No bite behind government's spend-cutting bark

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Tim_Harris.jpgThe budget’s steps to curb government spending fail to address re-course for non-compliance, said Democratic Alliance finance spokesman Tim Harris.


“Cost containment measures were welcome, but there was nothing about what would happen if ministers did not meet those measures,” said Harris.


He was responding to the four steps to contain government spending that Finance Minister Pravin Gordhan announced in his budget speech in February.


The four steps emphasise allocating spending efficiently, enhancing management, cutting waste and eliminating corruption.


One. Spending reviews were under way to examine programme performance and value-for-money, conducted by the Treasury and the Department of Performance Monitoring and Evaluation, and by provincial treasuries.


Two. The office of the Accountant-General has stepped up efforts to strengthen the financial control environment, and has undertaken 27 forensic reviews over the past 12 months, leading to criminal investigations and internal disciplinary action.


Three. As part of its efforts to combat waste, cost-containment instructions were issued in January. This includes the curtailment of budgets for consultants, travel, accommodation and venue hire, which will contribute to savings over the next three years.


Four. Coming regulations will strengthen the Treasury’s oversight of public entities by requiring compliance with reporting requirements for expenditure, revenue, borrowing and performance.


Meanwhile, as government puts the brakes on spending, Treasury reported a slow in under-spending.


Spending of R965.5-billion out of a total appropriation of R971.5-billion amounted to under-spending of 0.6%, said the Treasury. This compared favourably with a shortfall of 1.1% in the 2011-12 financial year.


Spending on general public services was relatively low, mainly as a result of low capital spending by the Department of Public Works.


Poor performance in addressing school infrastructure backlogs resulted in significant under-spending on education, while institutional instability in the Community Works Programme affected spending in employment and social security.


In its budget review Treasury said there was strong growth in spending on local government, housing and community amenities, while the allocations for education and health also grew in real terms, reflecting above-inflation increases in their salary bills.


Spending on economic services, government administration and security is seen to moderate after strong growth over the previous three years and in line with the various programmes’ capacity to spend.
 

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