Gordhan eyes R25bn savings through belt-tightening by 2018/19

Finance Minister Pravin Gordhan is slashing fat cat spending on travel‚ advertising and cellphones by government officials.

Delivering the National Treasury budget vote in parliament on Wednesday‚ Gordhan announced new regulations regarding government officials’ spending‚ which would effect:

- R1.4-billion savings per year by renegotiating the top 100 government contracts;

- R1-billion savings per year by changing policies regarding travel;

- R500-million savings per year by changing policies regarding cellphone usage;

- R2.8-billion savings per year through the renegotiation of government leases; and

- R1.4-billion savings per year by using an e-portal and central supplier database.

Gordhan said that by 2018/19‚ government should save R25-billion a year through belt-tightening.

Central to better financial management is firmer municipal and provincial management‚ Gordhan indicated.

Non-payment of suppliers‚ more procurement from township small‚ micro and medium enterprises‚ and less red tape are part of what Gordhan foresees for improving service delivery.

Regarding provincial equitable share‚ the National Treasury has endeavoured to assist provinces with revenue collection‚ and better provincial management of municipal management.

On revenue collection‚ the tax authorities met their targets. New plans against tax evasion will be included in imminent legislation.

Gordhan praised South Africans who‚ in a tough global climate‚ fight against a credit downgrade‚ and welcomed the renewal of Treasury director-general Lungisa Fuzile’s contract.

The budget deficit should come in at 3.9% of GDP this year‚ and economic growth at 0.9%.

Gordhan said much progress has been made regarding electricity constraints‚ the operation of the New Development Bank‚ tourism numbers and the way a national minimum wage could be implemented.

Democratic Alliance (DA) MP David Maynier said Gordhan’s austerity measures did not go far enough.

Therefore‚ this year‚ in an unprecedented move‚ the DA will propose over 300 amendments to the 2016/17 budget‚ adjusting the budget by over R9.5-billion‚ to fund proposals aimed at creating jobs‚ fighting crime‚ supporting poor students‚ combating corruption and providing relief to the poor.

The DA will also propose a comprehensive spending review aimed at identifying savings and eliminating wasteful expenditure in all three spheres of government.

Finally‚ the DA will introduce four private members’ bills to redraw the fiscal landscape‚ namely:

 - The Public Finance Management Amendment Bill providing for an expenditure ceiling;

- The General Laws Amendment Bill providing for a debt ceiling;

- The Public Service Amendment Bill providing for concurrent powers for the finance minister to sign off future public sector wage agreements; and

 - The Employment Tax Incentive Amendment Bill to provide a youth wage subsidy for young people who do not have jobs‚ or have given up looking for jobs‚ in South Africa.