Big spending Ministers undermining belt-tightening measures implemented by National Treasury

26 September 2016

The Minister of Finance, Pravin Gordhan, is desperately trying to implement belt-tightening measures to cut spending on “non-core goods and services” including consultants, travel and subsistence, catering and entertainment, which cost reached a staggering R 35.2 billion in 2015/16. 

These “cost containment measures” were originally introduced by the Minister three years ago via National Treasury Instruction No. 1 of 2013/14. 

However, a reply to a parliamentary question reveals that the Minister’s belt-tightening measures are achieving mixed results and are being resisted. 

A total saving of R5.59 billion, or -18%, was achieved on consultants in 2015/16 compared to 2014/15, to the credit of National Treasury. 

However, cost containment measures on travel and subsistence, catering and entertainment failed as follows:  

- spending increased on travel and subsistence by R215.58 million, or 2%, from R9.06 billion in 2014/15 to R9.27 billion in 2015/16; and

- spending increased on catering, entertainment and venue rental by R58.67 million, or 7%, from R868.74 million in 2014/15 to R927.42 million in 2015/16. 

National Treasury received numerous requests for deviations from cost containment measures, including a request from the Minister of Home Affairs, Malusi Gigaba, requesting a deviation to allow his support staff to fly business class, so that he was not inconvenienced.  

The motivation for the deviation from National Treasury’s cost containment measures reads as follows: “The Minister was inconvenienced and had to further wait for the disembarking of the personnel assistant from another terminal to be able to proceed with the trip which resulted in the Minister arriving late for scheduled appointments.” 

To National Treasury’s credit, it turned down 22 of 28 requests for deviations from cost containment measures between 01 April 2015 and 31 July 2016. 

The Minister of Finance, Pravin Gordhan, is clearly desperately trying to hold the fiscal line but his belt-tightening measures are being resisted by Ministers and officials too accustomed to the high life. 

We will have to identify big spending Ministers who are undermining cost containment measures being implemented by National Treasury.

Issued by David Maynier, DA Shadow Minister of Finance, 26 September 2016