Budget 2023
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Will Nene crack the whip on the govt wage bill?

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Johannesburg - The ballooning public sector wage bill, which stands at R450bn annually, will be keenly watched when Finance Minister Nhlanhla Nene delivers his budget speech.

This is the view of Nazeer Essop who is the public sector leader for Deloitte Southern Africa and an audit partner.

He said a big concern going forward is as the economy and revenues to the fiscus decline; there is less money for service delivery as the wage bill continues to eat up in the available funds.   

"Our public sector wage bill makes up about 38% of our total budget expenditure, whereas if you compare it to the Brics countries, they make up less than 25% of their total budget expenditure.

"The question would be how effective and efficient is that workforce in the Brics countries versus South Africa, with a much higher wage bill in relation to service delivery."

Essop said with economic growth forecast to be 1.4% in 2015, 2.5% in 2016 and 3% in 2017, government has to balance the books in an environment of shallow growth and much needed infrastructure development

He said public sector employees account for approximately 22% of the workforce and job cuts are not an option for government because it would add to the already high unemployment rates.

"Currently we have too many administrative staff with little focus on service delivery. Government needs to link its service delivery tasks to employees and skills.

Essop also called for an adequate performance management system to be implemented to ensure effective service delivery.

"Another critical factor for government is to look at the issue of linking pay to performance and its policies relating to the guaranteed 13th cheque and performance bonuses."

Listen to the full interview to hear what else Essop has to say about curbing government expenditure:

* Visit our Budget Special for pre-budget commentary, live streaming of the Budget speech, live post-budget analysis, Budget infographics, more Tips for Nene and much more.

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