The National Treasury has stuck to its guns to cut the public sector wage bill and maintains that its proposals to freeze salaries for public servants should be viewed in the context of the tough economic conditions facing the country.
Acting head of the budget office in the National Treasury, Edgar Sishi, told MPs on Friday that they want to freeze wages for workers in the public sector.
Finance Minister Tito Mboweni told Parliament last week when he tabled the Medium-Term Budget Policy Statement that they want to cut the wage bill by R300 billion in the next four years.
Mboweni had also said they wanted to reduce the salaries for ministers, MECs and councillors to free up funds in the fiscus due to the escalating debt and budget deficit.
Sishi told MPs the wage bill had been escalating over the last 15 years.
“We have shifted over the years from a situation where public servants receive an increase less than economic growth to a situation where now public servants receive an increase in their salaries that noticeably outstrips economic growth,” said Sishi.
He said the wage freeze would be able to keep some funds in the fiscus.
South Africa was in a very tight fiscal space and if something was not done it would worsen the economic situation, he said.
“We consider that we, as government, need to take a hard look at ourselves about the fiscal position we are in. It’s not always appropriate to make these kinds of comparisons, but if you run a company and you have the kinds of numbers that we have at the moment, you’ll make very different types of decisions than some of the decisions you have made in the past,” said Sishi.
He added that they would engage with the unions on the issue of the wage bill.
But Cosatu and its affiliates have come out guns blazing and rejected the proposals to freeze salaries for public servants.
Mboweni has said they will do everything possible to try to avoid a strike on this matter.