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Government overspends by R2 billion on salaries due wage agreement

Public sector unions reached a wage agreement with government in March. Picture: FILE

Public sector unions reached a wage agreement with government in March. Picture: FILE

Published Aug 29, 2023


National Treasury has revealed that government has overspent by R2 billion on its salaries for public sector employees because of the wage agreement that was struck in March between the state and unions.

The government had reached a deal of 7.5% increase in salaries for employees in the public sector following months of negotiations.

The state had initially proposed an offer that was lower to the proposal by unions, but after talks between the two parties, they reached an agreement.

Deputy Director-General for Public Finance in the National Treasury, Mampho Modise, told the standing committee on appropriations on Tuesday that the wage bill was projected to be R44.7 billion during the first quarter of the year, but this increased to R46.7 billion.

She said the over-expenditure was due to the wage agreement.

The departments had sent their spending projections before the agreement was reached, but when it was signed the money had been already been allocated.

"If you look at the compensation for employees, the projection is R44.7 billion, and the outcome of this spending was R46.7 billion, which is an over-expenditure of R2 billion.

"This mainly was a result of the wage agreement that was concluded after the departments have sent through their projections for the year. Of course, the departments have the opportunity to update these, but most of the updates will be incorporated in the Medium-Term Budget Policy Statement. The over-expenditure, if you see it in many departments, is mainly because the initial projections did not incorporate some of the wage agreement employee related costs," said Modise.

Finance Minister Enoch Godongwana will table the MTBPS later this year.

It is where he will provide more information on the wage bill in the public sector for the current financial year.

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