Economists calling for wage bill to remain unchanged
Finance Minister will present his medium term budget policy statement this afternoon.
JOHANNESBURG - Economists are urging Finance Minister Nhlanhla Nene to make a promise that government won't increase its wage bill, when he presents his medium term budget policy statement this afternoon.
They're warning that government is running out of space in which to move, as the number of civil servants has grown over the last few years.
Wits University economist professor Jannie Roussouw says urgent action is needed.
"We really need to grain in the civil service wage bill. It is impossible to give civil servants the 15 percent salary increase they have asked for. So there will have to be difficult political maneuvering."
While FNB chief economist Sizwe Nxedlana says this problem has arisen because the economy simply isn't growing.
"The economy is under performed. The tax tape for the first five months of the fiscal year has underperformed while spending has been creeping up slightly."
The Democratic Alliance has also weighed in urging the minister to abolish foreign exchange controls.
The party's shadow finance minister, Dion George, says the move will boost economic growth.
"The archived, out-of-date foreign exchange control regime, leads to a decline in investments in our economy which severely hampers growth and job creation."
The Freedom Front Plus says Nene has little room to maneuver when he delivers his medium term budget policy statement.
The party's leader, Pieter Mulder, says tax revenues aren't keeping up with state spending and the country's getting deeper into debt.
"Broadly I think he only has one of two choices. He must either increase taxes, that only be next year but he can already set the climate, or he must drastically cut state expenditure."