Ghost workers audit anchors Treasury’s wage bill reforms

The 2025 medium‑term budget policy statement (MTBPS) makes clear that fiscal consolidation is not only about cutting budgets but also about enforcing accountability in the public service.

With the compensation of employees projected at R817.5bn in 2025/26, the wage bill remains one of the largest items of expenditure, absorbing about a third of consolidated spending. The Treasury has signalled that tackling inefficiencies in payroll and managing staff exits would be central to stabilising personnel costs and restoring credibility in the state’s finances.

One of the most important interventions is the audit of ghost workers across national and provincial departments. Working with the department of home affairs and the SA Revenue Service (Sars), the Treasury analysed payroll, population and tax data. The exercise flagged 8,854 high‑risk cases requiring verification, including individuals drawing salaries from multiple departments, inactive employees still receiving payments, deceased individuals listed on payrolls and bank account anomalies suggesting fraud.

A two‑month verification process will begin in January, after which appropriate legal action will follow where fraud is detected. The next phase will introduce a single sign‑on application for public servants and upgrades to the government payroll system to automate monitoring and prevent irregularities in the future.

Complementing the payroll clean‑up is the early retirement programme, begun in October. The Treasury allocated R5.5bn over the medium term to enable 15,000 exits by 2026/27.

Average annual savings of R3.5bn are projected over the longer term, reducing personnel costs while allowing departments to refresh their staff profiles. The programme offers retirement without penalties and with added incentives, creating space for younger employees to enter the public service while trimming the wage bill.

The Treasury notes the public‑service wage agreement includes a 4% floor, ensuring that employees are protected against inflation while keeping growth in compensation aligned with fiscal sustainability. This balance is designed to protect per‑capita spending on public services while avoiding runaway personnel costs.

Beyond payroll integrity and retirements, the MTBPS highlights the Targeted and Responsible Savings (TARS) initiative, which identifies underperforming programmes and inefficiencies across government. Personnel expenditure reviews are part of this drive, ensuring that resources are directed to frontline delivery rather than wasted on duplication or fraud.