BL Premium reports that provinces are projected to overspend their 2023/24 budgets by a total of R24.8bn mainly due to the implementation of the wage agreement reached between government and public sector trade unions.
The wage agreement provided for a 7.5% increase from 1 April at an unbudgeted cost to government of R37.4bn. Provincial governments were expected to accommodate the wage increase from their existing budgets as the wage agreement had not been concluded by the time of the February budget and was not factored into it. The February budget provided for a 1.6% wage increase for 2023/24. Finance minister Enoch Godongwana warned in a speech on the Treasury budget vote in parliament earlier this year that headcounts in the public sector would have to be restricted in a bid to save R37.4bn and cushion the blow of the wage agreement on the fiscal framework. Identifying savings could entail a rationalisation of staffing levels and the deployment of headcount management strategies to curb the wage bill. Trade-offs would be necessary, Godongwana said. The education sector is projected to overspend by R10.3bn, provincial health departments by R12.2bn and social development by R356m mainly on the compensation of provincial employees.
- Read the full original of the report in the above regard by Linda Ensor at BusinessLive (subscriber access only)
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