His comment with regard to plans by the SABC underlined the belt-tightening approach the Treasury is likely to adopt in the medium-term budget he will present next week.

He told parliament's standing committee on finance this week that the government needed to starting cutting back on non-essential programmes.

In a reply to a question by COPE MP Juli Kilian, Gordhan said the SABC management should take "credible measures to stop wasteful and ill-considered projects and expenditure".

He said the Treasury had refused the SABC's request in March for an amendment to the government guarantee targets because the corporation had not adequately dealt with the issues that created financial instability, such as cost increases that exceeded revenue growth.

Gordhan said the downward revision of the targets increased the risk to the government arising from the guarantee.

"The SABC needs to demonstrate progress in achieving the original targets to which is committed," Gordhan said.

The SABC had not, for instance, achieved the target of reducing personnel costs to R1.5-billion by March. Gordhan said the SABC had submitted its business plan for a 24-hour news channel to the Treasury, which was considering the financial implications.

The SABC had not finalised a shareholder's compact based on the revised corporate plan and had only partially completed an implementation plan for its turnaround strategy. But it had set up a team to deal with concerns raised by the auditor-general. - I-Net Bridge