The government plans to save R27-billion over the next three years by cutting wasteful spending, Finance Minister Pravin Gordhan said on Tuesday.
In a preliminary report of the ministerial task team, established earlier this year to scrutinise state spending, he says belt-tightening could see both national and provincial government saving R14,5-billion and R12,6-billion respectively by the 2012/13 financial year.
Task team members include Gordhan, Minister in the Presidency Collins Chabane and Public Service and Administration Minister Richard Baloyi.
The report, released alongside Gordhan’s medium-term budget policy statement, says big savings can be had simply by changing the ”spending habits” of government departments and cutting out ”non-core items and frills”.
It offers as an example the R97-billion spent last year by national and provincial departments on procurement and travel.
”Finding savings is not only about reducing budgets and reprioritising expenditure, it is also about combating wastage, leakage and corruption in government, specifically in the procurement system.”
The report says the state plans to save R2-billion by reducing administrative costs in departments, and re-routing money to their core services.
It also urges state departments to cut their collective salary bill for part-time and contract workers — estimated at R400-million this year –by 20%, thereby saving R80-million.
The task team is busy reviewing the Ministerial Handbook, following an outcry over a ministerial spending spree on luxury cars. The handbook generously gives ministers car allowances of close to R1-million.
The report says certain aspects of the handbook ”may no longer be suitable”, but gives little hint of how the rules might change.
It points out that government departments are wasting money by procuring goods and services at prices above the market rate, and says new guidelines will be drafted to stop this.
The report also vows to use Treasury’s powers to probe financial management in all departments, in a bid to clamp down on fraud.
An interdepartmental working group, including Finance Ministry and tax officials, the Auditor General and the special investigations unit, was hard at work in this regard.
”A large number of government employees in national departments, provinces and municipalities have been identified as suspects in defrauding the state.
”A short list of cases has been identified for immediate action.”
The suspects could face not only internal disciplinary action, but criminal sanction and blacklisting from doing government business, the report states. — Sapa