TimesLIVE reports that the government’s decision earlier this year to offer a R1,000 one-off gratuity to civil servants as a sweetener for them to accept a 1.5% wage increase will cost R20.5bn in the current financial year.

This is money that was not catered for when former finance minister Tito Mboweni tabled the 2020/2021 budget in February. This means that current finance minister Enoch Godongwana will have to ensure that government departments reprioritise and shift funds around to finance the payment of the gratuity. Commenting when tabling his maiden Medium-Term Budget Policy Statement (MTBPS) in parliament on Thursday, Godongwana said this was in breach of the National Treasury’s measures to contain excessive spending on salaries of civil servants, which now accounted for 37% of the government’s total expenditure at just over R635bn a year. He advised that the gratuity was also expected to cost the same amount in 2022/2023 if a new agreement was not entered into with public-sector unions. Godongwana also warned that a further risk to his measures to rein in the public sector wage bill, was a pending Constitutional Court (ConCourt) decision in a case in which labour unions were challenging the non-implementation in 2020 of the final leg of the 2018 wage agreement. The ConCourt could overturn the Labour Appeal Court’s decision that the 2018 agreement was unlawful and government was not compelled to honour it. Godongwana said such a ruling would be disastrous to government finances as they would have to “implement the agreement retroactively.”

• Read the full original of the report in the above regard by Thabo Mokone at TimesLIVE

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