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Gordhan looks to slash travel costs

Parliament's future in Cape Town could be in the balance after the medium-term budget statement.

Parliament in Cape Town. Picture: AFP.

CAPE TOWN - Parliament's future in Cape Town could be in the balance following Finance Minister Pravin Gordhan's medium-term budget policy statement on Wednesday.

He revealed government is going to look at just how much it costs to have the National Assembly in Cape Town, while state departments and the executive are based in Pretoria.

Slashing government's travel bill is just one of a range of measures he announced today aimed at eliminating wasteful government spending.

The government spends a small fortune ferrying ministers and officials between Pretoria and Cape Town.

Now Gordhan has decided to take a closer look.

"The leader of government business, Deputy President Kgalema Motlanthe, has been asked to engage with Parliament on measures to reduce costs and the cost implications of the current Pretoria/Cape Town arrangement."

The minister also informed Members of Parliament (MPs) that tax money will no longer be used on over-the-top luxury vehicles, expensive hotels, first-class flights, foreign junkets or on extravagant catering.

Government credit cards are to be cancelled and no new ones will be issued.

The new rules on government spending were agreed to by Cabinet on Wednesday morning and will come into effect on 1 December.

"These guidelines and instructions that are emerging will apply to national government, provincial government, local government, government entities and state-owned enterprises," he said.

Gordhan says no alcohol will be bought with public funds, but says exceptions might be made for state banquets.

He said global and local economic circumstances were considered when crafting a fiscal strategy for the next three years.

The minister says global economic activity remains subdued.

"In the euro area, which is our main trading partner, a GDP growth of one percent is expected next year after a negative growth during much of 2012 and 2013."

Gordhan expects the South African economy to grow by about 2.1 percent this year.