While the South African government was committed to “fair and sustainable compensation of employees,” the current spending of the National Treasury was just the opposite due to the unsustainability of the wage bill, Finance Minister Enoch Godongwana has said.
The minister was tabling his first medium-term policy speech in Cape Town on Thursday, where he warned that the government had found the US$1.42 billion in the fiscus to pay public servants but cautioned that the increasing public wage bill was unsustainable in the long run.
The government managed to put together US$1.42 billion to increase salaries of public servants due to better-than-expected tax revenue and by slashing the infrastructure fund, he said.
“As discussed in previous years, however, compensation growth has been on an unsustainable trajectory,” Godongwana said.
He added: “Although the wage growth moderation in 2020/21 has helped to make compensation spending growth more sustainable, the extent to which this will continue depends on the outcome of ongoing wage negotiations.”
To cover the increase in wage bills, the government would need to use the high tax revenue it received to cover this, he said.
The Ministry of Public Service and Administration would continue to review the increasing public sector wage bill as government aimed to stabilise the spend on the compensation of employees, the minister said, adding that the public wage bill accounted for 35% of the government’s spending.
Congress of South African Trade Unions spokesperson Sizwe Pamla accused Godongwana of resorting to shifting blame to workers in the “uninspiring” speech to the ballooning public wage bill.
“The wage bill has been stable at 35% of the budget for more than a decade. What has changed is that politicians, their friends and families, have looted municipalities and State-Owned Enterprises to the brink of collapse.
“We demand that the government abandon an unhelpful four-year wage freeze and engage organised labour at the Public Service Central Bargaining Council on wage increases for workers,” Pamla said.
NM/jn/APA