To support higher levels of capital investment the state needs to contain the public service wage bill, which has crowded out spending in other areas, Finance Minister Malusi Gigaba said on Wednesday. In his budget speech, Gigaba said the government was working to ensure that current wage negotiations resulted in a fair and sustainable agreement. Ratings agencies have long raised concern about the increasing public sector wage bill. The Treasury’s 2017 medium-term budget policy statement showed that public sector wages increased 10.3% annually since 2009, which is significantly higher than the rate of inflation. In its 2017 economic survey of SA, the Organisation for Economic Co-operation and Development (OECD) said the public sector wage bill was at about 35% of the budget, and increasing interest on debt left the government with little room for fiscal manoeuvre. The OECD has suggested the government increase its investment in infrastructure and education. According to the Budget R...
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