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18 min ago
Wage bill | Significant trade-offs to fund 7.5% increase
JOHANNESBURG - Unions have largely accepted government’s latest wage offer.
Over a million public servants will see a 7.5 percent increase this month.
Next year, the increase will be determined by the projected inflation rate but capped at 6-point-5 percent.
This will cost government over 37-billion rand for the 2023/2024 financial year.
National Treasury says there will be significant trade-offs in the short and medium-term to implement the deal.
Waldo Krugell from the North West University Economics Department explains what this means.
"One of the ways is that they will be freezing positions that become vacant. They will also not be advertising non-critical positions that become available and even recruitment for new positions will be very selective," he said.
"So they will be reducing the head count number of public servants and in that way limiting the spending. They are also giving permission to departments at provincial level to reprioritise some of their budgets toward paying these salaries.
"So they will be able to take money from maintenance or supplies or any of the other budgets and use that for paying some of these salary increases."