JOHANNESBURG, SENIOR public officer bearers in South Africa will not enjoy an increase this year as the government reduces the public service wage bill.
In addition, the government will this year publish a new law introducing a remuneration framework for public entities and state-owned companies to prevent excessive pay for board members and executives.
President Cyril Ramaphosa made the announcements on Monday, days after Minister of Finance, Tito Mboweni, presented the Budget to Parliament.
Mboweni announced during the presentation that government aimed to reduce the public sector wage bill by R160 billion (US$10,2 billion) over the next three years.
The public service wage bill is by no means the only area where we are cutting costs, Ramaphosa said before making the above announcements.
The president said the wage bill remained the largest component of spending by economic classification.
Growth in the wage bill has begun crowding out spending on capital projects for future growth and items that are critical for service delivery.
Ramaphosa said over the next three years, government expected to achieve savings of around R261 billion by cutting the budgets of several departments and reducing the rate at which the public service wage bill increased.
At the same time, however, government will need to spend more to support the restructuring of state-owned enterprises like Eskom and South African Airways (SAA).
As a result, Ramaphosa said, they expected a net reduction of R156 billion in non-interest spending over the medium term.
Trade unions have reacted with disappointment to the proposed wage cuts.
Ramaphosa appealed for their co-operation and said the unions were justified in their stance that government must prevent leakages of public funds by addressing corruption, ending irregular, fruitless and wasteful expenditure.
Such times call for us to be realistic, not dogmatic. They call for cooperation, not conflict. Compromises and trade-offs will have to be made, he said.
The president said the Budget presented a sobering assessment of the economy.
The figures make it plain that unless we act now to turn things around, there will be even more difficult times ahead.
Africa’s most advanced economy is grappling with a declining economy marked by unemployment and inequalities.
Source: CAJ News Agency