Finance Minister Enoch Godongwana has defended the National Treasury’s ongoing use of the Government Technical Advisory Centre (GTAC) to conduct expenditure reviews aimed at enhancing the financial efficiency of government departments and state-owned enterprises.
Speaking in the National Assembly, Godongwana said the National Treasury, through GTAC, has conducted expenditure reviews since 2013.
“The majority of this work was done by the officials at the National Treasury. Some of the work was outsourced to consultants and contractors,” he said.
Godongwana also stated that no department can have the capacity to do everything hence there were different departments.
“With expenditure reviews, we require a particular set of skills relevant to that sector so Treasury can't have it. The capacity of the Treasury is to create an institution such as GTAC, where it does expenditure reviews on its own. In some instances where it can't, depending on the nature of the skills that it can't, it outsources,” he said.
In response to queries regarding whether expenditure reviews have taken place concerning the total cost of the Cabinet and related expenditures, Godongwana said a process was done between the National Treasury and the Presidency to look at the re-organisation of government.
“That re-organisation included the review of the different government departments. The truth is that work is still going to continue, but what happened after the elections, with the construction of the Government of National Unity, in so far as departments are concerned, that review did not proceed. In so far as public entities it is continuing.”
Godongwana’s response comes at a time the expenditure reviews have been a sticking point of disagreements within the Government of National Unity (GNU).
The DA has been pushing in the GNU to agree to growth-focused economic reforms and a full spending review while Godongwana has insisted that the spending reviews on expenditure will not yield the required money for the Budget shortfall within a short space of time.
When pressed on actions to ease the burden on South Africans, especially in light of taxpayers being overtaxed, Godongwana reiterated the importance of broadening the tax base and, where feasible, decreasing tax rates.
He stated that given the economic environment at the time, spending pressures may periodically necessitate tax increases.
“Government will continue to investigate possibilities of closing down loopholes, broadening tax basis by limiting unnecessary interest and deductions, reviewing the efficacy of tax expenditures, and supporting better tax administration, including the additional spending allocation.”
Godongwana also stated that he and the National Treasury have committed to also undertake an audit of ghost workers, starting with national and provincial departments, to use ongoing detailed review of the labour market, education programmes, and public employment programmes to consolidate and rationalise the entire public employment market.
“The aim of the review is to reduce duplications and improve operational efficiency across the more than 100 active labour market programmes.”
Godongwana also said he was hoping the recommendation of the review would be presented to the Cabinet in due course.
“The consolidated recommendation of this Budget review will be taken to Cabinet with the intention of pursuing their implementation by the end of June.”
He also said President Cyril Ramaphosa has also undertaken to establish a committee between the Presidency and National Treasury to identify waste, inefficiency, and underperforming programmes.
Godongwana said any savings that arise from the expenditure review will depend on whether they can be effective in the next financial year or whether an adjustment will be made during the Medium-Term Budget Policy Statement.
Asked whether the planned expenditure reviews would not become another stack of ignored paper recommendations, Godongwana said: “Their implementation is a function of the executive authorities of the different departments.”