Sars has just reached an agreement with unions for an immediate 8% wage increase followed by two years of CPI plus 2% increases. This is surely economic suicide.
It comes on the top of general state wage increases far above inflation and a recent increase of 7% forced upon Eskom by public enterprises minister Pravin Gordhan. Eskom is hopelessly overstaffed, with an average salary much more than in the private sector, and is on the brink of insolvency.
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The result of all the above is that the state wage bill is totally out of control, rendering the our recent budget complete nonsense.
Taken together with Sars’ recent revenue collection shortage shortfall and ongoing attempts to bail out the state-owned enterprises, all every one requiring billions, we can expect a huge borrowing increase and a calamitous mid-term budget statement in October.
And I haven’t even mentioned This is not even considering ongoing looting, enormous irregular expenditure and bloated government costs.
Furthermore, The unions now have 8% as their minimum acceptable increase. This will have a huge negative effect impact on future negotiations in all sectors of the economy, increasing both inflation and job losses. Yet the media and most economists haven’t even raised this as an issue.
Our The government sacrifices the economy because of its paranoid fear of union anarchy. How pathetically weak.
The Ramaphosa government simply does not have the will or ability to run an efficient economy. The new dawn is a joke.