Treasury identifies R38.1bn in savings over medium term
National Treasury says savings were identified through social-grant verification, programme reviews, grant changes and the recovery of public-entity surpluses.
Finance Minister Enoch Godongwana has identified R38.1 billion in savings over the medium term through the identification of wastage and duplication in government programs. During the presentation of the Medium-Term Budget Policy Statement (MTBPS), Godongwana highlighted targeted and responsible savings that are improving the quality of spending and reducing funding pressures.
The National Treasury has phased out unfit programs, restructured underperforming ones, and reduced administrative inefficiencies and fraud. The Targeted and Responsible Savings (TARS) initiative introduced in the 2025 MTBPS has led to savings in various areas. R12 billion was identified in the 2026 budget, and a further R38.1 billion over the 2027 Medium Term Expenditure Framework period.
Savings have come from low-priority programs, fraud reduction in social grants, halting the human settlements development grant, and surpluses in public entities. Enhanced biometric enrolment and beneficiary verification have saved R13.1 billion in the social grants system over the medium term. Similarly, data-driven approaches are improving targeting of student financial aid and housing subsidies.
The Human Settlements Development Grant is being redesigned to address planning and implementation issues. By pausing the grant, R7.8 billion has been identified for reprioritization. The government obtained R11.7 billion in savings from national departments through prioritization and efficiency measures, including modernizing technology, reducing administration expenses, and cutting duplication in rural development programs.
Surpluses in public entities will be recovered in 2027/28, with R5.5 billion deposited into the National Revenue Fund. Efficiencies and savings can also be found in provincial budgets, and improving spending efficiency is a central priority supported by budget reforms and efficiency measures. The government will continue to reduce leakage and fraud by improving administration, verification, and redesigning ineffective programs.
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