Govt won't budge on state wage bill, says Mboweni

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Minister of Finance, Tito Mboweni.
Minister of Finance, Tito Mboweni.
Gallo Images/Ziyaad Douglas

Finance Minister Tito Mboweni told an investment conference the Treasury won’t back down on its insistence that any wage agreement for state workers mustn’t breach the government’s fiscal ceiling.

Mboweni made the comments at a conference organised by JSE and sponsored by Citibank and Absa Group that’s closed to the media, a person attending the event told Bloomberg, asking not to be identified.

Mboweni angered powerful labour unions allied to the ANC last year by reneging on a prior deal to raise wages for 1.3 million government workers. In February, he announced a new three-year pay freeze in the public sector as part of plans to rein in government spending, reduce the budget deficit and stabilise debt.

Unions, which are demanding increases of inflation, which averaged 3.3% last year, plus four percentage points, have threatened to strike.

Mboweni also said he’s not in favour of a basic income grant and would prefer employment incentives, the person said. Social Development Minister Lindiwe Zulu last month said a basic income grant proposal will be taken to Cabinet this year, News24 reported.

Only 15 million people out of a working-age population of 39.5 million were formally employed in the first quarter in South Africa, adding to the country’s poverty and inequality challenges.

Mashudu Masutha-Rammutle, Mboweni’s spokesperson, declined to comment on the minister’s remarks, but said a recording would be shared with the media later. The JSE took the decision to lock out the media, she said.

The JSE said it wanted investors to have frank conversations with ministers and therefore had decided not to invite the media.

Mboweni raised eyebrows last year when he and senior National Treasury officials addressed Goldman Sachs clients in a private call. Five days after the event Goldman put a recording of the call on its website.

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