Mboweni calls time on government’s out-of-control wage bill

The Finance Minister has also pledged to fix the South African Revenue Collection Service as a matter of urgency.

Finance Minister Tito Mboweni delivers the 2018 Medium Term Budget Policy Statement in Parliament on 24 October 2018. Picture: GCIS

CAPE TOWN - Finance Minister Tito Mboweni has cracked down on the government’s soaring wage bill, saying no extra money has been allocated for the public sector wage agreement reached earlier this year.

The settlement amounted to more than R30 billion more than was planned for in the February Budget – and is taking money that could be used on goods and services and capital investment.

Mboweni, delivering his maiden medium-term budget policy statement in Parliament, has also pledged to fix the South African Revenue Collection Service as a matter of urgency – and has announced a once-off payment of R11 billion in VAT refunds.

“The 2018 public-service wage agreement exceeds budgeted baselines by about R30.2 billion over the medium term. We have not allocated additional money for this.”

Mboweni says national and provincial departments will have to cover the costs from their existing budgets.

He also promised to restore Sars to the strong institution it once was.

“We’ll urgently fix the South African Revenue Service. It is a matter of public record that the capacity of Sars has been weakened. It is in this context that the Sars leadership must and has to be strengthened.

"We cannot expect to continue functioning effectively if the tax collection authority is broken.”

The breakdown at Sars is partly responsible for a revenue shortfall of R27.4 billion, which includes R11 billion in outstanding VAT refunds that will now be repaid.

READ: The full MTPBS

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