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Agreement On Salary Increase For Public Servants 2020

In his statement on medium-term fiscal policy (MTBPS) on Wednesday (October 28th), Mboweni said the national finance ministry would propose a three-year wage freeze to stabilize the rise in the public sector wage bill. According to Finance Ministry documents, the wage-setting process has been “separated from reality, with increases in overinflation not taking into account a weaker economy. “To achieve these objectives, which are essential for the sustainability of public finances, the government has not implemented the third year of the 2018 collective agreement. Survey data from Statistics South Africa also indicates that growth in public sector compensation over the past decade has outpaced growth in private sector compensation, as discussed in the statement on medium-term fiscal policy in 2019. In addition, the government is coordinating work to develop a comprehensive medium- and long-term compensation strategy for the public sector. These include civil servants, state-owned enterprises, public bodies and local governments. On November 16, 2020, the employer presented a comprehensive report for all divisions presenting the following challenges: CAP- The government plans to curb the increase in civil servants` salaries. Reducing civil servants` wage costs will account for the bulk of the spending cuts the government intends to implement to reduce their unsustainable debt burden and move from consumption to investment in infrastructure. “Since 2006/2007, average civil service salaries have grown faster than GDP per capita and are now 4.7 times higher, partly the result of slow economic growth and high unemployment,” he said. “The Minister of Public Service and Administration and the leadership of the public service unions are meeting to discuss how best to adapt to reality, to do more with less and to be there together.” He said low-paid civil servants, paid between R70,000 and R109,000 a year, would not receive a salary increase this year, but medical aid, bonds and everything else.

Wage increases in the public sector, as a percentage of tax revenues, “rose from 31% before the global financial crisis to 41% in 2009-2010 and stabilized around 37%. The percentage exceeds 50 percent of revenue this year and will be 47 percent next year and 45 percent in 2022-23,” the report said.

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