Cost-cutting saves state R27bn

Pretoria - Government has managed to save a big chunk of spending - R14.5bn at a national level and R12.6bn at provincial level - in its quest to keep a lid on total expenditure at a time of mounting pressure on the fiscus.

The Medium-Term Budget Policy Statement (MTBPS) said savings identified at national level would be used to fund additional personnel costs, the phasing-in of the child support grant, higher spending on public works programmes, and the cost of establishing new departments.

Provincial savings will be reprioritised to reduce funding gaps in provinces' education and health budgets arising from higher-than-budgeted occupation-specific salary agreements.

To date, substantial savings had been identified in administration and non-essential items, such as catering, communication, consultants, inventory, stationery and printing, travel and subsistence, accommodation and entertainment.

Some savings had also been identified by cutting expenditure from low-priority programmes.

In addition, the general level of expenditure on administration programmes across national departments, which had increased by an annual average of 11.7% over the past five years, had been reduced. Government is to realise further savings over the medium term by adjusting procurement processes and deferring non-essential purchases.

The MTBPS said a ministerial task team on cost-cutting was reviewing a range of programmes, agencies and public entities as part of government's comprehensive expenditure review.

The task team would analyse spending across government and consider rescheduling, rationalising or phasing out certain activities, while ramping up others in support of key priorities.

The task team will develop proposals and guidelines to ensure that tangible cost-cutting measures are adopted throughout national, provincial and local government.

In similar vein, a separate ministerial task team has been established to review the operations and finances of state-owned enterprises.

- Fin24.com