Govt extends austerity measures to control expenditure

The federal government has formally extended its existing austerity policy into the ongoing 2026-27 fiscal year as part of a continued effort to manage public spending and restrict non-essential state expenditures.

Following an official decision reached by the federal cabinet to maintain spending controls across public sector institutions, the Ministry of Finance issued a detailed notification on Tuesday outlining the continuation of these operational guidelines.

Under the reinforced financial regulations, the government has mandated the immediate abolition of all public sector positions across federal departments that have remained vacant for the past three years.

Furthermore, the policy maintains a complete, ongoing prohibition on the creation of any new posts, while also extending strict limitations on the procurement of new machinery, official equipment, and public sector vehicles.

In addition to procurement restrictions, the federal government has kept in place its ban on state-funded medical treatment abroad for officials, as well as restrictions on non-essential foreign travel funded at the government’s expense.

However, the Ministry of Finance specified that certain essential service categories will remain exempt from the purchase ban. These exemptions cover ambulances, specialised mobile medical vehicles, fire-fighting engines, buses and vans intended for educational institutions, waste and garbage collection vehicles, and operational motorcycles.