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Government ‘eager to eliminate wasteful spending’

Thursday, 27 November 2014   (0 Comments)
Posted by: Author: Linda Ensor
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Author: Linda Ensor

Government recognises that there is "significant room" for improving the cost effectiveness of service delivery by eliminating wasteful spending and corruption, Finance Minister Nhlanhla Nene said on Wednesday.

He said government was implementing various measures to eliminate this.

In a written reply to a parliamentary question from Democratic Alliance (DA) MP David Ross, Mr Nene said the newly established office of the chief procurement officer headed by Kenneth Brown would play a "critical role" in reducing the scope for both wasteful spending and corruption by designing and implementing new procurement rules for the public service.

These new rules would include the centralisation of the procurement of a variety of standard goods and services used by departments across government. "This will ensure greater purchasing power and less scope for unnecessarily inflated prices," Mr Nene said.

The office has been benchmarking the standard prices for goods and services purchased by government.

Mr Nene also said that in January Treasury had issued an instruction on cost containment measures to all departments in a bid to significantly reduce wasteful expenditure.

"Departments will be audited on these measures in the preparation of annual financial statements. In addition, in line with the approach to be taken by national government to meeting lower spending ceilings in 2015-16 and 2016-17, government departments will reduce nonessential spending," Mr Nene said.

This would include freezing budgets of nonessential goods and services at 2014-15 levels, withdrawing funding for posts that have been vacant for some time and reducing the rate of growth of transfers to public entities, particularly those with cash reserves.

Mr Nene said government would seek to reduce corruption through increased vigilance and enforcement, partly to be achieved by increasing the resources of the public protector, the Financial Intelligence Centre and the Directorate for Priority Crime Investigation.

Mr Ross also wanted to know what proactive steps Treasury would take to address the low rate of economic growth, particularly with regard to small businesses.

In reply Mr Nene said Treasury’s medium-term budget policy statement provided "a roadmap to safeguard public finances, sustaining the space for spending on infrastructure, skills and health. These steps will support growth more broadly in the economy."

The Taxation Laws Amendment Bill 2014 provided small businesses with several forms of tax relief. The Preferential Procurement Policy Framework Act also supported small business.

"Over the last three years funding to agencies that support small and medium(-sized) enterprise development has grown 12.7% per annum. National Treasury will continue to provide support to these schemes over the medium-term expenditure framework", Mr Nene said.

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