Tito Mboweni. Picture: ESA ALEXANDER
Tito Mboweni. Picture: ESA ALEXANDER

Finance minister Tito Mboweni told an investment conference on Thursday that the Treasury would not back down on its insistence that any wage agreement for state workers must not breach the government’s fiscal ceiling.

He made the comments at a conference organised by the JSE and sponsored by Citibank and Absa Group, that was closed to the media, a person attending the event told Bloomberg, asking not to be identified.

Mboweni angered trade unions in 2020 by reneging on a prior deal to raise wages for 1.3-million government workers. In February, he announced a new three-year pay freeze in the public sector as part of plans to rein in government spending, reduce the budget deficit and stabilise debt.

Unions, which are demanding increases of inflation, which averaged 3.3% in 2020, plus four percentage points, have threatened to strike.

Mboweni also said he was not in favour of a basic-income grant and would prefer employment incentives, the person said. Social development minister Lindiwe Zulu said in May that a basic income grant proposal would be taken to the cabinet later in 2021.

Only 15-million people out of a working-age population of 39.5-million were formally employed in the first quarter in SA, adding to the country’s poverty and inequality challenges.

Mashudu Masutha-Rammutle, Mboweni’s spokesperson, declined to comment on the minister’s remarks, but said a recording would be shared with the media later. The JSE took the decision to lock out the media, she said.

The JSE said it wanted investors to have frank conversations with ministers and therefore had decided not to invite the media.

Mboweni raised eyebrows in 2020 when he and senior Treasury officials addressed Goldman Sachs clients in a private call. Five days after the event Goldman put a recording of the call on its website.

Bloomberg. For more stories like this, visit Bloomberg.com

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