SA’s public sector wage bill ‘stabilising’


23 October 2013

South Africa’s biggest employer – the government – is committed to ensuring that the growing public sector wage bill does not threaten the country’s expenditure ceiling, Finance Minister Pravin Gordhan told Parliament on Wednesday.

Presenting his medium term budget policy statement in Cape Town, Gordhan said that, while the compensation of public servants now accounted for 39.4% of the budget of non-interest spending and would continue to outpace inflation, it would grow at a slower rate than over the past three years.

Public sector wage increases have begun to align more closely with inflation, following the conclusion of occupation-specific wage dispensations and the three-year wage settlement reached in 2011, he said.

While the average level of wage settlements grew at about eight percent in 2010, when inflation was running at about four percent, they had grown at about seven percent in 2012, slightly above inflation at about six percent.

Gordhan said the increase in the public sector wage bill had been driven by the implementation of occupation-specific wage dispensations designed to raise public-sector salaries for skilled and experienced staff.

Since 2005, more than 250 000 additional public servants – mostly nurses, teachers and police officers – were added to the government’s payroll at both national and provincial level.

Of the over 1.2-million public servants, 485 370 or 38.8% are in the education sector, with 318 756 or 25.5% in health care and 275 154 or 22% in policing and criminal justice.

Over R350-billion is currently spent on government salaries.

Gordhan said there was growing concern about managerial and administrative staff increases across government.

He said the government aimed to maintain current staff numbers over the next three years, and that senior officials would have to provide compelling reasons for hiring additional personnel.

To this end, the National Treasury and the Department of Public Service and Administration would work hand-in-hand to monitor wage bill trends and to enforce discipline in hiring, Gordhan said.

The government was also working towards reaching a sustainable public-sector wage agreement.