FINANCE Minister Pravin Gordhan made his Budget debut yesterday with an announcement of big cuts in wasteful spending, a condemnation of government corruption and a pledge to forge a bold new path.
Gordhan told Parliament in presenting his medium-term Budget policy statement that due to the economic meltdown the budget deficit for the current financial year would balloon to 7,6percent of gross domestic product from a 1,0percent deficit last year.
But he said South Africa was gradually emerging from its first recession in 17 years and should post GDP growth of 1,5percent next year after growth shrunk an estimated 1,9percent this year.
Gordhan said government would maintain spending on infrastructure and service delivery despite the extra borrowing made necessary by the deficit, but cuts in wasteful expenditure caused by "frills", corruption and inefficiency were essential.
He said a task team on which he serves with two fellow ministers had since July identified R27,1billion in wasteful or unnecessary spending that could be cut over the next three years.
"In municipalities and government agencies, spending on unnecessary travel and entertainment, unfocused consultant contracts, procurement of supplies at uncompetitive prices and layers of administrative paper work will be cut," Gordhan said.
Among other things, the task team is reviewing the Ministerial Handbook that lays down how much ministers can spend on luxury limousines and when it is acceptable for them to stay in hotels at taxpayers' expense. Gordhan gave no details of planned changes to the handbook.
Asked what kind of frills the government planned to cut, Gordhan said: "What we are talking about is the habit of, for example, officials who have a boardroom next door, now going to a hotel to have a meeting; going off for two days to the bush to do strategic planning, but you could do it in your own boardroom."
Budget documents said "numerous instances of wastage and inefficiency" in government spending on procurement and travel had been identified.
Gordhan said he was concerned at "the number of government tenders, in all three spheres of government, that were tainted by corruption".
"Corrupt officials stand on one side, while on the other stand corrupt business people," he said. "A culture of gifts, wining and dining, and all manner of enticement has become pervasive. We must act decisively against such a tendency."