President Cyril Ramaphosa has used his weekly newsletter to the nation on Monday to make a strong argument for a reduction in the rate at which the public wage bill grows.
Ramaphosa echoed Finance Minister Tito Mboweni’s proposals contained in the budget he presented in Parliament last week.
According to the proposals, the reductions in the wage bill would amount to R37.8 billion in the 2020/2021 financial year, R54.9 billion in 2021/2022 and R67.5 billion in 2022/2023.
‘Increases have been higher than inflation’
However, labour federation COSATU and the Public Servants Association of SA slammed the proposals last week, with COSATU saying the “battle lines have been drawn.”
It added, “The fixation with the wage bill is nonsensical when considering the fact that it has been stable for the past 10 years at 35% of the government consolidated expenditure, in line with international standards.”
In his newsletter, Ramaphosa said the proposals are part of wider measures to contain public spending and consequently curb runaway government debt.
He said, “Our approach is not to dramatically cut the size of the public service, but to examine the rate at which wages grow. Public service wages have on average increased at a much higher rate than inflation over many years, and we need to fix this if we are to get public finances under control.”
‘Be realistic, not dogmatic’
“The wage bill remains the largest component of spending by economic classification. Growth in the wage bill has begun crowding out spending on capital projects for future growth and items that are critical for service delivery,” the President added.
He said engagements with the unions need to be conducted “in a spirit of seeking solutions,” adding that the government will address corruption and end irregular, fruitless and wasteful expenditure as the unions have suggested.
Ramaphosa said, “We are fixing our public finances to make inclusive growth and job creation possible.
“Such times call for us to be realistic, not dogmatic. They call for cooperation, not conflict. Compromises and trade-offs will have to be made.”
The government has tabled the proposals at the Public Service Coordinating Bargaining Council, where the unions are expected to oppose them.
Daily Maverick reported over the weekend that the African National Congress (ANC) National Working Committee (NWC) was expected to discuss the proposals at its meeting on Monday.