PARLIAMENT, February 24 (ANA) – Treasury is set to further cut the bulging public sector wage bill as it attempts to lower the country’s expenditure ceiling by R25 billion over the next three years.
Tabling the budget in Parliament on Wednesday, Finance Minister Pravin Gordhan said the spending cuts would be not be targetted at frontline service delivery personnel.
Rather, goverment would be placing limits on the filling of managerial and administrative posts “subject to review of human resources plans”, Gordhan said.
Unnecessary posts would also be eliminated.
According to the budget review: “Effective 1 April 2016, appointments to non-critical vacant posts will be blocked on government’s payroll system, pending the submission of revised human resources [HR] plans.”
“Teachers, nurses, doctors, police officers and other critical posts will be excluded from the lock.”
Government departments will have to align their HR plans with the limits on spending on compensation of employees, and their adherence to the restrictions would be “strictly monitored”.
The proposals on cutting the wage bill of civil servants followed a warning by Gordhan’s predecessor Nhanhla Nene last year that the country could not sustain higher than inflation salary increases, unless they were accompanied by an improvement in performance of the public sector.
The cost of funding salary increases following last year’s wage negotiation process stood at 10 percent this financial year, and would average two percentage points higher than inflation for 2016/17 and 2017/18.
Last year’s contingency reserve was wiped out as a result of the increases. Government was forced to allocate an addition R1.2 bln nationally, and R3.8 bln to provinces to cover the increases.
The 2015 wage negotiation process would be assessed, Gordhan’s budget review said.
“The results of the assessment will be used to develop and propose reforms to collective bargaining and remuneration that could further enhance fiscal stability.”
– African News Agency (ANA)
