A crucial test for the administration of President Cyril Ramaphosa will be how it deals with the ballooning public sector wage bill that threatens to eat into the ability of departments to deliver services, the Institute of Race Relations said.
Releasing a report on SA’s bloated and costly public service, head of the institute’s politics and governance department, Gareth van Onselen, said the public sector wage bill needed to be brought under control. The last thing the governing ANC wanted was to wage a war with the trade unions, he said.
"Unless someone is willing to take a hard line, and soon, it [the wage bill] is set to become the defining obstacle to economic growth," Van Onselen warned.
Wage negotiations between the government and public sector trade unions were under way in the Public Service Coordinating Bargaining Council. Their outcome, he said, "will go some way towards revealing just how much influence the president wielded".
But Public Servants Association deputy general manager Tahir Maepa disagreed with the view that the public service was bloated, pointing out that large numbers of government employees were needed to deliver services. He said there were more than 160,000 vacant positions in the public service.
Federation of Unions of SA general secretary Dennis George also highlighted the shortage of employees, though he conceded the public service might be bloated at higher levels of management.
The public sector wage bill, which in 2018-19 will amount to R587bn, represents 35% of projected government expenditure of R1.67-trillion.
When presenting the 2018-19 budget, Treasury warned that a wage agreement exceeding consumer price index inflation would make it difficult to achieve the limits set on expenditure. This would blow out the budget deficit.
The 2018-19 budget review also noted that for the state to support higher levels of capital investment, it "needs to contain the public service wage bill, which has crowded out spending in other areas".
"The South African economy simply cannot afford it as things stand, and the relatively small economic growth forecasts for the future suggest the situation is not going to improve either," said Van Onselen.
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