The government has unveiled new reforms aimed at driving efficiency by cutting costs while eliminating waste over the next three years.
Minister of Finance Enoch Godongwana announced in the medium-term budget policy statement (MTBPS) in parliament on Wednesday afternoon, saying initial savings of R6.7-billion will be achieved over the period.
Godongwana delved into pressures that resulted in the cost-cutting measures.
“This MTBPS follows a highly contested 2025 budget. Government emerged from the process with broad consensus on reforms to improve value for money in spending and enhance public engagement with the budget.
“These reforms, which are already built into the 2026 budget process, will help the government to cut waste and improve the effectiveness of spending,” he promised.
Godongwana highlighted that the government has begun a process to identify and remove low-priority or underperforming programmes from the budget.
“The initiative will reduce aggregate expenditure and, where appropriate, reallocate funding towards pressing priorities. The Targeted and Responsible Savings (TARS) initiative has recommended several programmes that can be closed immediately, phased out, scaled down or subjected to further scrutiny,” the minister said.
“Based on initial work over the last few months, the fiscal framework proposes medium-term savings of R6.7-billion to be realised as part of the TARS initiative,” he said, adding that further announcements will be made in subsequent budgets.
Godongwana also revealed that the government has employed new data-driven approaches to remove ghost workers from the payroll.
“Initial results from this process flagged 8 854 cases where individuals were receiving payments from multiple departments, were inactive employees, or had bank account anomalies.
“The ghost worker identification process will also identify individuals appearing on multiple government systems.”
Godongwana gave an update on the early retirement programme, which was initially announced in the 2024 MTBPS.
“Early retirement without penalties and with added financial incentives has been implemented since 15 October 2025. This initiative allows qualifying employees to exit the public service, where possible replacing them with younger employees.
“Government set aside R5.5-billion during the 2025 MTEF period to enable 15 000 eligible employees to exit the public service between 2025/2026 and 2026/2027. Over the medium to long term this will achieve estimated average savings of R3.5-billion per year.
