Mixed feelings about Cabinet downsize and cost cutting
1 Jul 2019 - by Kim Cochrane
FOLLOWING the recent reshuffle that saw the Cabinet size reduced from 72 to 64 members, the travel industry has been divided on whether this will lead to a reduction in travel.
There are, however, bigger concerns about whether government departments will pay and what the changes mean for suppliers operationally.
Marco Cristofoli, ceo of BCD Travel, believes there won’t be a big difference in government travelling. He is optimistic that the incumbent administration will be compliant with account payments and doesn’t feel that TMCs and suppliers will experience negative effects from the Cabinet downsize.
Sailesh Parbhu, md of XL Nexus Travel, thinks the cost-cutting measures will most likely translate into less travel because the departments will have fewer resources to dedicate to travel.
Kananelo Makhetha, ceo of Club Travel Corporate, says even if there is a reduction in government travel, the volumes will still hold much significance for the industry.
National Treasury has gazetted cost-containment measures for municipalities, saying that mayors may only travel business class if their flight exceeds five hours.
The regulations state: “The cost containment policy must limit international travel to meetings or events that are considered critical. The number of officials or political office bearers attending such meetings or events must be limited to those officials or political office bearers directly involved in the subject matter related to such meetings or events.”
Travel perks have been tightened for new Cabinet members. According to AfricaCheck, the new tighter allowances include first-class tickets for themselves and spouses for official international journeys, 30 single business-class flights per year within SA, six single economy-class flights per year for dependent children, and a choice of any hotel for Cabinet members, spouses and dependent children when travelling on official business. Members may travel by train when not flying to a destination, including on the Blue Train.
Legacy Hotels group sales manager, Hara Jackson, says since introduction of the government’s cost-containment policy, some of the group’s hotels have had to adjust rates to accommodate government business.
“Where possible we will listen to a plea and accept if viable for the business. The issue of B-BBEE is also being advocated. Government departments are allowed and have a right to further negotiate rates over and above current stipulated cost-cutting policy rates.”
The travel trade continues to express concerns about the economy, saying more stability in government policy is needed for the travel and tourism sector to improve.