PARLIAMENT - The National Treasury will not allocate any money to fund shortfalls following the higher-than-expected salary increases following June's wage deal with public sector workers.
Instead, government departments will have to work within their compensation limits, according to the National Treasury's medium-term budget policy statement (MTBPS) tabled by Finance Minister Tito Mboweni on Wednesday.
"This means increasing efficiency and carefully managing overtime and performance incentives," the National Treasury said.
Government budgeted R212.5 billion over the medium term for the increases, but the wage deal took this to R242.7 billion, creating a R30 billion shortfall.
"Government's current wage bill accounts for about 35 percent of consolidated spending," the National Treasury said.
"No additional funding is available over the 2019 MTEF [medium term expenditure framework]. Instead, departments need to fund shortfalls by adjusting within their compensation baselines."
I WILL PROTECT TREASURY
Mboweni said he would strive to protect the National Treasury from political interference but conceded that he would be naive to think he could succeed.
"I thought one thing I am going to try to do is provide political protection to National Treasury or to the extent that is naively possible," Mboweni told journalists shortly before tabling his policy statement in Parliament.
The finance minister, who has only been in the portfolio for a few weeks, was responding to a question on how he would handle the populist wing of the ruling African National Congress.
"To keep it free from unnecessary interference, I will do that, it is nigh impossible but I will try to do that....we understand the political environment very well."
Mboweni said National Treasury held talks with leaders of political parties represented in Parliament this week, and he would delegate Deputy Minister Mondli Gungubele to liaise with them regularly to forge consensus around fiscal policy.