Joseph Maqhekeni. Picture: SOWETAN
Joseph Maqhekeni. Picture: SOWETAN

TRADE unions are concerned lower-paid public servants and those who depend on state services will bear the brunt of the intention to keep a lid on the public sector wage bill.

As expected, Finance Minister Pravin Gordhan on Wednesday announced that an additional R16bn over the next three years will go towards the higher education sector, to fund a raft of concessions made to student protesters.

Hiring freezes for noncritical vacant public sector posts are in the offing.

In the foreword for national estimates of expenditure for labour, Treasury director-general Lungisa Fuzile noted that personnel spending would increase at an average annual rate of 7.5% over the period, above inflation. Increases had been weighed carefully against other government objectives, he said.

"In the case of departments which historically underspend on their wage bill, the budgets for compensation of employees have been reduced accordingly. A ceiling is put on compensation of employees budgets of national departments through the 2016 Appropriation Act. Resources cannot be diverted from frontline services for the wage bill," Mr Fuzile wrote.

National Council of Trade Unions (Nactu) president Joseph Maqhekeni said on Wednesday the federation was concerned that state austerity and the attempt to rein in the wage bill would hit lower-paid public servants, not management.

This would ultimately cause long term problems, said Mr Maqhekeni.

The federation’s general concerns were over high inequality in SA, and the budget should have more firmly addressed these issues in terms of corporate tax and the billions of rand lost through tax avoidance, he said.

Federation of South African Trade Unions (Fedusa) general secretary Dennis George said issues of the public sector wage bill must be dealt with clearly and in line with government policies, and through the public sector bargaining council. There should also be recognition of a need to continue and grow state services.

For example, growth of services, such as health through the National Health Insurance (NHI), could require additional public servants. "These considerations have to be balanced," he said.

"Government also has to set the example … SA has 35 Cabinet ministers while Germany, which has a much larger economy than us, has 15," said Mr George.

Fedusa welcomed much of the speech, including Mr Gordhan’s comments on the state focusing on what it does well.

However, it could also mean next year’s budget would be similar, with a focus on cutting costs and growing revenue. He said more creative measures, including related to the role of state-owned enterprises, should be considered. "If you want radical economic transformation you have to think out of the box."

The Congress of South African Trade Unions (Cosatu) could not immediately be reached for comment, but the federation is expected to hold a briefing on Thursday following the conclusion of its central executive committee meeting, which continued on Wednesday.

However in a pre-budget release on its expectations, Cosatu also called for cuts to be targeted at fruitful and wasteful expenditure, including at the salaries and perks of state officials.

"These cuts must not be made at the expense of lowly paid public servants," Cosatu said. "Government must further narrow the public service wage gap and stop blaming lowly paid public servants for wanting a decent living wage so that they can take care of their families," it said.

Solidarity, in its pre-budget statement, called for reduced expenditure and government interference. The union called for less reliance on government expenditure and more stimulus of free capital formation, the spin-off of some government entities such South African Airways (SAA), regulatory changes to stimulate competition in these sectors, and reversal of policies seen to inhibit confidence, including those on expropriation.

Gerhard van Onselen, economic researcher at the Solidarity Research Institute (SRI), said on Wednesday that higher than expected inflation may put additional pressure on the wage bill.