A war on waste and corruption, job-shedding in the civil service and an austerity budget to avoid South Africa slipping into junk status is expected to be the focus of Finance Minister Pravin Gordhan’s budget speech in Cape Town tomorrow.Gordhan will have to show the world that South Africa is serious about turning its economy around by cutting fat and taking pain to return to a sustainable growth path.
As in many parts of the world, lean times have arrived for South Africa.
In the two months since he has been re-appointed finance minister, Gordhan has met leaders in business and broader society, impressing many with his grasp of the challenges and his determination to succeed.
His message has been that waste, corruption and excessive state expenditure has led to what he told one high-level meeting in Pretoria late last month a “budget crisis”.
He has acknowledged that corruption is rife and called on South Africans to act rather than discuss or take note.
“Corruption and stealing is rampant and indefensible, especially in some provinces,” he reportedly told some of the closed meetings.
In some meetings, he warned senior roleplayers that if there is no self-discipline, the country could go the way of Greece, adding that to save, the state must cut its bill for goods and services, and employment conditions for civil servants.
Three drastic steps under consideration are:
lA complete freeze on all civil service staff appointments, even in the cases of resignation, death or existing vacancies, with the exception of occupational specific staff such as doctors;
lA freeze in salaries of all civil service staff earning more than R1-million a year, including officials, mayors, ministers, senior MPs and CEOs. This could save the country R3-billion in a single year; and
lCabinet agreed that the government’s national human resources costs must be cut by R5.2-billion this year and provinces by R4.8-billion – much of it from the wage bill.
Because labour laws mean it takes time to implement such cuts, the expectation is that staff cuts will happen practically from next year.
Such steps will include retrenchment packages, natural attrition, voluntary severance packages and early retirement.
Gordhan is expected to provide greater clarity on which state-owned entities will be merged, shut down or privatised, as announced by President Jacob Zuma in his state of the nation address.
Provinces may be forced to cut R1.5-billion from their budgets in the current financial year, a further R1-billion next year and R800-million the year after.
In what is expected to be an unpopular move, pro-poor aspects of provincial conditional grants could also be cut to the bone.
lThe Dispatch will publish a bumper edition on the day after the budget speech, containing news and analysis from our team in the National Assembly.
Dispatch business journalist Ray Hartle will also be present during Gordhan’s presentation to bring our readers indepth coverage of the implications of the budget for the people of the Eastern Cape.
Gordhan to make war on waste
Gordhan will have to show the world that South Africa is serious about turning its economy around by cutting fat and taking pain to return to a sustainable growth path.
As in many parts of the world, lean times have arrived for South Africa.
In the two months since he has been re-appointed finance minister, Gordhan has met leaders in business and broader society, impressing many with his grasp of the challenges and his determination to succeed.
His message has been that waste, corruption and excessive state expenditure has led to what he told one high-level meeting in Pretoria late last month a “budget crisis”.
He has acknowledged that corruption is rife and called on South Africans to act rather than discuss or take note.
“Corruption and stealing is rampant and indefensible, especially in some provinces,” he reportedly told some of the closed meetings.
In some meetings, he warned senior roleplayers that if there is no self-discipline, the country could go the way of Greece, adding that to save, the state must cut its bill for goods and services, and employment conditions for civil servants.
Three drastic steps under consideration are:
lA complete freeze on all civil service staff appointments, even in the cases of resignation, death or existing vacancies, with the exception of occupational specific staff such as doctors;
lA freeze in salaries of all civil service staff earning more than R1-million a year, including officials, mayors, ministers, senior MPs and CEOs. This could save the country R3-billion in a single year; and
lCabinet agreed that the government’s national human resources costs must be cut by R5.2-billion this year and provinces by R4.8-billion – much of it from the wage bill.
Because labour laws mean it takes time to implement such cuts, the expectation is that staff cuts will happen practically from next year.
Such steps will include retrenchment packages, natural attrition, voluntary severance packages and early retirement.
Gordhan is expected to provide greater clarity on which state-owned entities will be merged, shut down or privatised, as announced by President Jacob Zuma in his state of the nation address.
Provinces may be forced to cut R1.5-billion from their budgets in the current financial year, a further R1-billion next year and R800-million the year after.
In what is expected to be an unpopular move, pro-poor aspects of provincial conditional grants could also be cut to the bone.
lThe Dispatch will publish a bumper edition on the day after the budget speech, containing news and analysis from our team in the National Assembly.
Dispatch business journalist Ray Hartle will also be present during Gordhan’s presentation to bring our readers indepth coverage of the implications of the budget for the people of the Eastern Cape.
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