Cape Town - The Democratic Alliance will propose a comprehensive spending review to reprioritise spending in the next two financial years, after Finance Minister Pravin Gordhan has delivered his 2017 Budget Speech.
Comprehensive spending review have in the past been introduced in Australia, Canada and the UK to relook at the composition and efficiency of spending and to identify future spending priorities, said David Maynier, DA spokesperson on finance.
Maynier said the fiscal tools Gordhan is currently using - such as an expenditure ceiling, cost containment measures and procurement reforms - are "fragmented" and often result in perverse outcomes.
The finance minister has budgeted for total consolidated expenditure of R1.5trn, 33.3% of gross domestic product for 2017/18. The expenditure ceiling has been set at R1.2trn but new spending pressures are on the horizon, such as higher-than-expected employee salaries (budgeted as amounting to R549.bn) and extra spending on post-school education (budgeted to cost R76.7bn).
Gordhan in previous budget speeches introduced a number of measures to curb spending, such as freezing non-critical vacancies of administration and managerial positions and a clampdown on unnecessary travel and subsistence costs and the use of consultants.
However, a preliminary report on spending for 2015/16 showed government spent altogether R35.2bn on consultant services, travel and subsistence as well as on catering and entertainment, despite the cost containment measures.
"Although cost containment measures send the right fiscal message," Maynier said, "they target a small proportion of expenditure.
"We need to do things differently and so we will propose a comprehensive spending review aimed at all three spheres of government and state-owned entities," he added.
Such a review would require cooperation between National Treasury, national and provincial departments, municipalities and state-owned enterprises to reduce and reprioritise spending.
Maynier said the savings that will be realised as a result of a comprehensive spending review should be used for fiscal discipline, infrastructure spending and job creation.
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