Public Service Commission Advises Caution in National Treasury’s Cost-Cutting Endeavours

The PSC warned the National Treasury about its efforts to reinstate the government’s escalating spending. The nation grapples with a deteriorating fiscal situation. EWN reports that Treasury has proposed a series of cost-cutting proposals. However, the PSC* has raised concerns about the potential consequences of a blanket approach to cost reduction.

National Treasury has been exploring various measures to address the country’s fiscal challenges, with the Mid-term Budget Policy Statement scheduled for November 1, 2023, looming. The fiscal woes are mainly due to declining tax revenue and tighter borrowing conditions. Of particular concern is the ballooning public service wage bill.

Among the cost-cutting proposals presented by the National Treasury are a moratorium on new appointments within the public sector and a freeze on new infrastructure projects. These suggestions aim to balance cost-saving and preserving essential service delivery.

Also read: Eskom’s Ability to Borrow Further Funds in Doubt, Warns Energy Expert

Anele Gxoyiya of the PSC stresses prudence in these cost-cutting endeavours. “What National Treasury is trying to do is to get government departments to cut on frills but not to hinder service delivery, and government’s responsibility is not about maximising profits. So, it can’t be about saving at all costs,” explains Gxoyiya.

It’s worth noting that the proposals exclude the executive and schedule 2 public entities, which encompass certain state-owned companies. The PSC’s guidance underscores the delicate task faced by the National Treasury in its quest to restore fiscal stability without compromising critical services.

*Public Service Commission

Also read:

DA Joins ANC in City of Joburg to Approve Councillors’ Salary Increases

Picture: Facebook / National Treasury RSA

Follow us on Google News.