The government is spending more money on paying its employees than providing goods and basic services, a report by Statistics SA showed on Thursday.

Government spending on compensation of employees increased more than R40bn from R473bn in 2013-14 to R514bn in 2014-15.

This means the government spent more money paying its employees than actually procuring goods and services to be delivered to the people of SA.

This is contained in the Financial Statistics of Consolidated General Government for the 2014-15 fiscal year, released by Statistics SA on Thursday.

The report contains statistics on the South African government’s income and expenditure for the financial year ended March 31 2015. It provides detail on the sources of income from all levels of government‚ such as taxes‚ social contributions and "other" receipts. It also explores various expenditure items‚ including compensation of employees‚ interest paid on loans‚ social benefits‚ grants and subsidies.

The report showed that the R40bn increase in compensation of employees was due to an increase in the wage bill of provincial governments‚ which shot up by R18bn.

This was followed by national government surging R8.5bn‚ municipalities up R7.7bn‚ extrabudgetary accounts and funds R3.9bn‚ and the higher education institutions with an increase of R2.4bn.

Extrabudgetary accounts refer to accounts and funds of national and provincial governments not included in normal budget totals and which do not operate through normal budgetary procedures such as trading accounts and general government accounts.

It showed that government spent more than R159bn on social benefits‚ R122bn on interest‚ R87bn other payments‚ R53bn on grants and R24bn on subsidies.

Cash receipts from operating activities increased by R107bn to R1.12-trillion in 2014-15‚ mainly due to an increase in taxes collected.

The largest contributor to total cash receipts from operating activities for the 2014-15 fiscal year was taxes, at R1-trillion‚ followed by other receipts at R138bn‚ social contributions (R22bn) and grants (R2bn).

The increase of R94bn in cash receipts was mainly due to increases in taxes paid by individuals‚ VAT on goods and services‚ and taxes paid by businesses.

The R12bn increase in other receipts‚ from R126bn in 2013-14 to R138bn in 2014-15‚ was mainly due to increases of R3.8bn in sales of goods and services by the municipalities (rates and general services)‚ R3bn by universities and R1.9bn received in interest by the national government.

TMG Digital

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