Budget 2021

Party almost over for government’s 29 000 millionaires, Mboweni warns

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Minister of Finance Tito Mboweni announced on Wednesday that cabinet members and other politicians may face salary cuts.

While Mboweni had announced proposals including early retirement, reorganisation, salary freezes and the reduction of bonuses to keep public service spending in check in his February budget, he said on Wednesday that these had "not realised as much savings as we hoped".

So for the "foreseeable future", he said, the salaries of Cabinet members, premiers and MECs would be frozen at current levels, "with the likelihood of an adjustment downwards".

Tabling his second medium-term budget in Parliament on Wednesday afternoon, Mboweni said National Treasury's research found 29 000 public servants earned more than R1m each in 2018. This includes public servants, members of the national executive, MPs and members of the provincial executive.

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

The average wage increase across government was 6.8% in 2018/19, he said, or 2.2% above inflation.

"And after adjusting for inflation, the average government wage has risen by 66% in the last 10 years," said Mboweni.

For all civil servants, Mboweni said government will cap the cost of official cars at R700 000 (including VAT) as well as limit cellphone, travel, subsistence and accommodation allowances.

Mboweni told MPs that reducing spending on the public service was one way in which he hoped to save the fiscus R150bn in three years.

The minister said he looked forward to "meaningful engagements" with public service unions on reforms.



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