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Cape Town - The February national budget is likely to give more meat to cuts in government spending including reducing provincial and municipal government budget allocations and making sure that support to state-owned enterprises does not exceed inflation.
Hints of what action Finance Minister Nhlanhla Nene will take in his February budget to cut government spending were given in his reply to a question from Dion George, the DA finance spokesperson in a written reply on Wednesday.
George asked, with reference to the National Treasury’s Medium Term Budget Policy Statement which was delivered in October, what were the specific measures to be implemented to cut government spending at government departments and state entities.
Nene said spending reductions will be imposed through a lowering of the baseline allocations of national department and public entities “and by lowering the provincial equitable share and provincial and local conditional grant allocations”.
The reductions would be achieved through a freeze on nominal growth in spending on non-essential goods and services items, “in other words maintaining spending on such goods and services at 2014/15 levels or allowing only inflationary growth on some items”.
Funding would be withdrawn for a large portion of vacant posts in certain departments.
Significantly Nene said Treasury intended to lower the rate of growth in transfers to public entities to be in line with inflation. He proposed that “some of the cash reserves” accumulated in public entities would be absorbed in the process.
“The same principles will be applied to identify spending reductions within public entities,” he said noting that further details on the baseline reductions would be published in the 2015 budget.
Hints of what action Finance Minister Nhlanhla Nene will take in his February budget to cut government spending were given in his reply to a question from Dion George, the DA finance spokesperson in a written reply on Wednesday.
George asked, with reference to the National Treasury’s Medium Term Budget Policy Statement which was delivered in October, what were the specific measures to be implemented to cut government spending at government departments and state entities.
Nene said spending reductions will be imposed through a lowering of the baseline allocations of national department and public entities “and by lowering the provincial equitable share and provincial and local conditional grant allocations”.
The reductions would be achieved through a freeze on nominal growth in spending on non-essential goods and services items, “in other words maintaining spending on such goods and services at 2014/15 levels or allowing only inflationary growth on some items”.
Funding would be withdrawn for a large portion of vacant posts in certain departments.
Significantly Nene said Treasury intended to lower the rate of growth in transfers to public entities to be in line with inflation. He proposed that “some of the cash reserves” accumulated in public entities would be absorbed in the process.
“The same principles will be applied to identify spending reductions within public entities,” he said noting that further details on the baseline reductions would be published in the 2015 budget.
