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Govt departments spent whopping R35bn despite Gordhan's cost cut plans

Sep 27 2016 13:46
Liesl Peyper

Cape Town - Despite Finance Minister Pravin Gordhan’s stringent cost containment measures, government departments continue to spend vast amounts of money on consultants, travel, catering and entertainment. 

In a parliamentary question posed by the DA’s David Maynier, Gordhan said preliminary spending for 2015/16 showed government to has spent altogether R35.2bn on the services of consultants, travel and subsistence as well as on catering and entertainment. 

Although state entities managed to save 18% or close to R5.6bn in the period 2015 to 2016 on consultants (in 2014/15 the amount was R30.58bn) the expenditure on travel and accommodation went up by R215.5m, while spending on catering, entertainment and venue rental increased by R58.6m. 

Government spent altogether R9.2bn on travel and subsistence costs and R927.4m on catering, entertainment and venue rental in 2015/16. 

Maynier said in a statement it’s obvious that Gordhan’s belt-tightening measures is being resisted by ministers and officials who are “too accustomed to the high life”. 

READ: Cost-cutting measures for executive - Zuma

“National Treasury needs to identify the big spenders who are undermining these cost containment measures,” he said. 

Gordhan first introduced measures to curb spending by government ministers in 2013. He repeated the call for spending restraint in this year’s budget speech, but went a step further, freezing non-critical vacancies of administration and managerial position. 

These measures would help government to reduce its spending ceiling by R10bn in 2017/18 and by R15bn in 2018/19, Gordhan said at the time. 

In a separate question, Maynier asked Gordhan if there had been any requests from government departments for deviations from the mandatory cost containment measures originally introduced by National Treasury. 

In his reply, Gordhan listed a number of departments requesting authorisations for expenditure ranging from a request from the Civilian Secretariat of Police for newspaper subscription renewals, a request from the Department of Military Veterans for its officials to travel business class on flights to the Landbank’s request to rent “comfortable cars to drive from airports to business branches”.

READ: Gordhan roadshow: where's the belt tightening?

These requests – 20 in total – which dated from 1 April 2015 to 31 July 2016, were by and large turned down, except in exceptional circumstances. 

“The National Treasury established a Departures Committee to evaluate all requests for deviations from Treasury regulations or instructions,” Gordhan said in his reply. 

“This Committee, which is chaired by the Accountant-General, assesses each application on a case by case basis. Departures from provisions contained in the Cost Containment Treasury Instruction are only granted under exceptional circumstances and this policy has not changed since this Treasury Instruction took effect from 1 January 2014.” 

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