Government reviewing tax and spending incentives

Cape Town – Finance Minister Pravin Gordhan says government is reviewing its tax and spending incentives to ensure that they are more impactful on the business sector.

The Minister said this when he tabled the National Treasury’s Budget Vote Speech in the National Assembly, on Wednesday.

The Minister said over and above this review, government would also look closely at government accommodation leases and remuneration trends in central, administrative and policy departments and in public entities.

“High on the agenda now, is the review of government incentives.

“We are undertaking these reviews to improve our understanding of the impact and effectiveness of both tax and spending incentives, so that our support for businesses can be better targeted and its impact on growth, jobs and investment optimised,” he said.

Minister Gordhan said the National Treasury was also reviewing its approach to capital budgeting and major infrastructure projects that require multi-year commitments.

Procurement reform progressing well

The Minister said procurement reform remains focused on value for money and accountability in supply chain management.

He said the procurement of goods, services and works over the next three years will amount to R1.5 trillion across all spheres of government.

“This is an enormous amount of money. Wisely and efficiently spent, it can be a great force for good. It can ensure that those in need receive services, that infrastructure like roads and ports is built and maintained, that schools are well-equipped and that health services are widely available.”

He said procurement of goods can also spread wealth to hard-working entrepreneurs who successfully tender for government contracts and who, in the process, create jobs.

Minister Gordhan said the Office of the Chief Procurement Officer (OCPO) has put in place measures to accelerate the modernisation of the supply chain management system and enforce greater discipline and effective controls.

“I plan to table a single public procurement bill addressing all the legislative and regulatory requirements of the system, and to consult on this by August 2016.

“The Public Procurement Bill will ensure that the supply chain management system is fair, equitable, transparent, competitive, and cost-effective, in line with section 217 of the Constitution,” he said.

The Minister said, meanwhile, that measures to avoid unnecessary purchases, reduce waste and to contain costs continue to be prioritised.

These include:

- Reviews of the top 100 contracts, which will lead to an estimated saving of R1.4 billion a year;

- Review of the government travel regime and the introduction of a national travel policy for government, which will save R1 billion a year;

- Review of mobile and fixed telecommunication services, with potential savings of R500 million a year;

- Renegotiation of government leases aimed at savings of R2.8 billion over the next three years;

- Savings of R650 million a year through the phasing in of the eTender Portal, and R750 million a year through the Central Supplier Database. By 2018/19 the OCPO plans to register savings in government procurement of R25 billion a year.

The Minister said the National Treasury will review State-Owned Entities (SOE) procurement practices, processes and contracts.

He said their procurement plans are also subject to the National Treasury’s eight transparency and disclosure reforms, and will be published on the eTender portal.

He said the OCPO is also targeting the non-payment of suppliers by government departments.

“In some cases, suppliers are owed for over three years. This irresponsible practice must stop immediately.”