Nhanhla Nene warns on wage bill: Accept inflation-related increases

The public service will henceforth have to accept inflation-related increases or face staff cuts, Finance Minister Nhlanhla Nene warned on Wednesday in his first mid-term budget.

“If increases in public-sector wages significantly outpace inflation, government will be forced to curtail service delivery — either by reducing social spending or capital budgets, or by trimming staff numbers,” he said.

Nene added that civil service staff numbers would be frozen for the remainder of the medium-term framework, and that therefore departments creating new positions would have to fund these out of their existing resources.

“To contain compensation budget pressures, government personnel headcounts will be frozen for the next two years,” he said in his Medium-Term Budget Policy Statement.

“Any increase in personnel will be funded from existing allocations.”

He said National Treasury would, with the help of the departments of public service administration and performance monitoring, conduct a review to consider permanently withdrawing funding for posts that had not been filled.

“Natural attrition will create space for new appointments,” he said.

Source : Sapa /ef/rod