigorous procurement reforms were being initiated, especially in infrastructure project management, to strengthen service delivery, eliminate waste and root out corruption. “In reviewing the procurement system, we will also ensure that its contribution to broad-based black economic empowerment and local industrial development is reinforced,” explained Finance Minister.

He said the NDP recognises that the country needs a better education system to address poverty and build a more capable workforce. The Minister said that education is the largest single category of government expenditure and that it is projected to increase by an annual average rate of seven per cent over the next three years to R287 billion in 2016/17. He said the school infrastructure backlogs grant and education infrastructure grant will grow strongly over the spending period.

Minister Gordhan mentioned that the Community Work Programme will be operational in every municipality by the end of the spending period.
He said under the oversight of the Presidential Infrastructure Coordinating Commission, the rate of public investment will gather further momentum next year and beyond, supporting social delivery, industrialisation and skills development. He added that projects that will get under way soon include a new dam in the Eastern Cape, rehabilitation of the main roadway between Eastern Cape and KwaZulu-Natal, and a new coal-fired power station.

“As government, we acknowledge that we too must provide value for money. Although most government spending is effectively managed, there are many opportunities to cut or minimise costs and stop abuse,” explained Minister Gordhan.

He said in respect of the Executive, including provincial and municipal Executives, Cabinet has of its own accord decided the following:

Cars:

• The cost limits for official cars will be standardised
• Bulk purchasing will be used to reduce costs
• Security features will be a consideration
• There will be no compensation for use of personal cars.

Overseas delegations:

1. Business Class only for Ministers
2. Assistants to Ministers will be limited to two
3. Direct routes will be used
4. Number of officials to be kept to a minimum.

Housing:

• Ministers awaiting allocation of houses will be accommodated in rented apartments not hotels
• New refurbishment guidelines for limiting costs will be developed. No new credit cards to be issued and existing ones to be cancelled immediately.

Our approach to reducing costs and eliminating wasteful expenditure in the rest of government will focus on six areas over the period ahead:

1. The largest is consultant services. There are of course necessary engineering and advisory services employed by government departments. However, we need:

• Better contract management
• Stricter control of consultancy fees
• Each government entity to develop a consultancy reduction plan over the course of this financial year.

2. No credit cards.

3. Travel and related costs:

• Hiring of cars to be restricted to B Class except for special instances such as rural travel.
• The number of officials travelling to Cape Town offices will be limited.
• The Leader of Government Business will engage with Parliament on measures to reduce costs, such as the size of delegations appearing before Parliamentary committees, and the cost implications of the current Pretoria-Cape Town arrangements.
• Business class for overseas travel for directors-general (DGs) and Deputy directors-general (DDGs) only.
• Business class for DGs only on domestic flights.

4. Advertising:

• Guidelines to limit non-essential costs and for better use of GCIS facilities will be developed.

5. Catering and event costs:

• Guidelines will be developed for reducing event costs, including better use of government facilities rather than outside venues for meetings.
• No public funds to be used for purchase of alcohol.
• The entertainment allowance will be limited to R2 000.

6. Following the review of accommodation leases initiated by Minister Nxesi (Public Works Minister Honourable Thulas Nxesi, MP) steps are under way to reduce long-term office accommodation and government housing costs and make further savings from electricity demand management measures in government buildings.