HILARY JOFFE: Wage deal may not be as big a risk to budget framework as feared
This year’s settlement will build on the shift to moderation of the past three years
Over the past three years the government has firmly bent the curve on public sector pay, halting a decade-long trend of above-inflation wage increases that had seen the payroll’s share of public spending rise steeply.
The new two year wage settlement the government and public sector trade unions now seem set to sign would continue that trend, bringing an unexpectedly early end to the usual pay dispute. But it would add R35bn-R40bn of unbudgeted government spending over the next three years. And it leaves many unanswered questions about what level of personnel spending is sustainable, and what kind of public service the government wants and SA needs...
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