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The Sunday Times reported that Business Unity SA (Busa) warned that SA was “on its way to becoming another failed African state” if it did not address the wage bill.
The report shows that between fiscal 2006 and 2018, the wage bill skyrocketed from R154 billion to R518 billion, a compound annual average growth rate of 10.5%, almost entirely due to gargantuan wage increases.
As a percentage of state spending, SA has the worst score of the 46 countries surveyed, with more than 35% of the budget dedicated to the payment of salaries, a third more than the international average of 26.1%. And at 11.6% of GDP, SA’s wage bill was roughly 25% higher than the global norm of 9.4% in 2017.
Busa wants social partners to hold an urgent debate on the wage bill, saying it has become a “critical impediment” to SA’s economic recovery.
In October, Finance Minister Tito Mboweni proposed a “wage freeze” in the public sector for the next three years.
Mboweni made the announcement in parliament when he introduced the 2020 National Treasury Medium-Term Budget Policy Statement (MTBPS), telling MPs that the public sector wage bill has increased by 51% since 2008.
This has resulted in 1.3 million government employees in national and provincial departments earning 567 billion rand in salaries and other benefits by the end of March 2020.
TimesLIVE
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