Govt eyes staff cuts, hiring caps after wage deal
Government is considering layoffs and early retirement packages for staff in the public sector to avoid breaking its pledge to cut spending after unions clinched above-inflation wage increases, the Treasury said on Friday.
Under a deal reached in May, the government will raise salaries of public sector employees, including teachers, police, and nurses, by up to 7 percent this year and by 1 percent above inflation in the two years after that.
While the increase is less than the 12 percent unions wanted, it was above the 4 percent the Treasury planned for in its February budget when it outlined plans to reduce the country's large debt pile to stave off ratings downgrades.
The Treasury said that the "government has indicated on several occasions that a wage agreement that departs significantly from inflation would need to be accommodated within announced expenditure limits, failing which such an outcome could have adverse consequences."
Specific details on the measures would be given at a later stage, the Treasury said.
South Africa's budget deficit and public debt ballooned while economic growth slowed to a near standstill in nine years under former president Jacob Zuma.
New President Cyril Ramaphosa promised to implement wide ranging reforms after being elected in February to try to kickstart economic recovery.
The country narrowly escaped ratings downgrade to full-blown junk status with S&P Global Ratings Moody's and Fitch Ratings, which kept the credit scores unchanged in reviews released in March and June this year.
Comments
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation