Budget seeks to get value for money

04 March 2014

Phumla WilliamsIn what has been widely hailed as a positive 2014 Budget Speech, Finance Minister Pravin Gordhan firmly set the tone on how government departments will operate this coming financial year. 

The minister was steadfast on government’s plan to contain expenditure and not tolerate excess, wasteful spending or corrupt activities. All government departments will be required to operate within strict expenditure guidelines and cut unproductive costs. 

Said Minister Gordhan: “The emphasis falls therefore on ensuring that expenditure is allocated efficiently, enhancing management, cuts waste and elimination corruption.” 

The government is clear in its message to the public and private sectors: every taxpayer rand will be accounted for and used to the maximum benefit of the country. 

Notably, there is a shift away from consumption towards infrastructure investment, and the government has placed a firm cap on expenditure, in line with the commitments made in last year’s medium term budget policy statement. 

This reinforces the government’s stance that fiscal prudence is an overriding consideration when it comes to the handling of public finances. 

The cap on spending does not in any way jeopardise the social obligations to provide free service at public health facilities, housing, water and electricity in poor communities and no-fee schools. 

Spending on social assistance has risen from R75 billion in 2008/09 to R118 billion. The impact of social programme cannot be overstated; they provide a safety net for communities who would otherwise be devastated by poverty and unemployment. 

Investment in our economy continues unabated through infrastructure investments of R847 billion over the next three years, R6.4 billion will support small businesses and R21.8 billion has been earmarked to support industries until 2016. 

Where additional funds have been required for key priorities, the government has reprioritised these funds from across various departments. The cap on spending is helping to lower the Budget deficit, which will be lower than previously projected. 

The government understands the need to ensure it gets value for money. While most government spending is effectively managed, there remain opportunities to cut or minimise cost and stop abuse. 

Aside from the cost-containment instructions, maladministration and corruption are being dealt a blow through the establishment of the chief procurement office, which monitors procurement plans audits tender documents and oversees property leasing. 

This office will also play a key role in effect savings in the procurement of health equipment, drugs and medicines, which has been centralised under it. The business interests of government employees will be analysed by the office. 

Government recognises that its spending needs to be more productive and reviews are being undertaken by the Treasury and the Department of Performance Monitoring and Evaluation

To strengthen the fight against corruption, the office of the accountant-general has reinforced its financial control. Over the past 12 months undertaken 27 forensic reviews which have led to criminal investigations and internal disciplinary action. Payments worth R503 million have been cancelled and R61 million recovered. 

New regulations will enhance oversight of public entities to ensure compliance with reporting requirements for expenditure, revenue, borrowing and performance. 

Unless there are compelling reasons to fill positions, new employment in the public service will be frozen over the next three years. 

The private sector has an important role to play in ensuring all receive value for money by pursuing business and ethical standards that are beyond reproach. 

A review of property leases found that government was paying for unoccupied buildings and accommodation occupied by non-government entities. 

Furthermore, discrepancies existed between the size of the accommodation and the space that was paid for. While plans are in place to correct this, Godhan called on landlords to account for the excess rent and for services not rendered. 

The government is determined to work hard to maximise value for the money in all the programme it embarks on. The private sector is an important component in this commitment. Let the prices offered to the government be market-related. 

Phumla Williams is acting CEO of the Government Communication and Information System (GCIS)