Fin24 reports that according to Finance Minister Enoch Godongwana, National Treasury is committed to the process of collective bargaining, but it finds itself between a rock and a hard place and has to stick to its strategy of arresting runaway debt, even in the face of rising vacancies in areas like healthcare and education.
Speaking at the public service summit on Monday, Godongwana said while 2021 GDP numbers came out better than the government initially expected, and labour might view this as a justification for better wage increases, a lot of the factors that drove the country's economic recovery were likely to reverse. For instance, SA Reserve Bank interest rate hikes will begin to affect consumption expenditure that is driven by credit. Furthermore, Russia-Ukraine war is already driving global inflation to new heights. So, the government had to carefully balance its expenditure on many competing priorities, including the rising cost of servicing its debt, while the level of economic growth was not guaranteed. It also has to honour the promised relief to consumers through the freezing of certain taxes and the review of the fuel price formula. So the government could not borrow more in order to compensate public servants. Godongwana added that, while he was cautious in his management of the public wage bill, he was "a fan" of bulking up frontline departments. Currently, there were 12.7% unfilled vacancies in public services, mostly in healthcare and education. Godongwana said this was partly a result of the government's decisions to redirect money from frontline services to bail out Eskom. He added in the 14 years of power outages in SA, it had focused on "fixing Eskom" instead of investing to get more electricity into the grid.
- Read the full original of the report in the above regard by Londiwe Buthelezi at Fin24
- Read too, Fuel tax should be put on hold, government told, at BusinessLive
Get other news reports at the SA Labour News home page