Tax windfall funds public servants’ gratuity
The Treasury sticks to fiscal framework while at the same time avoids diverting funds from other needs
The government has used some of its revenue overrun to pay the R20.5bn it promised public servants after it failed to hold the line on salaries, a key promise made in February.
In February, the Treasury announced that there would be no cost-of-living increase for public servants, which was an attempt to rebalance public finances after the growth of remuneration over the past decade far outstripped inflation as well as GDP growth. However, a compromise was reached with unions this year to award all employees a R1,000 after-tax gratuity which did not form part of their pensionable income...