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Public service wage bill to be cut by 1% over next 3 years

The Budget review presented to Parliament by Finance Minister Tito Mboweni reads like a dream for proponents of bold cuts in the public service.

Picture: EWN

CAPE TOWN - The government has finally bitten the bullet on the public wage bill - announcing major cuts to salaries and benefits in the next three years in an attempt to save billions of rand.

The proposed reductions will see that wage bill decrease by 1% over the next three years.

The move has already invoked anger from public service unions which have threatened war and it’s likely to spark major political fallout.

The Budget review presented to Parliament by Finance Minister Tito Mboweni reads like a dream for proponents of bold cuts in the public service.

The wage bill accounts for just over 34% of the total national Budget.

In last year’s Budget, Mboweni announced a scheme to encourage early retirement amongst public servants to reduce the spend by R27 billion.

But that appears to have failed as Eyewitness News reported this week that only 4,600 public servants applied for the offering which was targeting 30,000 workers.

Now Treasury wants compensation budgets of national and provincial departments and other entities to be reduced to claw back R37.8 billion this financial year, R54.9 billion in 2021/22 and R67.5 billion in 2022/23.

But the promises to cut that fat will bring government into direct opposition with unions.

The Budget also mentions the tabling of position paper at the Public Service Coordinating Bargaining Council where the state revealed that it intends to review the 2018 wage agreement that has to be implemented by 1 April.

Treasury maintains it has faith parties will find each other - with Mboweni adding he had political support.

“There is full support for the direction we are taking. And much appreciation for the fact that we have to take a tougher stance.”

In his speech, Mboweni said the adjustments to the bill amounted to R160 billion over the medium term.

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