Over half of the compensation amount was paid to employees in education, followed by those in health.
It is no secret that most of the government’s money goes to paying its workers, but the Eastern Cape takes it to another level.
The province spends the biggest share of its budget on salaries, followed by Limpopo and the Free State.
According to Statistics South Africa’s (Stats SA) data on exploring the provincial government wage bill, Western Cape and Northern Cape have been found to spend the lowest on salaries.
Stats SA noted that the provincial government provides a wide range of essential services, from education and health to infrastructure development. However, it raised concerns about how much money is spent on paying employees.
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What provincial government spends money on
“Government expenditure can be classified in functional and economic terms,” stated Stats SA.
“The functional view reflects the purpose for which transactions are undertaken, mainly in terms of the services that government provides.”
Data revealed that spending in provincial government is dominated by departments of education and health. Together these departments account for R561 billion, approximately 76% of provincial government expenditure, this is according to the latest financial statistics of provincial government statistical release.
Provincial government expenses
“In economic terms, expenditure is classified according to the nature of the transactions involved. Compensation of employees and purchases of goods and services are line items that come to mind.”
According to Stats SA, in the 2023-24 financial year, provincial government expenses amounted to R704 billion. Compensation of employees was the main cost driver, accounting for almost two-thirds of the total.
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How employees are paid
Stats SA highlighted that the amount spent on compensation of employees is R451 billion by function. Over half of that amount was paid to employees in education, followed by those in health.
Most money is spent on these departments is because there is a need for teachers, education personnel, nurses, doctors and healthcare workers.
“A time series provides insight into how much the provincial government wage bill has grown over the last decade,” said Stats SA. “In 2014-15, compensation of employees amounted to R271 billion, rising to R451 billion in 2023-24.”
This equates to an annual growth rate of 5.8%, lower than the annual growth rate of 7.4% for purchases of goods and services (R98 billion to R186 billion). The annual increase for total expenses was also 5.8% (R423 billion to R704 billion).
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