KZN cabinet agrees to cost-cutting exercise

THE KwaZulu-Natal cabinet yesterday agreed after intense discussions that the spending of all departments must be cut by more than R2billion.

This was announced by finance MEC Ina Cronjé during a mid-term budget review in Pietermaritzburg yesterday .

"We are all aware of the difficult times for most of the world and South Africa," she said.

"The recession has wreaked havoc across the world. It's that time of the year when we look at our mid-term reviews and there is a chance to intervene and introduce the necessary measures."

In addition to the agreed reprioritisation, the provincial cabinet has also approved a few cost-cutting measures.

These include business class travel only for MECs and heads of departments; class of vehicle to be lowered during car hire bookings; officials to travel together unless absolutely unavoidable; no performance bonuses to be paid from 2010 to 2011; no leave conversion payments and air travel to be limited to important meetings.

"A lot of these measures apply across the board. Where applicable it will also apply to MECs. We really need to look at what is in the province's interest. Should the plan work, the province will save an estimated R1 720billion. Cabinet is determined to go below this amount," Croné said.

"We do not want to count our chickens before they hatch but we are confident the new strategy will work out."

Indications at this stage are that the projected year-end over expenditure is R5681billion. This amount does not include additional funding to be received from national Treasury or the reprioritisation and cost-cutting measures.

"We had to act boldly and do things differently. Every single department was called to cabinet and told that times are tough and asked to reprioritise together," Croné said.