Finance Minister Enoch Godongwana said on Wednesday there was no guarantee that the projected amount budgeted for the public sector wage bill will not be over the budget.
Godongwana said the government was in the midst of wage negotiations with the labour movement.
“We have made a specific offer which is being considered by the unions,” he said when he was answering oral questions in the National Assembly.
The Medium-Term budget Policy Statement projects the public sector wage bill to cost more than R298 billion over the medium-term expenditure framework by 2027.
Godongwana said at the time of the budget, they had projected the baseline on the consumer price index, which was standing at 4.5% and subsequently moved downwards.
He said the government has made an offer of a 4.5% salary increase that was increased to 4.7% after the facilitation process.
“We can’t guarantee the negotiations will end at a higher amount or not.”
Godongwana confirmed that there have been battles between the government and unions which landed up in court over the last few years.
In one year the government did not provide an increase and in another cash gratuity was subsequently converted into base line to make up 7.5%.
The minister also said as part of cost containment measures, there was an agreement not to fill vacant posts other than critical ones.
“To the extent that a department has, it has to make an application to the Department of Public Service and Administration with Finance concurrence. There is no blanket ban on filing critical posts other than the challenges we face,” he said.
Godongwana defended the bloated cabinet when asked to justify the size of the cabinet and whether he was committed to spending resources in a responsible manner.
He said there was a plan to reduce the number of cabinet posts before the elections, and part of that included restructuring public entities.
“That programme of reducing public entities is in place, but the necessity of the GNU requires that there is accommodation of some of the critical players in the formation of the GNU, and therefore, that necessitated the increase in the number of cabinet posts.
“The strategic thrust of reorganizing the government remains on course.”
Meanwhile, an institution such as the Postbank would be crucial in the competitive financial sector environment to provide affordable finance to SMME and transformation.
“Progress is being made to ensure licensing of the bank is achieved. We are in discussion with the Department of Communications and Digital Technologies as to the appropriate funding for the Postbank, which once concluded an announcement will be made accordingly,” Godongwana said.
He also said the National Treasury was engaged with the KwaZulu-Natal government to ensure that Ithala Bank has a banking licence after operating on an exemption for 20 years.
“Ithala has therefore not complied with the regulatory framework since that exemption expired in 2023. As we speak Ithala, to be honest, does not have a licence.”
“We work with the government of KwaZulu-Natal to achieve that objective,” he said.
Asked about strides made to rescue the South African Post Office (SAPO), Communications and Digital Technologies Minister Solly Malatsi said the institution needed to adapt to the changing environment that was highly digitized and competitive.
“It is to this end, together with the Treasury, we established a task team to look at seeking partnerships that can help competitiveness of the Post Office and help make it sustainable,” Malatsi said.
He said their focus was to make sure they positioned SAPO in a way that it was able to meet the market demand.
“The task team will look at solutions through partnerships to help it to be sustainable and not be wholly dependent on the fiscus.”
Cape Times