US President-elect Donald Trump announced on Tuesday that the world's richest man, Elon Musk, will lead a new government efficiency group tasked with cutting federal waste, as the Republican added a series of seasoned figures and hardliners to his incoming administration.

Musk became a key ally to Trump during his campaign, reportedly spending over US$100 million to help the former president and repeatedly boosting Trump's candidacy on X, the social media platform he owns.

Trump said Musk and another stalwart ally, businessman Vivek Ramaswamy, would lead a "Department of Government Efficiency ('DOGE')" a tongue-in-cheek reference to an internet meme and cryptocurrency.

"Together, these two wonderful Americans will pave the way for my Administration to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies," Trump said in a statement.

He said the department "will provide advice and guidance from outside of Government," a move that could allow Musk to avoid disclosing his financial holdings.

In a post on X, Musk said the department's actions will be published online "for maximum transparency" and will include a "leaderboard for most insanely dumb spending of your tax dollars."

"This will be both extremely tragic and extremely entertaining," Musk wrote. (AFP)