The South African Government is sticking to its hard line on Public Service pay, with Minister for Finance, Tito Mboweni (pictured) insisting that only moderate increases, well below the rate of inflation, will be allowed “for the next several years”.
Presenting his Budget to the National Assembly, Mr Mboweni said that allowing the public sector wage bill to continue rising in line with recent trends was not sustainable.
He was referring to the recent past practices in which Public Servants scored above-inflation salary increases accounting for 41 per cent of Government revenue.
Mr Mboweni said the Government was phasing out performance bonuses and considering whether to amend or abolish some allowances or benefits.
The Minister foreshadowed doing away with annual cost-of-living adjustments until 2023-24, together with measures to reduce head counts, including early retirements and natural attrition, as well as freezing or abolishing non-critical posts.
It comes as unions are challenging the Government’s decision not to award the third stage of an agreed salary increase, citing lack of affordability.
This latest development is likely to heighten hostility between the Government and labour organisations such as Cosatu and the Public Servants Association.
The public sector wage bill stood at R550bn ($A47 billion) in 2017, shooting up to R623bn ($A53.3 billion) by 2019, the period characterised by above-inflation increases during the administration of former President, Jacob Zuma.
Pretoria, 26 February 2021
