Rorisang Kgosana
Premium Journalist
1 minute read
26 Feb 2020
2:32 pm

Budget2020: Public sector wage bill to be slashed

Rorisang Kgosana

Mboweni's announcement of a massive R160 billion reduction in the public service wage bill is sure to raise some eyebrows, but the move is expected to yield a 1% reduction in consolidated compensation spending.

Debt budget. Picture: iStock

The public service wage bill will be sliced by R160.2 billion for national and provincial departments and national public entities, in a move that is sure to upset organised labour.

This proposed reduction would see a consolidated compensation spending lessen by 1% over the medium term. This target can be achieved by a combination of modifications to cost-of-living adjustments, pay progression and other benefits.

The consolidated wage bill is, however, projected to grow by an annual average growth of 3.5% over the medium term.

While government agrees that its employees should be fairly paid, their salary demands should balance the broader needs of society.

Public servant salaries have increased by 40% over the past 12 years. The growth in the wage bill has started to overcrowd spending on capital projects for future growth and items essential to service delivery.

Minister of Public Service and Administration Senzo Mchunu has been tasked with leading interactions with the public sector, labour unions and associations on the proposed reduction.

Deputy finance Minister David Masondo said the wage bill was above inflation and had a huge impact on employing more workers and providing public service. The management of the bill was on the agenda of the Public Service Co-ordinating Bargaining Council.

“They had said [they want] to reject our proposal and to relook at the wage agreement which was agreed upon in 2018. But it is not just workers who make a sacrifice but all of us. We presented measures to cut the cost of public service. We won’t give up and will continuously engage labour movement.”

Finance Minister Tito Mboweni said government aimed to save R37.8 billion in the next financial year by implementing the reduction.

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