Nene leaves public wage bill intact

Cape Town - Finance Minister Nhlanhla Nene left the public sector wage bill untouched at around 40% of government spending in his first main budget on Wednesday, and appealed to the sector to be reasonable in its demands.

"The share of personnel compensation is projected to remain about 40% of non-interest spending," Nene told Parliament as he tabled his 2015/16 budget.

Nene told journalists at a briefing shortly before that he hoped there would be no public sector strike for higher increases, adding that the figure had been set before inflation forecasts were adjusted downwards.

"Indeed it is a concerning matter and as negotiations unfold it is our hope that we will be reasonable in what we settle for," he said.

"What we have budgeted for was based on our inflation numbers when we tabled our MDTPS. You will realise that since then things look better on the inflation side than when we tabled our MDTPS.

"I would want to believe that what that should help us with is moderation in what we call for because our objective is to protect the buying power of the salaries of public servants."

Speaking shortly before wage increase negotiations begin, with local government elections a year away, he urged the sector to be reasonable in its demands and reminded it that government was expecting productivity in return for its money.

"I think it is also clear that as government we have a demand of productivity from the public service. It is for that reason that I am convinced that whatever it is that happens it should not impact on our deficit and what we have allocated.

"And that is why in the past from our allocated resources we were able to cater for what we have budgeted for, and when it reaches a point where we pay more for wages than we pay for services, it is a sad situation and I don't think that is where we want to go."

He stressed, as he did in his medium-term budget policy statement in October, that funding for provincial and local government was set to grow more slowly than in the past.

Nene told reporters he was appealing to government departments to "moderate the growth in numbers" and to hire people in the core areas of their operations, citing as an example to be avoided the more rapid increase in health of administrative than medical staff.

This would force provinces and municipalities to focus on saving on goods and services, including personnel costs.