PUBLIC SECTOR COST CUTTING MEASURES: NATIONAL TREASURY ISSUES GUIDELINES

PUBLIC SECTOR COST CUTTING MEASURES: NATIONAL TREASURY ISSUES GUIDELINES

• 18 September 2023
• Public Service
• SA Legal Academy

National Treasury has published guidelines on implementing cost containment measures apparently introduced in August 2023. This is with the intention of:

• assisting government accounting officers and authorities in their efforts to ‘reduce the pace of expenditure’, thus
• preventing ‘the materialisation of potentially crippling resource constraints in the later part of the 2023/24 financial year’.

The measures and guidelines seek to respond to ongoing ‘fiscal challenges’ originating ‘mainly’ from:

• ‘an exceptionally large year-to-date decline in government tax revenue collections’
• tighter financial conditions:
  • constraining government borrowing, and
  • ‘exacerbated’ by the March 2023 public sector wage settlement, and
• failed ‘claw-back mechanisms’.

Among other things, the guidelines seek to curtail expenditure on:

• recruitment
• travel
• conferences, workshops and catering
• fixed capital, and
• machinery and equipment.

The guidelines apply to all national departments, ‘the provinces’ and entities listed in Schedule 3 of the Public Finance Management Act, 1999. Although they do not apply to ‘major public entities’ listed in the Act’s Schedule 2, according to the document’s introductory remarks their executive and accounting authorities are ‘strongly urged’ to ‘implement similar measures’.

• guidelines
• schedules to the Public Finance Management Act
• text of National Treasury’s August 2023 letter on cost curtailment measures (Politicsweb)

Published by SA Legal Academy Policy Watch

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