R3.52 of every R10 spent by government goes to public sector salaries
With finance minister Tito Mboweni set to deliver his maiden budget speech, all eyes have once again turned to South Africa’s finances.
One of the biggest points of contention will likely be government’s growing wage bill, and how much government spends on public sector wages.
Mboweni was recently quoted saying that as much as R8 out of every R10 spent by government going to salaries of civil servants
However, this figure was dismissed by South African Federation of Trade Unions general secretary, Zwelinzima Vavi, who described the share as “absolute nonsense”.
How much does the government spend?
Fact-checking website, Africa Check, has analysed the budget data to see how much money government actually spends on public sector wages.
It notes that South Africa’s 2018 budget shows that money paid to employees made up 35.2% of the government’s consolidated spending in 2017/18. This is R3.52 per R10.
Jabulani Sikhakhane, spokesperson for South Africa’s national treasury, further clarified to Africa Check that Mboweni was describing a situation he wanted to avoid.
“Minister Mboweni was not stating as a fact that government spends R8 out of every R10 on salaries,” Sikhakhane said.
“His was an illustrative point, that if government spent R8 out of every R10 on employee remuneration, it would be left with R2 for all other services.”
He added that salaries as a share of spending would vary by government department.
“In provincial education and health departments, for example, compensation of employees will absorb a significant proportion of the budget.”
Salaries based on revenue
While government’s wage bill is already high compared to other emerging countries, Africa Check noted that the figure increases further when looking at employee compensation as a share of government revenue.
The South African government spends more than it collects, so it has to borrow money to make up the shortfall, explains Professor Jannie Rossouw.
Rossouw is head of economics and business sciences at the University of the Witwatersrand and part of the Fiscal Cliff Study Group.
In a 2018 journal article, the group said it was concerned that South Africa was “headed for a fiscal cliff due to declining revenue and rising expenditure”.
The group calculated that compensation of employees accounted for 46% of government revenue in 2018, or R4.60 per R10.
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