Tito Mboweni commits to bailing out provinces should wage risk materialise
Should the Constitutional Court decide that the public-sector wage agreement be implemented, provinces would be in for a lot of financial pain
Finance minister Tito Mboweni has given an undertaking that the national government will step in and assist provinces should the Constitutional Court order that the government honour the 2020/2021 wage increase for public servants, which has not been paid.
Provinces had their baseline budgets sharply cut in February 2020, mostly on the assumption by the Treasury that the provinces would not have to pay the anticipated wage increase — in the region of the consumer price index (CPI) plus 1% — to public servants from April 1. This was after the government reneged on the third leg of a wage agreement with unions, freezing wages on the argument that the increase was not affordable, given the country’s deteriorating financial position...