The latest budget documents published by National Treasury shows how much money is being set aside to pay government employees in the 2019/2020 financial year.
In his speech, finance minister Tito Mboweni noted that government salaries currently account for the biggest portion of the budget, which was a major concern.
The public service wage bill has been overloading government spending, resulting in an unsustainable R30.2 billion deficit from last year’s wage agreement.
To help rein in government spending, Mboweni said Treasury will be looking to save as much as R20.3 billion through plans to cut the public service wage bill from 1 April 2019.
However, this will be undercut by the R16 billion it will take to implement government’s second plan – early retirement without penalty, which aims to push out costlier, older public servants in the hopes of introducing a younger, more affordable cohort.
South Africa’s government wage bill issues were recently highlighted by economist Mike Schussler, who said that the country’s public servant bill is out of control.
Revenue collected from personal income tax by SARS in 2018 did not even come close to covering government salaries, he said.
Government wages as a percentage of GDP, meanwhile, sits at around 14% – far higher than the global average of 10% and OECD average of 10.4%, with the government wage bill being 42% higher than the total collected from personal income tax.
According to Schussler, government’s wage spending extends beyond the 14% of direct costs, with outsourcing costing around 8% of GDP for government – this amounts to duplication of roles, and the taxpayer footing the bill for bringing in workers to do the jobs that government should be doing already.
When looking at how these wages have increased over time, Schussler said that government salaries have increased more than inflation, the JSE all share, and the average commercial salary over the past decade.
Commercial sector wages increase at twice the rate of inflation, while the government wage bill over the last ten years increased by three times more than the CPI.
Highest-paying government departments
Not all of the 1.3 million or so employees who work for government earn budgeted salaries. The majority (almost 900,000) have their salaries determined by public sector wage negotiations.
However the budget documents, published on 20 February, show a breakdown of salary projections for each department over the next three years, for the balance of employees who earn budgeted wages.
While a three-year projection is included (to financial year 2021/22) for each department, there has been speculation that the number of departments may be cut following the outcome of the 2019 election.
The graph and table below outlines which departments will pay the highest average salaries in 2019, and where the forecast sees these salaries in 2022.