Managing public resources responsibly

Curbing wasteful government expenditure is good and should be welcomed by all stakeholders. However, given the size and complexity of the public service, this is easier said than done. Successful cost cutting interventions require more than just speeches and press statements. They require political will and resolve. They also require changes to current organisational structures, systems, processes and behaviours.

Making behavioural changes is perhaps the most difficult and challenging. There are several reasons for this:

• Mobilising government employees to see and to be convinced of the need to do things differently is a mammoth task
• Legacy structures, systems and processes in government seldom reinforce the new behaviours required to support new policy decisions
• Not having within the civil service the skills and competence required to act or behave in the new way
• Not seeing superiors and subordinates acting in the new way

The anticipated expenditure cuts will not be as effective as the Minister would like. This is on account of the last bullet point i.e. not seeing superiors and subordinates acting in the new way (being more cost conscious).

This is because those entrusted with the responsibility to manage and disburse public resources do not manage these resources as they do their own money. Until and unless that happens, curbing government expenditure will remain but a distant dream. Well-conceived efforts to reduce wasteful expenditure will sadly fail.

I will share my reasons for saying this by discussing two initiatives proposed by the Finance Minister to effect expenditure cuts.

1. Restricting travel by business class to Principal Secretaries and officers of comparable standing
2. Capping the price at which goods such as publications and refreshments are purchased

Restricting travel by business class to Principal Secretaries and Officers of comparable standing does not signal the right messages. Senior public servants must lead by example and model the behaviours they want others to follow.

I did a quick check of the cost of a return flight from Johannesburg to New York on one of the airlines. Flying from Johannesburg to New York will cost the taxpayer roughly M18k when a PS travels economy and M61k when they travel business class. This is more than 3 times more expensive.

What cogent reason justifies paying M61k when M43k could be saved? If those at the top are not walking the talk i.e. tightening their belts, what incentive or motivation is there for those lower down the food chain to do so?

Perhaps more pertinent is whether this same person would have travelled business class if they had been using their own money? It’s highly unlikely.

M43k is no small change. Such monies should rather be diverted to programmes aimed to reduce food insecurity, child mortality and the high incidence of HIV. We should honestly not be lavishing people who have willingly agreed to be public servants with such extravagance.

The actions of everyone and not just the minnows must align with the intent to save costs. Those at the top need to be the most compliant.

Moving on. The decision that the price Ministries pay for publications should no longer be more than 20% of the face value of the publication or that they should no longer buy refreshments and other commodities at a price which is more than 20% of the whole sale price of the item is further proof that public monies are being managed uncaringly.

Why not insist on paying the most competitive market price? Who would not do that with their own money? I for one would never buy a newspaper for M7.20 when I could get it for M6.

This is waste loading when the objective should be to eliminate all forms of waste.

The message that this sends out is clear and unambiguous. Lack of competitiveness and innovation is tolerated.

Businesses therefore have no incentive to reduce costs. This results in private sector inefficiencies being passed on to the public sector and being paid for by tax payers.

I am certain most rational people patronize businesses that offer the most value at the best. Why should this be different when public resources are concerned?

Business entities should earn profits from the strategies they employ in the open market and not from the charity of tax payers.

Capping the purchase price to 20% will not therefore foster required cost cutting behaviours. On the contrary, it will kill the competitiveness and innovation essential to driving efficiencies and value creation which are drivers of economic growth.

If the intention is to tighten the fiscal belt so that scarce resources are not wasted but rather made available to fund government priority areas such as health care, education and infrastructural projects etc., those entrusted with the responsibility to manage and disburse public resources must manage these resources as they do their own money i.e. responsibly. It can’t be business as usual.