Public sector wage bill to hit R631bn

The public sector wage bill will rise to R631bn in the medium term, despite the government's efforts to curb the growth in public servant salaries. The next multi-year wage negotiations will take place in 2018, adding further uncertainty to the Treasury’s projections.

The public sector wage bill will rise to R631bn over the medium term, despite the government’s efforts to curb the growth in public servant salaries.

The next multi-year wage negotiations will take place in 2018, adding further uncertainty to the Treasury’s projections.

The wage bill will rise at a real annual average growth rate of 1.31% over the next three years, from R550.4bn in 2017-18, to R631bn in 2019-20.

The Financial and Fiscal Commission (FFC) said on Tuesday that a “radical rethink” of government employment policies was needed to reduce the wage bill.

The commission is a statutory body that makes recommendations on the government’s fiscal plans and structures. It presented its view on the 2017-18 budget to a joint meeting of Parliament’s finance and appropriation committees.

FFC economist and research director Ramos Mabugu told MPs that “a radical rethink of current labour policies should go hand-in-hand with efforts to streamline operations and reduce duplication”.

He reiterated the FFC's recommendation that the salaries of public officials should be linked to productivity increases.

The wage bill shows real growth, but allocations to capital assets take a “severe knock” with a 0.8% average annual contraction, Mabugu said. “This decline is of concern.”