The ballooning public-sector wage bill has hit a crisis point, leading the Treasury to flatly refuse to allocate more money to public servants’ pay, despite a formal agreement with trade unions to increase expenditure by R20bn over the next three years. The issue is sure to be a hot political issue, with ministers already at odds over the consequences of the agreement, which commits government to spend R242.7bn over the next three years.

The increase exceeds the existing provision of R212.5bn budgeted for salary increases and other conditions of service over the medium-term expenditure framework period, adding R30bn to the bill. The Treasury is not refusing to implement the increase, but has tossed the biggest hot potato in government back to departments, cryptically saying they need to fund shortfalls by “adjusting within their compensation baselines”...

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