In response to the National Treasury’s call for cost containment measures to close the fiscal gap, Consulting Engineers South Africa (Cesa) has expressed concern about the potential implications of such proposed measures. The 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 the 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 prioritisation and deliberate expenditure in specific areas to yield the desired economic outcomes.

We urge Treasury to carefully consider the prioritisation of spending and to equip government departments with appropriately skilled personnel to ensure that investments yield the desired results.”