President Cyril Ramaphosa has moved to allay fears about job losses in the public sector following Finance Minister Tito Mboweni’s budget speech last week.
Ramaphosa said the approach was not to dramatically cut the size of the public service, but to examine the rate at which wages grow.
“The wage bill remains the largest component of spending by economic classification. Growth in the wage bill has begun crowding out spending on capital projects for future growth and items that are critical for service delivery,” he said. A new law was on the cards, and this would introduce a remuneration framework for public entities and state-owned companies to prevent excessive pay for board members and executives.
While the state focused on fixing public finances to make inclusive growth and job creation possible, he called on South Africans to be “realistic, not dogmatic”.He called the budget a sobering assessment of the state of the economy, and repeated his words from his state of the nation address that “unless we act now to turn things around, there will be even more difficult times ahead”.“Such a route would have seen deep cuts in spending on the social services that poor people rely on,” he said.
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