CAPE TOWN: South African Finance Minister Nhlanhla Nene said in Parliament on Thursday that the 10% wage increase currently being demanded by public sector trade unions would add R20bn to government’s wage bill over the amount provided for in the 2015-16 budget.
Government is currently involved in wage negotiations with public sector trade unions and is offering 5.9%. The two parties have failed to reach agreement and have taken their dispute to arbitration. The budget anticipated that the consolidated wage bill would grow at a nominal annual average of 6.6% over the next three years.
Mr Nene said the effect of a 10% increase would be to raise the share of the wage bill of gross tax revenue by 1.7 percentage points while its share of gross domestic product would rise by 0.5 percentage points. The overall change in the composition of total government expenditure would be 1.5 percentage points in favour of compensation of employees.
Treasury reported in the 2015 budget review that its research showed most public servants were in the top 30% of wage earners nationally. The consolidated national and provincial wage bill, including public entities stood at 40.6% of gross total revenue as of 2013-14 compared to a level of 31.5% of gross total revenue in 2006-07.
