The impact of government travel spending cuts will not be as far-reaching as was first expected when finance minister, Pravin Gordhan, announced limitations on business travel perks in his mid-term Budget speech, including the withdrawal of official credit cards.
A new ‘no credit card’ rule for government travel applies to personal cards issued to political office bearers and officials and not to lodged credit cards used for travel bookings.
This has been confirmed by the minister’s spokesman, Jabulani Sikhakhane, after the minister announced sweeping government travel spending cuts, including the immediate cancellation of existing credit cards and a stop on new ones.
Fedhasa Cape chairperson, Michelè de Witt, says the withdrawal of government-issued personal credit cards should not affect the industry significantly because larger establishments offer bill-back facilities to departments and smaller ones require pre-payments. Retailers say lodged credit cards are well managed by government and need to remain in use because the use of OBTs is gaining momentum.
However, travel agencies reliant on the public sector are certain to be negatively affected by government’s reduction in travel spend, says SA Travel Centre ceo, Bulelwa Koyana. “The anticipated reduction in both travellers and value of bookings will likely be accompanied by reduced earnings,” she predicts. She hopes the measures will not be detrimental to the travel trade. “Support for SMME’s should equally be prioritised by government and adherence to speedy payments would contribute positively as well.”
For more on this story, go to TNW, November 6.
