Finance Minister Enoch Godongwana stated that the National Treasury has identified savings of R38.1 billion through the detection of surpluses and duplication in government programs.
Speaking before Parliament while presenting the Medium Term Budget Policy Statement (MTBPS), Godongwana noted that targeted and responsible savings are yielding results as the government improves expenditure quality and reduces financial pressure.
He emphasized that there is a phased withdrawal of programs that no longer align with objectives, alongside the restructuring of inefficient and underperforming programs, concurrently with reducing administrative inefficiencies and fraud within these programs.
Godongwana introduced the Targeted and Responsible Savings (TARS) initiative in the 2025 Medium Term Budget Policy Statement. This initiative compelled ministries to address program efficiency and effectiveness when requesting funds for various priorities.
The Minister informed MPs that savings of R12 billion were identified in the 2026 budget. Furthermore, an additional R38.1 billion in savings was determined during the Medium Term Expenditure Framework for 2027.
According to the MTBPS, these savings were achieved through low-priority programs, reductions in social grant fraud, the suspension of the human housing development grant, and surpluses in state institutions.
It was noted that work in four key areas led to R38.1 billion in medium-term savings. Specifically, improving biometric registration and beneficiary verification resulted in R13.1 billion in medium-term savings in the social grant system.
The document also points to the use of similar data-driven approaches to improve the targeting of scholarships under the National Student Financial Aid Scheme and the housing subsidy system.
Moreover, the Human Housing Development Grant was being reviewed to address issues of poor planning and implementation. The housing public submission provides an opportunity to restart housing provision to ensure shelter access and promote access to jobs and business opportunities. Suspending this grant allowed for R7.8 billion to be allocated for reallocation in the medium term while a more responsive model is developed.
The National Treasury also reported that the government secured R11.7 billion in savings from national departments by focusing on priorities and increasing efficiency in the medium term. These funds include savings from technology upgrades, reduced administrative costs, and decreased duplication in rural development programs.
The MTBPS also highlighted surpluses accumulated in certain state institutions. The document states that R5.5 billion will be returned and contributed to the National Revenue Fund in 2027/28 through the development of a consistent legislative approach considering the specific conditions of various institutions.
Godongwana added that efficiency improvements and savings can also be found in provincial budgets. He mentioned that implementing more effective remuneration policies for healthcare workers could help attract more health specialists.
The National Treasury stated that improving expenditure efficiency is a central priority supported by budget reforms, program reviews, and efficiency measures. The government will continue to reduce leakage and fraud by improving administration and verification, reviewing programs that fail to meet objectives, redirecting funds from low-priority, inefficient, or duplicated activities, and eliminating accumulated cash surpluses in state institutions.
Meanwhile, the National Treasury reported that the findings of investigations into government 'ghost workers' are being consolidated and will be published in the 2027 budget. Godongwana had previously announced in his 2025 budget that the National Treasury and the Department of Public Service and Administration initiated an audit process to identify 'ghost workers' and payment irregularities across all national and provincial departments.
He reported that the audit successfully identified 4,323 high-risk suspicious cases in the payroll system. The MTBPS also indicated that an online verification platform was developed in partnership with the Department of Interior to handle officials whose data could not be verified in the National Population Register, as well as other high-risk officials, as a supplement to physical checks conducted by the Department of Public Service and Administration. The National Treasury is gathering conclusions from all government initiatives to combat 'ghost workers' (including initiatives by the Department of Basic Education and the Department of Public Service and Administration) and will present the results in the 2027 budget. Furthermore, the National Treasury is collaborating with the Financial Intelligence Centre to investigate high-risk officials, and the results will be presented in the 2027 budget.