The SONA and budget speech both addressed the crisis in government salary spending, but most South Africans don’t fully grasp the amount of money that’s been spent on government salaries.
As reported by Business Tech, the current cost of government wages is 42% higher than the amount of personal income collected by the tax man. As a percentage of GDP, government salaries account for 14%.
Tito Mboweni is looking to reduce the public service wage cost by as much as R20.3 billion with R16 billion set aside to send some of the older employees off on early retirement without penalty.
In addition to the direct salary costs, a further 8% of GDP is spent on outsourcing costs where the government has brought in an external provider to do its work for them.
Not so amazing when looking at the size of the current wage bill, government wage increases have outperformed both inflation and the private sector salaries.
Government Wage bill is a WINNER
The only thing performing better than anything else in SA are the public servants wage increases. See white line on graph. pic.twitter.com/bh9hfx7L8i
— Laetitia (@llpot) February 27, 2019
When the budget documents were published, they gave insight into where our money is currently going and what the projected spending is into the future.
The only wildcard here will be the extent to which the president restructures his government which could change the number and names of departments which are currently part of the Finance Minister’s planning.
Interestingly, Statistics SA is one of the few departments that will be getting an improved salary budget. Business Tech reports that StatsSA salary spend is expected to grow by 78.74% while most other departments expect growth in the mid-teens.
This is possibly an indication that the government will be looking to improve its information gathering and analysis capabilities.
During his Budget speech in Parliament this week Finance Minister Tito Mboweni spoke of the need to reduce the bloated public service wage bill by 27-billion rand over three years and open up space for young people to come in and work. #sabcnews
— Radio 2000 (@Radio2000ZA) February 22, 2019