Government is cracking down on wasteful spending by government departments as it seeks to focus expenditure on areas that will contribute to job growth.
Finance minister Pravin Gordhan yesterday said government must “address inefficiency, extravagance and waste in public administration”.
Several government agencies, such as the Independent Communications Authority of SA (ICASA) and the Universal Services and Access Agency (USAASA), have recently been found to have wasted money.
Gordhan, presenting the mid-term budget in Parliament yesterday, said there must be “greater efficiency” over cash management, as well as in procurement. He said “ordinary disciplines of financial management have to be strengthened”.
Additional steps will be taken to reduce administrative costs and “unnecessary duplication of capacity”, said Gordhan. Departments will have to identify and report on savings initiatives, and the Auditor-General will be asked to “strengthen his focus on value for money”.
Not enough
In February, the minister said government would implement measures to cut down on tender fraud, in a bid to make sure taxpayers get value for their money.
In September, it was revealed that USAASA paid a service provider R15 million to provide 20 access centres, but only delivered one in the first quarter of the year.
Subsequently, CEO Phineas Moleele was placed on precautionary suspension after the Department of Communications ordered a forensic investigation into the agency for financial mismanagement.
In addition, ICASA received another qualified audit opinion from the Auditor-General, after incurring R5 million in irregular expenditure in its most recent financial year. The AG also could not verify the correctness of the amounts due for licence fees, or what was payable to Treasury.
Building blocks
Yesterday Gordhan said that globally, there is anger about the impact of financial and governance failures on ordinary people, on employment and on livelihoods.
“But anger is not enough - we have to act, we have to be bold and far-sighted in our resolve to move ahead with the reforms that will build a better future, not just for ourselves but for generations to come.”
Gordhan said the composition of government spending must change and infrastructure investment must be prioritised over consumption expenditure. “Government consumption has also increased steadily, but general government capital spending has declined for three years in a row.”
Over the next three year, spending growth will be moderated, said Gordhan. “We must borrow to invest in infrastructure - not for government consumption.”
Gordhan warned that SA's economy will not grow at the expected rate this year and that the global economic environment poses risks to SA's economy. The economy is expected to grow at 3.1% this year, down from the projected 3.4% Gordhan predicted in February.
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