Out of every R1 you pay in taxes, the ANC now spends 58 cents to pay public service salaries – and this may soon increase to 61 cents
26 June 2020
Note to Editors: Please find attached a soundbite in English and Afrikaans by Dr. Leon Schreiber MP, DA Shadow Minister for Public Service and Administration
Out of every R1 paid in taxes, 58 cents now goes towards paying the salaries of public servants – and that figure may soon increase to 61 cents. Alongside explosive spending on debt repayments, which now cannibalises 22 cents out of every R1 in tax revenue, this means that almost none of the taxes paid by South Africans are used for productive investments to grow the economy. With salaries and debt devouring 80% of all tax revenue, only 20 cents out of every R1 paid in taxes is now available to pay for everything from social grants to education, healthcare and infrastructure development.
These shocking facts were revealed in the supplementary budget review tabled in Parliament by Finance Minister Tito Mboweni on Wednesday. According to National Treasury, main budget revenue this year is set to decline from R1.398 trillion to R1.099 trillion as tax collection collapses due to the ANC lockdown crisis. At the same time, the state will still spend at least R638.9 billion this year on paying salaries for public servants. This spending includes continuing to pay the exorbitant salaries of 29 000 millionaire managers, many of whom are ANC cadres appointed to powerful positions to capture the state on behalf of the party.
To make matters worse, the amount of R638.9 billion is based on the assumption that there will be no further wage increases this year. The government on 1 April unilaterally froze the salaries of public servants in a belated attempt to lower the wage bill. However, the state did so in contravention of its own 2018 collective bargaining agreement that guaranteed above-inflation wage increases until 2021, after public sector wages already increased by 66% over the past decade.