Nene draws line in the sand on wage hikes

2014-10-22 14:52

The public service will have to accept inflation-related increases or face staff cuts, Finance Minister Nhlanhla Nene has warned.

“If increases in public-sector wages significantly outpace inflation, government will be forced to curtail service delivery – either by reducing social spending or capital budgets, or by trimming staff numbers,” he said today in his first mid-term budget.

Nene added that civil service staff numbers would be frozen for the remainder of the medium-term framework, and therefore departments creating new positions would have to fund these out of their existing resources.

“To contain compensation budget pressures, government personnel headcounts will be frozen for the next two years,” he said.

“Any increase in personnel will be funded from existing allocations.”

He said National Treasury would, with the help of the departments of public service administration and performance monitoring, conduct a review to consider permanently withdrawing funding for posts that had not been filled.

“Natural attrition will create space for new appointments,” he said.

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