President Cyril Ramaphosa says that government is focusing on fixing the country’s public finances.
Reflecting on the national budget that Finance Minister Tito Mboweni delivered last week, Ramaphosa says in his weekly letter that South Africa was in a precarious and unsustainable situation in which spending outstripped earning, attracting rising debt servicing costs
We are fixing our public finances to make inclusive growth and job creation possible. Such times call for us to be realistic, not dogmatic. They call for cooperation, not conflict. Compromises and trade-offs will have to be made.
— Cyril Ramaphosa ?? (@CyrilRamaphosa) March 2, 2020
He says a large part of achieving savings will come from reducing the rate at which the wage bill grows, which has begun affecting spending on capital projects for future growth and items that are critical for service delivery.
Government’s total allocations for this financial year amounts to R1.95 trillion and almost half of that will go towards social spending
President Ramaphosa says that in order to keep public finances under control, the focus must be to curb the rate of growth of wages rather than dramatically cut the size of the public service. He says discussions with public sector unions must be held to find a solution. Ramaphosa also says there will be no increase in the salaries of senior public servants this year and a new law will be published which will introduce a remuneration framework for board members and executives. He says government aims to save around R206 billion over the next three years.
Below is President Cyril Ramaphosa’s letter
In his 2020 budget speech in Parliament on Wednesday, Finance Minister Tito Mboweni announced plans to reduce the government wage bill by R160.2 billion over the next there years.
Complete Budget Speech by the Finance Minister:
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