Finance Minister once again commits to cutting Public Service Wage Bill

The bulk of government's spending cuts rest on striking a deal with public servants on a wage freeze and unions are not happy.

Finance Minister Tito Mboweni: Image: Twitter/SAgovnews

CAPE TOWN - Finance Minister Tito Mboweni on Tuesday again committed Treasury to cutting the Public Service Wage Bill.

Last month, Mboweni presented a Medium-Term Budget Policy Statement (MTBPS) that fleshed out how government would practically turn the economy around.

However, the bulk of government's spending cuts rest on striking a deal with public servants on a wage freeze and unions are not happy.

Asked whether he thought government would be able to pull off the political balancing act, Mboweni said there was no other choice.

“I hope so, and I pray so; because otherwise we’ll be facing the obvious. If we do not contain expenditure in the light of these developments I’ve described then we are not serious about running a middle-income country.”

Earlier this month, trade unions called on National Treasury to cut the salaries of ministers and senior officials instead of freezing increases for police officers and teachers.

National treasury received a number of submissions on the MTBPS from health organisations, trade unions, and civil society.

They commented mainly on economic growth reform, spending reductions in service delivery, and a pay freeze for public servants.

On the wage issue, Cosatu's parliamentary co-ordinator, Mathew Parks, said the government should rather target higher earners like ministers and senior officials.

“If think that if this government is serious and wants to create political capital, they should immediately cut what ministers, MECs, premiers, and mayors earn. They need to implement a public service cap on what management can earn at state-owned entities where they have huge wages for them,” he said.

But Treasury official Edgar Sishi said public servants were overpaid.

“The remuneration for public servants tends to be higher now than it is in the private sector. Some data shows, for instance, starting salaries in the public sector are higher than starting salaries in the private sector. More than 95% of public servants now earn more than 150% of all the registered taxpayers in this country.”

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