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Cape Town - The National Treasury believes it will achieve a “budget expenditure ceiling” reduction of R25bn in the current and following fiscal years by lowering the rate of growth in transfers to public entities, a freeze on non-essential goods and services and withdrawing funding for vacant posts.
In reply to DA MP Dion George, who asked what impact the ceiling reduction would have on service delivery, Finance Minister Nhlanhla Nene said the Treasury expects a “minimal impact” on service delivery "as the reductions to budget allocations in 2015/16 and 2016/17 have been targeted at non-essential items of expenditure”.
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”.
Mum on Eskom
While Nene did not comment on Eskom’s fiscal injection requirements - expected to be at least R23bn this year - he said he would be “lowering the rate of growth in transfers to public entities to be in line with inflation and to absorb some of the cash reserves accumulated in public entities”.
It is estimated that Eskom actually needs ten times the amount being injected this year, but Nene did not comment specifically on the state power utility.
There would also be a withdrawal of funding for a “portion of vacant posts that exist in certain departments”, Nene reported. He said the same principles had been applied to identify spending cuts within the nine provinces and public entities.
Further details on specific reductions could be found in the 2015 estimates of national expenditure, and details on provincial reductions could be found in the individual provincial budget statements published by provincial treasuries, he reported.
