An overly cautious budget that is hampered by ANC radicals who oppose growth
23 February 2022
The Minister of Finance Enoch Godongwana’s budget speech offered a welcome but cautious narrative on the state of South Africa’s fiscal trajectory. The DA is, however, concerned that he did not go far enough to address the elephant in the room, the public sector wage bill, escalating costs of our national debt and precise detail on the State-Owned Enterprises (SOEs).
Public sector wage bill
The Minister anticipates more salary increases for public sector workers arising from the new round of collective bargaining, which is expected to start in March 2022. This is in contrast to the DA position that there must be a salary freeze for non-Occupation Specific Dispensation staff. As long as the government keeps kicking the wage bill can down the road, the threat of a budget blowout will remain high. It is clear that ballooning state expenditure has been driven by wage demands in the public sector, and unions, as well as the Radical Economic Transfer-faction in the ANC, clearly will not allow the government space to contain this spiralling cost.
Debt spiral