The Democratic Alliance (DA) proposed, in an alternative national budget on Monday, disbanding several government departments and doing away with district municipalities.

"There is a lot of inefficiency and fat in government and we are proposing to cut it," DA finance spokesperson Tim Harris told reporters in Johannesburg on Monday.

The alternative budget sets out how the DA would overhaul taxation and re-align expenditure priorities to implement its policy programme at national level.

The DA proposes disbanding the departments of economic development, women and children, public works and sports and recreation.

Instead, it proposes creating single ministries for natural resources, education and the public service.

Harris said several departments had been created by President Jacob Zuma to merely "repay favours in the tripartite alliance".

He said that, in the alternative budget, the government could save R529-million by doing away with district municipalities.

"District municipalities are a really inefficient level of government," said Harris, adding that their responsibilities could be re-allocated.

He said there were policy contradictions in the tripartite alliance which influenced budget considerations.

"You have these two ideological schools that disagree and certain policies such as the youth wage subsidy get put to the sword depending on which side of the ideological spectrum they fall on."

He said the DA had focused on 12 key areas of the National Development Plan in its alternative budget.

"We think the number one thing that [Finance Minister] Pravin Gordhan can do on Wednesday to restore confidence in government is to start implementing practical items from the National Development Plan."

He said the potential for growth in the economy should take precedence over tax increases.

"We seem to have a limit on our growth potential. The reason why we focus on it in the budget is we think that growth is a great way to raise revenue," Harris said.

"There is a lot of talk about potential tax increases, I think that in an economy that is not growing... increasing taxes is going to have a detrimental effect."

Harris said the alternative budget allowed for R9.4-billion in tax cuts.

"We see this budget as a response to the credit rating agencies. If the finance minister tabled a budget like this on Wednesday, he would deal with the majority of their concerns."

DA federal chairperson Wilmot James said the alternative budget would boost confidence in the country after the downgrades by credit rating agencies.

"Our proposals are intended to inject hope and optimism realistically in the midst of gloom that has been prompted by the tragic events at Marikana, the 2012 sequential downgrades and the depressingly pedestrian speech given by president Jacob Zuma in the state-of-the-nation [address]."

The alternative budget also puts forth proposals to legalise online gambling, for free public transport for pensioners and the unemployed and a R10-billion increase for land reform over the next five years.

It proposes disbanding the National Youth Development Agency, Sector Education and Training Authorities (Setas) and the National Skills Authority.

Budgets for the presidency, and the secret service would also be reduced.

With job creation it proposes implementing the youth wage subsidy and with education, a scarce skills allowance for teachers, specialist maths and science schools and a "dysfunctional schools" task team.