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Thu Apr 17 12:15:30 SAST 2014

Wages eat up 57% of budget

AMUKELANI CHAUKE | 06 March, 2013 01:00
Finance MEC Mandla Nkomfe
Image by: Foto24 / Lerato Maduna / Gallo Images

Gauteng will spend more than half of its R76-billion budget on salaries.

With the country experiencing a harsh economic climate and services being under pressure, finance MEC Mandla Nkomfe yesterday called on provincial departments to tighten their belts.

Tabling his budget in Johannesburg yesterday, Nkomfe said the soaring wage bill continued to be a concern, adding that the bulk of funds should go to service delivery.

Gauteng contributes the biggest share of the country's gross domestic product, 35.7%.

Of the R75.9-billion budget Nkomfe announced for the 2013-2014 financial year, R43.3-billion (57%) has been set aside for salaries .

"That's the problem of South Africa," Nkomfe said.

"We must ensure that funds go towards [ funding infrastructure] and not on personal consumption.

"We can't continue on this path of increasing the wage bill when the economy is not working properly, when investment in productive sectors of the economy and infrastructure is not very good.

"It is not sustainable," Nkomfe said.

The provincial department of education spends R22-billion, or 70%, of its R29-billion budget on salaries.

The health department, which has been put under the administration of the provincial treasury, will spend R16.8-billion, or 60%, of its R27.9-billion budget on salaries.

Following reports that the department of health lacks the funds to pay for salaries, goods and services before the end of the current financial year, Nkomfe said an additional R1.1-billon would be set aside to fund "non-negotiables" in 2013 - including cleaning hospitals and the provision of medicine s.

Finance Minister Pravin Gordhan warned of the dangers of the soaring wages bill in last year's Budget speech.

Last week, the Treasury revealed that salaries accounted for a third of government spending.

Nkomfe said difficult decisions had to be taken when allocating funds.

"All of us should ensure that we do not live beyond our means.

"We should all do away with the nice-to-have kind of programmes, and programmes that fail to deliver on our [intended] outcomes."

He suggested signing three-year wage deals with trade unions and doing away with reckless appointments, saying both moves would free funds for service delivery.

Nkomfe said the provincial treasury had been allocated R30-million for the assignment of officials to the health department and to fund the appointment of an administrator.

About R3.2-billion is to be spent on HIV/Aids campaigns in the province.

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Thu Apr 17 12:15:30 SAST 2014 ::