Provincial austerity measures cut costs

PROVINCES were making progress in reducing spending on non-core goods and services and in controlling personnel costs, Finance Minister Pravin Gordhan said yesterday.

Tabling the 2017 Budget in the National Assembly, Gordhan said provinces had made progress in implementing the cost-containment measures announced in 2013, and that provincial financial management was in the context of the country’s constrained fiscal environment.

Gordhan said spending on non-essential goods and services fell in real terms by 7.1 percent in 2014/15, 6.1 percent in 2015/16 and was anticipated to decline by 4.5 percent annually over the next three years.

“The proportion of provincial spending on personnel has declined to just under 60 percent in 2016/17, freeing up more resources to invest in services,” Gordhan said.

“Provinces have also put their public entities under review, to eliminate duplication of activities and ensure effective governance and clear development mandates.”

Allocations to provinces total R1.7 trillion over the next three years, with Gauteng taking the lion’s share. This would be an average annual growth rate of 7.5 percent and slightly