Budget 2021

Mboweni on wage bill: Whether Faith Muthambi likes it or not, she was part of creating the problem


Finance Minister Tito Mboweni is not backing down from a previous statement he made that former ministers of public service and administration Faith Muthambi and Richard Baloyi are to blame for the excessive public sector's wage bill.

The minister was speaking at a briefing on the medium-term budget policy statement to Parliament's Standing Committee on Finance and the Standing Committee of Appropriations, as well as their select committees on Thursday.

At the briefing, Mboweni singled out the public sector's wage bill as one of the risks to the fiscus.

"Whether Faith Muthambi likes it or not, she was part of creating this problem, and Richard Baloyi," the minister said.

Mboweni had told journalists ahead of the tabling of the medium-term budget policy statement that the ministers had signed off on wage agreements that they were not supposed to.

Earlier on Thursday Muthambi issued a statement hitting back at Mboweni's remarks. She denied she signed off on the wage agreement and blamed Minister of State Security Ayanda Dlodlo, who was minister of public service and administration last year, Fin24 previously reported.

"Had the minister taken time off his busy social schedule to read the agreement on the salary adjustments and improvements on conditions of service in the public service, he would have not only found out who the signatories were at the time to blame, but also discharged his duties with integrity and do justice to the office he occupies," Muthambi said.

Mboweni told committee members that the public sector wage bill is a significant challenge. In his speech he said that a detailed analysis on spending on public-sector wages showed that 29 000 public servants earned more than R1m last year. This includes members of the national executive, Parliament and the provincial executive.

"After adjusting for inflation, this is more than double the number of civil servants earning more than R1m in 2006/07," he said.

"The average wage increase across government was 6.8% in 2018/19, or 2.2% above inflation. After adjusting for inflation, the average government wage has risen by 66% in the last 10 years," he added.

ANC MP Dipuo Peters said the minister's statement that 29 000 public servants are millionaires is a misrepresentation to the public. Mboweni's response was that he was not wrong. "I'm sorry about the millionaires thing, but it is true. Everyone who earns above R1.1m is a millionaire."

Cutting fringe benefits

In his speech Mboweni also announced reductions on benefits for government officials. This includes a R800 000 cap on vehicles, all domestic travel is now to be economy class and there will now be caps on amounts claimed for cell phones.

According to Mboweni analysis by Treasury shows that approximately R5bn per year is spent by the public sector on cellphones.

The minister said that the state is in a difficult situation and needs to make ends meet. This includes selling off assets and reducing costs. Mboweni said he is in discussions with the Minister of International Relations and Cooperation Naledi Pandor to rationalise international missions.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot