Cesa CEO Chris Campbell.
In response to the National Treasury calling for cost containment measures to close the fiscal gap, Consulting Engineers South Africa (Cesa) has expressed concerns about the potential implications of such proposed measures. Treasury has said it will, from September 15, implement a number of cost-cutting measures to limit government spending, including a hiring freeze and a halt in advertising new procurement contracts for all infrastructure projects, following a shortfall in revenue collection.
Although Treasury may not explicitly have used the term "austerity," it is clear that these measures are effectively serving that purpose, Cesa says.
“Treasury has imposed a freeze on new recruitment, which could have far-reaching consequences, especially in sectors such as healthcare and local government, where there is already a shortage of critical personnel. It is in fact critical to address these shortages to ensure the proper functioning of essential services,” says Cesa CEO Chris Campbell.
Additionally, the freeze on all new infrastructure projects raises questions about its wisdom, especially during challenging economic times.
Campbell believes investing in infrastructure even during economic downturns plays a pivotal role in stimulating economic growth and development.
Finding the right balance between fiscal prudence and economic development is essential. “While we recognise the necessity of expenditure control, we must also take into account the long-term consequences of neglecting our infrastructure,” Campbell adds.
Therefore, Cesa questions whether withholding spending, as advised by the Treasury, represents the most effective approach to stimulate economic growth.
“We advocate for placing more emphasis on prioritization and deliberate expenditure in specific areas to yield the desired economic outcomes.
“We urge Treasury to carefully consider the prioritization of spending and to equip government departments with appropriately skilled personnel to ensure that our investments yield the desired results.
“Downsizing or right-sizing should be accompanied by the necessary skills development to maximize the impact of government expenditure,” Campbell states.
While Cesa appreciates the need for fiscal responsibility, it encourages Treasury to rather adopt a balanced approach that ensures the long-term sustainability of the country’s infrastructure and the growth of the economy.
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