Gordhan draws hard line on cabinet expenditure - CNBC Africa

Gordhan draws hard line on cabinet expenditure

Southern Africa

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National Treasury will do away with credit cards for cabinet members as a cost-cutting measure.

The country’s Minister of Finance Pravin Gordhan, at his medium term budget address on Wednesday, explained that it was necessary that Cabinet found a number of opportunities to eradicate unnecessary spending.

“Cabinet has decided to take a number of initiatives which will apply both to members of Cabinet and to officials in national, provincial and local government. This will include state entities and state-owned enterprises,” Gordhan said in his parliamentary address.

Cabinet located expense areas in cars, travel and housing, and plan to implement various measures for provincial and municipal executives, as well as all other cabinet members.

The cost limit for official vehicles will be standardises, and the implementation of bulk purchases will be made to curb costs. Certain security features alongside vehicles will also have to undergo consideration before approval.

Watch the full speech here

Travel allowances have been significantly costly for government over the years. In 2000, a number of members of parliament had been found to have conspired with a number of travel agencies to abused state funds.

In terms of overseas delegations, provincial and municipal will now be restricted to Business Class tickets when travelling by air, and will also be restricted to taking two assistants. The number of officials in the delegation will also be limited to two.

Ministers awaiting housing will be placed in rented apartments instead of hotels, and no new credit cards will be issued. Existing credit cards will also be cancelled.

“Steps are under way to reduce long term office accommodation and government housing costs, and make further savings from electricity demand management measures in government buildings,” added Gordhan.

He added that cost cutting would also be focused upon in six areas going forward, largely in consultant services, catering and event costs as well as advertising.

Although most government spending is effectively managed, “There are many opportunities to cut or minimise costs and stop abuse. As government, we acknowledge that we too must provide value for money,” said Gordhan.