Johannesburg – During his Budget vote speech, Finance Minister Enoch Godongwana said a key challenge for the fiscus was the management of the public sector wage bill.
Godongwana said a higher-than-budgeted wage agreement meant less space for the recruitment of staff.
He said that currently the government spent roughly one-third of the budget on the salaries and benefits of public servants and political office-bearers.
"In 2025/26, the public sector wage bill is set to rise to over R760 billion. The recent wage agreement has placed upward pressure on the wage bill. This means that in the current financial year, the National Treasury must identify over R37.4bn in savings to cushion the blow to the fiscal framework.
“This will involve executing difficult trade-offs and may entail a rationalisation of staffing levels and the deployment of headcount management strategies as a means to curb the wage bill," said Godongwana.
He said his department would work closely with the Department of Public Service and Administration, as well as the provinces, to co-ordinate the process of identifying ways of restricting headcounts, among other things, so that the funds for the wage increase could be recouped.
“The National Treasury continues to be committed to supporting the millions of South Africans, especially young people, who are unemployed to access the job market and acquire the necessary skills, allowing them to meaningfully participate in the formal economy.
“Through the Employment Tax Incentive, a cost-sharing mechanism between the government and employers allowing them to reduce what they pay in tax when hiring young people, we are encouraging youth employment,” the minister said..
The Star